My mortgage refinance
journey
Last Thursday, December 18th, 2008,
I brought some of my personal financial information to my local bank.
My mortgage gal from the bank told me she could "lock in"
5.375% interest for a new mortgage.
I was told that at a minimum I would get
the 5.375% rate with not points applied OR I would get 4.875% with
one mortgage point.
A "mortgage point" is a payment made to the mortgagor to
obtain a lower rate on issuance of the loan. So, for a $300,000
loan, for example, with a 30 year payout, a point would cost me $3,000 in addition
to the normal closing costs.
She told me she would "try her
best" to get me a lower rate since the feds recently reduced the
overall credit rate.
Her bank associate told me she had locked
in a mortgage for 4.5% that day. This made my mouth water for the
possibility of a lower rate for me. I did not ask if there were any
mortgage points included in that lock in. At 5.375% there were no
points.
I also obtained a quote from my friend
and State Farm insurance agent for 5.1% with no points on December
19th, 2008.
What does it mean to "lock in"
a mortgage loan?
Here is some info
about lock ins.
Update 12.31.08
I received the papers for the lock-in a few days ago. My banker
locked us in at 4.875% on 12/12/08 for a 30 year standard mortgage.
This translates to 5.018% Annual Percentage Rate (APR).
I've watched the rates since I received
these papers. At this time, the rate offered is still very good
(cannot find a lower rate somewhere else). I did discuss my situation
with two other major banks.
The total estimated closing costs are
$5,415.00 as shown in my Good Faith Estimate.
Some of the fees to process this loan
are:
Appraisal fee: $400
Credit Report: $16
Processing fee: $300
Underwriting review fee: $150
Administration fee: $250
Document Preparation fee: $55
Title charges: $1115
Total estimated closing costs: $5,415
More later....
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