what LTV for the best rates?

NEW -> Contingent Buyer Assistance Program
V

villiagepeople

New member
question for all you mortgage brokers out there... i am looking to purchase shortly... i have the new home project picked out and based on current prices  i can put up to 50% down... but i don't know if i want to do that... the question is, if i put more down, say 30%, 40% or 50% will i get a better rate?  i googled and can't seem to get a good answer.  i'll probably go with the lender at the new home place cause they are giving incentives but i don't want to ask too many questions because i want to bring in a realtor and split the commission with him/her...
 
to clarify, i'm assuming i'd get a better rate at 30% down, but how much should i expect off (.125, .25, more?).  also, at what point does it stop... if say i put 80% down do i get a better rate than 40%?  all the rates online give me options if i want to do 30, 20, 15 yr loans, but i haven't found one that will give me comparisons based on LTV.
 
villagepeople said:
to clarify, i'm assuming i'd get a better rate at 30% down, but how much should i expect off (.125, .25, more?).  also, at what point does it stop... if say i put 80% down do i get a better rate than 40%?  all the rates online give me options if i want to do 30, 20, 15 yr loans, but i haven't found one that will give me comparisons based on LTV.
Click to expand...
Don't quote me on this but I believe that you'll get the best rate with 25-30% down on a loan amount of 417k or lower. There aren't any price adjustments down the more you put down.
 
The Agencies just hiked their already pretty hefty Loan Level Pricing Adjustments. Here's a few examples of the new ones:

740 FICO and above, between 75.01 to 80.0 LTV:  .25 add to fee.
720-739 FICO, between 75.01 and 80% LTV: .50 add to fee.
700-719 FICO, between 75.01 and 80% LTV: 1.00 add to fee.
680-699 FICO, between 75.01 and 80% LTV: 1.750 add to fee.

If you have reasonable credit - 700 and above - the price add on's fall off at 60% LTV.

Note that no matter if you have a 740 FICO or an 825 FICO, when you put 20% down you're going to give FNMA/FHLMC .25 in fee. Mortgage hucksters can't pitch the old line "oh, your credit score is 750 so you get better pricing" - which was always a crock to begin with, what with these higher add ons.

IMHO - Nothing like penalizing responsible credit use. Per FNMA: Putting 20% down? You're a risk!

There is an interesting post at TheTruthAboutMortgage.com putting a fine point on the coming future: "Wells Fargo Calls for 30% Down Payment on Mortgages"
http://tinyurl.com/49ep5of


My .02c


Soylent Green Is People.
 
SGIP,

Are you saying one need to put 40% down (LTV of 60) to get a no fee loan

sgip said:
The Agencies just hiked their already pretty hefty Loan Level Pricing Adjustments. Here's a few examples of the new ones:

740 FICO and above, between 75.01 to 80.0 LTV:  .25 add to fee.
720-739 FICO, between 75.01 and 80% LTV: .50 add to fee.
700-719 FICO, between 75.01 and 80% LTV: 1.00 add to fee.
680-699 FICO, between 75.01 and 80% LTV: 1.750 add to fee.

If you have reasonable credit - 700 and above - the price add on's fall off at 60% LTV.

Note that no matter if you have a 740 FICO or an 825 FICO, when you put 20% down you're going to give FNMA/FHLMC .25 in fee. Mortgage hucksters can't pitch the old line "oh, your credit score is 750 so you get better pricing" - which was always a crock to begin with, what with these higher add ons.

IMHO - Nothing like penalizing responsible credit use. Per FNMA: Putting 20% down? You're a risk!

There is an interesting post at TheTruthAboutMortgage.com putting a fine point on the coming future: "Wells Fargo Calls for 30% Down Payment on Mortgages"
http://tinyurl.com/49ep5of


My .02c


Soylent Green Is People.
Click to expand...
 
No. Not exactly. Rates and the fees associated with a specific rate vary based on a number of factors. Example:

SFD purchase, 20% down, $417k loan.

