How can I find a good deal on a mortgage in New York state?

My wife and I are buying a house in Rochester New York. However, I don’t have a job there yet. I am still working and living in North Carolina. I plan on moving there when I get a job, which should be soon. However, we have to buy the house now. Some lenders don’t like the fact that our sole income is out of state- don’t consider it to be permanent since I plan on moving.

We are selling our house in North Carolina and will pay off some of our credit card debt with the equity, but still have about $10,000 in credit card debt and about 10% to put down on the house in Rochester. Also, my income is about $52,000/year and the house is worth about $175,000. I also have about $25,000 in student loans, but no car loans or other loans.

I have a lender who is willing to finance our house, however the rate is 6.95%. I know that is high, but many lenders won’t touch us because of out-of-the-area income. Should we just go with this rate, or can we do better?

By | 2013-08-24T03:19:39+00:00 August 24th, 2013|Mortgages Home Loans Interest Rate|2 Comments

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  1. mister ed August 24, 2013 at 4:51 AM - Reply

    hate to say this but you are between a rock and a hard place — really the 6.95 is not that bad considering the mortgage situation right now and your out of state status — i would go with the loan in hand!!!

  2. achievablemortgages August 24, 2013 at 4:08 AM - Reply

    If your credit is good, you should be able to do a little better, but it will be something like 6.5, so the difference will be minuscule. Most of the big banks should be able to help you here. Countrywide, WAMU, Chase, Wachovia are all in the same range of 6.25-6.5 on a 30 year fixed, but they’ll charge you closer to the 6.5 so they can make more money on the deal. It’s called yield spread premium. The lender or broker make money for selling you a higher rate than the rate they get from fannie. The difference is paid to them in the form of ysp or yield spread premium. If you are getting a no closing cost up front loan at 6.95, this is a good deal, because they are soaking up the closing costs with what they are making through the yield. Your best bet is to try to contact one of the big banks or ditech to get your loan done quickly and with minimum costs.

    Good luck.

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