Am I getting a good deal? $110,000 loan 4.750 interest rate.

Asked by kari89virgo, Somerset, NJ Mon Dec 9, 2013

Hi,

My loan amount is $110,000 for 30 years and interest rate 4.750. It is a conventional loan through Weichert Financial. I am putting down 20% of the purchase price which is $137,400. I am receiving a $6,400 in seller's concession which will go toward closing costs. My closing costs will be about $6,700. I was talking to a couple of collegues which said they thought I could get a lower interest rate and they said they weren't sure I had such a great deal. But I am a week a away from closing. Does this sound like a good deal? The home I am buying is a single family home ,2 (potential 3) bedroom 1 bath in somerset NJ.

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Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Mon Dec 9, 2013
BEST ANSWER
The seller concessions are fine. The 3% limit only applies if you put 5% down.

Rates are generally dependent on a couple factors: Home type, Occupancy type, LTV, and CREDIT SCORE.

You did not indicate your credit score, but just looking at my rate sheet from today, if you have a marginal credit score (680-699) then 4.75% is probably about right.

Rates should be a little bit lower if you have great credit (740 or higher), but even then you're really only looking at about 4.5%

That 1/4% difference in rate only equals about $17/month difference on payment, so I would really advise you not to sweat it. You're not going to switch lenders a week from closing (because you will have some pi$$ed off sellers if they have to wait longer) and it's not going to improve your quality of life by saving a whole $17. I'm guessing you're getting a pretty fair deal. Besides, no one can ever know if they got the absolute rock bottom rate or not until it is in hindsight since they change daily, sometimes more frequently.

Don't listen to spectators. Your colleagues have no idea what your unique circumstances are and they don't know where rates are on a daily basis. There are tons of people out there who locked in 3.5% rates a year ago, but that time has come and gone and that is just not where rates are at now.

Look forward to closing on your new home and enjoying it and put the mortgage in the rear view mirror. Best of luck!

Tony
0 votes
Thank You so much for your advice! Everything you said is spot on and yes that is the range where my credit score falls on.
Flag Tue Dec 10, 2013
Joshua Marri…, Agent, Southlake, TX
Mon Dec 9, 2013
Did you only speak to one lending company? I recommend people get multiple quotes. I am in Texas so things might be slightly different in NJ. Your interest rate will vary depending on a number of factors. It depends on your ability to pay off the note, ie mostly your credit. If it makes you feel better, it is in an acceptable range. You're getting out of mortgage insurance most likely since you put down 20%, which is great. Your sellers concession seems high unless you're using an FHA loan. Here you can only get 3% from a seller for conventional loans.

The best thing to do is to get a few more lending quotes. If it stands out that you're getting a bad deal, have your agent amend the contract to extend closing and change your lender.
0 votes
I had gone to a couple of banks before Weichert but they brushed me off never returning emails or messages and I never got a quote. I am glad to hear I am in a good range for interest rate. That worried me the most and I wasn't sure how to check. Thank you very much your comment and advice.
Flag Tue Dec 10, 2013
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