Current Events > Got quoted 7.0% mortgage from one place, 5.7% from another

(+) Yeah! (+)

This is my first time doing this, reaching out to lenders to get pre-approved.

It actually blows my mind how big these differences are....theres absolutely no difference in the quality of the company. The 7.0 offering lender has been passively annoying me every few days about a status update. The loan officer who sent me info about the 5.7% has been straight to the point, no BS, and given me space. Hasn't been bombarding me with "followup" calls and emails.

Even Laurel Road offered 6.5%.

But man, once I do the math, the monthly payments are mind-blowing and a reality check like fuck. I make solid ass income and alot of these houses are out of reach for me, htf do other people doing this?

Should have got one year and a half ago. Rates were around 3.5%. Rates suck now.

I wouldnt take any of those rates

Fixed or adjustable?

I'm locked in at a 3.5% APR. I could have refinanced and gone even lower, to 2.5% or so. I wasn't sure what the downside was.

My house:
https://gamefaqs.gamespot.com/a/user_image/6/5/9/AAdbDbAAESkz.png

My 2nd house:
https://gamefaqs.gamespot.com/a/user_image/6/6/0/AAdbDbAAESk0.png

Feels good.

Yeap. Makes you think wtf is buying at the prices+rates and how so many people are able to.

Eat_More_Beef posted...

Fixed or adjustable?

30 year fixed was 5.75, 5.76 APR
7/6 ARM was 5.375, 6.321 APR
This is assuming 780+ credit and excellent income

The second one the 7.0% interest rate with 7.4% APR was 7/6 ARM, they didn't quote me a 30 year fixed lol.

Straight jokes man.

Closed exactly a year ago today with 30 year fixed at 3.875%.

One question I have is: Why would anyone get a 30 year fixed right now? Why would everyone not get a ARM with a lower rate, then refinance to a fixed when rates are cheaper in the next few years? Refinancing should be easy, right? As long as you maintain good credit.

So in my case when I calculate out 5.375 instead of 6.5% which is what most auto-quotes give me online, it makes a massive difference. Why not lock in 5.375 then in like 3-4 years refinance when rates should be lower, lets say in the low 4s?

Never ever EVER go with an ARM. 30 year fixed all the way

kage_53 posted...

Should have got one year and a half ago. Rates were around 3.5%. Rates suck now.

4.2 this time last year

Dan_Haren- posted...

One question I have is: Why would anyone get a 30 year fixed right now? Why would everyone not get a ARM with a lower rate, then refinance to a fixed when rates are cheaper in the next few years? Refinancing should be easy, right? As long as you maintain good credit.

So in my case when I calculate out 5.375 instead of 6.5% which is what most auto-quotes give me online, it makes a massive difference. Why not lock in 5.375 then in like 3-4 years refinance when rates should be lower, lets say in the low 4s?

Most people don't know anything about refinancing. Or keeping their credit score up tbh

7% is fucking insane for a house.

i knew a guy in the military that bought a used car, fucking used ass average car, with a 25% interest rate. credit wasn't even bad, he was just fresh out of high school and had no idea that he was being bent over.

america needs to factory reset.

Euripides posted...

Never ever EVER go with an ARM. 30 year fixed all the way

Without any explanation or addressing my logic, this post is effectively straight bullshit.

Dan_Haren- posted...

One question I have is: Why would anyone get a 30 year fixed right now? Why would everyone not get a ARM with a lower rate, then refinance to a fixed when rates are cheaper in the next few years? Refinancing should be easy, right? As long as you maintain good credit.

So in my case when I calculate out 5.375 instead of 6.5% which is what most auto-quotes give me online, it makes a massive difference. Why not lock in 5.375 then in like 3-4 years refinance when rates should be lower, lets say in the low 4s?

It's gamblers choice. You get a fixed, you know what your paying despite market volatility. ARM can fuck you if you're not careful.

Also, at the rates you're getting (over 5%), you're getting screwed.

5.7 isnt bad in this rate environment. Id lock that down if it still works in your budget.

Dan_Haren- posted...

Why not lock in 5.375 then in like 3-4 years refinance when rates should be lower, lets say in the low 4s?

Because they probably won't? The record low interest rates the past decade weren't the norm.

Same for the entire economy then as well. So locking in a ARM could very easily screw you over in the long run then.

As such locking in at what rates are now with a fixed is the safest option. Either they raise or you hold, or the lower and then you refinance.

Dan_Haren- posted...

I make solid ass income and alot of these houses are out of reach for me, htf do other people doing this?

Life is balanced around dual income households these days. Either have to find a partner or roommate to help bankroll your house.

Every realtor I know says to avoid ARMs like the plague.

ARMs assume rates will be lower later but the way things are going right now they wont be lower for a while. Maybe if you get one that starts adjusting like 5+ years down the line and you refinance before then but were still at pretty low rates in the grand scheme of things and inflation isnt much better than it was at its peak, not to mention the fed is dumping money into the banking sector which may or may not have effects on the greater economy going forward.

