New Mortgage Question?

Deal Score0

I was just approved for a mortgage with an 6.75 interest rate.
It is an FHA loan. I am a vet so using a VA loan is an option for me. My monthly payment will be 1,023 a month. I am a first time home buyer and I think that is steep. My fico scores arent that great but they arent terrible either. I just want to know, should I go with the FHA? Shop around for a better interest rate or go with a VA Loan. The loan was for 130,000

Trans Union- 657
Experian- 675

  1. Reply
    January 27, 2011 at 6:14 am

    You can get a lower rate however, lower rates are associated with higher costs (upfront). Tell your lender you will take the lower rate and then when you fo to buy a home you can negotiate with the seller to credit you for the additional costs.

    657 mid score isn’t too bad depending on the reason. I recommend looking into buying units for you meaning a 4-plex or 4 unit building. The rents will count toward income to help you qualify, you can live there and if you structure your deal correctly, the tenants in the other three units will cover the monthly payment. Live there for a year or so and then buy another place. When you move out, the rent on the unit you were living in becomes positive cash flow. Hold the property and raise the rents every year. There’s a lot of benefits to doing things this way. I can help you out by email if you send me a message.

  2. Reply
    January 27, 2011 at 6:18 am

    Im a loan officer and I can tell you that both FHA and VA loans are great options…there are benefits to both..however I think there is a slightly greater benefit to a VA loan. Firstly, FHA loans are capped no matter what at 97% which means that even if you were approved at 100% you are still going to have to bring 3% out of pocket. Secondly, although the rates on an FHA loan are decent you are going to be offered a better rate with a VA loan and you can still got all the way to 100%. You’ll be bringing less to the table and you’ll still have a lower monthly payment. VA loans are benefits for those serving our country. Take advantage!!

  3. Reply
    January 27, 2011 at 7:16 am

    If this is a 30 year loan and you are going to be paying principal and interest your payment would be around $ 843 per month.

    Ask your representative if this a 30 year fixed? Are you paying principal and interest? Does your loan contain Private Mortgage Insurance? Find out how much the payment will be with property tax and homeowners insurance.

    Ask your representative or tax advisor to explain the benefits are of being a homeowner.

    If you truly feel that you cannot manage this payment, tell your representative to offer you other options or reconsider if now is the right time for you to commit yourself to this loan.

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