Edgewood, WA Real Estate Blog

Since this is my first post at Edgewood Blog, I thought I should take this opportunity to review how I price the mortgage interest rates that are posted here.  Here are the factors (all which impact rates) that I use for the purpose providing readers an understanding of what direction mortgage interest rates are going.   If your scenario is different, your rate may be too.   The rates quoted below (and future posts) are based on the following for conventional mortgages:

• Purchase transaction.  Refinance and cash-out refi’s may have adjustments to rate.
• Owner Occupied - Single Family Residence.
• Low-mid credit score of 720.   This means that if a two people are qualifying for the mortgage, the lowest middle score (from the 3 credit bureaus) of the two borrowers is used for pricing the mortgage.   If the lowest mid-score is 719, the rate/pricing will be impacted.
• Zero Points.  No discount or origination points are included in this quote.  How you price your mortgage is your choice, however I’ve found that more often than not, paying points may not pan out.   Typically, but not always, 1% (of the loan amount) in origination/discount points equals 0.25% to interest rate.  Roughly, if you deduct 0.25% from the rates below, you’ll be close to a quote based on paying a point.
• 30 Day Lock.   This means that the transaction is closing within 30 days.   The longer the rate lock period, the more the rate cost.
• Full doc loans.  I almost feel like I don’t even need to add this…however I’m still getting calls for people in search of stated income loans.  
• Impounds.   Rates quoted include having taxes and insurance included in the mortgage payment.  Waving your reserve account (aka impounds, escrow account) actually costs you 0.25% to rate.  Lenders charge this either upfront or price it into the mortgage interest rate.
• No prepayment penalty.   None of the rates I’m quoting include a prepayment penalty.
• Loan to Value.   Conventional rate quotes are based on an 80% loan to value (20% down payment).   However, you can buy a home with less than 20% down.

This is just a sample of rates/programs that are available.

Conforming-loan amounts up to $417,000 for 1-unit properties.  The conforming rate quote below is based on a sales price of $500,000 and a loan amount of $400,000.  

30 Year Fixed:  6.250% (APR 6.314%)

30 Year Fixed with 10 Year Interest Only Payments:  6.500% (APR 6.559%)

5/1 LIBOR ARM:  5.625% (APR 6.955%)

Conforming-Jumbo-loan amounts from $417,001 to $567,500 for Pierce, King and Snohomish Counties.  The quote below is based on a sales price of $700,000 with a loan amount of $560,000.

30 Year Fixed:   6.375% (APR 6.486%)

30 Year Fixed with 10 Year Interest Only: 6.875% (APR 6.947%)

5/1 LIBOR ARM:  5.625% (APR 6.946%)

Jumbo/Non-Conforming-loan amounts for $417,001 and higher.   For purposes of this rate quote, the sales price is $850,000 with a loan amount of $680,000.

30 Year Fixed:  7.500% (APR 7.593%)

FHA.  Pricing based on a credit score of 600 or better with loan amounts up to $362,790 for Pierce, King and Snohomish Counites with a minimum 3% down payment with 1% discount/origination point.

30 Year Fixed: 6.250% (APR 7.032%)

FHA Jumbo.   Pricing based on loan amounts from $362,791 - $567,500 in Pierce, King and Snohomish Counties with a minimum 3-5% down payment with 1% discount/origination point.

30 Year Fixed:  6.375% (APR7.160%)

VA.  Pricing based on credit scores of 620 or better with loan amounts up to $417,000 with 1 point.  Loan amounts beyond $417,000 for VA loans are also available.

30 Year Fixed:  6.375% (APR 6.700%)

Prime Rate (what HELOCs are based on):  5.00%

Rates quoted are as of June 2, 2008 at 8:30 a.m.  and may change at anytime.   This is not a guarantee nor is it a commitment of interest rate.  For live rate quotes for various scenarios, follow me on Twitter. 

Rates provided by Rhonda Porter, CMPS and Washington State Licensed Loan Originator 510-LO-32047.