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 | Metropolitan Mortgage Bankers | 5/9/2008 |
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<--Previous Newsletter Dear Readers, The following are commonly asked questions on mortgage and real estate topics. We invite you to participate with your own questions and comments. At Metropolitan Mortgage, we strive to educate our constituents and provide excellent customer service. Obviously, your participation is optional, but at very least I would like to give you the opportunity to review my answers for everyone else in my group. You can add the email addresses of your friends and family who are interested in receiving this newsletter through the form on our homepage which is linked below. Visit Our Website Q. When I met with my loan officer he quoted me a rate of 5.875 percent and 0 points. Once he pulled my credit score he stated that he needed to charge me a point since my score was low. I only wanted a 30 year fixed loan. How can it be that I’m charged more just based on my score? -4/8/2008 A. In the beginning of the year, Fannie Mae and Freddie Mac instituted tiered pricing based on credit scores. Fannie and Freddie are the conduits that purchased loans from lenders like Chase or SunTrust. If your score is below a 680 they are asking for increased points.
Q. The Fed keeps lowering their interest rates. Why aren’t mortgage rates coming down? -4/8/2008 A. The Fed rate is the rate they charge to banks, not mortgage rates which are tied to mortgage back securities. You are seeing an immediate drop in rate for your equity lines which are tied to prime. Mortgage rates will follow, however supply and demand in the market place may keep rates artificially high for a period of time.
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