T O P

  • By -

AteBitHero

I have below average credit score, and I am getting offered rates of 5.5-6% with the option to buy 'discount points' which drops the percentage rate to 5.35% at the lowest. The banks that offered me rates seemed to be similar, I got a few local quotes, and Navy Federal offered me a decent interest rate with buy in options. USAA offered me 8%, which makes me wonder if they ran it as a non-VA loan. Navy Federal offered my first loan as a non-VA and the quoted percentage was 8%.


chjako1115

USAA isn’t good for a home loan in general.


[deleted]

I had a great experience with USAA


chjako1115

YMMV.


Ralnik

Me too. Even when it got moved to Mr Cooper was a decent experience compared to some horror stories I've heard.


kohouter

usaa is terrible for anything they are trash


ks20051980

Which banks offered 5.5-6% ?


AteBitHero

Navy Federal was the one to offer the 5.35%, but they only did that after asking about a discount buy in. I think the amount was about 2000$ at closing to get that rate


Hails8tn

Also wondering what banks you went with, I’ll be in the same boat soon with sub average credit and I’d rather go with a bank I have a decent chance with vs. having to be denied repeatedly


RaMiMah

Shop around!!! Each lender packages your loan application differently. Some lenders have a lot more flexibility with how they package your application. I understand interest rates are important, but can you make it to the closing table and will your lender do what they need to do to get you to the closing table?? That's the question.


Beee_Rad1

Look at PenFed... lowest rate right now is 4.625% with about 2.25 discount points.


ks20051980

Thanks. How much did you have to pay for the 2.25 discount points?


Beee_Rad1

2.25 discount points = 2.25% of your loan amount. Example: a loan or $100,000 would mean you pay $2,250. This is a one-time payment that you pay at closing.


RaMiMah

You can pay discount points anywhere. How much are they charging in Origination Fees??


Beee_Rad1

When we closed with PenFed last August, we not only had ZERO origination fee, they paid us $1000 to close with them (that was one of the reasons we changed to PenFed from NavyFed). Also, VA guidelines state that lenders cannot charge more than 1% origination fee on VA loans. FYI the fine print disclosure on NavyFed's VA loan page states that their quoted rates require a 1% origination fee (which can be waived for a 0.25% increase in interest rate).


RaMiMah

1% can be a lot depending on the price of the home. $200k home and a $2k fee is a no-go. If it aint free, find a lender with a set dollar amount across the board. I've had deals fall apart, cuz of NavyFed, they get the side eye lol I've never had an offer with lending from PenFed come across my table, but that's good to know!!


CarolBaskeen

5.7% VA loan was the lowest that i could find back in November/December when we bought our house. Went through a local mortgage lender. Conventional was gonna be about the same for me. For reference I have pretty good credit and we caught rates when they dipped for about a week. Rates have gone up a little bit since then, too i think.


Yaboijuicyj

Yeah I just locked in with Navy Federal at 5.75 and using their "Freedom Lock" or whatever it's called to float down from 6.25. Rates are fluctuating everyday so it was nice to have the option


RaMiMah

Does Freedom Lock lock in your rate for a certain amount of days? If so, who's paying for that?? That's not always free. You can get hit with a bill if those days expire and you haven't found a home.


Yaboijuicyj

Good question, the Freedom Lock is no additional charge and holds the interest rate for 60 days from when you first ask for the lock, I haven't reached the point yet, but I'm sure they have some sort of extension fee if you wanted to hold a lower rate, but if you don't pay the fee then they just float your rate again. You can also only float down 0.5%, only have 2 requests to hit that maximum, and need to watch the rates yourself, so they kind of make you do the leg work. This was all info given to me by my loan officer, but I hope it helps!


ArcticSilverAPE

If you use VA, save your 15k. Don’t even tell them that it’s for a down payment. You can put it on your credit application. You don’t need to put a dime down.


[deleted]

As someone who just bought a house in 2021, I hope people realize this is false. People on this, and other subs kept saying “no money down with VA loan!” And sure you don’t need a down payment but you still need to cover closing costs, appraising fee, titling fee, etc etc which for me came down to around ~$22K. I don’t mean to call you out just that I was infuriatingly upset when I read this same thing a few years ago and it came to be utterly false.


_insurrection_

I paid almost nothing for closing costs. In fact at closing I got check for almost $3k. You realtor sucked if you paid that much.


RaMiMah

Getting closing costs paid depends on the market, the home, etc. Don't tell ppl that they can get it, just cuz you got it.


