Thursday, January 29, 2009

Mortage Rate Alert - 4.375%!

by Osman Parvez
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To the point of falling rates (in my last post), I just received this email from a friend.
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Just a heads-up - If you or your clients are looking for a mortgage lender, Provident Funding has some very good rates. They have high standards, cut no corners, lend in "nice" areas, so this is for the folks with high credit ratings and documentation of income.

I'm paying down my existing loan (a jumbo) to get it below $417,000, locking in at 4.375% (and paying 1.75 points). $2600 in fees.

(they discount 1/4 point for credit ratings over 740)

...not the cheapest fees around, but not bad - and I can't find a better APR.

Once I close this, I'm going back to Third Federal for their crazy-low HELOC. (currently Prime minus 0.65, and they guarantee that if anyone has a better rate, they will beat it or pay you $1000 - even after you establish the line)

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9 comments:

  1. Caution - Sarcasm below!!!!!

    Pay enough points and fees and I'm sure you could find a lender to loan at a 0% rate.

    ReplyDelete
  2. that rate is for conforming per the email...your headline is misleading.

    ReplyDelete
  3. rate is for conforming, per the email...headline is misleading.

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  4. Does anyone have a link to these guys' website or some more information about which branch was being talked about? I'm seeing _much_ higher rates on http://providentfunding.com/

    ReplyDelete
  5. Regarding Jumbo rates:
    Yesterday's Wall Street Journal reported that 25% of all Prime Jumbo loans now exceed the value of the home they back.

    Incredibly, 6.9% of all "Prime Jumbo" loans (yes, Prime) are now 90 days delinquent vs non-Jumbo prime loan delinquencies of 2.1%. The 6.9% figure was only 2.6% a year earlier. And I often hear that people buying high-end homes are wealthy, have cash on the side and can afford the payments more than those in lower-end homes; hmm.

    The major buyers and underwriters of Jumbo loans have been burned, so they are leaving the market. Therefore, Jumbo rates are going up. True, the rate influences a home's affordability. Alas, so does the home's price.

    Given the glut of high-end inventory, rising jumbo loan rates, rising loan qualifications, and the increasing number of forced sellers (including banks), it would be hard to argue that high-end home prices could stay flat or rise.

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  6. Did Genworth add all of CO to the distressed markets list?

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  7. Anon #1 - you're right. I was rushing out the door and misread the email.

    Still a pretty good rate. Post title corrected.

    ReplyDelete
  8. Pay enough points and get 4.375% -but this is not the par rate! Actually Wells Fargo and Countrywide have some of the best rates now - and they are all above 5.25% at par -(par means no points required, just the origination fee)

    ReplyDelete
  9. I'm the one that sent Osman the info about my Provident loan.

    Their website is: http://www.providentfunding.com

    Be sure to dig deeper than the home page to get a rate quote for your given area and circumstances. (There's an "advanced" quote option).

    The day I locked, the par rate was 5.375 (zero points), but I locked just 2 days after rates bottomed and bounced up a bit. The day I locked Provident was at least a quarter point better than any others I could find. (and they knock off 0.25 on the points if you have a 740 rating or higher)

    Anyhow, I'm sure the rate race will change leads often - and now that I've locked I'm sure the government will mock me by handing anybody some kind of 4% Obama rescue rate.

    My goals were to get out of the Jumbo, reduce my rate, lower my payment - all on my own dime - without any sort of bailout nonsense.

    My payment is going from $2777 down to $2000, my rate is going from 5.875% down to 4.375%.

    ...the combo of these will save me a big chunk.

    ReplyDelete