Your Questions About Mortgage Rates

Joseph asks…

How low do you think mortgage rates will fall in the next 6 to 8 months?

I live in Raleigh, NC . I’m wanting to buy a house some time this summer. I have a FICO score of 700+. I’m looking for 170K to 200K house with a 5% downpayment. what kind of interest rate can I expect for a standard 30 year fixed mortgage?

admin answers:

The mortgage rates right now are 5.63% for a 30-year fixed and 5.08% for a 15-year fixed. There is really no way of knowing if the rates will continue to fall. They can change daily! However, you may be able to get more for your money. Raleigh/Cary had an increase of 122% of foreclosures last year. There are going to be more people looking to sell quickly, which is good news to the buyer!

Thomas asks…

Can you explain to me in layman terms how adjustable mortgage rates work?

My sister has an adjustable rate mortgage. Over the past year her mortgage payments have gone up several times. Now her monthly mortgage payment is $2,235 for a 2000 sq ft home in a nice area. No new construction has gone I dont understand…

I was under the impression if you paid your bills on time your monthly payment would adjust down not up.

My condo (2500 sq ft also in a very nice area) payments have gone down, but her payments keep rising..why?
DJM: You hit on something that required a phone call to my sister. I pay $50 over my monthly payment while my sister simply pays the monthly payment…

Great answers here. So far only one answer had me pulling out my hair because the person used a lot of jargon…

admin answers:

In an ARM loan, once a year the money markets are accessed to determine the cost of the particular reference interest rate. Might be yield to maturity of 10 year government bonds, for example, or average cost of funds at all S&Ls in the western US.

To that percentage one adds the amount specified in the contract … 375 basis points, for example [which means 3.75% since 100 basis points = one percent].

This becomes the new interest rate on the loan.

Then an amortization table is consulted with the remaining principle balance, remaining life, and the new interest rate. This determines the P&I portion of the payment.

The taxes and insurance portion is approx equal to 1/12 of the most recent property tax and insurance bills received and those two portions are the total months bill.

So if your sister benefitted from low rates over the past several years and the new calulated rate is higher, her monthly payment goes up.

Monthly payments also go up if property taxes or insurance skyrocket [as is happening in Florida atm].

Does this help?

James asks…

Should we shop at around at diffrent banks for mortgage rates?

My husband and I are first time home buyer’s. We didn’t kow if it was better or worse to let several banks run pre-approvals. I wasn’t sure if it would hurt our credit for a bunch of diffrent people to pull up our history. I want the best rate but I don’t want to harm our rating. What is the best route to take when looking for a mortgage?

admin answers:

Why don’t you just ask for their rates without having them run your credit history? That’s what I do.

Donna asks…

I’m looking for New Jersey FHA Mortgage Rates. Can someone please refer a fha mortgage lender in NJ to me?

My wife and I are refinancing our home in NJ and would like to know what the new jersey fha mortgage rates are like as of now. Any input would be appreciated. Thanks!

admin answers:

5.25% – 5.5% on a 30 year fixed.

Robert asks…

Does anyone know of a Bank or someone that give really low mortgage rates for first time home buyers?

Looking to buy a house in Virgina and am shopping around for low mortgage rates. Anyone know of any low rates?

admin answers:

All banks just about offer the same products and loan programs with the different qualifications in each of their programs.

No one can tell you the best rate for anyone individual. If all you are interested in is the best rate possible you can go to your local paper, they are publiched each day by participating banks.

Your interest rate is based on your credit score and how well you have paid your consumer debt over time.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, preferrably with a mortgage broker, which you can find one in your local telephone book.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will then run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K plan from your place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need he will be able to tell you the loan programs you are qualified for, the approximate interest rate and monthly payments

He can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

I this has been of some use to you, good luck


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