Advice on FHA loan
We are buying a new home and need to lock our rate as soon as possible. Rates are going up steadily in the past few days and my lender told me that I could get last week's rates for $600. We are applying for an FHA loan and would like to know if shelling out $600 for a lower rate is worth it? by milton393 from Georgetown, Delaware. Oct 14th 2021
Dan Paladin (dpaladin)
#356 ranked lender in California - 792 contributions
That is a decision you can decide on by analyzing the cost difference. How much is the payment now before paying for the lower rate? Then what is the difference between the lower rate and the current rate? Say it is $25 for example...then it would take 24 months to recoup the $600. Then you also take into acct the cost over the life of the loan or how long you think you might keep the current loan....most will refinance out of FHA in a few years to remove mortgage insurance. Hope this helps.
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