Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
First you should check your credit to know how good or bad it is. Once you know how strong of a buyer you are, then you can know what to expect. APR is the simplest way to shop for a loan, the lowest APR, the better. But you should also factor in monthly PMI on an FHA and Conventional mortgage. In my experience, Conventional loans have slightly higher rates, but the insurance premium is lower. In the end, going Conventional can sometimes save you money. If you need more closing help and don't have much money saved, then FHA might be the only option.
Did you have a question in particular about the process? It's a very open question with many variables. If your credit is good, expect the best options, if your credit isn't the best, then there is no use in comparing it with the advertised rates because you won't get those.
I went with a broker for both buying and refinancing. They can find you a loan with lower closing costs vs the big banks. But I'd check with a couple of mortgage brokers as well as a couple of big banks to see what you'll be paying. Trying to line up all of those numbers will make your head spin though.
We have about 5k credit card which I don't know if we should pay off before we go for a loan or not
We have been pre-approved for a loan of 160k but it was 6 months or so ago and we got a raised recently.
We plan to down about 10-15% (because I heard that we have to pay for about $10k for a 200k home
thanks for your inputs
You should qualify for the best rates. You should definitely speak to a couple good loan officers to see which offers the best options. I'm not a loan officer, but I don't think you have to pay your credit card debt down at all. They will only calculate your minimum monthly payment into your monthly debt. That will be added to other debts like car loans, cell phones, students loans, etc.
I believe 30 years rates are between 3.75-4%. That's pretty good.
Rather than put down 10%, with a 90% loan - you might consider a 10% down, with a 80/10 loan combo. It will eliminate Private Mortgage Insurance. The 10% loan will be at a higher interest rate, but will still wind up being less in total payment. Afterwards, concentrate on knocking out the 10% loan, at the higher rate.
Agree with tstone - avoid the bigger banks. It used to be the opposite but the world has flip-flopped.
Whoever you talk to - ask for a GFE (Good Faith Estimate) on an imaginary house for a certain amount. Compare the GFEs.
Go to your local credit union and talk to a mortgage loan officer. They can pull up your credit report and tell you what you need to fix in order to qualify for a mortgage. That is what my husband & I (first time home buyers too) did last week and found out that we qualified for an FHA loan with a very good interest rate. We too thought that we needed to pay off our credit card debt before qualifying for a mortgage, but that wasn't true at all. They are more concerned with your credit score & monthly expenses vs income ratio.
I agree that the local credit unions often have the best rates, but I find their loan origination fees to be expensive. Talk to your credit union, adn get a referral from your realtor for a mortgage broker that can pre-qualify you and shop a loan out at the best price. Remember, you cannot lock in an interest rate until you have an executed purchase contract and rates can always change.
Although you dont need to pay off your credit card, you should. Why would you want to pay $6 interest each month on your chinese food you bought 2 months ago. Paying credit card interest is a huge waste if you have the money.
Lets say your interest rate is 12% and you pay $100 payment each month on a $5,000 credit card bill. It will take you 259 months (21 years) to be rid of your debt. In that time, you will pay $4,544.98 in interest.
Use credit cards, but pay them off each month.
Last edited by 399083453; 12-29-2011 at 07:30 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Mortgage shopping