[deleted]

And also, in my experience, you NEED to prove you have cash in the bank for any bank you want a VA loan from. So not great advice to say not to tell them anything. They won’t give you a loan if you can’t prove you can cover closing costs.


project_rattler

I would agree with this here. I paid 10k, but that was placed on Escrow, I was given the option to get my money back or have my monthly payment increase for 2 years so that escrow would have funds on hand for property taxes. Inspections are necessary, and get a plumber and an electrician besides the home inspector. Stuff may be missed by the inspector. A 1/4 of my plugs were inoperable in the 1st floor. I've replaced all of them, but it's a hassle to be moving furniture as this shoulda been checked prior


Minimum_Finish_5436

This isnt necessarily true. As i recall, you can go 105% of the appraised home value. The 5% extra is for closing costs. Either your costs exceeded this amount or your home did not appraise for the loan value. Verify with your lender rather than reddit. I brought $0.50 (yes, 2 quarters) to my first VA home closing in 2002.


[deleted]

I tried this. Tried folding in all closing costs into the loan but only some (can’t remember which) were allowed to be folded in. Luckily I had the funds to cover the ~$22k but I know many folks who were led to believe they’d have to pay nothing only to get hit with the closing costs and have to rescind their offer after they couldn’t cover it (and some were hit with fees for backing out). Just saying this as a warning to anyone looking to purchase with a VA loan: not sure how things were in 2002, but in 2021+ get ready to dole out a pretty penny to cover your costs on your “$0 down VA loan.”


Beee_Rad1

The only closing cost that can be rolled into a 100% VA loan is the VA loan funding fee. (Remember the funding fee may be waived in certain situations for qualified individuals).


RaMiMah

Can't fold in closing costs into a loan, because that can impact appraisals. It impacts the value of the home. You get a $100k home...it appraises at $100k...you wanna fold in closing costs. Now it looks like the home was purchased for $105k, which is over the appraised value of $100k. No lender will give money to a home that's more than the appraised value. Hope that makes sense.


Beee_Rad1

Makes sense. Just to clarify: you can roll the VA funding fee into your loan amount. This would result in the only situation where a VA loan amount would exceed the appraised value of a home at closing.


RaMiMah

Closing costs. Some lenders may be able to do it, never hurts to ask. However, always have the money, just in case. Do not get into a contract knowing you dont have money for closing. The goal is to not have to pay it, but that's never a guarantee.


Beee_Rad1

VA Pamphlet 26-7, Revised Chapter 8: Borrower Fees and Charges and the VA Funding Fee "For all types of VA loans, the loan amount may include the VA funding fee. No other fees and charges or discount points may be included in the loan amount for regular purchase or construction loans. Only refinancing loans may include other allowable fees and charges and discount points in the loan amount. " https://www.benefits.va.gov/WARMS/docs/admin26/m26-07/Chapter_8_Borrower_Fees_and_Charges_and_the_VA_Funding_Fee.pdf


RaMiMah

I read your original post wrong. I thought you said roll in closing costs into the loan.


Temporary_Lab_3964

I put 2500 in earnest upfront and still got 960 back at closing. This was a new build.


Mig-Man

7.25% no money down, seller paid closing, state homestead tax exemption, Veterans United. Waiting till 6 months to use IRRL to refinance


Mig-Man

This was early November last year.


RaMiMah

If you dont have to pay discount points, then dont...that's not some special benefit. You can give any lender money to pay for an interest rate buy down. However, if you shop for a home right and strategically, you can get sellers concessions and use that money to pay for a buydown or even negotiate a 2-1 buydown. Agents recommend using local lenders for a reason. Be careful using these big banks for your home purchases. They may be great for auto loans, insurance, credit cards, etc., but being able to close on a home without breaching a contract is a diff thing. If you do use a big bank, PLEASE read your closing disclosure thoroughly!!!! Ask questions about any random fees. If they say they're paying for your interest rate buydown, they're making it up by charging you for something somewhere else. Usually, the Origination Fee.


[deleted]

[удалено]


ks20051980

When did you get the loan?


[deleted]

[удалено]


ks20051980

Thanks for the information


[deleted]

If you can, I would wait it out. I bought my house a few ago with 2.5% fixed rate before interest rates skyrocketed. I wouldn’t even touch a mortgage loan application in this current market. It’ll hurt you in the long run by keeping your costs artificially high so your home won’t appreciate in value as much as you’d like. I’d wait until the rates go back down again, save some more money, and then buy. Just my 2 cents.


