Hello Friends,

I am planning to buy a house. This is going to be my first home purchase. Could you please suggest me the best mortgage that you know of? My credit history is excellent and I want to put down payment as less as possible. I heard that there are some banks which pay the closing costs themselves. Also, I hear that there are some lenders who are giving loans with interest rate as low as 5.25%. Which lender should I choose and how should I choose? Thank you for your time in helping out this luchha friend of yours with your suggestions.

Dear Luchha,

The info that you have asked depends on so many factors including but not limited to the location you are about to buy the house, the price of the house etc. My suggestion is buying a house with a "low down payment" is not a good idea if you can afford it, unless you can use that money somewhere else and make more returns for your money. You probably will find a bank which will pay the closing costs, but you do know that ultimately it will come out of your pocket. Be careful with lots of bank's hidden closing fees. If you have a finance broker, discuss with them and tell them to give you a better picture of all the costs involve. 5.25% is a good rate as of today, but becareful with the other charges they slap you behind it like points. Try to get good faith estimate from few lenders and make sure compare apple to apple, meaning if one lender gives you the rate with 0 closing cost and 0 points make sure you compare that with the same from other lenders (and of course with the same terms of mortgage years)

My suggestion,  if you can not afford atleast 10% down paymnet. dont buy a house yet.

 

Luchha, I sent you an email earlier about who I used and the way to go about the process.  Hope you looked into it.  Mr. Working Class Hero (Lennon) above has pretty much summed my main point in it.

Luchha!

John Lennon has put forth some great points there.

Samsara! how you doing my man! :)

In addition, I would go with a fixed rate mortgage. Hopefully, the house prices has declined to reasonable price to rent ratio in your area by now and you have a dependable source of income for the long haul. The real estate you are considering should not be too far away from the city center. I have read/heard these days that buyers can get away with 3-5% down if that works out better in your financial plans.

my two cents :)

if you can't put down at least 20% up front, you will have to pay monthly PMI insurance.