interest rates?

Question

my mortgage lender told me that i can get a much better interst rate if i put five percent down on the home i want to purchase, but i wonder how much i would save per month, i would really feel better about keeping my cash if possible, but i dont want my payment too high?any info would be great thanks

Answer 1

Spend some time plugging the numbers for your loan into a mortgage calculator. bankrate.com has a good one.
http://www.bankrate.com/brm/mortgage-calculator.asp

You will be able to see the different payments for the different interest rates and down payment amounts.
Keep in mind that the figures are for interest and principle only, and do not include insurance and taxes that may also be part of your payment.

Answer 2

First of all, bank rate is not going to do much for you. Since you do not really know what the interest rates are for different loan types, how would you know what rate to put in the box?

Your lender is half right and half wrong. There are mortgage types out there that would allow 100% financing with market or below market rates. The reason your lender has told you this is because when you get about 80% loan-to-value (LTV) then banks are going to look at that loan as a higher risk. That is why you see Private Mortgage Insurance (PMI) on loans over 80% LTV because the lender wants the note insured in the event that you were to default. Once you get over that 80% mark, the lender adds hits to the pricing, which in turn gives you the higher rate.

I would ask the lender you are dealing with right now about an FHA loan. They are easy to get done, provide financing at 97% LTV and also allow for Down Payment Assistance (DPA) programs which you would not be liable to pay back (i.e. Nehemiah, Neighborhood Gold, Ameridream). So, if the seller was willing to pay the 3% down payment for you through a DPA, then you would be coming to the closing with only closing costs.

Honestly, if your housing market is anything like the market here in Columbus, Ohio then the sellers are more than willing to offer anything they can to get the deal done. Talk to your Realtor about this option.

If your lender does not have access to FHA financing, then you may want to look somewhere else. I actually specialize in these types of loans, so if you would like to ask me more questions about these then feel free. The best place to reach me is going to be email at timothy.kazee@americanhm. com. I will help you out in any way that I can. You can also visit my website at www.yourohiomtg.com.

I hope that this has answered your question. Good luck.

Answer 3

if your interest rate will be lower for more then 1%- it is worthy to put 5% down payment, but of course it depend of your loan amount- the higher, the difference with your mortgage payment will be higher. ask them how much your mortgage payment is going to be with those 2 situations and then decide what you feel more comfortable with.

Answer 4

if you have good credits, and a first time home buyer :
see if they have a program for you..might save some on rates