$100,000 loan, 30 years.  

Found a house I really like.  The house has been on the market for about 1.5 months now.  Brick house, good roof.  Haven't been inside yet, but I really like the house.  The house is VACANT!!  Great location.  Out of town by about 3 miles, in a great subdivsion, big lot, with the snowmobile trails just down the road!!  I love the location.

I make about 50k a year and have excellant credit.  No debt (except child support payments of $40/week).  

They are asking $125,000 for the house.  I can easily put 30k down on the house.  

Long story short, what interest rate can I expect to pay?  Any other ideas you may have are appreciated.  Thanks a lot!!

vmax84

Go get pre-qualified.

I think interest rates are under 6.00% at the present time.

With good credit, you should gte in no problem.

Why put 30k down, when you can just put the minimum down.Liquid cash is good.

Get a local paper, and look for the published rates.  The rate is not dependent on the property, or the amount borrowed.  Term and points mean a lot.  I wouldn't bother with buying points, unless you intended to pay the minimum for the term of the loan (dumb, if not necessary).

Be careful... and get a thourough termite, and structural inspection.  If the house is old, make sure the electrical service is current (200 amp).

Thanks for the input.  The realtor will be getting back with me.  Would really like to see the inside of the house rather than peeking in thru the windows.  

vmax84

If you want to avoid mortgage insurance, you'll probably end up with the $30k down or more.  Those goddamn fees and charges really add up at closing time.  
I am so envious, I make just a little more than you, and I couldn't buy a $100k house within 100 miles of me that wasn't in the middle of the ghetto or on wheels.

oh, and check out [url]www.homebanc.com[/url]

They were handling the loan for the guy that bought my old townhouse, and they were EXCELLENT.  Fast tracked everything, got the approvals and inspections etc. very quickly. Great company.

Depending on what type of loan you get, getting it under 6% should be no problem. Most fixed rates around where I live are going from 5.125% to around 5.75%. Most ARM's I have seen are 4% and under. Read the fine print, know your closing costs, figure up the points,etc., etc., before you decide on the loan type and company.

vmax,

With your bigger than normal down pmt, you can expect to be able to get conforming conventional rates and they are around 5.5% for a 30 yr term. You could get a break on the rate if you sign up for a 15 yr term, today it is down to 5.0%.

These rates are fixed for the entire term and reflect PAR pricing. This means that the mortgage broker is getting no money from the lender to do your loan. This situation usually means that the broker will offer these rates, but charge you points in order to build the broker's income from this loan.

Let me know any other questions.

BTW- I am a mortgage broker.

Thanks again for the replies.  Like I said, I really like the house, but according to the printout on the house I got off the computer, the annual taxes are around $2400 bucks per year.  Seems kinda high, but the area the house is in is probably the best in the area.  Lots of nice houses around.....best in the area.  Will see what the realtor has to say about the taxes.  Thanks a lot.

vmax84

My house right now would sell in the $125K range, but my taxes round about $700 a year. Wow!!, $2400 is a big hit. Are taxes in MI that high?

The is no maximum age, as that would be age discrimination.

I have closed plenty of 30 year fixed rate loans and other types for people in their 60's and 70's.

SO ... Age = no problem. You wanna borrow... go for it! Just remember, even if you die, the loan will need to be repaid. Hope this helps.

Hey V-Max

I am a Michigan based Mortgage Lender, so if you want facts instead of opinions (although everything I have read above is valid and on target) let me know.

Dang, the realtor just called me and said there was an accepted offer on the house.  

I think I'd almost start jabbing sharp sticks into my eyes than continue to look for houses.  What a pain in the ass.

Oh well.  I didn't want to go quite that high anyway.  

vmax84

vmax,

I would suggest that you get with a mortgage brokerage and;

1. get qualified for a loan amount that has a payment you want, make sure that this payment is inclusive of the taxes and insurance (called PITI payment).
2. get, in writing, a Good Faith Estimate indicating the total amount of closing costs you will probably be responsible for.
3. this GFE should also indicate the total amount of down payment required and the term of the loan and the approximate interest rate.

These preliminary items will make your offers much more attractive to potential sellers as they will know that you are approved and that they are not wasting their time selling you their house.

Get yourself pre-qualified for a mortgage, it doesn't commit you to that mortgage company, but it helps you get your foot in the door as some realtors and sellers don't want to spend the time on non-quals and dreamers.

Plan on closing costs to be WAY over the estimates. You are going to be paying some portion of the property taxes, plus a real estate transfer tax, some legal fees, 1st years homeowners insurance right up front, etc.  Our closing costs came out around 10K...really.