Try Better mortgage or one of the other cheap, internet based lenders. I had by far the best luck with them. But yeah, the prices are absolutely ridiculous right now.

As for the ARM thing, the Fed continues to state that their plan is to increase interest rates. They're gonna keep going up, with no end in sight, so doing an adjustable rate probably doesn't make sense unless you have some reason to think we're near the ceiling of rate increases. The only indication of that is the issues the banks are having.

Dan_Haren- posted...

One question I have is: Why would anyone get a 30 year fixed right now? Why would everyone not get a ARM with a lower rate, then refinance to a fixed when rates are cheaper in the next few years? Refinancing should be easy, right? As long as you maintain good credit.

So in my case when I calculate out 5.375 instead of 6.5% which is what most auto-quotes give me online, it makes a massive difference. Why not lock in 5.375 then in like 3-4 years refinance when rates should be lower, lets say in the low 4s?

One thing I've never understood either in the whole process. ARM is like bro it can go up, sure, but if it goes down, you can just refi with 30yr fixed anyways.

Very weird.

TaylorHeinicke posted...

One thing I've never understood either in the whole process. ARM is like bro it can go up, sure, but if it goes down, you can just refi with 30yr fixed anyways.

Very weird.

a ton of people took them out in the early 2000s thinking they will go down and then got fucked in 08

kage_53 posted...

Should have got one year and a half ago. Rates were around 3.5%. Rates suck now.

Yea, thats insane how much it has gone up in a short time. 7% is absurd

Prismsblade posted...

Because they probably won't? The record low interest rates the past decade weren't the norm.

Same for the entire economy then as well. So locking in a ARM could very easily screw you over in the long run then.

As such locking in at what rates are now with a fixed is the safest option. Either they raise or you hold, or the lower and then you refinance.

You can always refinance, find a different lender, someone will do it.

I got my house in 2013 at a 4.5% interest rate. I paid extra every month and refinanced to a 10 year 1.99% rate in late 2016. I still can't believe how good of a rate I got.

Pick the lower number tc

I bought a one bedroom(720sq) home during the pandemic and everyone thought I was beyond stupid. But I got it on a 15 year 2.5 and it now rents out for a 1000 a month making its money back.

I feel like sometimes you got to take risk

Dan_Haren- posted...

Without any explanation or addressing my logic, this post is effectively straight bullshit.

The lender will ALWAYS sell it as "yeah, after a few years you can lower your rate!!" when they have no idea what rates will be in 3, 5, or 7 years.

Remember the 2008 housing crisis? A ton of those foreclosures were on ARM loans

Dan_Haren- posted...

Without any explanation or addressing my logic, this post is effectively straight bullshit.

lol. You go ahead and do ARM, bro. You do you.

Euripides posted...

The lender will ALWAYS sell it as "yeah, after a few years you can lower your rate!!" when they have no idea what rates will be in 3, 5, or 7 years.

Remember the 2008 housing crisis? A ton of those foreclosures were on ARM loans

That's assuming you don't refinance.

2008 was people with shit credit getting ARMs. This is assuming you have good credit and good income, ARM right now is a no brainer

Dan_Haren- posted...

That's assuming you don't refinance.

2008 was people with shit credit getting ARMs. This is assuming you have good credit and good income, ARM right now is a no brainer

If you have great credit, you're going to get a better rate with a 30-year fixed. Why put yourself into a situation where you're going to have to refinance in a few years (which isn't free)?

Euripides posted...

If you have great credit, you're going to get a better rate with a 30-year fixed. Why put yourself into a situation where you're going to have to refinance in a few years (which isn't free)?

An ARM will still be lower than a 30 year fixed even with great credit

theAteam posted...

a ton of people took them out in the early 2000s thinking they will go down and then got fucked in 08

The much smarter people itt

https://gamefaqs.gamespot.com/a/user_image/1/5/1/AAL4saAAESsf.jpg

Dan_Haren- posted...

An ARM will still be lower than a 30 year fixed even with great credit

Until its not. The promise of being able to refinance at a lower rate is complete conjecture. Maybe the rate will be lower in 5 years. Maybe it will be double what it is now. Why take that risk?

Refinanced last year before rates starting going up at 3.75% for 15 years fixed

I'm relieved every time I see the rates now

Euripides posted...

Until its not. The promise of being able to refinance at a lower rate is complete conjecture. Maybe the rate will be lower in 5 years. Maybe it will be double what it is now. Why take that risk?

Because it won't double from 7 where its at now. A recession is already impending. We just had a historic velocity in the fed funds rate for which the consequences will be seen soon, either this year or next. We'll see business growth slow down as businesses will be unable to get capital. In a few years longer timeframe we'll see businesses with existing loans needing to refinance.

I would always ask what adjustments there are. Your rate can be decreased or increased by a lot of different factors that may not be included in a quote but will come out of the woodwork later.

Things like credit score, relationship or autopay discounts, down payment/LTV, etc.