Question about interest rate-

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  • #65000
    Sshanny
    Participant

    I will structure this so hopefully is easier to understand/answer:

    CONTEXT:
    I am currently in the “Mortgage Process” part of the process.
    The initial closing disclosure indicates that if I bring 10k it will lower the interest to 2.16
    I do have a limit of what I can buy interest down to (and I THINK ITS 2.16)

    **I am waiting for the final closing disclosure**

    QUESTION:
    **The interest rate changes daily- and I see it is lower today.
    If the Clear to Close happens to happen and closing happens on a day that interest is lower, do ??I bring a different amount of money to closing?? Would I need to lower the amount I bring ?

    #65002
    vonny2421
    Member

    WHAT WAS YOUR RATE ON YOUR LOAN ESTIMATE? I BELIEVE THAT IS THE RATE YOU’RE STUCK WITH PRIOR TO APPLYING YOUR BUY DOWN.

    #65003
    Nelsont
    Member

    A few things. First the interest rate locks at credit access. Since you you are already beyond that point your interest rate is locked and CANNOT change at all without buying down so you should not be paying attention to the current rate unless you back out of your contract. Whatever the rate was a few weeks ago when you submitted your offer is your base rate and the ONLY rate you can get without buying down.

    Second, if you are buying your interest rate down that is something that should have been talked about with your MC prior to the bank app stage and is something that is reviewed by the underwriters prior to credit access approval. You cannot just decided on a whim to buy down. The funds necessary need to be underwritten, they need to be in your account prior to the bank app, the source needs to be acceptable AND the buy down amount will be in addition to your MRF which both need to represented in your bank account. If you really want to buy down your interest rate at this point and this is not something you were planning on doing initially then you will need to have your MC resubmit your file.

    Third, you cannot get a rate of 2.16. The rate only fluctuates in 0.125 increments and you can only buy down in 0.25 increments. So today it is 3.125. From there it can go to 3.25 or 3.375 or 3. You can buy down to 2.875, 2.625, 2.375 or 2.125 from 3.125 but not 2.16. If you did math that showed your available funds can get the rate down to 2.16 then that means you will be stopped at 2.375 making the payment unaffordable or you will need to go to 2.125 which could be more than what you have. Just something to think about.

    • This reply was modified 3 weeks, 3 days ago by Nelsont.
    #65013
    2BLESSED
    Member

    Good afternoon @Nelsont I was told by my MC that you can change your buydown amount. She stated to me on several occassions that they would have to submit a Change of Circumstance prior to closing. Please advise if this is not what you have learned.

    #65015
    Nelsont
    Member

    Yes. You can. As I mentioned you would have to resubmit. It’s not a full on re-qualification but it is a delay.

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