SavingsTalk.com

Storm · 10-31-2007, 08:09 PM

I have poor credit score 543, but do have equity in my home. I have been approved by a lender for a fixed rate of 7.25, but I have to buy the points which will add about $9,000 to the principal of the mortgage. This does not have to come out of pocket. It is rolled into the mortgage. Is this the way to go? I'm afraid my ARM will keep adjusting up to 16%. Any advice is appreciated.<br />

sasha · 10-31-2007, 08:09 PM

Go for the fixed rate, but don't pay $9000 for points, that is insane.

Find another lender or settle for a slightly higher rate.

seo_guru · 10-31-2007, 08:09 PM

Take the fixed rate...most people are hit with a suprise jump in interest and if your income doesn't go up to keep up with the increase you could find yourself in a bind financially....It seems like a good idea since your interest is going down from what it is now and since the market is flat this is a good time to start building equity.
The points can be deducted from your taxes for this year.

highlander · 10-31-2007, 08:09 PM

It sounds like you should look into an FHA loan. You won't have to buy it down and you could save yourself that 9000. I have done them in the past, down to a 500 score as long as you can fully document your income. Anyway it wouldn't hurt you to look into it.

big$saver · 10-31-2007, 08:09 PM

you should find a FHA approved lender, and a loan officer who can offer credit advice.

FHA loans are 7% with no discount points......30yr fixed...and 1origination fee.

Tom Ryan · 10-31-2007, 08:09 PM

I would definitely go with the fixed rate as opposed to the adjustable in your situation.
That having been said, the mortgage you're telling us about seems REALLY expensive. If your credit score is that low, the FHA is a much more affordable option, if your lender offers it. If not, find one who does to compare the prices and then go with your best deal to fix in the rate.

50cents · 10-31-2007, 08:09 PM

It sounds like this lender is taking you for a ride. Depending on the loan amount, i can definitely get you in cheaper than 7.25 with far less than 9k in points. If you are interested, please feel free to contact.

quicken · 10-31-2007, 08:09 PM

Your scores are the issue that im sure your current loan officer is playing up to get those kind of points. But a 2nd opinion is always wise.

Get a second opinion first on that rate. Did he tell you what the par rate was so you know if you are actually buying anything down or just paying points?

Have you been offered government program or just conventional.

You ARM will keep adjusting if you dont act.

Rolling costs into a loan is fine but you should still only pay reasonable cost. In the loan is costing you in rate, outside the loan cost you in cash.

Let us know if we can help look over your current offer.
Click on our site and hit LIVE CHAT.

Open Book Advisors?

10-31-2007, 08:09 PM	#1 (permalink)
Storm Greenhorn Join Date: Jul 2006 Posts: 24 Rep Power: 3	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? I have poor credit score 543, but do have equity in my home. I have been approved by a lender for a fixed rate of 7.25, but I have to buy the points which will add about $9,000 to the principal of the mortgage. This does not have to come out of pocket. It is rolled into the mortgage. Is this the way to go? I'm afraid my ARM will keep adjusting up to 16%. Any advice is appreciated.<br />

10-31-2007, 08:09 PM	#2 (permalink)
sasha Greenhorn Join Date: Jul 2006 Posts: 5 Rep Power: 0	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? Go for the fixed rate, but don't pay $9000 for points, that is insane. Find another lender or settle for a slightly higher rate.

10-31-2007, 08:09 PM	#3 (permalink)
seo_guru Greenhorn Join Date: Jul 2006 Posts: 30 Rep Power: 3	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? Take the fixed rate...most people are hit with a suprise jump in interest and if your income doesn't go up to keep up with the increase you could find yourself in a bind financially....It seems like a good idea since your interest is going down from what it is now and since the market is flat this is a good time to start building equity. The points can be deducted from your taxes for this year.

10-31-2007, 08:09 PM	#4 (permalink)
highlander Greenhorn Join Date: Jul 2006 Posts: 32 Rep Power: 3	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? It sounds like you should look into an FHA loan. You won't have to buy it down and you could save yourself that 9000. I have done them in the past, down to a 500 score as long as you can fully document your income. Anyway it wouldn't hurt you to look into it.

10-31-2007, 08:09 PM	#5 (permalink)
big$saver Piggy Bank Join Date: Jul 2006 Posts: 59 Rep Power: 3	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? you should find a FHA approved lender, and a loan officer who can offer credit advice. FHA loans are 7% with no discount points......30yr fixed...and 1origination fee.

10-31-2007, 08:09 PM	#6 (permalink)
Tom Ryan Greenhorn Join Date: Jul 2006 Posts: 17 Rep Power: 0	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? I would definitely go with the fixed rate as opposed to the adjustable in your situation. That having been said, the mortgage you're telling us about seems REALLY expensive. If your credit score is that low, the FHA is a much more affordable option, if your lender offers it. If not, find one who does to compare the prices and then go with your best deal to fix in the rate.

10-31-2007, 08:09 PM	#7 (permalink)
50cents Greenhorn Join Date: Jul 2006 Posts: 16 Rep Power: 0	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? It sounds like this lender is taking you for a ride. Depending on the loan amount, i can definitely get you in cheaper than 7.25 with far less than 9k in points. If you are interested, please feel free to contact.

10-31-2007, 08:09 PM	#8 (permalink)
quicken Greenhorn Join Date: Jul 2006 Posts: 27 Rep Power: 3	I want to re-finance. I currently have an ARM at 9.75% that will be adjusting to 11.25%? Your scores are the issue that im sure your current loan officer is playing up to get those kind of points. But a 2nd opinion is always wise. Get a second opinion first on that rate. Did he tell you what the par rate was so you know if you are actually buying anything down or just paying points? Have you been offered government program or just conventional. You ARM will keep adjusting if you dont act. Rolling costs into a loan is fine but you should still only pay reasonable cost. In the loan is costing you in rate, outside the loan cost you in cash. Let us know if we can help look over your current offer. Click on our site and hit LIVE CHAT. Open Book Advisors?

SavingsTalk.com

Your guide to saving money and making smart investments!