Rates on Bank Websites

I received this email from a client yesterday.  Since it’s a common question, I thought I’d share it with you:
“I just noticed on the [big bank’s] website that the conforming mortgage rate with 1 point is now 5.75.
Do you know what type of rate it would be for conforming jumbo without paying a point?
How much do you anticipate my closing costs will be if I decide to refinance?   I know [big bank] has a new program now where they pay for all closing costs besides interim interest and taxes when you refinance.   Do you know if any other banks offer the same program?”
I checked big bank’s website and confirmed the rate they are offering 5.75% with 1 point.   Guess what, under the terms they’ve offered, I could too.

Here’s the fine print from their website:

“All rates are based on the purchase of a 30-year term, owner-occupied single family residence in this state, conforming loan amount ($417,000 or less), with 20% down, a 30-day lock period and 0 (zero) discount points in most cases. All rates shown include a one point (1%) origination fee, which will be assessed at closing.”
Major pricing factors impact the rate for my client.  To begin with, she has a “conforming jumbo” loan amount which has (in addition to a different base rate than the conforming rate) the following price adjustments over the conforming purchase rate mentioned above:
  • Rate term refinance for conforming-jumbo:  0.5% to fee
  • Credit scores 700-719: 0.5% to fee

A 1% add to fee generally equals a 0.25% increase to interest rate.  A static web page isn’t going to spell this out for you.

Accurately quoting rates requires knowing the credit scores of all borrowers, loan amount, loan to value/equity…just for starters.  Even when I post rates here at Mortgage Porter, I’m careful to provide as much detail as possible so consumers can tell if they’re close to that pricing criteria.

Nothing replaces a live Mortgage Professional (assuming they’re provided all the necesesary criteria) for an accurate rate quote.

Regarding closing costs for a refinance, they’re pretty close to what you pay for a mortgage when you purchase your home.  You can have the mortgage priced with or without points and all you can opt for “no closing costs”.  Just know that if you’re doing a “no closing cost” refi, it’s priced in the rate.

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