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PenFed Lowers Mortgage Rates Again! 5/5 2.75%, 30 Yr 3.375% (Limited Time Offer)

Rokket 7,146 September 6, 2012 at 09:37 PM in Home & Home Improvement (11)
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Today I received an email from PenFed (Pentagon Federal Credit Union) touting new lower mortgage rates: "Limited-Time Offer -- PenFed Lowers Mortgage Rates AGAIN!"

The 5/5 adjustable rate mortgage is now just 2.75%, with no origination fees and PenFed paying closing costs up to $10K. (There's also the 5 year HEL with a 1.99% rate; the HEL rate is not new.)
https://www.penfed.org/55-Adjusta...-Mortgage/
https://www.penfed.org/Home-Equit...-Overview/

The 30-year fixed rate mortgage is now just 3.375%, with no origination fees (per fine print on the application page).
https://www.penfed.org/30-Year-Fixed-Mortgage/

PenFed used to charge a 1% origination fee on all fixed rate mortgages, but right now the 30-year fixed rate mortgage seems to be exempt!

There are many ways to join PenFed; for example, you can make a donation to the National Military Family Association. The PenFed website has further details: https://www.penfed.org/

704 Comments

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#661
Quote from iowe2much View Post :
Replying to myself here just to add that I asked for and received the "addendum" which states that the $714.93 is to pay taxes which are due in August, but aren't they already collecting that as part of the "Reserves deposited with lender" which includes an entire year of Insurance and 5 months of taxes?
I really dont think this looks like a good deal for you. I suspect the new rate will save you about $110 a month (guessing you paid 175k for the house 10 years ago). Right now you owe exactly what the house is worth so minus realtor commission ($7k) you are upside down already. Then if you did this loan you would immediately be another 3K in the hole just to save $110? That's 27.2 months of payments just to break even on the charges for this loan. Then when you really look closely you would probably see that your principal in 27.2 months would be much lower sticking with your current loan (run some loan amortization calculations on bankrate.com and see for yourself). Now I hear you say they are asking you to hurry up and do this, thats a red flag for me. I think if you take a close look at cost vs. savings you will know what is right. Furthermore consider how long you want to live in this house and what are the chances for appreciation? 5.25% Vs 3.875% on $136,000 loan is really not that much of a difference. I mean I would always take a lower rate but at what cost?
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#662
Yup, same bank should do a streamlined loan or loan modification at little to no cost to you.

I'm doing one refi with CapWest with less than $2000 closing costs and $1200 of that is Title Costs, which nobody can avoid. But, I'm going from 6.125% to 3.125% and from a 30yr to a 15yr. No brainer for me and will save me $98k in interest.

Another refi I'm doing with Roundpoint with even less fees and saving over $200k in interest!

Nobody gets out of the pre-paids(insurance, taxes, etc), but you already have an escrow so it should be a wash.

Just sounds like their taking it to you.

Later,

Bub
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#663
Quote from Jaynos View Post :
I really dont think this looks like a good deal for you.
Quote from BubBowen View Post :
Just sounds like their taking it to you.
That's what I thought too and I couldn't agree more with what you both said. I'm feeling good about cancelling the closing and am very glad I came here to ask the question and I'm very grateful for the advice given. I will cancel the whole loan request when they call Friday unless they come back with very substantial lower fees, which I doubt they will because they could have done the right thing right from from the get-go. I'll keep shopping for a good deal.
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#664
I am Buying $750,000 home. I am thinking of dumping hard cash to take non-jumbo loan upto $417,000 loan so that monthly payments are lower. Then I came across of Penfed 5/5 arm of 3% for 5 years, max increase of 2% next 5. The site says they will pay closing costs.

1. Is it good to dump hard earned cash of $183,000 more into the loan? Jumbo of $600,000 vs $417,000 conformed. I don't see much secured investments over 5%, with bank rates @0.5%.

2. Is Pen fed 5/5 good? I plan to stay in the house at least 10 years, I will be Senior citizen at that time. I may keep up to 15 years max. With 30yr fix now at 4.625%, 3% for 5 years appear to be steal. I am not expert, but appreciate good suggestions.

Thanks
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#665
Dimagwala please use your dimag and Keep your hard earned money with you.

In 10 years you will be a senior citizen and you do not know if the house will be worth 500k or 1M.

If you go all in now, then there will be more uncertainties after 10 yrs.
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#666
Quote from 4SlickDeal5 View Post :
Dimagwala please use your dimag and Keep your hard earned money with you.

In 10 years you will be a senior citizen and you do not know if the house will be worth 500k or 1M.

