May 212011
My husband and I had to file a ch.7 bankruptcy last year due to a severe car accident and loss of employment, we are since doing much better financially, and need to buy a bigger home to fit our growing family. What kind of troubles are we looking at with getting financing for a new home? We have never been late on our current mortgage, and reaffirmed our mortgage debt in our bankruptcy. We have never not even once had a problem paying our mortgage in full and on time. Will that help us in any way?
150,000 mortage at 6.5%. I have an extra 5K. Should I buy 3 points off the interest, or should I add that to the down payment to make the mortgage 145,000?
PAY down mortgage.
Points are prepayment of interest so u get a ‘lower’ rate. good for them , not u.
u can add principle to payment and come out a head faster.
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or: (3) save it for move-in expenses.
in most situations a pt will get you a reduction of somewhere between 1/8 to 1/4 off your rate. so 3 pts if u are allowed to buy it down that much will knock off 3/8 to 3/4 you need to check with the lender to see how much they will knock off and how many pts you can buy down some lenders limit it to 2 pts. , now i am assuming you are looking with that rate ata 30 year term, your p &i will be 948, if you can buy 3 pts at 1/8 per pt your p &i will be for 6.125% 911, and if u get really lucky and can buy down at 1/4 pt to 5.75 you p &I would be 875 so in best scenario you will save approximately 73 a month it would take you 62 months to break even if u spent 4500. now the question is are you going to stay in the house that long, if not and things do happen why spend the money to buy the rate down. another thought 4500 is a lot of money if your world goes to hell at 1000 a month for P&I 4500 will buy you 5 months of mortgage payments giving u time to get back on your feet health wise or job wise, think about that if this is all the money you have do you really want to spend it when it could save your house or your financial future. if it was me i wouldn’t spend it for pts to buy down unless i had extra reserves and was absolutely sure i was going to be in the house at least 72 months. worse case scenario, you lose the house or walk away you still have the 4500 plus the interest its earned lets say at 5% for 6 years in your pocket to start over with hmmmm thats now close to 6000. what do you think is the wise thing to do gl.
is this the best offer you got from several lenders it is a bit high if you hve good credit. if you do have good credit and they gave you this rate look elseware.
People are generally not advantaged in buying the rate down. I would stay liquid. You never know when you might need some extra cash flow especially buying a new home.
I would check around. You may be able to do better than 6.5%. In Ohio, we have a first time homebuyer program that provides 100% financing at around 6.125%. Of course, PMI is required, but it is only .5% annually based on the loan amount or $ 62.50/month there is a 1% origination fee, but the rest of the fees are very reasonable.
Check with your state housing authority to see if they may have any special programs for you.