Loans based on the London Interbank Offering Rate (LIBOR) have moved up only about.3 percentage points since January and now run just under 8 percent, while loans based on those hyperkinetic Treasuries jumped almost a full percentage point and are going for 8.25 percent. The laggardly cost of funds for Western banks has barely budged. You can snag one for about 7 3/8 and expect less volatility in your annual adjustments.
HUD is about to issue tough reporting rules for brokers, but you don’t have to wait: press for a full fee report before you write your loan application. Compare brokered offerings with quotes from major local or national lenders. And stoop to haggle: if you know they’re taking 2 points to place the loan, ask them to shave it for you.
Countrywide Home Loans offers Lock N’ Shop, a guaranteed quote that lasts for 30 days while you house-hunt and then converts to a 45- or 60-day lock when you bring in a signed contract. This plan offers downward mobility: if rates fall while you’re shopping, you get the lower quote.
Look for a lock that’s short and sweet, says loan auditor David Ginsburg, who advises ““walk if it goes on for three pages of small type.’’ You can fit rates, points, dates and the signature of a senior lending official into 50 words or fewer.
