A local mortgage company offering refinance of 2% fixed? beside fannie mae or freddie mac back. Scam?

I haven't been able to ask them however, what exactly it is that they are doing but I do know that that are will charge a $2500 fee... Has anyone else heard of something approaching this?
Answers:
The $2500 fee might be a buy down of the rate. The typical fixed rates now are around 4% or so, and the duty could be an up front payment to buy the rate down. This is a common practice and is usual. You may find that with the same company you could also catch 2.5% with a $2,000 fee, a 3% rate beside a $1500 fee, a 3.5% rate with a $1000 payment, a 4% rate with a $500 fee, and a 4.5% rate next to no buy down fee.

We used to offer rates (years ago) resembling 8% with 2 points and 9% with no points, so you receive the idea how it works.
If your having to rate the fee upfront it is a SCAM ... if the cost is included in the loan amount later you should be fine. Source(s): Loan processor

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