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My husband and I recently got pre-approved for a home loan, and the lender figured it with $0 down payment because we qualify for USDA/FHA (?) assistance (my husband knows the specifics).
Anyway, my dad has offered to loan us $10,000 to put toward a down payment. It would be a huge help, but I’ve used online mortgage calculators, and maybe I’m doing something wrong, but it seems $10k down hardly makes a difference (it’s a loan, not a gift, from my dad, so consider I’m paying him $100/mo for a while here).
All we have saved at the moment is the $1,000 that we plan to use as earnest money when we make an offer, so $10k would be a huge help.
The lender did say that for every $1,000 you put down, you probably take less than $10/month off your mortgage payment. So is it even worth taking my dad up on the offer, if we have to pay the mortgage, AND my dad $100/month (for 8 1/2 years)?
Just wanted to know what the advantages are to putting down such a sum of money as opposed to going with 100% financing like we originally planned. Would it help us get approved for a better interest rate or something like that?
I’m also considering taking him up on it so we can clear all of our credit card debt, that way our only "debt" is paying him $100/mo and not throwing away money on interest.
Which would be the better option, in your opinion?
I would wait until you get to closing to decide what to do with this money. In all likelihood, you will need about 3% of the purchase price of the house for closing costs. When you go to closing, you will have to pay as much as three months’ real estate taxes in advance, plus probably some transfer taxes for your county, plus title insurance, property insurance and an upfront payment on your mortgage interest. Ask your realtor to show you a sample "good faith estimate of closing costs" so you can see everything involved. I was amazed when I bought a house how many times I had to shell out $400 for this… $500 for that, $250 for this other thing. Unless you are prepared, these are all expensive surprises.
When you get to closing, you will need to show CASH in the bank for all of the closing costs. Plus there are a whole lot of costs involved with moving – utility hookups, extra shopping for supplies, moving itself.
So, deposit your dad’s loan, get through closing and moving in, and then set aside 2 months’ worth of living expenses in a savings account for emergencies. If anything remains after that, put it toward your credit cards.
One thing you don’t want to do is to move into a house cash poor. Every house needs minor repairs and fixes, and you need an emergency fund with at least $1,000 to be prepared for these, or else you will find yourself back in credit card debt again.
Putting 20% down should I either get a 15yr loan or a 30 yr loan. The property would cost about 170K and would rent for conservatively $1000 a month. Putting the #’s into the calculator below http://www.finance.cch.com/sohoApplets/MortgageRentvsBuy.asp
On the 30yr loan my value of investment goes into negative even though the rent would carry my mortgage costs. However, when I do the 15yr my value of investment is really high but, I would have to bleed a few hundred dollars each month. (which i can afford)
I preface this with I don’t really understand home equity loans but, at 24 I would like to maximize my money for the long-term in the best way possible.
You should get a 30 year loan, positive amortization, no pre-payment penalty, fixed rate mortgage.
At the time you go to closing or settlement you ask for or its automatically given to you:
an amortization schedule – tailor made specifically for your mortgage.
Simply by taking the total monthly payment of principlal and interest THEN adding the following month’s principlal to that amount, you’ll save the interest on the second month.
Paying the principal does not mean you can skip the next month.
It means you’re saving the second month’s interest.
When month 2 comes, you pay the same amount of principal and opayment for month 3 AND ADD the principal for month 4.
Repeat this throughout the life of the loan. You’ll save THOUSANDS – tens of thousands of dollars.
With EACH payment, you enclose a note:
IDENTIFY THE PROPERTY: ADDRESS & LOAN NUMBER – AS WELL AS ALL BORROWERS.
Then you simply type a small note. The body is the same. Only the dates and amounts change:
Date: ____________, 2008
To Whom It May Concern;
Please be informed, enclosed is check no. ___ in the amount of $___. This payment represents
this month, ____, 20___ principal & interest, as well as the principal payment fior next month, ____. 20____
Please appl;y that additional amount to the balance of the mortgage.
According to the amortization shedule, the balance on the loan is $____
Very Truly Yours,
Signed
IF you have ANY Qs, speak with the loan officer. They may have the letter already prepared.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name!
Online mortage calculators seem like they are fulll of lies. I exact same info used has be from 700 a month to over a 1000 (for a loan of about 122,000). I know taxes and interest rate will change, but about how much is your loan and what is your monthly payment? I’ve hear it is about 10% of your mortgage, but I have a really hard time trusting the people that make a living off of selling homes.
The assumptions will change and they can really, drastically affect the mortgage payment. You have to know if they are estimating taxes and insurance or not.
