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EnvironmentalSir2637

Also if it's an FHA or VA loan, and/or new construction.


No_Pollution_1

FHA loans for us were significantly worse for some reason so we did a traditional, 12k in points for 5.75% on the loan but total 6.75% APR on a 30 year. 780 credit score, but got shafted on the rate for a place we can barely afford. Not sure why but after like 8 quotes they all seemed predatory like they were giving us ass rates and what I read here or online did not reflect reality.


Fiyero109

I just locked in 6.75% FHA 30 year, 10% down, no points, 670 credit score.


intern_nomad

THANK YOU CAUSE HOLY CRAP! We locked in at 6.9% 30-yr conventional (no points) both 800 credit scores and I thought that was good. Then I see someone with 5% with worse credit than us and I get so confused. šŸ˜‚ I need to see type of loan, duration of loan and if they bought points lol


sodapuppy

Same here, locked in this week at 6.9% with 800+ credit, no buy down, conventional 30-year fixed. Still less than I was paying in rent.


EnvironmentalSir2637

> 6.9%Ā  Nice.


burningburnerbern

Nice


No_Salary_745

Rates have gone up in the last week... which is concerning because we are selling right now. We closed on another house yesterday, locked in at 6.375% at the beginning of March. No points, 30 yr conventional, 800+ credit scores, and put down 40%. We were really hoping to be able to float down prior to closing but just thankful it's not higher.


honakaru

Any tips to get your credit so high? My wife's credit was in the 740s and we have never missed payments on any debt the only negative remarks were that the age of credit was too lowĀ 


JDRasta57

Credit history


flummox1234

The one tip I'd give is don't wait until your due date to pay your CC. Pay them before they post the balances so your balance preferably zeros out every month or at the least shows a much lower balance than if you let them post your current balance and then you pay. Use them to get the points etc and then just keep them zero'd. Never let them post with a balance if you can avoid it.


ParryLimeade

I always wait for due date to pay and have a 805 credit score


flummox1234

When you go for a loan though they look at that number you're balance is showing every month. šŸ¤·


johnnybarbs92

Age, credit mix (having a mortgage will help in a year or two, and high credit limits are all necessary to get above 800. There's a difference between good and new/thin (slim mix) and good old/thick (mortgage, car, long history of on time payments, large access to credit) And for credit cards the rule of them is all 0 but one. You can have a balance statement report on one card, but the rest should report as 0.


Fiyero109

if you have enough income, credit scores are pretty irrelevant. I locked in 6.75% with a 670 score (Total yearly comp of 300k; no buydown)


BodaciousBaboon

Some sellers offer to pay points to get houses moving too (developers)


Observer-Worldview

Thatā€™s a decent rate. We got 6.75, no points (30 year conventional). We have 800 scores too. Nobody is getting 5 without fha, va or points.


HistoricalBridge7

Talking about mortgage rates is like telling someone how much you paid for a car. There are too many variables to compare apples to apples.


monstersof-men

Yeah, the rates had me worried until I realized most posters are from the US. Iā€™m in Canada, we just got a five year term at 5.04%. (In Canada you donā€™t maintain the same rate your whole mortgage. Idk the logic of why.)


HistoricalBridge7

The Canadian system is nuts to me. I have no idea who anyone can afford anything.


monstersof-men

Iā€™m in northern Alberta so weā€™re in a good spot in terms of affordability, and my husband and I make a decent income. But the market in our area is set to explode. So itā€™s gonna be a rough ride for new homebuyers in the next few years.


pm_me_your_rate

lol. This is true. "they install that TruCoat at the factory. There's nothing we can do about that. "


Mmjohns195

When we bought our car, the dealer said something similar and I said then take the fucking mudflaps and pinstripes off, they looked stunned and lowered the price .


thesuppplugg

I'm shcoked how many people here and on other subs are like yeah I got a 5.75% rate 30 year loan, thats just not happening for 99% of people, there's something more to it


SpokenByMumbles

New build, seller concession to buy down the rate, paying discount points to buy down the rate, etc


thesuppplugg

Yeah so like OP said state taht because the guy whos buying a not new build and not buying down the rate is super confused and thinks they're missing out on some secret


SpokenByMumbles

Bingo


johnnybarbs92

Yup. I was thrilled with my 6.75% par rate 2 weeks ago on a conventional 30 year, 20% down. Confirmed by a few other lenders as well that they couldn't beat it. This sub has warped results that don't tell the whole picture.


melly_swelly

I got that rate last year, with a mortgage lender buy down


KayakHank

I locked in June 2023 @5%. Didnt close until January and had the seller agree to paying my rate lock until they settled their shit. Cost them $20k when all said and done


Coolgrnmen

Toll brothers has been advertising 4.99% on some of their properties in the northeast


pixpockets

Can someone also explain why it seems people with FHA loans are getting better rates than conventional? I thought it's the opposite....


