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paul57763
67 Posts |
 Posted - 08/18/2008 : 3:21:46 PM
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I understand CA is a high cost state...basically what I want to do is I have a client who wants a rate in the low 5's that would take like 8 points or something like that to buy it down that low. Would I have a problem closing this loan in CA???
Please advise! Thanks! |
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Hustler12
1334 Posts |
Posted - 08/18/2008 : 3:23:28 PM
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| LOL. Yes. CA is 8% for Section 32. Hope that helps. |
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TimmyZ1
908 Posts |
Posted - 08/18/2008 : 3:51:48 PM
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| I hate telling anyone how to structure a loan but there's several good chart sout there about when buying points is a good idea and when its not. My suggestion is chat with your customer for a bit and see how long they will stay in the property. |
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mandysmom
338 Posts |
Posted - 08/18/2008 : 4:36:39 PM
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| Although you don't specify the loan amount, how is this loan beneficial to your client? How long will it take them staying in the home to break even on that 8 points |
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kevinloans
590 Posts |
Posted - 08/20/2008 : 9:27:03 PM
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| since when did it change, i thought CA has always been 5.99% |
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ownerop
418 Posts |
Posted - 08/20/2008 : 9:58:48 PM
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quote:
Originally posted by kevinloans
since when did it change, i thought CA has always been 5.99%
California has 2 different thresholds, One is California High Cost the other is Section 32(federal law), Section 32 is 8% and high cost is 6% so all lenders keep you at 5.99 or below. Not all the same fees are used in the 2 different calculation so lenders run a high cost and seciton 32 test before docs are drawn to make sure you are not exceeding either one. I don't have the formula for either one at my disposal but I do have it at the office and can post it tomorrow. |
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BigFire
2963 Posts |
Posted - 08/20/2008 : 10:11:06 PM
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5.99%
you borrower wants it, let them pay to get it, but I have not seen the rate that low in a long time. Check off sheet pricing. |
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Jack Straw
1335 Posts |
Posted - 08/20/2008 : 10:25:09 PM
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| It is 6% up to the conforming loan limit where is falls under CA AB489 also known as Cal 32. Anything over conforming falls under Section 32. |
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ownerop
418 Posts |
Posted - 08/20/2008 : 10:36:58 PM
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| NO, your client cannot pay that much to get the rate he wants. I doesn't make sense to me why the government has to legislate stupidity and prevent someone from paying so much to buy down a rate that they will never recoup the cost in the savings on the payment, but they do. I also don't understand why lenders publish rates that cannot be obtained, even with fee adjustments your client can never get the rate sheet pricing, I have seen some rates posted on rate sheets with a 10 point cost; basically the lender is saying we don't want to sell this product by pricing it like that, but why even publish it on the rate sheet; it makes no sense. |
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paul57763
67 Posts |
Posted - 08/20/2008 : 10:44:02 PM
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| They told me they wanted that. I explained that it wouldn't make sense and wasn't worth it...but hey, the guy adamantly wants a blue suit, you sell him a blue suit...right? |
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