Your loan of 122,000 will have principal and interest payments of $751 (for a 30 year fixed loan at 6.25% interest).
At 4% interest (not saying you can find it, just for the difference in payment) the payment would be $582. At 9% interest that loan would be $982 per month.
Taxes. Taxes can run anywhere from 0.5% of the value per year up to 4% of the value per year. It could range from $508 per year ($60 a month) up to $4880 per year or $410 per month! Insurance, depending upon where you are, could also have a huge range from a few hundred a year to a few thousand.
Then, if you don’t put down 20%, you’ll have PMI (private mortgage insurance) which could add up to another $200 a month onto your loan payment.
It is confusing and depending on what is included in the calculation, it will look very different.
good luck!
my loan is for $260,000. I pay $1500 a month at 5.5% interest and pay my taxes and insurance on my own (they are not included in the $1500).
I’m looking at universities for next year and like most students i’m worried about money. I have EMA so i’m pretty sure i’m eligible for one. I’ve gone on a student finance calculator but I don’t understand which column to look at.
Currently, i’m living with my parents but will hopefully move away to university when i’m there. So do I look at the loan for ‘If you live at your parental home’ or ‘If you live away from parental home’.
I’m confused, explain please?
I saw your question I have decided to help people out due to the fact that I myself has been scammed four times by four lenders in my search for a loan but at last I got a reliable lender. that gave me the loan($60,000 USD) that I was in dire need of. Hence I decided that I will refer anybody I come across to this God sent lender he is reliable and his terms are fair. You can get to him via his email address: dr_amandajohnson101@live.com, Please tell him that Pastor Graham Timothy from CA. USA church Mission Of God Church.. I have search for a legit lender until I got him and I decided to help my fellow humans with this because there are a lot of fake lenders out there and I do not want any body to fall a prey please get to him and tell him that I referred you to him.
this is the question and the suggestion he gave us….
A customer comes in to see you. They want to compare 2 loans, both for $150,000. one is a 1 year ARM starting at 4.5% with a 2% annual cap, and a 6% lifetime cap. The other is a 30 year fixed rate at 7.5% they feel that the market will rise, and want you to calculate what they have paid on each loan for the first 5 years, if the ARM increases its maxium each year.
you will need a financial calculator for this one or try one of the online websites that have loan calculators such as www.bankrate.com
our teacher said to get some help form a our banks lending department and i have tried 4 different banks in the area and none of them were willing to help 
Calculate the annual payment for 30 years, $150,000, 7.5%.
Then calculate the annual payment for 30 years, $150,000, 4.5% (the first year of the ARM). Figure out the principal remaining at the end of year one.
The max payment in year two is a 29 year loan, 6.5%, for the remaining principal. Figure out how much is left at the end of year two. Then do it again for year three (now 8.5%) and year four (now at the max ARM rate of 10.5%).
I find Excel is easiest for this type of problem.
My fiancee and I are deciding to buy a home basically because we pay 975 a month for a 1 bedroom apartment in Virginia. We are sick of spending that much money on something we will never own and feel like we are thrwoing it away and could be investing in something like a home. The only thing is that realty is really expensive in VA and we are not in the position to move out of the state. I go to school here for nursing and he just relocated here for his job (not military). I work only part time and make just a little over 700 a week after taxes and he makes a little over 2300 a week after taxes. We are looking at homes in the nicer parts of Norfolk, which is VERY limited!!!! We we interested in buying a home last year and got pre-qualified and was told we we pre qualified for somewhere in the 180,000 range. But then I was working full time makeing about 1200 a week and he was making 2300.
For some reason he seems to think that we still qualify for 180,000 range and has been looking all over for homes in that range, but I don’t think we do. I have done the mortgage calculators and it says we qualify for like 150,000… but that will get you nothing now a days.
We lost contact with the person who we got pre qualified with last year, and we met her through a friend that we lost contact with, so we are on our own and don’t know what the hell to do first!!!! He seems to think that if we buy a home for 180,000 that our mortgage payment will only be around 900-1000 a month (30 yrs.) but I think he is sadly mistaken and any time I try to tell him this is causes a HUGE fight. There is no way that we are gouing to get a home for 180,000 and only pay 1000 a month for a mortgage… maybe I am wrong?
He thinks that the first time home buyers program will cover all closing costs and things like that, and also is planning to only put down like 5,000… and still only pay 1000 a month on a 180,000 mortgage note!!!!
What loan should I get that would have the best rate and one that will not require me to put a bunch of money down??? Who should I go through?
