Author Topic: I need mortgage help - first time home buyer, house under contract  (Read 2244 times)

KiloRomeo

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I need mortgage help - first time home buyer, house under contract
« on: September 09, 2015, 11:14:49 AM »
Way too many options and wayyy to confusing for a first time home buyer. Especially confusing since it seems like most advice out there is geared to the general public and not mustachians.  Before I make a major mistake I was hoping you guys could offer some insight.

My wife and I are under contract on a 200k house which we will be putting 20% down. We both have excellent credit (800 me, 770 her) and plenty in reserves/emergency funds. I used to be firmly in the "get a 30 yr mortgage @4%, invest the rest at 7% but now I'm not so sure. Cash flow wise we would be comfortable with either a 30 year or a 15 year mortgage. I foresee us staying in this house a minimum of 5 years, ideally we would stay for 5 years and then convert it to a rental property after that.

 Shopping the different mortgages just get super complex and I'm not sure if I should be focusing on APR or actually doing the math between closing costs and monthly payment. So far we are looking at Penfed, Aimloans and Guaranteed Rate for a mortgage. 

Any insight regarding 15 vs 30 year? Should I shop by APR alone (since closing costs should be included)? Any other thoughts/advice?

Thank you.

Spreadsheet including what I've found so far but I'm not sure I trust the closing costs column:


MDM

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #1 on: September 09, 2015, 12:16:11 PM »
I should be ... actually doing the math....
That would be a good mustachian mantra.

MaikoTsumi

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #2 on: September 09, 2015, 02:00:08 PM »
Check with a local mortgage broker (several actually) and look around for a local credit union to compare.  Those closing fees are higher than what I can get locally, but that may be just your area.  You can shop around as much as you want within a 30 day window and it will only count as one hard inquiry as far as your credit score is concerned and the savings may be thousands.

KiloRomeo

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #3 on: September 09, 2015, 02:13:51 PM »
Shouldn't the APR include closing fees? If so, local credit unions can't touch Aimloan or Guaranteed Rate.

waffle

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #4 on: September 09, 2015, 03:54:38 PM »
If you want to look compare different costs you can use this spreadsheet that I put together. The PMI factor in the top right might need to be updated, but its great for evaluating different loan options. I play around with it all the time looking at different scenarios. You can plug in the numbers and see which is going to leave you with the most money when you sell.

KiloRomeo

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #5 on: September 09, 2015, 07:29:47 PM »
Thanks Waffle,

After further research I'm going to apply with Reliant, Aimloan (Got GFE), Smarter Mortgages (in process), guaranteed rate (applied but they didn't provide a GFE) and then talk to other local credit unions.

Any other ideas?

Aim Loan offered:
Loan Amount: $160k
LTV: 80%
3.625%
Origination charges $1995, Required services they select $477, Title services $575, Owners Title Insurance $1085 , $400 various.

The rest are transfer taxes/escrow which I've excluded from above. What do you think?
Credit Score 800

waffle

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Re: I need mortgage help - first time home buyer, house under contract
« Reply #6 on: September 10, 2015, 08:02:25 AM »
If you are only planning on staying in the house for 5 years then you might also look around at no closing cost loans. They pay all those fees and you just have a little higher rate. When I bought my house I did that because we are also planning on living in our current house just a few years and it will take about 9 years to break even with the little bit higher rate we pay.