home buying help

PittSpeed Automotive PittSpeed Off Topic
1

Ok guys here’s the deal.

I have never bought anything larger than a car, that I needed a loan for. looking to get a loan for my current house. It is currently owned by a relative. Can someone give a quick leasson in what all of the terms and thinks to know are?

like closing costs?

Points?

Terms? (I can figure out that 30 yrs means just that, you pay for 30 years. But why not take a low monthly payment on say a 30 year loan, and just pay more monthly or even extra payments instead of taking a 15 year loan?)

Anything else I may need to know.

Thanks,
Tom

2

taking out the 30 yr FIXED rate mortgage would be the best way to go. Overpaying is always a good idea especially since in the first couple years you are hardly paying toward your principle with the min. payment. Rates are low and housing is reasonable in most areas so it is a good time to invest. good luck!

3

We’re going through buying a house too. I am not an expert by any means, but this is my second house purchase so I know some of the stuff.

Closing Costs consist of the following:
-Processing fees
-Settlement fees
-Document prep. fees
-Notary fees
-Title insurance
-Transfer taxes
-and various other nickel and dime fees

-Points are paid when you lock in an interest rate or when you get a lower rate. For instance right now I can get a 5% mortgage with no points or I can get a 4.5% rate with points. Points are paid at closing and they are essentially a % of the price. So if I paid 0.5 points it would be 0.5% of the sales price that I would have to pay at closing.

-And the term is really up to you. If you have the monthly cash flow to pay off a mortgage in 15 years, more power to you. You can get lower interest rates and over the life of the loan you will spend a ton less in interest. It is kind of sickening when they show you the total $$ you will spend over the life of your loan to actually own your house. If you can minimize the interest that you pay, I would go for it.

4

There is something called a quit claim deed that might be worth looking in to.

I don’t know the details but I am pretty sure it’s cheaper to do it this way. Since it’s a family member that might be the way to go.

5

that’s just for the property transfer…the closing cost are mostly related to the loan itself so you might as well let them handle the deed work as it is included in ur closing costs.

6

Previous posts cover most of the main points. Shoot a PM to foz here on pittspeed. He is in the biz and can help you out with detailed info.

7

Go get quotes from more than one lender!!!

Closing costs can vary greatly from one lender to another…you want the lowest interest rate you can get, no points, and low closing costs.

Oh yeah, unless you have 20% down, most of them will tell you that you have to pay PMI as well.

From my past experience, most of the ones on the Internet are rip-offs. Stay with a local company!!

8

Agreed. Rates and closing costs can really vary from company to company. I saw a huge swing in the money I needed at closing and the monthly payment that I would end up with when I got quotes from multiple companies. You would be surprised how different the results can be considering that they are all using the same information that you provide.