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should i get mortgage now or wait?


mike111
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current scores:

TU 659

EQ 671

EXP 645

Which socre would mortgage companies use if they say a loan requires 640+, does all 3 score have to be higher than the required score to qualify?

Would wait till my score go over 680 help a lot? by how much 0.25, 0.5?

I live in the Phoenix area and am considering a 200k-250k house purchase.

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when I applied for a mortgage they used the average of all three scores.

The low score wont hurt you as much as the history that is causing the score to be low.

No need to rush as far as rates go. I figure with the fuel prices peaking in May-June, shwerd old Greenspan will predicatably wittle down the prime rate to buffer the economy from the fuel prices.

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when I applied for a mortgage they used the average of all three scores.

The low score wont hurt you as much as the history that is causing the score to be low.

No need to rush as far as rates go. I figure with the fuel prices peaking in May-June, shwerd old Greenspan will predicatably wittle down the prime rate to buffer the economy from the fuel prices.

Except the house price are going up fast where I live, southeast valley of phoenix area. I'm inclined to start looking unless there is major difference between my credit score now and 680 or 700.

What kind of rate would i be looking at with my current score? any ideas?

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Hi Mike

Do you have any funds for a down payment?

Other than those funds, do you have liquid assets (bank accounts/$ you can take from a 401K etc) that would equal 2 months PITI (Principal/Interest/Taxes/Insurance)

I would suggest that you look into a 5 year ARM, either interest only or full payment, as rates are about the best and since most people either refinance or sell and buy another home every 5-7 years, there is not much risk of rates going up and it changing your lifestyle.

Charles

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mike111 how is your employment & income?

What other debt payments do you have?

What makes your scores:

TU 659

EQ 671

EXP 645

and not 680-720?

Is it just you on the loan or do you have a spouse?

I have a few collections, but nothing major, total debt is 3-400. Just starting to get revolving accounts, so I think that hurts it a bit.

It will be just me on the loan, my past w-2 is like 50k-78k a year for last few years, this year maybe higher - but i'm on this new job, only a few months.

I can put down like up to 20k - throgh borrowing from parents - i have like 6k in 401k from previous employer i can turn into an IRA and withdraw for first time home buyer if needed.

Suppose I put down 20k, what interest rate am i looking at for a 200k house - assuming I did manage to get mortgage.

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On an 80/20 combo loan, a 5-year ARM rate in the 5's should be realistic. Your rate on the 2nd mortage of the 80/20 combo will be a bit higher, you could get lower with 680+ scores. With $20k down you should be able to get a payment under $1,200 before taxes & insurance.

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Also, since you have access to about 10% of the sales price, look into an 80/10/10, as rates will be best with that situation.

There are pricing "hits" when you get over 80% (for the combined loan/s), that raise your rate, and the "hits/Adustments" are higher for 100% than they are for 90%. WHY? The more $ you have invested in your home, the less likely you will not make your payments if times get difficult.

One other long term consideration for you. Since you are seeing 6-10% home value inflation in your area, (Even as far out as Queens Creek) about a year after your financing, you should be able to refinance your 2nd, at what will be a lower rate, due to the fact that the pricing on the second is also related to the CLTV (Combined Loan to Value-the total percantage of the sales price/value of your home) so if your 2nd starts out at a 90% CLTV, and you refinance to an 80% CLTV, your rate on the 2nd will drop a lot.

How this works is that if you purchase your home for 200K, a year later it is worth 220K, your loan on the 2nd will be based on the new value.

If you keep your scores at 680+, there are some lender programs that are

No cost" to the borrower for that type refinance of the 2nd. Your Loan officer (as long as you are working for a broker that has a lot of lenders available to them) will have some for you to choose from.

Last comment on the subject of 2nds. Be very careful as to how the investor/lender/bank reports the 2nd. If you have chosen to take a bit of a risk to get a lower rate, and go with a HELOC, some report as mortgages, which is great, but some report the same as a credit card, and in that case, your scores will fall dramatically due to a trade line with over 50% usage.

Charles

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Great, thank you both! I'm a bit in a rush to buy, as house price are going up like crazy here, i feel if I don't do it now, may never be able to buy here. Under a different situation, i might wait longer.

One more thing, if I buy new construction houses, do I need a realtor?

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No, you don't need one. Be prepared to have the builder insist that you use their lender. Can not imagine why the do that, but it really happens a lot.

Charles

Would the realtor be able to negotiate the price any lower or make a difference in any other way?

If the price is the same, shouldn't I go through a realtor that offers rebate that way I can get a rebate off the hosue purchase while the realtor will split hte 6% comission with the seller's agent?

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