Saturday, May 10, 2014

Rate locked in and closing costs info

We locked in our rate yesterday. Forecast is that rates will go higher by the end of the year and looking at the trend last year, lowest interest rates were between April to early May. But REALLY no one knows what's going to happen with the rates! We are just tired of risking so we locked in after 3 days of getting a daily email from our LO. Our rate is about 0.125% lower than the rate when we signed our contract in January so at least that's good.

Conventional 30-yr fixed mortgage rates averaged about 4.25% yesterday and we locked ours in at a slightly higher rate than that. We are putting less than 20% down so we are required to pay about $200+ for PMI. To avoid this monthly PMI, we opted for the lender paid mortgage insurance (LPMI) for a slightly higher rate, which after thorough analysis would be more cost effective for us.

We refinanced our current home at 3.25% so not totally happy with our new rate but at least it's still lower than the rate we got when we first bought our house in 2006 which was 6.375%.

I also contacted NVR settlement service (NVRSS) to give me exact fees that I need to pay for closing. They gave me an HUD with the list of their fees, which are high so I called several title companies to get quotes for closing fees and owner's and lender insurance, etc. I forwarded the quotes to NVRSS and yes they beat the quotes from the other title companies. So that's saving us close to $800 in closing costs.

If you are building in VA, the Grantor's tax, which is calculated as 0.1% of the purchase price of the home, is usually paid by the seller. However, it is built in Ryan Homes contract that buyers pay it. For those still negotiating, you could have Ryan pay this tax. Too late for us, that could have saved us another $400+.

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