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I want to buy a home or condo in Indiana . I don’t much savings, just $1200. I went through a consolidation program to pay off credit cards and owe $8500 with the monthly payment being $180. i pay $120 towards student loans. credit score checked last month is 712, 720 and 735 .

The broker I approached advised me to save $350 a month and have about $3500 in cash savings. They said something about reserves. What I’ve decided is to move in with my parents and pay off the student loan, then save for the down payment. The broker said I would qualify for approx $130,000 at 6.75% from a nationalized lender (right now he doesn't want to reveal the name) and $100,000 at 7.25% . I don't know much about the loan except that the first is an ARM and the second a heloc. Can you suggest some options or do you think the offer isn't a good one? I'm here to take advise that can help me get a home with no hassles around.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Jett,

Welcome to the forum.

Your credit seems good. So I think you should get approve for better rates and terms. But you have only given us information about your credit history, But to get approve for a mortgage, lit depends on lots of things like monthly income, employment history, your present due debt amount etc. So can you please inform us these?

But I will like to say that you should shop a bit for lenders so that you can get better rates and terms. You can even get No-obligation free consultation from the rates lenders of this community so that you can get better options.

Feel free to ask if you have any further questions.

Best of luck,
Larry

gmakerley · Posted: Fri Apr 25, 2008 7:57 am Post subject:

unquestionably, you ought to be able to obtain a better interest rate than 6.75% for a fixed-rate mortgage. with as little as 3% down, you would fit perfectly, it seems, into an fha mortgage. rates on those can be as low as in the 5.5% range. all rates, quite frankly, depend on how much cash you have. the lower the rate, the more it will cost you in points (fee). even if you don't pay to reduce your rate, you still ought to be able to do better than what you were quoted.

i would steer clear of a heloc if i were you. this is a variable rate loan with billed payments of interest only. it is way too convenient to pay on the interest and not reduce your principal balance.

check with indiana housing about their bond program. interest rates on that ought to be better than what you will find elsewhere.

steer clear of any lender who tries to dissuade you from using the bond program. these are wonderful deals for first-time homebuyers, offering not just lower rates, but many other goodies such as downpayment assistance, etc.

you've not share your income with us, and i'm not asking you to do so, but you might just qualify even if you didn't pay off your student loans. i would suggest saving at the same time you're prepaying those loans. don't wait for one to happen before you do the other.

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