Home Buying in Philadelphia>Question Details

xx8907, Home Buyer in Philadelphia, PA

How good is the mortgage rate I was preapproved for?

Asked by xx8907, Philadelphia, PA Tue Oct 2, 2012

Hello! I am interested in purchasing a condo next month. I was prequalified for a 200K loan with 20% down payment (which I have). The interest rate that was offered for 30 years fixed was 3.625% with -0.625% points. Is this good? Should I look at other banks? Can I (Should I) try to negotiate with this mortgage company?

My credit score is ~620, I have ~50K in savings, and make ~35K a year.

Thank you for your help!

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Carla Pennington’s answer
Your credit score is probably some of what is costing you points and interest rates. It's at the lowest end of what is "approvable". Considering that in my life houses have financed at upwards of 18%, I'd still say this is a good rate!
1 vote Thank Flag Link Tue Oct 2, 2012
I've been seeing loan getting approved no problem in the 620 range and with 20% down definitely should not be a problem. You can have your credit run by numerous lenders for purposes of shopping for a mortgage with no effect on your score as long as within a certain amount of time which I believe is 2 weeks. As far as the rate quoted, I would say it's in line with current market conditions and I would just try to negotiate the points. Good Luck!
0 votes Thank Flag Link Sun Oct 7, 2012
Talk to the same lender and then talk to another lender. Compare apples to apples when you compare the rates and terms offered. Go to http://www.hud.gov for list of hud approved lenders and mortgage counselors and resources for home buyers.
0 votes Thank Flag Link Sun Oct 7, 2012
A 620 FICO does not get you a conventional mortgage. You need a minimim of 640. Go over your credit report with a counselor from you local non profit housing group. They will tell you what you need to do to improve your score.
You should only be looking at FHA approved condominiums because of your score. Usually for conventional a 720+ FICO is needed. FHA only requires 640+. Either way the condominium association must be approved.
0 votes Thank Flag Link Wed Oct 3, 2012
OK xx,

Banks are getting selective on Condos now a days because the Association is PART OF the Ownership of your future Condo and there is an acceptance list on what associations are up to par on their members Dues.
Yes... the banks will research the Associations other lateness or Delinquent accounts within the membership.

Whom ever you want to compare your rates with in the Lending Industry.... make sure your cerdit does NOT get pulled too many times, for this will throw up flags and effect your Fico score. If your at a 620..... then your border line to begin with so ask for a copy of your report form your initial lender prospect and send that copy to your other prospect lender so.... you wont get too many credit pulls.

Does that make sence? I hope so...

All the Best John Curci RE/MAX 215-757-2889
0 votes Thank Flag Link Wed Oct 3, 2012
Hello xx8907,

I would be happy to show you some condo's and also put you in touch with a few lenders I use to see if they can get you a better rate.

Feel free to call me anytime at 267-688-1110.

Warm Regards,

Keith J. Lawson
RE/MAX Affiliates N.E.
9237 Frankford Ave.
Phila, PA 19114
267-688-1110 (cell)
215-992-5534 (office)
LawsonRE@gmail.com (email)
http://www.keithlawsonhomes.com (web)
Member- N.A.R.,P.A.R.,G.P.A.R
Member - AREAA Philadelphia Metro
Follow me on Facebook at http://facebook.com/keith.j.lawson
Follow me on Twitter http://twitter.com/#!/KEITHJLAWSON
0 votes Thank Flag Link Wed Oct 3, 2012
Carla is right, your credit score is right on the cusp of what is considered "approveable" in the current climate. Congratulations on getting your pre-approval!

When shopping for a mortgage, keep in mind that interest rate does not tell the whole story. You may be getting a higher rate, but your total costs (including monthly payment) may actually be lower depending on the type of loan program and whether or not mortgage insurance is required (such as if you took out an FHA loan vs. 20% down Conventional).

A word of caution: Since your credit score is so close to the "magic number" of 620, if you have too many lenders pulling your credit as you shop around, you may potentially lower your score to the point where you may not be able to get the loan.

Best of luck to you!
0 votes Thank Flag Link Wed Oct 3, 2012
Not good at all, but don't worry.

Rates change every day and they have remained very low and should remain that way for awhile.

Once you get your agreement of sale finalized, check with a few companies to see what they can offer you. But, make sure through your real estate agent that the condo is financeable.

If they are not sure, you can contact me and I can find out. That is very important. Not all condos can get mortgages.

Also, you may need an FHA mortgage based on what you want to buy. FHA is very specific about which condos they approve.

Feel free to contact me to go over your details when you are ready.

Fred Glick, NMLS #133975
Web Reference: http://usloans.com
0 votes Thank Flag Link Tue Oct 2, 2012
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