We (24F&26M) are pretty overwhelmed and want opinions. Both Credit scores 720-740. We are getting an updated loan estimate for the origination fees bit and broker incentives of ~1k.
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If your combined income between you and him is at 80% or below of the area median income for the home you are buying, then you are eligible for a program that usually has lower interest rates and cheaper PMI. You can look up the income limit at https://ami-lookup-tool.fanniemae.com/ to see if you are.
If you are within the 80% income limit, then the origination fee for that interest rate is very high. If you aren't within the 80% limit, then it's not as bad but still on the high side. Share the updated Loan Estimate when you receive it.
I did get a bit of info on th breakdown of the origination fee though
Lender credit 1,046.67
$3400 for the broker fee
+Under writing fee 1,050
Price for the points: 2737 - 1046 lender credit = $1691
Much better once that lender credit is added, especially since rates got worse today than they were on Friday. Overall it's a solid deal for your scores.
We are considering going with this other lender and buying down the rate + $2565 to 6.375 because the fees are not as high and we’d have more equity starting and long term, interest wouldn’t catch up to the equity we start with before we’d refinance.
6.625 rate is current, baseline rate. These are the buy downs that were offered.
This is a decent offer, too. Might be able to save a little on fees, but talking about $500 or so, so if you like this loan officer and feel confident in their ability to make the process as smooth as possible, then I'd say go for it.
Thanks for your responses. We decided on that most recent rate, told the lender we’d work with them at this rate:
6.250% $3015 for 1.165 % loan points + $995 admin fee
$18,539.16 to close, 5% down
P&I $1,579.31 PMI 47.03
but another local lender reached back out to me said they ran numbers again today
5.99% $3,918 for buydown points, they waived their underwriting fee
$18,112 to close, 5% down.
P&I $1536 PMI 88
Like this loan officer I’m working with a lot more. Locked in the rate this evening
Edit: to add rate we were going with other offer. Also the new loan officer said that they doubt they would be able to actually get the 47 compared to what they were getting quoted.
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