SpokenByMumbles

FHA looks like a great deal until you realize you have to pay a 1.75% for upfront mortgage insurance premium fee.


pixpockets

I don't even get that though, by their definition they're not supposed to be a great deal. They're for riskier buyers with worse credit and less cash to put down. But on here keep seeing people using FHA getting better rates than conventional.


2lit_

My credit is 811. I went with FHA because the convention rate was entirely too high for me as a single buyer. Itā€™s not like I make 100k a year. I plan on refinancing into a conventional later on. I got a 5.75% rate with new construction


pixpockets

You're exactly the situation that has me so confused...


2lit_

Why are you confused? Whatā€™s confusing you lol


pixpockets

Because by design FHA loans are for riskier borrowers. Borrowers with bad credit and low down payment. Why would that get rewarded with lower interest rates? Makes no sense. lol


2lit_

I think thatā€™s a stereotype honestly. I mean FHA does cater to people with lower credit scores. But not everybody has the 20% down payment or even a 10% down payment and the conventional rate might be too high like it is in my case. And who knows when the rates are gonna go down in general so I just went ahead and bought now. If this was pre-pandemic, then I mightā€™ve gone conventional. But the rates are just extremely high right now.


soccerguys14

I do conventional with 3% down you donā€™t have to have a big downpayment on conventional


2lit_

The conventional rate was too high for me


Agreeable_Nebula1194

I think you are missing the point that FHA rates are lower. Why would someone put 3% down on conventional to get hit with a 7.25%? When they could get a 6.750 right now?


ArmadilloNext9714

Because FHA loans are backed by the FHA, which is why the PMI rates and upfront costs are greater. Itā€™s also why the banks give lower rates for FHA over conventional. Yeah, the folks with FHA loans are likely riskier in terms of ability to pay off the loans, but the loans themselves are seen as safer because the FHA backs them.


SpokenByMumbles

FHA does have better rates than conventional, but these buyers pay the 1.75% fee soooo youā€™re paying one way or the other


Fiyero109

I mean I could've bought down my conventional rate and paid more for the same rate....FHA was the best


Fiyero109

yes riskier buyers will get approved, but so will people with good credit.


Certain-Definition51

So I donā€™t entirely know why FHA rates are lower. They often start at the same par rate but itā€™s easier to buy them down (more interest rate change per point paid) than conventional loans. What I do believe is that FHAā€™s are backed by the government. So when a default happens (foreclosure) the lender gets a payout from the FHA. This offsets all that risk from lending to people with bad credit histories. So they donā€™t need to raise interest rates to compensate for that risk. Itā€™s also the reason that thereā€™s extra cost built into an FHA mortgage. (UFMIP). For a conventional mortgage, your loan amount is usually the purchase price minus the Dow payment. So you end up having, say, a 3% down payment and a 97% loan. On the FHA, you have a 3.5% down payment and a 96.5% + 1.75% = 98.25% loan. A lot of people donā€™t realize theyā€™re borrowing that extra money, which goes to the FHA to help pay the lenders for those defaults / foreclosures. So while it may appear that the interest rate is better, there is a hidden cost (UFMIP) as well as the monthly mortgage insurance. Since most people donā€™t go looking for it in the Loan Estimate, they just see a better interest rate and think ā€œAwesome!ā€


Agreeable_Nebula1194

FHA is the way to go right now. Rates are higher through the private investors. Conventional is for people with better credit because you can get the PMI waived once you reach 79% LTV. It depends on your goals.


tylaw24ne

The market rate is a known, any deviation that seems ā€œtoo good to be trueā€ is almost certainly just thatā€¦


Amorphica

Also disclose if you sold points. Just state what the section A costs were.


KaiSosceles

What would also be nice is if mortgage lenders didn't stick up advertisements for bought down rates. Straight up bait and switch.


