Question:

An issue while in escrow...Help??

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Ok i'm buying a house and getting assistance with my downpayment from a city program. The city program requires that I have a 6.25% interest mortgage. My lender told me that the rates today are not that, so I have to buy down my interest rate to get that 6.25%. She said this can cost me between $4k-$9k. This doesn't sound right to me. The mortgage loan is only $220k. Is she trying to scam me for more money? How does this point system work? I am ready to close escrow but we just ran into this problem.

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  1. Anyone that is posting that they have never heard of "buying down" the interest rate, clearly, doesnt' work in the industry b/c it's done every day, all day, with every lender in the country.

    It depends..you didn't say what the rate started out at.

    She isn't necessarily trying to scam you (b/c you didn't post enough information for anyone here to make that determination).

    You didn't "just run into" this problem...your rate should have been quoted to you within 48 to 72 hours of you applying for the loan and you should have been locked in.

    If you are dealing with a lender that won't lock in, I can already tell you are most likely dealing with subprime...no subprime lender locks rates.

    The main reason someone has to buy down tons of points is when their credit is so poor, they don't qualify for a lower rate.

    That's not their fault, that's yours.


  2. you CAN buy down your mortgage...  The cost will depend on how much you need to buy it down to get to 6.25%

    Here are some articles you should read to get a better understanding:

    http://www.mortgage101.com/Articles/Loan...

    http://homebuying.about.com/od/financing...

    http://www.wisegeek.com/what-is-a-buy-do...

  3. This sounds confusing. You may want to talk to the attorney in charge of your closing to see if the can clarify for you/make sure it is legit.

  4. .   This is why it is so difficult to use the "assistance" programs from the city.  Interest rates are 6.6% today.  You can not get a "free" 6.25% loan.  So the city "rule" puts you at a deadend.   Most people switch to an adjustable rate at 5.2% to meet the city rule.  

  5. I'm a loan officer and based on the information in your message, i would quote 1.25% in points which would equate to $2,750 to get 6.25%.  She is charging too much.  My website has a page that has links to many banks that post rates.  Check it out.  

    http://www.mortgagemagnifier.com/tools/r...

    If you'd like me to review your good faith estimate in more detail, send it to me at info@mortgagemagnifier.com

  6. See if you can talk with a title company which does the closing. I have not heard of anyone buying there intrest rate. The rate is usually based onn you credit score and which bank is going to give it to you. So if i was you, I would talk to others realtors , or title companys which does the closing. Good luck. Find out before you pay please. There are a lot of scam out there. If it don't sound right, go with your gut  and investigate.  

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