Posted on: 23rd Feb, 2011 08:43 am
Hi,
Very new to this forum, please advise me i am posting something wrong here.
1) I am looking for mortgage for first time, i am considering options of 30yr fixed and 7yr/arm. Pretty new to this concept but i am assuming 7yr arm mean for 7yr, interest rate will remain same and after that rate will be variable according to the 2018 market rates. I am trying to find advantage for each of these option or there are better mortgage products i am missing.
2) usually what are most reputed mortgage companies which can do preapproval for free ( when i approched citi bank they told its 500$(appplied when if loan is taken with them), but recently around 10 of my friends said that they shopped with atleast 3-4 mortgage companies and they did not charged anyamount for pre approval
3) for that current week for state of virginia, if i opt for fha loan with 3% down, i have excellent credit( around 790-805) and around 80k-85k income/around 3000$ lease amoutn remaining/no other debt. what kind of rate i can expect for a mortagage say 320-350k.
Very new to this forum, please advise me i am posting something wrong here.
1) I am looking for mortgage for first time, i am considering options of 30yr fixed and 7yr/arm. Pretty new to this concept but i am assuming 7yr arm mean for 7yr, interest rate will remain same and after that rate will be variable according to the 2018 market rates. I am trying to find advantage for each of these option or there are better mortgage products i am missing.
2) usually what are most reputed mortgage companies which can do preapproval for free ( when i approched citi bank they told its 500$(appplied when if loan is taken with them), but recently around 10 of my friends said that they shopped with atleast 3-4 mortgage companies and they did not charged anyamount for pre approval
3) for that current week for state of virginia, if i opt for fha loan with 3% down, i have excellent credit( around 790-805) and around 80k-85k income/around 3000$ lease amoutn remaining/no other debt. what kind of rate i can expect for a mortagage say 320-350k.
welcome to the forum - the choices is simply a matter of security vs. risk
if you are sure you will sale or refinance before 7 years are up there is no risk in doing an adjustable rate mortgage (which you understood based on your description) the down side is if you stay longer than 7 years and rates have gone up you could suddenly be faced with a higher rate. since rates are still at very good all time lows i would advise against an adjustable if you know you will be staying. if you find a broker instead of a bank they should be able to do a preapproval for free or at most the cost of the credit report - there is no cost to them so there should be no cost to you. banks like citi want you to pay $500 because they know you will not back out and will use them since they have your money up front.
right now rates are still very good - assuming your scores and that loan amount with 3.5% down (the required amount) you should be looking at a rate in the 4.625%-4.75% range with no points - you will still have costs but there should be no charge for that rate -
another good feature with fha is you can still get a seller credit for closing costs - if you negotiate for the seller to pay the costs when offering it is possible to buy a home with just the 3.5% down and maybe the appraisal fee out of pocket. if you do not get the seller to agree you should prepare to have 2-3% of the loan amount for costs - this would include the money for your first years insurance as well as the costs to start your impound account for taxes.
hope this helps - let us know if you have any other questions
brian
if you are sure you will sale or refinance before 7 years are up there is no risk in doing an adjustable rate mortgage (which you understood based on your description) the down side is if you stay longer than 7 years and rates have gone up you could suddenly be faced with a higher rate. since rates are still at very good all time lows i would advise against an adjustable if you know you will be staying. if you find a broker instead of a bank they should be able to do a preapproval for free or at most the cost of the credit report - there is no cost to them so there should be no cost to you. banks like citi want you to pay $500 because they know you will not back out and will use them since they have your money up front.
right now rates are still very good - assuming your scores and that loan amount with 3.5% down (the required amount) you should be looking at a rate in the 4.625%-4.75% range with no points - you will still have costs but there should be no charge for that rate -
another good feature with fha is you can still get a seller credit for closing costs - if you negotiate for the seller to pay the costs when offering it is possible to buy a home with just the 3.5% down and maybe the appraisal fee out of pocket. if you do not get the seller to agree you should prepare to have 2-3% of the loan amount for costs - this would include the money for your first years insurance as well as the costs to start your impound account for taxes.
hope this helps - let us know if you have any other questions
brian
1) Thank you so much for your detailed explaination, usually where can i find the broker?, How are they different than bank? So do they still go to bac/citi/wachovia for actual loan?
2) I was advised by some friend to reach out to 3-4 lenders ( or brokers as you mentioned is the best choice) with a weeks time so as to get best possible rate/costs.
3) Do i need to go to a broker physically and through online is it fine? and also is there any way to say that particular broker is geniune and not fraud
Thanks so much
2) I was advised by some friend to reach out to 3-4 lenders ( or brokers as you mentioned is the best choice) with a weeks time so as to get best possible rate/costs.
3) Do i need to go to a broker physically and through online is it fine? and also is there any way to say that particular broker is geniune and not fraud
Thanks so much
There are brokers everywhere - I would maybe ask friends and family if they know of anyone - I would be careful of just finding someone online by searching google - you never know what you will get - there are other better ways to find brokers/bankers online - and there is nothing wrong with a bank - just do not get trapped by paying fees upfront.
You can look at 3-4 lenders but do not let them all pull credit it is unnecessary =- get a copy of your report from the first and then take it to anyone else for a quote.
Good Luck
B
You can look at 3-4 lenders but do not let them all pull credit it is unnecessary =- get a copy of your report from the first and then take it to anyone else for a quote.
Good Luck
B
Thank you so much Brian
Welcome - good luck