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Victor Said:

I have a 1 year home mortgage plan ending in Feb 2009, 7.9 to 6.9 on a 398000 home in Cali should I refi now?

We Answered:

It would depend on the following:

1. How much is your pre-payment penalty?
2. Are you willing and able to verify your income and/or assets?
3. How are property prices holding up in your area?
4. How strong is your credit profile now?

Even more pressing are the recent modifications to the Loan Level Pricing Adjustments made by Fannie Mae and Freedie Mac. Basically these are premiums that lenders are forced to assess onto interest rates depending on how risky a loan is.

For instance, the rate of a 95% loan on an investment property will be significantly higher than the rate of a 80% loan on your own home because of the pricing adjustments assessed on rates on investment properties and loans above 80% due to the greater risk they represent to lenders.

Even more imperative is the need to make a decision that is inline with your long term financial plans. This means that any new financing you obtain should take into account your children’s 529 college savings plan (if applicable), any major expenses you’re contemplating in the immediate future (a new car, the purchase of a second home, the birth of a child, etc., etc.), your present investment strategy, your insurance needs and obligations or other important financial plans that can be complicated or even derailed if you make the wrong decision about your mortgage financing now.

If you’re looking for a comprehensive solution to your financing needs feel free to contact me at RLFunding@AOL.com. We are licensed in all 50 states and specialize in TAX FREE mortgages in the state of New York.


Best Regards,

J. Polanco
Financing Advisor
Robbins and Lloyd Mortgage Corp.
347 5th Avenue, Suite 1506
New York, New York 10016
www.RobbinsLloyd.com

Theresa Said:

Will I get less than the average mortgage rates if I have great credit?

We Answered:

Great credit scores get the best rates.

A lender told me that many online calculators put on a rate for an average credit score, but some quote the best rate available.

Do not forget to compare more than interest rate between lenders. Closing costs, especially with online lenders, can be very different from shop to shop. Ignoring closing costs and only looking at interest rate can cost you thousands of dollars.

Andrew Said:

how are mortgage rates determined? Why is one listed as "the" rate i thought it depended on credit score

We Answered:

Mortgage rates are determined by several factors such as:

Credit Score
How much are you borrowing 100%, 5%, 20% 3%?
Type of property- example manufactured homes have a price adjustment
Debt to income ratio
Are you buying down the rate by paying orig,discount points?

Lee Said:

What are VA home mortgage rates? Are these rates set by the VA or can a mortgage co. charge higher rates.?

We Answered:

Yes, they can. The Veterans Administration does not actually make loans. They act as an insurance company. The money comes from the bank but the loan has an insurance policy in the form of the VA funding fee you pay to obtain the loan. This funding fee covers the insurance for the bank with the VA and insures that in the event of a default by your son, the bank will be able to get most of their money back. This insurance is what makes the loan a VA loan. Without it, the loan is considered a conventional loan and your mortgage company would then obtain the insurance through a private mortgage insurance company (PMI).

Consequently, the rate charged by the institution is at their discretion. however it must be within reason or the VA may not allow them to continue making VA loans. 6.875 is somewhat high right now for a typical VA loan. I would question this with the lender. There may be a reason for this, but without reviewing your file, I have no idea on what that may be.