What is the best Home loan?

Question

My Wife and I plan on buying a home soon, we both have 760+ credit scores with about $10K for a down payment whats the best type of home loan to get for first time home owners?

I will be buying a home in central Georgia and looking for one in the price range of 100K-200K.

Answer 1

The best loan is the standard 80% ltv loan...you put down 20% of the purchase price and still have enough cash for closing costs, then borrow 80% of the purchase price. This is the loan that will get you the best rate.

The other advice you've been given is all good. As a real estate agent, I never got anything for recommending one lender over another, except maybe an occassional lunch or small gift...nothing that would induce me to steer you to anyone.

There are loans where the bank pays the closing costs. Bank of America offers one. You really don't pay the closing costs. If the lender says no out of pocket costs, find out who is paying the closing fees. Somebody is going to pay them, and no out of pocket costs could mean they're financing the closing costs into the loan, which means you're paying that $3000 over the next 30 years. $3000 is an arbitrary figure...your closing costs will be based on the lender you use, the state you live in, and the value of the property.

I would reiterate to stay away from ARM or any other funky types of loan. Get a regular old fixed rate loan. The differences between the ARM and the fixed right now are not worth the risk of the ARM of the hassle of refinancing in a couple years. You never know what the rates will be in 3 to 5 years, so get something you can live with today.

Answer 2

How much is the purchase price? Is 10k the total amount you have to put down including closing costs? If your purchase price is over 100k, you'll have to get a traditional Fannie Mae loan. You should see rates in the very low 6%'s. Also, try for an FHA loan as well. They sometimes will have better rates than regular conforming loans. In any case, with your credit rating, I would definatly go to your local banks, and talk with a Mortgage Broker as well to get the best possible deal. Don't let your real estate agent talk you into using someone. (most of the time they'll get more money if you use someone they insist on.) Also, talk to a broker about doing an 80/15. This will split your loan into two mortgages so that you'll avoid having to pay Mortgage Insurance. That will definatly save you some money in the short term and long term. And NEVER, NEVER, NEVER take an adjustable rate mortgage. Even if you only plan on being in the home for 3 years. You never know what the future will bring, and life is too short to gamble.

Hope this helps.

Answer 3

Previous responders were correct on several issues; ask youur chosen lender about special first time buyer program like State Bond programs, My Community loan programs, and, especially, FHA.

Mortgageman was wrong about not using your Realtor's lender referral. It is a violation of the Real Eatate Settlement Procedures Act for a lender to pay a Realtor a referral fee and the penalties are so severe you will seldom find it done, especially by reputable lenders. Often times Realtors will have an established relationship with a particular lender specifically because their experience with that lender has been one that created the satisfied buyers which lead to the referrals that are a Realtor's lifeblood.

Speaking of Realtors, make certain you hire your own Realtro to negotiate on your behalf, the listing Realtor works for the seller and since all realty fees are paid by the seller, it costs you nothing to be represented. Take advantage of that.

Answer 4

the federal government gives special things to first time home buyers but also check your area because sometimes there are options only available to you in your area that people here wouldn't know, give your city/state the home is in or check there!! really a realtor in the area will know best but I know it can be hard to find a non car salesman realtor sometimes