the TRUTH and nothing but the TRUTH - Posted by Rob Ricker
Posted by Rob Ricker on May 05, 2006 at 12:59:59:
Is this an investment property?
Are you seeking 100% financing?
If so, you are no longer a prime borrower, you’ve have made yourself subprime. Your 760 credit score will not save you from all the rate bumps and fees that 100% NOO financing requires. Your broker can not make these bumps to your rate go away, and $2,376 is not bad on fees for a loan with no yield spread premium (if that’s the case).
As I take a look at my rate sheet today I could offer a 100% NOO loan with a 760 score for 8.875% or a 80/20 loan for 7.875% on the first. This is making ZERO MONEY to do the loan. Your second mortgage rate does seem a little bit high, but the first mortgage rate and fees your broker is charging seem very reasonable for what you’re asking for.
Here’s my suggestion if you want to save money. Purchase with 10% down and you’ll get somewhere around 7% on your first mortgage with lower fees (more like $1,000). Get the second mortgage AFTER CLOSING to pay
yourself back for your down payment if you absolutely must have that 10% back. It’s all about working the system.