If you go all in now, then there will be more uncertainties after 10 yrs.
Right! 100% agreed -- Keep your cash. btw comparing to April-May rates are HIGH--check Zillow for charts [zillow.com].
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#667
ok, I understand. Is Penfed 5/5 good plan?
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#668
Quote from dimagwala View Post :
ok, I understand. Is Penfed 5/5 good plan?
Even if it resets at 5%, It averages about to be less than 4% for the 10 yr period and that too is before tax breaks.

Put minimum down, and Invest your extra money. You will earn a lot more than 4% even after long term investment tax.

I have 5/1 from penfed in its 10th year and the rate has gone down every time it adjusted. They did not use to offer 5/5 at that time.
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#669
Quote from 4SlickDeal5 View Post :
Even if it resets at 5%, It averages about to be less than 4% for the 10 yr period and that too is before tax breaks.

Put minimum down, and Invest your extra money. You will earn a lot more than 4% even after long term investment tax.

I have 5/1 from penfed in its 10th year and the rate has gone down every time it adjusted. They did not use to offer 5/5 at that time.
Thanks bud. If I have to stay around 12 years (no one knows what happens at that time!), either I have to refin, or pay off at that time. I hope this arm still makes sense vs 30 fix. I am not planning to stay at this place forever or for more than 15 years.
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#670
I was looking for a heloc but since this 5/5 is still going on I am wondering if I should refi.

I have about $143k owed. I refinanced last year at this time with a 4.3 rate 70% LTV.
Since this can only go up to 4.5 after 5 years, I think it is a good savings. (FYI I don't plan on being here for 10 more years).

However my property value has gone up about 30k since the last year (210 to at least 240). So I was original going to get a heloc as I want to invest in some rental property. Any advice? TIA
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#671
I got pre-approved with BOA for 300K @ 4.25% rate for a 30 yr fixed with 20% down. Are these other fees normal? Total closing costs come to 17k. First time home buyer. thanks.
_________________________________________________________________________________________________________________

Estimated Charge Charge Paid By Paid By Paid By Paid By
Settlement Charges Estimate Estimate Applicant Seller Lender Other Party
_________________________________________________________________________________________________________________
Our origination charge
Lender Origination Fee $ 900.00 ----------- $ 900.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Your Credit or Charge
(points) for rate chosen
Discount Points $ 801.60 ----------- $ 801.60 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that we
select
Flood Check Fee $ 17.00 ----------- $ 17.00 ----------- ----------- -----------
Tax Service Fee $ 89.00 ----------- $ 89.00 ----------- ----------- -----------
Appraisal Fee $ 440.00 ----------- $ 440.00 ----------- ----------- -----------
Credit Report Fee $ 12.00 ----------- $ 12.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Title Services and
Lender's Title Insurance
Closing-Escrow Fee $ 530.00 ----------- $ 530.00 ----------- ----------- -----------
Title Endorsement $ 118.64 ----------- $ 118.64 ----------- ----------- -----------
Lenders Title Insurance $ 100.00 ----------- $ 100.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Owner's Title Insurance
Owners Title Insurance $ 1,872.78 ----------- $ 1,872.78 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that you
can shop for
Survey $ 500.00 ----------- $ 500.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Government Recording
Charges
Recording Mortgage $ 160.00 ----------- $ 160.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Initial Deposit for your
escrow Account
Hazard Ins Upfront Impound
4 mos @ $121 $ 484.00 ----------- $ 484.00 ----------- ----------- -----------
County Taxes
12 mos @ $463 $ 5,556.00 ----------- $ 5,556.00 ----------- ----------- -----------
School Taxes
12 mos @ $339 $ 4,068.00 ----------- $ 4,068.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Daily Interest Charges:
1st Lien:
1 days interest @ $27.95 $ 27.95 ----------- $ 27.95 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Homeowner's Insurance
(Initial Premium)
Hazard Insurance - 1st Year $ 1,452.00 ----------- $ 1,452.00 ----------- ----------- -----------
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#672
Quote from kasak View Post :
I got pre-approved with BOA for 300K @ 4.25% rate for a 30 yr fixed with 20% down. Are these other fees normal? Total closing costs come to 17k. First time home buyer. thanks.
_________________________________________________________________________________________________________________