I'd plan on having at least that much in ready cash available to meet those costs. You will also find that there will be immediate repairs and upgrades you will want to carry out.  Things that were not serious enough to get in a battle over with the sellers, (not issues of code or safety) or are simple matters of preference.  Those costs add up.  Things like lawmowers, snowblowers, etc.  tend to pile up.

If you've got the scratch, put down the full 20% needed to get past PMI.  Make as big a downpayment as you can make, as that lowers the loan amount and the amount of interest you will pay. If you can swing the higher payments, a 20 year loan will cost you tens of thousands of dollars less over the life of the loan in reduced interest payments. BUT, if you would have trouble paying the payments, you should go with the 30 year, interest is pretty cheap these days.

Other things that will be wrapped up into your mortgage:  Most lenders will want to escrow your homeowners insurance and property taxes.  They will roll the annual premium costs into your payment schedule and pay those fees automatically when they come due.  Part of the closing costs will be a pre-payment to seed those escrow accounts for the year so that the mortgage company has something to pay those fees with. Tax revaluation will usually not screw up the payment plan, you'll just get a supplemental tax bill for the amount not covered by Escrow. All this makes owning a home more convenient for the homeowner, at least so long as they have a mortgage, but often leads to painful sticker shock when they pay off the mortgage and the tax and insurance bills start showing up at the door and need to be paid directly.  All those tax adjustments and revaluations that occurred over 30 years, and which you saw only a small fraction of, hit you full in the face and you are paying 45 bucks on the thousand of assessed value per year. Have a house assessed for tax purposes at 200K?  Your tax bill is 9k per year.  OUCH!  Fighting excessive property taxes at the municipal level is important!

Yep, get prequalified man!  There's no point even looking if you're not.  When I was selling my townhouse I wouldn't have even talked to you without it.  And there's two kinds of prequalified from what I found.  There's the letter that just says "yeah, we're gonna loan this guy money" and then there's the letter that says "yeah, we'll loen him up to $200k" or whatever.

I have a friend that is the mortgage manager for a pretty large bank that helped me out. I told her that I only wanted to spend about a grand a month total (minus taxes cuz they go UP with a new purchase). She locked me in at 5.3% $1081 for a $190,000 house in a booming city/neighborhood. This was in August '03, she just helped a friend get 6.0% on her mortgage. Shop around and get pre-qualified not pre-approved. You'll have a hand up on someone who isn't qualified when they bid. I stole this house from another couple this way after bidding on a few other houses and losing out. Good luck and let us know when the housewarming party is. I've STILL got beer left over from mine[:D]

Edited to agree with norman74, that letter makes a world of difference.

Not to change the subject...but how the hell did you pull this off??

ARe your kids living on top ramen noodles??

Sgtar15

Thanks men.  This thread has been printed out on my computer and put into my "real estate torture" folder for further reference.  Great advice.  Thanks a ton.


vmax84

Not sure how this quote thing works, but my child support is based on the difference in our income.  I am a great Dad to my kids (dropped the ball with my marriage, but with my kids, never missed a beat with them) and the court recognized this.  My ex wanted primary custody of my kids.  I make 50k a year with benefits, she makes 11 bucks an hour without benefits, whatever that works out to.  I could have been paying over $200/week, but my attorney (best divorce lawyer in the city and he's my cousin to boot) hit a home run for me.  I don't even have to provide the required 50% overnights with the kids (I'm a pilot flying a small turboprop....next day UPS boxes) since my job keeps me away at night.  

I don't like the situation I'm in, getting a divorce, my kids growing up like this.....makes me want to puke.  But I've decided to make the best of it, work my ass off (pick up extra jobs for cash under the table), do the best I can for the kids and "try and make it right with them" somehow, and somehow/someway start feeling good about myself again.  I still hurt a lot, but have realized it's time to pull the panties up and press on and start trying my best again.  

How's that old saying go "Winners never quit and quitters never win"......if I were a quitter I would have gotten killed long ago flying in Michigan's crap weather (ice, fog, etc.).  Got the wind knocked out of me, but slowly but surely, getting the wind back in my sails.  

Actually, this is kinda a bad day for me since the kids will be with their Mother for Thanksgiving, but I'll have them for Christmas so it kinda works out.  

I'm still nice to my ex, always will be, but have decided it's time to start rowing again.  

Thanks for letting me vent a little.

Have a great Thanksgiving, men.

vmax84


 

Just so you can all feel good about you taxes, a house priced just a bit higher ($141k) here in upstate N.Y. carries a total tax of $4600/yr.
That's on top of a high State tax and fairly high sales tax, etc.
The only thing that we are top's in the nation on are combined tax burden, and they wonder why people and businesses are fleeing the state.

Well, I am glad you are still a great dad to your kids....I am just used to seeing fathers getting screwed on support payments.

Sgtar15