Patti (whipartist) wrote,

Mortgage weirdness

Right now, adjustable rate mortgages generally have higher interest rates than 30-year fixed-rate mortgages. Why on earth would anyone choose an adjustable?

On Friday, quoted me 5.25% for a 30-year fixed with .875 points. I pulled the quote for a 300K loan on a 500K property. If I asked for 300001 dollars, it quoted me 5.25% with 1.125 points-- that sort of makes sense, since the extra dollar pushed it over 60% LTV ratio. However, if I asked for 299999 on the same hypothetical 500K property, it also offered me 5.25% and 1.125 points. Borrowing one dollar less meant $750 extra in fees. Weird!

In any case, 5.25% at either .875 or 1.125 is a screaming good deal, so I called my loan agent. "I know I've locked, but if rates were to drop significantly, can I pay some fee and lock at the lower rate?"

"Yeah, you could do that if the rates were to drop."

"OK. If I were to lock today, what rate would I get?"

I don't remember what she quoted me, but it was really close to what I locked at.

"Your website is quoting 5.25% with seven eights of a point."

"It IS?"

I walked her through the process of getting a quote from the website, and she got the exact same thing. She called her boss to see what was up, but it was around 4 p.m. on Friday and I suspect he was already gone for the weekend. I strongly suspect it was just an error on the website, unfortunately.
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