looking to buy a home, many mortgage questions...

[navyblue2000]

It's a big headache, it is!
ARMs, 80/15/5, FHA's, conventional...it's almost impossible to make heads or tails of it after a bit.


anybody good with this stuff, can help clarify some things?
I know interest rates look really good with conventionals and ARMs, and can be higher on FHA's, and FHAs require Pre mortgage insurance, which is crap...
but the rest...bleh :(

[sac2165]

Your best bet is to sit down with a small town bank & have 'em lay it all out for you. They can answer alot of questions and give you some advice based on your particular situation.

[RallyRed 98]

so what exactly do you need help with?

['98 BlackBird]

I rememeber sitting down with my mortgage lender and she went through everythng. We came to the conclusion that with my current credit and down payment, it was best to get a 1 year ARM and do that for a few years, then switch to a conventional 30 year loan. Right now I am paying 3.78%.
It is very confusing but do what sac2165 said: Your best bet is to sit down with a small town bank & have 'em lay it all out for you.

[ellik]

Depending on the realty broker you go through, they might have a financial department to help you out. We bought our home through Howard Hanna and their financial division got us better rates than we were being quoted by our local banks/ credit union. They are able to write nearly any type as far as conventional or FHA and can help you find a program that fits what you want/ need for them to sell you the house.

[JohnD.]

Any new home loan with require PMI to be paid if you don't put enough money down. The PMI can be dropped with a refinance down the road a bit.

Try and stick with conventional and lock in on a good rate.

There is a LOT to learn with this stuff.

[ellik]

I was able to do a split conventional mortagage and avoid PMI insurance. 80/20 loans w/ $0 down and made the sellers pay 2/3 of the closing costs. I bought the house with about $2k and had a cash left over to buy all new appliances for the kitchen and start some rennovation projects.
I made out WAY better than I was even hoping for. There are tons of options out there.

[MTMike]

I cant emphasize this enough.

SHOP AROUND!!!!!!!

I went to 3 banks mortgage lenders and a mortgage broker before I found someone who would sit down, talk it out with me, and show me the best deal. I even brought in my offers from the other banks and she showed me the differences and how theirs was different.

Don't worry about dropping your credit store by running it at multiple places as multiple inquiries within a 30 day period count as 1 inquery on your 3 major reports.

All I can tell you from experience is it is much MUCh more complex than buying a car, so shop around, talk to people, ask stupid questions, and don' t make any decisions in haste.

Good luck,

-Mike

[ September 21, 2004, 12:21 PM: Message edited by: MTMike ]

[RiceyRS]

Absolutely shop around, I just bought a house last month, there was over a 2% difference between the lowest and highest rates I was quoted. The type of loan you want will depend on a number of things, the amount you can put down, the length of time you plan on living there, what you want your payments to be, etc. But talk to different banks and brokers, and to different real estate agents. It's really not too complicated once they explain the basics.

[Everglades W68]

I agree with the "shop around" comments. Having said that, we've had quite a few mortgages what with buying different houses and refinancing several times.

Chase frequently was the best deal for us. Countrywide was great for Re-fi's until Wells Fargo decided to undercut their rates even more.

I recommend you not use a "mortgage broker." Their fees have to come from somewhere and the only source of funds is your pocket. You might want ot talk with one to get a understadning of the options in your area, but don't sign anything.

Be sure you carefully figure out how long you need to lock in your rate until closing. Be sure to build in some cushion for unforeseen delays.

FHA is usually more expensive - they may have easier qualification requirements, but given today's crazy "anybody can qualify" environment, I'm not sure what, if any, that is worth.

PMI (Private mortgage insurance) is also known as MIP (Mortgage Insurance Premium) in an FHA loan. Both work the same - you pay the insurance until your equity goes above a certain level, usually 20%. Pay attention to the details of how you are allowed to escape PMI when your equity goes high enough.

We try to avoid points on re-fi's because they are not immediately tax deductible. On a new purchase, you may be able to deduct points up front in the year of purchase.

ARMs - Interest rates have nowhere to go but up from here. You decide.

The big things now - and extremly dangerous for individuals and the economy as a whole - are interest only mortgages. You pay only interest, but woe to you if housing in your area turns down.

More power to you if you can afford a less than 30 year loan. If you can, strongly consider getting a longer term loan and paying it down on a shorter amortization. That way, you are paying the loan off faster, but can always drop back to a smaller payment if need be.

As far as the house itself, I cannot overemphasize the importance of the specific schools your house is districted for. find out what have been the patterns of re-districting and get the projections of future years from your school district(s). The closer you are physically to the schools, the less likely you will be switched. We chose one of our houses because we could see the elementary school from our front yard.

I'd be glad to answer any questions you might have.