Sorry all!!! I meant a 700 a month and 2300 a month!
You seem to have a much better idea of real life than he does. However you both need to learn a lot before you buy.
Ask friends or family that have bought homes in the area recently who they used to get a mortgage and if they were happy with the way things were done. Go visit the loan officer (in person) that they recommend. Ask what kind of programs are available for first time home buyers- ask what you can qualify for. Ask what your total payment will be including your payments for property tax and homeowners insurance. Only buy a place that you can comfortably make the payments on and leave some money for additional expenses like repairs or mowing lawns or stuff you want to furnish the home with.
Buying a home right now could the the greatest thing you ever did. In many parts of the country the prices are very low and the interest rates are extremely low. But you want to enjoy living there and that means you don’t want to get in over your head.
Also you only want to buy if you intend to stay in this area at least three to five years- because of the cost of buying and selling real estate.
Thinking about buying a condo with my fiancé in Los Angeles…Do you think we will qualify and about how much?
His Score EX 750
Mine EX 710
No negatives
INCOME
Gross income combined is 51k
My fiancé makes another 4k a year but is not reported or taxed…I know this won’t help us.
EMPLOYMENT
I am done with school and I am currently working in the same field I studied. I have been working with my current employer for a year and 3 months. Prior to that I worked at another company in the same field for 1 year.
My fiancé has been at his employer for a year and 6 months. Before that he worked for a sporting goods store for 3 years.
DEBT
Together the only debt we have is a 239.00 monthly lease payment on my car.
No school loans.
We have plenty of Credit cards but all balances are very small and paid off every month if any.
I also contribute $100 a month to a IRA retirement account.
ASSETS
25000K in savings to spend on down payment AND closing cost.
My fiancé has a 2006 truck with 15k mileage –Paid off… (I don’t know if that counts)
I have been looking at those online mortgage calculators but I don’t know how true they are.
Let me know what you guys think… THANKS!
Firstly, you need to figure out how much money you will borrow – don’t make the mistake to borrow an amount that you are unsure to afford to pay.
Once you determine the amount, you could consult a lender (a traditional one is better) and ask for an estimate for financing costs and the conditions you can expect in regards to your loan after the lender has reviewed your credit score.
If the conditions offered do not meet your expectations, do not hesitate to find a better offer.
The common rule of thumb is that when purchasing a house you want to look for one whose total annual repayment does not exceed a third of your annual wage.
Remember that your home mortgage payments can be higher than you paid for rent but there are also additional things to pay when you become a homeowner: property taxes, homeowners insurance policy as well as higher charges for utilities.
Hope this helps 
I want to purchase a home for 359,000, The mortgage calculator says my payment will be around 1780 a month on a 50 year loan with 0 down and 7 percent interest rate, is this accurate. Or is this even possible. I’m a first time home buyer and am not too familiar with all of this. My credit isnt the best but its decent. I make around 33,000 a year. Please let me know if this can happen. i would like some advise before i get to serious and get a real estate agent and come to find out i cant afford anything.
Not possible! 50 year, zero down, 7% with damaged credit? Not even last year when they were giving money away like chicklets. Save your money for a down payment and fix your credit. Plain and simple. don’t believe anything else … you are not ready to own a house yet.
Ohh, and besides, $33,000 per year cannot possibly qualify for (nor afford even if by some creative program you could qualify) a $1780 payment.
The industry needs a bit of tough love these days.
I have $25,000 in total credit card debt (3 cards). Interest rates are 4.99, 5.99 and 11.74. The card with the highest balance is also the highest interest rate. According to a debt calculator I used, I can pay them off in 42 months with my income. I have been offered a fixed rate personal loan of $30,000 at 7.74%. I would pay off the credit cards and use the rest for legal fees (personal situation). Using the same debt calculator, I can pay the loan off in 48 months easily and probably sooner.
Is it worth it to apply for the loan? Will it hurt or help my credit? I do need the extra cash and do not want to take it from my home equity or put more on credit cards. Thank you for your responses.
Why would you take 2 credit cards that interest rate is LESS than the fixed rate loan and transfer them to a higher rate?
Use the loan to pay off the highest interest card……pay the minimum on the 2 lower cards but take the payment you were making on the 11% card and send it to the fixed rate. This should help bring that balance down faster. When the fixed rate loan is paid, take that payment and add it to next higher interest card until paid off and then take THOSE payments and send them to the lowest card. Make sense? OR…see if you can do a balance transfer of all 3 cards onto a 0% credit card and go from there. It would only make sense to transfer all 3 if you can.