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Rate Lock Recommendation & why the rates are different for same program?
February 25th, 2010 7:26 AM

The current rate is not at history low. But it's very close for most loan programs. So you can consider to lock the rate if it's a good one.

I have one loan scenario, the current loan amount 710k. Appraisal value 900k.
We alreday locked 3.875% for 5/1ARM. Since the LTV is over 75% now, the borrower has to pay down 45k to make it LTV 75%. For this case, since the borrowers do not want to pay down, then we can not get this rate 3.875% even though the rate is available.

But we have our own lender, with the rate 5/1ARM 4.125%, and we have our
own appraisal company, we may be able to get 950k value, then we can get
the loan done(with 4.125%, but not the best rate).

Which rate is better? 3.875%. But for the client, 4.125% is the best deal
since we can not get the rate of 3.875% anyway.

Also, for the rate 3.875% 5/1ARM(no closing cost) high-balance loan, this
lender requires 6 payment history on the current mortgage. And if you want
to refi and you only made 4 payments now, the best rate you can get is
4.125%, not 3.875%.

And recently, I have two loans approved for Freddie Mac LTV 95% loan, the rate is not great, but the value is. We made it 95%. Otherwise, we can not get the loan done. The current Freddie Mac lender is Provident Funding. They don't do HARP refi with LTV over 80%. And for other lenders do the refi, the LTV should be less than 95%. So the value play an important role now. The good thing is that our appraiser will not take lowest value on the market, but will give a fair value of the property.

So even though there are a lot of good rates on the market, we may not be
able to get the best rates for some caes. The best rate is the best rate you can get to close the deal.


Posted in:General
Posted by Eric Fang on February 25th, 2010 7:26 AMPost a Comment

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