Mortgage/interest rate ?

[Gil BullyKatz]

Got approved for an FHA 30yr fixed loan from a local mortgage broker at 7.25% (I've got crappy credit)... (not a great deal considering the 5% of recent history)

You guys think the mid term elections will have any bearing on interest rates?

up or down?

you think it affects FHA loans as much as other loans?

I'm gonna be a 1st time buyer and I don't know if I want to buy within the next 2-3 months or wait untill may 07 when my kid's school year is over.

guess I can shop in the meantime...

:cheers:

Watch out Wisconsin!

[SeanP]

historically even 7.25% is low. 30 year interest rates track closely the 10 year bond market. Check out this graph on yahoo

http://chart.finance.yahoo.com/c/my/_/_tnx

http://chart.finance.yahoo.com/c/my/_/_tnx

what determines your rate is that 10 year rate, your credit history and the size of the loan. Jumbo loans over $349K (i think that is the recent threshhold) cost more interest rates. Can you clean up your credit score a bit? Close out unused credit card accounts?

How long do you think you will be in the house? if less than 7 years, than I would seriously look at an ARM that is fixed for the first 5 years.

SeanP

[IXNAYXJ]

I just re-financed my house and got 6.25% on a 30 yr fixed 80% LTV. Not as good as it could have been, but my ARM was about to adjust and quadruple my mtg. payment. http://smiley.onegreatguy.net/spend.gif

-----Matt-----

[Beej]

Wow. We're at 4.79% which was nice at the time, but even right now I have a locked rate at 5.2% which will expire at the end of December if we don't buy something...

[Rev Den]

Just spoke with my personal banker...

30yr fixed, 20% down...7.5%

Crappy credit will change that.

My advice is to jump on it....or try a ARM.

Rev

[IndyXJ]

6% three years ago 30 year with excellent credit.

[JeepFreak21]

How long do you think you will be in the house? if less than 7 years, than I would seriously look at an ARM that is fixed for the first 5 years.

SeanP

http://www.slicky.net/smilies/werd.gif Billy

[87manche]

friends with crappy credit (read bankruptcy 2 years ago)just got 5.9, but they're first time homebuyers, so I think they got it like that. I know it was an FHA loan.

[JeepFreak21]

Look at new homes. I don't know about in WI, but here in CA, builders are giving BIG incentives because of excess inventory. We often use big chunks of the builder's money to buy down interest rates. It can make a huge difference.

Also, being a first time buyer, you have the advantage of not having to wait to sell an existing home. You'll find the best opportunities as we approach the end of the year. Builders have goals to meet for 2006, and you should take advantage.

Billy

[RedHeep]

I got locked at 6.75% on 30 yr fixed 0 down (va loan), but I've shopped around and think I can get it down to 6 or 5.75. Have a friend of a friend at Wells Fargo that watches interest rates and said she can probably get us under 6, which is pretty good imo for the current rates.
Buddy of mine at work got 4.9% for the first year in a first time buyer program, then it went up to 5.9%, but he saved a point for a year, helped out the new home bills.
I'd agree with everyone else though, if you're using this property as a stepping stone to something bigger, get an ARM and get out of the property before the balloon.

[SeanP]

I am hoping you all understand "points" on the mortgage. a point is 1 percent of the total loan value that you pre-pay up front at the time your loan is originated. By adding points to the mortgage you will get a lower percentage rate. I think the rule of thumb is .25 or .50 for every "point" you pre pay on a 30 year. But it is the question that you want to ask up front "are there points". The only way right now to get lower than market average is to pay points, and what billy said is correct, the home builders are desparate so they are offering you points on your mortgage. Of course you could just negotiate a lower sale price ;)

So beware those "teaser" 30 year fixed rates. I still stand by my statement that if you are going to be in the house for a short period of time, an ARM makes a lot of sense.

SeanP

[JeepFreak21]

I am hoping you all understand "points" on the mortgage. a point is 1 percent of the total loan value that you pre-pay up front at the time your loan is originated. By adding points to the mortgage you will get a lower percentage rate. I think the rule of thumb is .25 or .50 for every "point" you pre pay on a 30 year. But it is the question that you want to ask up front "are there points". The only way right now to get lower than market average is to pay points, and what billy said is correct, the home builders are desparate so they are offering you points on your mortgage. Of course you could just negotiate a lower sale price ;)

So beware those "teaser" 30 year fixed rates. I still stand by my statement that if you are going to be in the house for a short period of time, an ARM makes a lot of sense.

SeanP

Yeah, every point is 1% of the loan amount. If you have 2 loans - an 80% loan and a 15% or 20% or whatever... you work with 1 loan at a time. You can buy down only the first mortgage (the bigger one) or just the second (that's the one that will have the higher interest rate) or both.

Each point usually reduces your interest rate by 1/4%, but this can vary. You can also do temporary buy downs, where 1 point reduces your interest rate by 1% or more... but only for a short period of time.

If you're going to keep the house for a long time... buy downs can be a good idea. But if you're going to refinance after a few years (maybe because your credit has improved from making your mtg payments on time ;)), then don't bother buying down the rate or do a temporary buy down.

If you're only going to own the house for less than 5 years, do a temporary buy down, or have the seller take the money right off the price. You want to make sure you're getting the full benefit of the seller's contribution.

HTH,
Billy