My husband and I got pre-approved for a 650K home in san jose. We went through Bank of America and here is

Asked by Newbuyer, San Jose, CA Wed Apr 15, 2009

what they got for us: with 15% down, the rate will be 6% with no PMI. We make 140K, no debts (just student loans), excellent credit score, is this a good deal? BTW, we are a first-time home buyer.

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6
Lori Lewis, Mortgage Broker Or Lender, Bethlehem, PA
Thu Apr 16, 2009
BEST ANSWER
The reason your rate is higher than the normal is because you are NOT paying PMI. This program is "lender paid MI" and there is a hit to the rate. Usually 1% - So your 5% fixed that you get from BOA (with less than 20% down) now becomes 6%.

If there is a way you can come up with that extra 5% down you can get your rate in the 5's.
0 votes
Sam Shueh, , San Jose, CA
Wed Apr 15, 2009
You need to bring your paperwork to go for a consultation with a loan broker. The interest rates and programs change constantly. There is no way B of A can provide different lending rates. If you can not find a reliable broker I can suggest a few.
0 votes
Glen Mitchell, Agent, Half Moon Bay, CA
Wed Apr 15, 2009
seems like you could do better, but you left out too many unknowns. are you self employed, do you have reserves, what are your exact credit scores, have any rich relatives :) etc.

Glen
0 votes
Bill Mccord, Agent, San Jose, CA
Wed Apr 15, 2009
When you go for a Mortgage at a Retail Bank outlet you are only going to hear about the tiny range of options offered by that company.
When you go to a competent Motgage Broker you will have access to the enormous range of Mortgage Lenders and the wide diversity of options available when you shop inteligently.
Based on the info provided what you have been offered is disgraceful.
Remember, the lowest interest rate on the wrong loan is no bargain compared whith the best available rate on the correct loan.
Shopping for the house you like is simple. Shopping for the mortgage you deserve is more complicated.
Get educated and save money.
Good luck,
Bill
0 votes
Gene Mundt, Mortgage Broker Or Lender, New Lenox, IL
Wed Apr 15, 2009
We are an illinois based Lender with the ability to lend in California. My thoughts for you at first look is that you can do better than 6%. Factors at play: You are paying a premium to NOT have the MI by accepting the higher rate. Your at 85% LTV and can get to 80% LTV in a relatively short time, especially when values rebound, so why not get the lower rate and pay the PMI .... all depends on HOW LONG YOU PLAN ON OWNING? Naturally, Credit scores and sufficient income to qualify must be verified. You may also consider a second mortgage for the additional 5% down also to avoid the PMI, if that second is available locally.

I can be reached at gene@chicagobancorp.com if you want more specifics, but I need more info to quote a specific option or rate. Thanks, Gene
Web Reference:  http://www.genemundt.com
0 votes
James Peters…, Agent, Los Gatos, CA
Wed Apr 15, 2009
There are many products out there for first time home buyers. You are looking in a price range to have a better rate than 6%! You can find rates with certain products under 5% right now. I would suggest talking with other banks and definately speak with a loan broker. Wells Fargo seems to be a great lender as far as rates right now. If you would like a recomendation for a great loan broker I would be more than happy to do that. Just e-mail me at james@wbreal.com.

If you are not working with a qualified First Time Home Buyer Agent I would be happy to show you some great tools to help you get started with your home buying experience as well.

Good luck!

-James Peterson
Broker
Keller Williams Realty
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