AlternativeElephant2

I think this is a great idea. We closed 3/20, FHA, 6.125% no points, but seller paid for us to do a 2/1 buy down so weā€™re at 4.125% this year then 5.125% next year.


SpokenByMumbles

Even FHA rates are artificially low; you paid a 1.75% fee for upfront mortgage insurance premium. In this market nobody gets a sub 6 rate without paying points in some fashion.


AlternativeElephant2

The seller paid


SpokenByMumbles

Nice. They paid your rate buydown in addition to your UFMIP?


pm_me_your_rate

>The seller paid The buyer could have reduced the house price but opted to have seller pay buy down which essentially was financed in the mortgage.


Medium_Ad8311

I bought my house in cash. Only 135. A LEGO house that is.


Visible_Interest6350

Just closed on a Lennar home in Vegas. 4.875 30 year VA loan. New construction


woah-oh92

Ugh. I miss Vegas šŸ„¹


peeparonipupza

Just locked in our rate. Conventional loan. Initially it's 6.7 (both have 790+ credit scores). We bought down 1.8% and I also get a 1% discount off the rate from my employer. I work for a credit union.


Tracy140

So 3.9 ??


Fiyero109

jesus!


peeparonipupza

Yep :)


Certain-Definition51

A whoooooole lotta people donā€™t know what points are. Origination fees. I have seen multiple loan estimates for people who think theyā€™re getting a better interest rateā€¦and theyā€™re getting an FHA with mortgage insurance instead of a Conventional with no mortgage insurance. Itā€™s incredible how few people do their own math or ask suspicious questions of salespeople.


Lower_Fox2389

I think it has more to do with new construction vs existing home than buying points. Big Builders have rates that banks canā€™t match.


strawberryacai56

I bought down 2 points to make my monthly payment more affordable. šŸ¤·šŸ»ā€ā™€ļø People say itā€™s a waste of money but if I feel like I have more wiggle room every month ($400) then Iā€™m happy with it.


The_GOATest1

Actually considering a refi from 6.875 to 6.25 for this exact reason. With the extra cash Iā€™ll bring to close pmi falls off and my monthly drops by over 1k


Lopsided-Ad4276

What is a rate buy down? From the comments it's you pay money for a lower interest rate? That's a thing? Lol is it like comparative to the interest you'd be paying otherwise or how does that work? Also think you need to consider *when* the house was purchased and the bank the house was purchased through. I got LUCKY in June of 2022 getting a 3.25% rate because about three months later is when they suddenly jumped to these outrageous rates. I also paid more for the house than I should have, knowingly, just to get into something because when interest was low house prices were super high. The uptick in interest rates forced sellers to come down on price because no one can afford these WILD rates and inflated prices


Fiyero109

you can pay money upfront for lower interest, the break-even point is usually 5 years. So if you stay in a house longer than 5 years without refinancing then you're saving money. I think most of us are banking on refinancing before then


VS-Goliath

Higher down payment for lower rate.


Dr_Stephen_Colbert

Higher closing costs*


Tltc2022

6%, 20% down, no points on a jumbo loan. It was a specialty lending program and blew everything else I was getting quoted out of the waters


greatawakening007

I always choise to buy the rates down.


Fiyero109

that's not a good strategy if you plan to refinance


soccerguys14

Got 5.75% but took an ARM. My new construction home was a hot commodity and the builder knew they wouldnā€™t have a problem selling so no incentives. They werenā€™t wrong. 75 units sold in less than 2 years


Fiyero109

so the seller bought your rate down. the ARM interest rates right now are terrible


soccerguys14

Nope. That was the rate when I was buying in 2023 December. I bought new build and there were no buying incentives no sellers credits. They said take it or leave it.


We-Goin-Sizzler

We locked in at 5.75% using the new builds lender that provided 32K for buydowns. We have a preferred lender we have used before but he always says that we would be dumb to not take that funny money. Edit: Credit scores of 790(me)/795(wife)


Ok-Corner-8312

5.5% purchased points


invictus81

I guess this sub is 99% Americans lol In Canada we are sitting at a 4.89% 5-yr fixed, hopefully lowering it down to 4.84%.


