If you are looking to refinance for the purpose of getting a premium low interest rate, and you see an advertisment for a loan program that will go up to 125% of your home's appraised value, chances are, it is NOT going to be the low rate that you had in mind.
*Even greater chance that the loan program will no longer exist by the time you call that phone number.
Those high loan to value loans are not meant for a borrower who already has a low "fixed" interest rate and can afford their mortgage payments.
The interest rates on non-conforming loans are usually higher than the standard "fixed" interest rates with lower loan to value ratios. Meaning, the more equity the borrower has invested in the property, the lower the interest rates. Less equity equals higher rates.
*A past client of mine told me she saw an ad recently for home loans up to 125% LTV. I told her that I had not heard of that and I would check. Turns out a few other MLO's on our company were also looking for that program. We learned that it was avaliable for a short while through a wholesale lender but was no longer available.
If it sounds too good to be true, it probabaly is.
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