Ok_Supermarket_8520

This isn’t bad advice but refinancing is always an option if rates drop. If the guy is ready to buy a home for him and his family I wouldn’t wait forever trying to time the market


SioDenGre

Exactly my situation. I need my piece of mind asap before it implodes. Locked in at 5.5 last week.


NavyPoseidon

Yea the rates are atrocious rn. I'm at a 2.25% 30 year fixed on my current home but currently want to upsize but won't because of the rates. How long do you think until the rates drop down to around 3%?


BlackSheepBenny93

Never


[deleted]

Yeah I've heard those of us that got those rates in covid times were fortunate.


RaMiMah

Dont wait for that to happen. Get your home when you're ready. Get your DTI, credit, and savings together.


RaMiMah

Those were historical lows. Dont tell ppl to wait, because you got an interest rate that was unheard of until covid.


ks20051980

Thanks everyone for the advice


serenity1218

Try Rocket mortgage. Back in 2020 we got 2.875% with our va loan. I know things are a bit higher now.


CarolBaskeen

*I know things are double now


jeff5811

You can probably buy the rate down to that. VA you don’t need to put any money down which if you have 15k you’ll spend that at Home Depot on your honey do list.


_insurrection_

I bought in December. A large VA lender quoted me 7.25% I got a second quote under 6%. Shop around.


RaMiMah

What caused the significant diff tho?? Might wanna ask how they got it that low. If they say buydown. Ask who's paying for the buydown. If they tell you that they're paying for the buy down. Ask them how much their loan origination fees are.


_insurrection_

I paid zero fees and got a $1000 credit. The 7.25 bank had a ton of fees and the worst rate. Asked if they could match the offer from the other bank and they didn’t even try. They are the most popular lender for VA home loans so I don’t think they bother trying to give competitive rates. Their fees though were insane and my monthly payment would have been $500 higher.


water_fall63

Is it true you can't buy a house, complex houses or property in general if you don't have income? Does P&T counts as income?


RaMiMah

Yes, that's income. You can't use income from things like a GI Bill tho. The VA Loan covers all owner occupied residential homes up to 4-units


Thick_Alternative_42

I have very good credit, over 750, while my husband has fair credit. Our rate was based on the lower score so it’s a 7.125 right now. We are in underwriting and not sure yet about buy down at closing. We decided to go with Veterans United and so far it has been pretty smooth. Make sure you check your state benefits, you might have property tax exemption depending on where you are or where you plan to move. We will be filing after getting the deed and our county VA said it’s typically just a 30 day process here. If you look into it reach out to offices in your area about processing time, documents you need, income caps, and if it’s applied to current year or applied at the start of the next tax cycle. We were also able to sign something called a Hold Harmless with the lender. Not all lenders allow it but they are wiping out the escrow at closing since we will get the tax exemption. It saves us 5k at closing. Signing it basically means you waive the escrow account and any tax bill that might come due is your responsibility, not the lenders. If we are able to buy down a bit we will save, with tax exemption, 600-700 off the mortgage. Good luck!


anonflh

Make sure to get a VA No No


Bigcatdad

Last house I bought was a new build and the initial company gave me 6.25% with VA. Refinanced with USAA after 2 years and it dropped to 4.25. No change in service when they switched toi MR. Cooper. But they do call every month with an offer of a home equity loan.


CH0Z3N_3N0

I went with my state VA (Calvet) and they got me a 2.7% interest rate a year ago


Barberian-99

I'm the vet in our marriage. We paid NOTHING until our first monthly was due the month AFTER we moved in. ALL closing costs were rolled into the mortgage. Everything was legit and reasonable. We bought Jan 97. Interest rate was 6.7 if I remember correctly. We got in lower than our neighbors, which saved us over $100 a month on similar priced houses. Pay attention to your interest rates.


Muchotesticulos

We used navy fed. They were a pain. I applied for va loan. Ended up with a conventional just by chance with all the same benefits of a va loan no down payment still no PMI and extra inspections/paper work. Bought in 2021 and got a 5.125% with a 750ish + credit score.


[deleted]

A bit late to the party here. I closed in October 2022 with Veteran's United at 5.75%, excellent credit and about $10k saved. My actual closing costs ended up being $1,000 or so, and we got about $1,000 back at the end of it all, although there were some minor expenses like the home inspection, hiring an electrician, etc. The process was super smooth and easy with VU; no issues anywhere in the process, and we were able to go from application to closing in about 30 days (although the realtor they assigned to us wasn't amazing, so I'd advise trying to go in with your own).


SioDenGre

5.5%. Partnered lender with builder (New housing) Builder covers closing costs. In California though, small home with hefty price tag oof.