What is the best rate out there? I have been quoted 6 7/8% with 3% down. Is this a good rate? Is it worth it to buy the rate down?
Scott

NO!  a GOOD rate would be 3-4%

That's a decent rate, but then it depends on many things.

Is the 3% for your down payment (ie. FHA)?
Is it 3% in points?

For decent and brief explanations of different types of loans PLUS some calculators go here:
http://www.countrywide.com/RetailLoans/Purchase.asp

You can plug in some various numbers in their calculators and figure out what your monthly would be (minus tax and insurance, of course), play with more/less down, points, prepayment, etc.

Here's another great calculator that figures out the whole mess with graphs:
http://www.jeacle.ie/mortgage/

Satcong, if you can steer me to a bank offering 4% mortgages, I want to refinance!

Here's a link to current rates: [url]http://www.bankrate.com/brm/default.asp[/url]

3-4% would be more likely for variable (ARM) rates.  A little more risk, but always a possibility depending on how long you intend to live in the home, how much more you intend to make in 3/5/7/10 years, etc.

Fixed rate at under 7% is pretty common about now.

30 year fixed. Conventional loan. 3% down. The 3% number was suggested as you get no break for any more down until it is a large piece.

Hmm...

Conventional?  Conventional loans are like what Paul is talking about.  20% down PLUS any points to pay down the rate.

Are you putting 20% down IN ADDITION to the 3%?

If it is just 3% down, then you are most likely looking at an FHA or some other govt. loan.

For a 15 year fixed with 25% down, and paying 1 point.  I was quoted 6.125% last wednesday.



for a 30 year wtih 25% down, and zero point, I was quoted 6.625%

Since I'm not looking at grossly expensive houses.  I'll ge takin' that 15 year loan.  I want to build that equity quickly!!!


If you plan on staying there for a long time, it will save you to buy down the rate.  Granted if the difference is only .125% then you have to weight cash flow issues.

The best thing to do is keep the loan term as short as possible.  A loan officer once told me that on a 15 year loan you own 30% or your house in the first 5 years.  On a 30 year loan, you only own 3% of your house after the first 5 years.

A 15 year loan to term, you effective (total cash outflow) buy your house 1.5-2 times.

On a 30 year loan, you buy your house 3-4 times.

The FED/Greenspan is supposed to lower lending rates soon, like a 1/2 percent and then maybe another 1/4 to 1/2 shortly after. Might be a good time to wait for the changes.

Nope, this is a conventional loan. 6 7/8% with 3% down. There is the origination fee & other stuff that is expected. Based on what you guys say, I think this is a good deal & will give it a week or so before locking in.
Thanks,
Scott