Sorry to ask here about mortgage rates but I figure a credit board is as good as any other place when it comes to interest rates. I'm stuck and don't know what to do. I've got a contract in on a home, new construction, which won't be finished till late Oct to November. My problem is with interest rates. I asked my lender, tied in with the builder, about a contruction loan as I understand, with that I can lock in now. The problem is that they don't offer such. What he did offer me in terms for a long term lock was to pay a 1/4 point and that would guarntee my loan will not go over 6.75%. It does have a one time float down option 30 days before closing. He says I shouldn't have any problem requalifying at 6.75 % but I'd like to know if there are any other options or what you folks think as to where rates will be in October. What do you think, pay the 1/4 point to get locked in now and get stuck at a max of 6.75% or float the loan until it's time to close to see where I end up? Maybe I should just or a ARM??? Sorry to ask you good folks to predict the future but this being my 1st home and never having a mortgage in the past, I'm really nervous. TIA!!!
I'm not sure about construction loans but 6.75% is high now especially with 1/4 point to lock in. Try going to bankrate.com and they list rates for various loans (new purchase, refinance, etc.) giving both national average and by state. They also have a section that will send you a daily market analysis and gives you information of market events that will effect the current weeks rates. There are many providers out there that will give you competitve mortigages (no or low points and limited closing costs). To determine the better rates make sure to check the APR because that will include all costs associated with the loan. Best of luck
The reason for the 1/4 point and a rate of 6.75% is because I can't close until late October or in November. The 1/4 point is for the program and there is a 1 time float down option if within 30 days from closing. I did check out BankRate.com and they have 30year rates down into the mid 5's if I pay a few points. I'm going to have to call some of them to see if I can get a long term lock. My other problem is that I can't disclose all my income because my better half isn't going to be on the loan as she already owns property in her name and with her, I can't qualify for the 1st home buyers program. So it's stated income or No Doc only for me. Thank God my FICOs are up there. Thanks for your reply. If you have any insite on where you think rates will go, please let me know. I'm sweating bullets, as my monthly payment is going to triple from my current rent.
the scenario that you listed is now totally different that your first post Full Doc v. Stated/No Doc/No Ratio rates have gone up considerably in the last few weeks here and you would be lucky to find a 30yr fixed in the mid 5's now. how long do you plan on living in this home? That is the question you should ask on whether or not you should choose an ARM over a fixed rate mortgage. BB AHMCC