1) 740 FICO: 4.875% 1.0 point origination fee, .25% LLPA, 1.25 Total or 5.25%, 1.0 origination, .25 LLPA, 1.25 Points. Lender credit of 1.25%. Net price is -0- points.

2) 699 FICO. Same pricing as above, but since the LLPA is so much higher, 4.875% costs 2.375 points (1.0 + 1.375). At 5.25% the rebate can't cover as much due to the LLPA. This borrower then must look at 5.5 to 5.75% for a zero point loan. At that rate the lender has enough rebate to cover their charges and the LLPA.

The loan to value does impact pricing, but not as much as the credit score will.

SGIP
 
waitin4ever said:
SGIP,

Are you saying one need to put 40% down (LTV of 60) to get a no fee loan

sgip said:
The Agencies just hiked their already pretty hefty Loan Level Pricing Adjustments. Here's a few examples of the new ones:

740 FICO and above, between 75.01 to 80.0 LTV:  .25 add to fee.
720-739 FICO, between 75.01 and 80% LTV: .50 add to fee.
700-719 FICO, between 75.01 and 80% LTV: 1.00 add to fee.
680-699 FICO, between 75.01 and 80% LTV: 1.750 add to fee.

If you have reasonable credit - 700 and above - the price add on's fall off at 60% LTV.

Note that no matter if you have a 740 FICO or an 825 FICO, when you put 20% down you're going to give FNMA/FHLMC .25 in fee. Mortgage hucksters can't pitch the old line "oh, your credit score is 750 so you get better pricing" - which was always a crock to begin with, what with these higher add ons.

IMHO - Nothing like penalizing responsible credit use. Per FNMA: Putting 20% down? You're a risk!

There is an interesting post at TheTruthAboutMortgage.com putting a fine point on the coming future: "Wells Fargo Calls for 30% Down Payment on Mortgages"
http://tinyurl.com/49ep5of


My .02c


Soylent Green Is People.
Click to expand...
Click to expand...
Basically when SPIG is saying is that you would need to put down 40% if you had a FICO of 700 to 719 then you won't have any additional ADD-ON fees (the 1.00% that he mentioned above in his earlier post).
 
Yes. That is one of the recent increases pushed by the Agencies. We just got another update having to do with secondary financing Combined Loan To Value (CLTV) price hits. Won't really impact us as many lenders won't go over 75-80% CLTV, but you can see a trend developing: Do you want to put less cash down? If so, then you not like the fees associated with it if your FICO score is a bit rough around the edges.

My .02c

Soylent Green Is People.
 
sgip said:
Do you want to put less cash down?
Click to expand...

i'm trying to put the minimum down while getting the best rates on a new home purchase... (detached, probably zoned condo)

loan amount <417k (let's assume primrose, 530k purch price... in case sevilla or detached los altos don't work out)
>750 credit score
<36% dti

so looking at the chart (table 2) i should be putting down 40% if i want that .25% credit, or 25% down with not hit to the rate...
 
At a $530k price - attached or detached - you do not have a LLPA fee hit (LLPA's do not impact rate, but fee remember....) with 25% down.

FNMA does not add to the cost of the loan with 25% down attached (the break point is 25% down for the .75 in fee hit) and since your FICO score is above 740 with that much down you won't have the .25 point add in fee for FICO's either.

If you decide to put more down, even to 60% LTV, you'll only have a decrease in the cost of your loan by .25. If the loan is already structured as a -0- point loan, you're putting 15% more down to get a $795 lender credit, or perhaps .125% in rate lower. That's to me a pretty high price to pay for such little relative benefit.

PS - You may have spoken with the builders lender, or your Realtor may have suggested working with a lender, or you may be looking on line for rates. Those resources should be telling you the same thing that those on the board are. Since they may not be doing so, why continue forward with a company that isn't providing a very high level of service?

