What mortgage would you get?

Deal Score0

this is a 30 year VA fixed loan for a newly constructed house.

1. Mortgage 1: Pay $ 2,785 closing cost for a $ 128000 loan and get an interest/mortgage rate of 4.875%.

2. Mortgage 2: Seller pays up to 4% of closing cost and get appliances (laundry washer/dryer machine and refrigerator) for a $ 128000 loan but get an interest/mortgage rate of 5%.

3 Comments
  1. Reply
    Rick B
    April 29, 2011 at 11:23 pm

    The second loan has closing costs that are DOUBLE the first loan AND a higher interest rate. Seems like a no brainer to me.

    A fridge, washer, and dryer are worth $ 3,000 at the very most. You are likely getting low quality appliances as part of the deal which are worth even less.

    Go with option 1.

    Of course, if I were you I would get a 15 year loan! Spend a lot less in interest, pay it off twice as fast, and only increase your payments slightly.

  2. Reply
    My Take on It
    April 30, 2011 at 12:21 am

    Number 1

  3. Reply
    Lisa L
    April 30, 2011 at 1:00 am

    This is backwards. Higher closing costs should mean lower rate. Plus, the mortgage company may not let all those appliances be part of the loan. They are not going to finance those appliances for 30 years. Stoves & dishwashers are built in so that is why they allow those as a customary part of the house.

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