Re: Financing Contingency Issue

So what is a very good rate, in today's market?

It depends. :-)

Assuming a credit score over 730, for a 30 year fixed with a 30 day
lock, a major, national wholesale lender today in the northern
Illinois market will pay a broker 0.8% yield spread premium on a 6.375
rate, and pay the broker 1.2% on a 6.5% rate. Smaller players can
probably offer slightly more aggressive rates.

Brokers I'd say are entitled to a 1% commission and have a right to
not wanna work for less, so a good rate to me would be between 6.375
and 6.5%. If you're in the hunt for a 45 day lock, add about an 1/8
to that.

A 6.75% rate pays a handsome 1.8% yield spread premium (commission)
today, so I'd agree that 6.75% ain't so hot a rate, assuming you're
putting 20% down and have good credit. Getting 6.5% shouldn't be too
hard unless you're trying to do a high LTV loan (i.e. putting down
less than 20%, which tends to add a quarter point to your rate), or
your credit is tarnished a bit (FICO 680-730 range adds a quarter
point).

Again, these rates vary by market because every market has its own
risk profile, and hence your locally available rates may vary if
you're in one of the markets that's considered possibly a bubble
market.


Todd,

Thanks for taking the time to write an informational post. Can you share your thoughts on 15 year terms?

-jav
.

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