I want to refinance my house with that program called 1-month MTA ARM with 1.5% interest rate but the broker is charging me 3 points. 1% loan origination fee and 2% loan discount. He says because I am not getting no prepayment penalties and because I got two investment properties. My score is around 670’s and he is doing it conventional with no doc.
If I could get some advice it would be greatly appreciated.
He is doing another transaction for me. I am buying an investment property which he is doing with 80% at 8.50 interest and 15% at 13.5%. he said he can’t do it at 100%.
The closing date was supposed to be this month and he just gave me those rates. I don’t know what to do. Need help.
I live in northern NJ.
Even going no doc (stated?) with no pre-pay on an option arm, two points is a bit high. Is the property NOO? You said "my house ", but you did not say if it was owner-occupied. If it is your primary, then you need to speak with another lender to compare those rates. As for your investment, you are not getting a good deal. Your rate on the 80% first should be mid to high 7’s. The 15% second should be low 10’s; even if you are going no doc on this loan as well.
I am not sure if this is the case, but sometimes you have to buy down by discount points just to get the loan from that bank given the situation so it will fit into their APR guidelines. Was the 2 discount points just on the second? I priced an investment loan out the other day that required me to pay 2 discount points on the 2nd just to make the loan work for the bank. Then again, I shopped it and found a bank that did not require me to do that. If I were you, I would get at least 1 or 2 more quotes from other brokers. Make them show you a good faith also. Good luck!
Ed, He is charging you three points on the investment property??? You need to run from this guy. At those rates you should be paying origination only. Take the advice from the professionals on this page. Shop around, go to one or two more lenders and get good faith estimates. At the very least you can present them to your lender and demand that he match those rates or you walk. There is a BIG difference between being paid for your professional services, and outright taking advantage of someone.
Ive been in the finance business for a while and dont know of too many loan officers that will charge less than 2 points on a residential loan…this includes up front broker points as well as ysp.
Ive had brokers tell me they only charge one point then come closing I see that there were 3 ponts on the back end of the loan.
Get a good faith and make sure anyoe who is telling you they will only charge you one or two points to have disclosures in writing where the one or teo points also includes points paid tyo them from the bank as well as up front Broker points.
I have 10 lender’s that do the 1.5% finance you are looking into. There is a big difference on which one you use because they all have a certain niche depending on your goal with the property. Before you commit to a specific option-loan. Shoot me an email with your goal on the property. I can give you advice on which option loan is the best for you. Whether its for your house or for an investment property. Doesn’t matter where the property is.