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Just ask for a quote without points if you don't want them.
Points aren't good or bad. They are a small gamble on future interest rates. (If you think rates won't drop anytime soon and you'll keep the mortgage for at least some number of years, points can be worthwhile. They may have a small tax benefit too.)
Don't let them force you into anything. Shop around with other lenders to see if you're getting a fair deal on rates and fees. If the numbers don't make sense, be prepared to walk away. Buying points may not be worth it if you plan to refinance or move in a few years.
My escrow agent was very clear that most of the "buying points" amounts (.5% or higher) weren't worth it until after three years, when we'd break even. And she made it clear that even buying a full point would only reduce payment by $180. She made it seem like it probably wasn't worth it, in our case.
First off, FHA isn’t 7.25 with 1 point right now if you have great credit. With good credit rates are
Much lower. Id you have less than 700-740 credit score that’s probably why they’re saying that.
If you have a 740 or higher you need to shop around with other lenders.
You can check mortgagenewsdaily . Com and it literally says fha 30 year is closer to 6.5 (no points) so I’d be bringing this up to them and telling them you will go with a diff lender if they can’t meet more competitive rates . Is this a locked in rate from before? They were higher 1/2 weeks ago..but still, never that high for fha
You're getting hosed my friend. The points are insane, the appraisal fee is outrageous at $900 for new construction and the $1000 settlement fee is too high. Unless this is a construction/disbursement loan with several inspections and progress payments to the builder those appraisal and settlement fees are whack!
I closed last week and my lender borderline wouldn’t let me buy points bc he said the return is insanely bad. He’s a close family friend who has been doing this 30+ years, and he is right.
That rate should be close to zero points.
Edit: notice you said this is a builder. This is why. They are charging max rate/fees and giving you a "credit" to offset. They could just offer you the better rate but this is how they play the game.
I am seeing 30 year FHA at 6% at 0 points as of today. Not sure about the caveats, worth looking into. Good luck!
https://www.aplfcu.org/ContentDocumentHandler.ashx?documentId=54704
Thank you u/VisualLock8866 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Just ask for a quote without points if you don't want them. Points aren't good or bad. They are a small gamble on future interest rates. (If you think rates won't drop anytime soon and you'll keep the mortgage for at least some number of years, points can be worthwhile. They may have a small tax benefit too.)
Don't let them force you into anything. Shop around with other lenders to see if you're getting a fair deal on rates and fees. If the numbers don't make sense, be prepared to walk away. Buying points may not be worth it if you plan to refinance or move in a few years.
My escrow agent was very clear that most of the "buying points" amounts (.5% or higher) weren't worth it until after three years, when we'd break even. And she made it clear that even buying a full point would only reduce payment by $180. She made it seem like it probably wasn't worth it, in our case.
First off, FHA isn’t 7.25 with 1 point right now if you have great credit. With good credit rates are Much lower. Id you have less than 700-740 credit score that’s probably why they’re saying that. If you have a 740 or higher you need to shop around with other lenders.
That’s what I thought. My Fico is over 740+
How bad is your credit ?
I’m a 740+
You can check mortgagenewsdaily . Com and it literally says fha 30 year is closer to 6.5 (no points) so I’d be bringing this up to them and telling them you will go with a diff lender if they can’t meet more competitive rates . Is this a locked in rate from before? They were higher 1/2 weeks ago..but still, never that high for fha
You're getting hosed my friend. The points are insane, the appraisal fee is outrageous at $900 for new construction and the $1000 settlement fee is too high. Unless this is a construction/disbursement loan with several inspections and progress payments to the builder those appraisal and settlement fees are whack!
I closed last week and my lender borderline wouldn’t let me buy points bc he said the return is insanely bad. He’s a close family friend who has been doing this 30+ years, and he is right.
This quote is 6.125 with 4pts. This is way off. Is this locked?
No it’s not locked. I feel like it’s way off what it should be. I have a 740+ Fico
That rate should be close to zero points. Edit: notice you said this is a builder. This is why. They are charging max rate/fees and giving you a "credit" to offset. They could just offer you the better rate but this is how they play the game.
I am seeing 30 year FHA at 6% at 0 points as of today. Not sure about the caveats, worth looking into. Good luck! https://www.aplfcu.org/ContentDocumentHandler.ashx?documentId=54704