My .02c

SGIP
 
why continue forward with a company that isn't providing a very high level of service?
Click to expand...

i was trying to buy with cash the second half of last year (so i'm not really working with anyone right now), i am trying to get educated before i start another loan, cause this is not my first time buying a home and i was a lot younger when i bought my first place... and luckily i bought low and sold high but i got ripped off by everyone in the process.

thank you for all your help, i really appreciate it..  i'm looking for a new home (hoping to avoid realtors and brokers) if the new home lender doesn't have incentives, then i'll definately hit you up!
 
Happy to help. There are many "lurkers" on the boards who do get their unasked questions answered in these posts. Continue ahead with any questions you have as your helping those who are in a similar situation.

My .02c

Soylent Green Is People.
 
villagepeople said:
why continue forward with a company that isn't providing a very high level of service?
Click to expand...

i was trying to buy with cash the second half of last year (so i'm not really working with anyone right now), i am trying to get educated before i start another loan, cause this is not my first time buying a home and i was a lot younger when i bought my first place... and luckily i bought low and sold high but i got ripped off by everyone in the process.

thank you for all your help, i really appreciate it..  i'm looking for a new home (hoping to avoid realtors and brokers) if the new home lender doesn't have incentives, then i'll definately hit you up!
Click to expand...

villagepeople,

I would suggest hitting up SGIP even if the new home lender has incentives just to see what SGIP can do for you.  I used SGIP for my last home loan and I have to say it was the most honest and easiest loan process I went through.
 
villagepeople said:
why continue forward with a company that isn't providing a very high level of service?
Click to expand...

i was trying to buy with cash the second half of last year (so i'm not really working with anyone right now), i am trying to get educated before i start another loan, cause this is not my first time buying a home and i was a lot younger when i bought my first place... and luckily i bought low and sold high but i got ripped off by everyone in the process.

thank you for all your help, i really appreciate it..  i'm looking for a new home (hoping to avoid realtors and brokers) if the new home lender doesn't have incentives, then i'll definately hit you up!
Click to expand...
Definitely reach out to SGIP when you are ready to inquire about getting a loan.  If you do decide to buy a new home, you might want to consider finding yourself a good realtor who'll split the builder's co-op with you (to cover your closing costs) and not leave any money on the table for the builder to benefit from.  Good luck on your search.
 
davenlei said:
villagepeople said:
why continue forward with a company that isn't providing a very high level of service?
Click to expand...

i was trying to buy with cash the second half of last year (so i'm not really working with anyone right now), i am trying to get educated before i start another loan, cause this is not my first time buying a home and i was a lot younger when i bought my first place... and luckily i bought low and sold high but i got ripped off by everyone in the process.

thank you for all your help, i really appreciate it..  i'm looking for a new home (hoping to avoid realtors and brokers) if the new home lender doesn't have incentives, then i'll definately hit you up!
Click to expand...

villagepeople,

I would suggest hitting up SGIP even if the new home lender has incentives just to see what SGIP can do for you.  I used SGIP for my last home loan and I have to say it was the most honest and easiest loan process I went through.
Click to expand...
If I remember correctly SGIP closed your loan in less than 4 weeks, right?
 
When trying to get the best rate, you must look at more than one factor.  The down payment is a big part but so is credit score and it varies from bank to bank.  I have been a mortgage broker for many years through the good times and bad.  One of the things I have done to help clients in the past is to improve their credit score.  If you look up at SGIP chart there is a huge jump in fees from .5 to 1 point just by going from a 719 credit score to a 720.  Having better than a 740 won't help you.

Another big thing if you are doing a refinance is to know what your home is really worth.  Here are some free sites that will give you a good idea what the house is worth.  Remember these are only estimates.  They are not always right.http://www.zillow.comhttp://www.eppraisal.comhttps://mortgage.chase.com/pages/other/home_value_estimator.jsp

When shopping for a loan know your home value and your credit score.  It will make things a lot eaisier.

Max
 
You must log in or register to reply here.
Back
Top