Estimated Charge Charge Paid By Paid By Paid By Paid By
Settlement Charges Estimate Estimate Applicant Seller Lender Other Party
_________________________________________________________________________________________________________________
Our origination charge
Lender Origination Fee $ 900.00 ----------- $ 900.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Your Credit or Charge
(points) for rate chosen
Discount Points $ 801.60 ----------- $ 801.60 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that we
select
Flood Check Fee $ 17.00 ----------- $ 17.00 ----------- ----------- -----------
Tax Service Fee $ 89.00 ----------- $ 89.00 ----------- ----------- -----------
Appraisal Fee $ 440.00 ----------- $ 440.00 ----------- ----------- -----------
Credit Report Fee $ 12.00 ----------- $ 12.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Title Services and
Lender's Title Insurance
Closing-Escrow Fee $ 530.00 ----------- $ 530.00 ----------- ----------- -----------
Title Endorsement $ 118.64 ----------- $ 118.64 ----------- ----------- -----------
Lenders Title Insurance $ 100.00 ----------- $ 100.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Owner's Title Insurance
Owners Title Insurance $ 1,872.78 ----------- $ 1,872.78 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that you
can shop for
Survey $ 500.00 ----------- $ 500.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Government Recording
Charges
Recording Mortgage $ 160.00 ----------- $ 160.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Initial Deposit for your
escrow Account
Hazard Ins Upfront Impound
4 mos @ $121 $ 484.00 ----------- $ 484.00 ----------- ----------- -----------
County Taxes
12 mos @ $463 $ 5,556.00 ----------- $ 5,556.00 ----------- ----------- -----------
School Taxes
12 mos @ $339 $ 4,068.00 ----------- $ 4,068.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Daily Interest Charges:
1st Lien:
1 days interest @ $27.95 $ 27.95 ----------- $ 27.95 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Homeowner's Insurance
(Initial Premium)
Hazard Insurance - 1st Year $ 1,452.00 ----------- $ 1,452.00 ----------- ----------- -----------
I don't see anything out of the ordinary other than the amount they need to fund your escrow account. Wherever you live, you're getting bent over on the amount of taxes and insurance you need to pay. OMG
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#673
Quote from joeH1974 View Post :
I don't see anything out of the ordinary other than the amount they need to fund your escrow account. Wherever you live, you're getting bent over on the amount of taxes and insurance you need to pay. OMG
thanks.. this is in Dallas. Since there is no state income tax, property taxes are high.
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#674
Quote from kasak View Post :
I got pre-approved with BOA for 300K @ 4.25% rate for a 30 yr fixed with 20% down. Are these other fees normal? Total closing costs come to 17k. First time home buyer. thanks.
_________________________________________________________________________________________________________________

Estimated Charge Charge Paid By Paid By Paid By Paid By
Settlement Charges Estimate Estimate Applicant Seller Lender Other Party
_________________________________________________________________________________________________________________
Our origination charge
Lender Origination Fee $ 900.00 ----------- $ 900.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Your Credit or Charge
(points) for rate chosen
Discount Points $ 801.60 ----------- $ 801.60 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that we
select
Flood Check Fee $ 17.00 ----------- $ 17.00 ----------- ----------- -----------
Tax Service Fee $ 89.00 ----------- $ 89.00 ----------- ----------- -----------
Appraisal Fee $ 440.00 ----------- $ 440.00 ----------- ----------- -----------
Credit Report Fee $ 12.00 ----------- $ 12.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Title Services and
Lender's Title Insurance
Closing-Escrow Fee $ 530.00 ----------- $ 530.00 ----------- ----------- -----------
Title Endorsement $ 118.64 ----------- $ 118.64 ----------- ----------- -----------
Lenders Title Insurance $ 100.00 ----------- $ 100.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Owner's Title Insurance
Owners Title Insurance $ 1,872.78 ----------- $ 1,872.78 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Required Services that you
can shop for
Survey $ 500.00 ----------- $ 500.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Government Recording
Charges
Recording Mortgage $ 160.00 ----------- $ 160.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Initial Deposit for your
escrow Account
Hazard Ins Upfront Impound
4 mos @ $121 $ 484.00 ----------- $ 484.00 ----------- ----------- -----------
County Taxes
12 mos @ $463 $ 5,556.00 ----------- $ 5,556.00 ----------- ----------- -----------
School Taxes
12 mos @ $339 $ 4,068.00 ----------- $ 4,068.00 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Daily Interest Charges:
1st Lien:
1 days interest @ $27.95 $ 27.95 ----------- $ 27.95 ----------- ----------- -----------
_________________________________________________________________________________________________________________
Homeowner's Insurance
(Initial Premium)
Hazard Insurance - 1st Year $ 1,452.00 ----------- $ 1,452.00 ----------- ----------- -----------
I personally think this is rather high. The rate is not bad but the origination fee is rather high. You also have to pay a huge amount in your initial escrow deposit of 12 months, which is why your closing costs are so high. You can usually find an initial escrow deposit for around 4 months or waive escrow altogether (though sometimes they charge you for this).
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#675
Quote from kasak View Post :
thanks.. this is in Dallas. Since there is no state income tax, property taxes are high.
Well, I guess they get you one way or the other. laugh out loud

Since you are putting 20% down, you may want to see if setting up the escrow account is necessary.
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