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Hi there! I'm a first time homebuyer in the Seattle area. I'm buying a 2 bed condo for $375k. The best mortgage that I have right now asks for a $19k cash to close and a $2300 monthly payment at a 5% conventional 30 year fixed rate loan.
My question is, is this the best I could get? Ideally, I would like to stay below $2000 monthly payment. Are there options that would give me that price? I have 20k in cash reserves, so my down payment and closing costs have to be within that number.
What is your middle credit score? Will this be a primary residence? How much are the property taxes? How much is the HOA? Do you have a homeowner's insurance quote?
I'm at 4.5% on a 30 year fixed on a condo in WA. That's with a 5% down payment. I'm assuming the seller is paying taxes, insurance, etc due at closing?
Sure, my middle score is 716. This is my primary residence. Taxes are about 3000 a year. HOA is 100 a month. Home insurance costs 700 a year. The seller is not paying for closing costs.
The base loan portion of the payment is about $1805, but then at 95% we have to escrow taxes and insurance, at $250 and $59, respectively. HOA is likely paid separately/quarterly.
But: at 5% down we need to add Private Mortgage Insurance, in this case at about $279 per month.
So the actual monthly payment is coming in at about $2392, PLUS the quarterly HOA payment.
There may be ways to pop your score - I'd love to see it over 740, that would help reduce the cost of mortgage insurance. Maybe pay down credit card(s)? Do you see any opportunities in this area?
a 740 score will drop the mortgage insurance to about $199 per month. Also, there are additional options on the mortgage insurance. You can reduce the monthly by paying a chunk at closing, which the seller can pay as well.
So it looks like you have a pretty straight deal, as long as you are not paying too much in origination. Typically, there's about $1400-15oo, and lenders categorize it differently. If you see more than that in the Origination box, that may be a pink flag....
To give you more information, my lender escalated the interest rate from 4.37 to 4.75 to cover for the PMI, since I wanted to keep the monthly payment down. And since my income is below a certain level, I was able to get MCC, which reduced my PMI.
So my 2200 payment includes PMI, taxes and home insurance at a higher interest rate. Do you think that is a reasonable deal or is it overpriced, from your experience?
Not sure I can increase my credit score just like that. It takes a few months I guess.
To give you more information, my lender escalated the interest rate from 4.37 to 4.75 to cover for the PMI, since I wanted to keep the monthly payment down. And since my income is below a certain level, I was able to get MCC, which reduced my PMI.
So my 2200 payment includes PMI, taxes and home insurance at a higher interest rate. Do you think that is a reasonable deal or is it overpriced, from your experience?
Not sure I can increase my credit score just like that. It takes a few months I guess.
I think it is very reasonable. Sounds like a seasoned, responsive lender to me.
I'm assuming the seller is paying taxes, insurance, etc due at closing?
What ??? Seller pays taxes/insurance at closing? BTW, what are these taxes, insurance? Are these state/county taxes, title insurance etc.?
I have never heard about. I am buying a house and have a closing in 3 weeks. As per the mortgage company's good faith estimate, I will pay the taxes, insurance at closing.
What ??? Seller pays taxes/insurance at closing? BTW, what are these taxes, insurance? Are these state/county taxes, title insurance etc.?
I have never heard about. I am buying a house and have a closing in 3 weeks. As per the mortgage company's good faith estimate, I will pay the taxes, insurance at closing.
Based upon the parameters that the OP laid out, the numbers didn't "work" unless that was in play - but then we discussed it further, and the numbers made better sense.
You, or your realtor, would have to negotiate that the seller "pay" items such as bank fees, Title Fees, and Prepaids (property taxes and homeowner's insurance) due at closing.
Taxes due at closing depend upon what state you are buying in, if property taxes are paid ahead or in arrears, how much the seller has paid, and whether you are escrowing taxes and insurance into your monthly payment. Also the due date for city/county/state property taxes comes into play, depending on when your closing date is vs. the date, or dates that said taxes are due.
Regarding insurance, it is Homeowner's or Hazard insurance. you need to have a 1-year premium paid at or before closing. Credit card, separate payment, or pay at closing. Plus a couple months if you are escrowing These are Escrow pads, and they collect a couple months of taxes in advance if escrowing as well, so that there is enough in the escrow account when they become due.
If the seller "pays" them, they become part of the price of the home, and are essentially rolled into the loan at whatever percentage of the price you are financing.
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