mortage rate question???

Question

HI..I am basically in the market for a mortage..
looking for 153 grand loan, 30 year fixed..about a 6. something rate,..make 32 grand..credit score of 791/able to afford 1200 monthly sorta mortage payment..don't want to put lil if anytihng on a downpayment
the problem I'm running into is the lender either has all these fees and a lower rate or a higher rate and no extra "fees".
I wasn't expecting a 5 percent rate..but this guy at usbank offered me a plan with 2 rates..6.6 for the first..7.6?? for the rest??
..it isn't like I am dirt poor or have bad credit..
what do you think is a good rate for someone in my situation..
is there a good mortage lender that has a no down payment 30 yr fixed mortage lower interest rate and no fees out there..or am I dreaming

sure I know this isn't a perfect world..but it feels like I'm swimming with the sharks
I'm in the Kc.mo area if this helps

Answer 1

OK, here are the basics:

Point and fees are either spelled out and you see them or are added into the rate you pay. It's a matter of whether or not you want to know or care what the fees are and making sure you understand that points and fees are basically prepaid financing charges.

Most people shop for mortgages based on monthly payment.

The key in evaluating the two scenarios is to determine how long you believe you will keep that mortgage before refinancing and compare cost of the two loans over that period.

If your plan is to keep the same payment (assuming a fixed loan for a certain period of time like 3-30 years) for 3-5 years, then ask to be quoted for both all inclusive rates and ones with points and fees.

Calculate the cost difference between the interest rate (monthly interest you will be paying, not principle payments) you will be paying with an all-inclusive loan versus a loan with fees over the period you think you will keep the loan. Then look at the loan fees and see which is greater, the fees, or the cost over time.

Another way to calc it out is to take the total of the fees you will might be paying and divide that by difference between the monthly payments on the two interest rates. The result will give you the approximately payback period in months on paying points and fees up front.

Paying points and fees up front is just like paying financing costs in advance. Just bear in mind they are not refundable.

If you need more details or a better explanation, email me direct.

You also mentioned that one charged you 6.6 on the first and 7.6 on the rest. This sounds like two loans. You're always going to pay a higher rate for the second loan as that lender is going to have less security than the holder of the first lien.

If they are quoting you 100% financing at those rates, you might not be able to beat them. Pretty cheap - oh wait, did you see the fee schedule yet? Ask for a good faith estimate and a truth in lending disclosure. These documents must be provided to you and will help you determine the overall cost of your financing.

Good luck! This will be a great learning experience for you. Just make sure you have someone on your side that you can go to for trusted advice.

Answer 2

Mortgage companies or banks for that matter dont make the rate. The loans are sold as mortgage back securities. We all the get same deal. They are sold on the open market and the market picks what the rate will be. Its simply supply and demand. So when you go to one mortgage company to another they all get the same rate sheets its just how much they want to charge you. Your loan will end up usually at the same place anyway.

With your credit score and your income you will be doing a confirming loan. It sounds like US bank wants to give you a Sub-prime mortgage. An 80-20 80% of the first 20% on the second. This makes no sense at all to me.

I would go with a 97% FHA. You have a non profit like Hart pay the down payment, which is gifted to the Non Profit from the seller.

Thus you dont need a down payment. Normally sellers are use to paying closing cost. It really shouldnt be this difficult.

If you wanted a rate around 5% you are about 2 years way too late. They are closer to around 6.5% but I would have to double check todays rates.

Write me if you have any questions, I can get you the information on FHA which you can give to your current loan officer. Loan officers only work at banks as a stepping stone to get out of the bank. They rarely know anything, and they get paid nothing.

Answer 3

That offer is typical for the area and current market conditons. 6.625% is about right for A+ paper on an 80% first and 7.6% is a great rate on a top-up second with no $$$ down, especially if it's a fixed rate 2nd or is at least rate-locked for 3 - 5 years.

It's typical to "buy down" the rate by paying extra points up front. If you have little cash to bring to the table, expect to pay full market rate which is what this lender is quoting.

If I were in your situation, I'd grab it. It is a good deal. Shop around to be sure, but I doubt you'll beat it by much.

Answer 4

"May I Help You" gave good advice.

I'm not an expert, but would suggest checking with a mortgage broker before committing to anything. Sometimes a broker can shop it to lenders who are a bit more flexible than a bank. (See link below for mortgage brokers in your area.)

Also, I personally believe that there is no such thing as a true "no fees" loan. The lender is always going to get his money one way or another. I'd rather pay them up front rather than over 30 years with interest.

Answer 5

Sounds like you are talking about "points" which is the fees you pay for getting a lower interest loan. It is not clear from your question if that is what you are talking about or if it's a stepped rate mortgage (rates increasing at set time). http://www.mtgprofessor.com/A%20-%20Points/when_is_paying_points_a_good_investment.htm
will tell you something about points.
If you belong to a credit union, try to get a loan with them or ask about FHA-backed loans. Don't sign until you have read the entire thing and understand what you are paying and how! THAT IS CRITICAL.

Answer 6

www.mortgagecalc.com

you can afford 35% of your gross monthly income for mortgage, taxes and home insurance.

You need 20% down on the property unless you want to buy FHA and the seller must pay to allow you to buy FHA. Many don't want to sell FHA.

Get together with your bank/credit union where you have your checking and savings account - and ask the bank manager to help you become prequalified for a mortgage.
That banker has a vested interest in keeping you happy.
Also check with the banks in your local area to see if they have any bank owned property that they aready took back from foreclosure - and they are your best deal for the money.

GOD bless us one and all, always.
MBA-Boston Univ.
CPA-retired
I worked my way through college selling real estate, and I helped many people become qualified and get the home of their dreams - and then some!

Answer 7

If somebody might desire to tell you what the expenses would be like in January, they could be millionaires. once you're content cloth with 6.5% fee, lock it in now. while in comparison with the eleven% and 14% expenses interior the Seventies and 1880s, 6.5% is a scouse borrow. in case you prefer to gamble and desire they bypass down, do not lock. that's all as much as you, no one can inform you for specific what's going to ensue. a area notice is that inflation maintains to upward thrust, so the Fed possibly won't be able to diminish expenses anymore. loan expenses are tied to the ten year treausury bond, not the Fed, however the Fed fee does effect them particularly.