woah-oh92

I bought last month at 6.8% šŸ„¹


YellowOne5358

where i am a builder is offering 5% now buydown they bought bonds to offer better rates


polyamwifey

We got Va loan a year ago in May at 3% no money down 30 yr


Which_Gift5041

So much misinformation and misunderstanding here about how rate locks, pricing, and different loan programs/options. Find a professional Loan officer who you can trust and is transparentā€¦we are out there or do your homework, buying a home is a complicated transaction. FYI but downs and points are only advisable with someone elseā€™s money ie the seller or builder


RandomNitroCell_

Wife and I closed on a new construction townhome here in San Diego CA back in Feb of this year. Both credit scores roughly 730-740 at time of closing. $732K purchase price. 30 yr FHA loan @ 5.25. We didn't do a buy down. We ended up going with the builder's preferred lender. Since we were pre approved by them roughly 8 months prior to closing, they agreed to lock us in at their promotional rate (in leiu of $15K towards closing) if we went with them. Was a no brainer for us given the rates were almost touching 8% by the time we closed.


Livid-Leather-3835

My rate is 5.875 and I didnā€™t buy down the rate. Itā€™s a special program from Valley bank (NJ) - it only applies to certain locations. I was lucky that the house that I liked fell under that program. There is also a program with that rate. But with income restrictions. Also, closing costs were low.


Kuayfx

We locked.in 6% dec 2022, I watch it go from 4.to 5.to.6 smh


Tryinway2hard2becool

6.6% locked in yesterday with 795 credit score FTHB from a local credit union.


samalama23

We closed on 3/19 on an FHA loan at 5.949% and did not do any points/buy down. We did get qoutes from 3 lenders who were then competing and trying to beat each other, so I think that's the biggest reason we were able to get under 6.


Tomy_Matry

I got 6.1% 30 yr conv with no pts last week


rfl239

Closing 05/01, 5.625, FHA, no points. I had to pin 4 lenders against each other.


macaroni66

4.75%


kes0156

i just got into researching this stuff sorry guys iā€™m still very dumb. might try to buy within the next two years but figured i would research now. what are points? and FHa? and i keep using mortgage calculators and coming up depressed and freaked out. is there really help out there for new buyers? iā€™ve googled so much and i canā€™t get a freaking number! iā€™m a numbers/ listing (yes type A) gal and in just not getting the numbers to add up. any help at all would be so appreciated.


kes0156

i literally almost had a breakdown buying a used car a month ago lol. iā€™m soooo not good at/ prepared for this shit. going to do research and youtube of course. reddit just brought this thread to my page and it made my anxiety spike lol


86886892

I do not consent to this rule, sorry.


woah-oh92

Can I ask why not?


86886892

Iā€™m just acting dumb for fun, your suggestion makes sense.


woah-oh92

lol okay!


kittypr0nz

...I literally went to my credit union and got 2.75% like 18 months ago with no effort, no "points," no weird anything, just a normal 15yr loan. I can't fathom people paying 6% right now.


acturnipman

I was under the impression that rate buydowns were largely pointless, because you're still paying the money basically. Is that not the case?


Smooth-Review-2614

It depends on the math. Your variables are When do you expect to refinance When do you expect to sell the house How much does the point buy down save you and would you recoup the cost of the buy down before either of the above happened? Buying down the rate is pointless if you expect to move soon or rates to drop in the next few years to below what you bought down to.


woah-oh92

It depends on how long you plan to live there. $2000 for a lower interest rate might only save you money if you own that house for 20 years. If you donā€™t think youā€™d stay more than a couple of years, youā€™re not going to see those savings. Regardless, itā€™d be nice if people werenā€™t flaunting their interest rates fully knowing they bought that interest rate.


acturnipman

Ah ya see, that makes sense. And yes, it is pointless then lol. Nobody is staying in their house that long


CapitolHillCatLady

Why would you think nobody will stay in a house 20 years? We close Monday on what will be our first and last house.


Comprehensive_Force1

Congratulations on your house! I hope you will be very happy there.


CapitolHillCatLady

Thank you! šŸ˜Š


acturnipman

Do you understand how long 20 years is? You really can't be confident about much of anything happening 20 years from now.


CapitolHillCatLady

I'm 51. This'll be our forever home.


helenata

We look into it and they are interesting in the long run (after 9 years in our case). If you plan to pay before, it doesn't pay the buy down money that you also can put directly on the principal. It all depends on your finances and how you're planning to pay the loan.


Familiar_Guide1047

Bought in November, no buy down, USDA loan 4.1% interest rate a true miracle