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berettafan002 · Joined: 06 Feb 2008 Posts: 9 6.68 Dollars($)

the loan terms i received for a new mortgage loan
was that i put down 20% for 7.125% interest rate/30 yr fixed/+$9000 for the discount rate.

20% is a lot of money on at 750k house. I would need close to 150k +closing cost (16K) by closing date.

i would like to put 10%...instead. what options do i have to negotiate with the lender? I know i may have to pay a higher rate but i don't want to
put too much in the house and would rather use the cash savings for other purposes.

Also, the mortgage loan terms above is from the builder.

any help is appreciated. thanks.

banker0679 · Posted: Sun Mar 09, 2008 3:41 pm Post subject:

builders will always offer the highest rate because they're trying to recoup the incentives they give from the house.

your rate may depend on your credit score if you go conventional, and also if you're going stated.
If you use FHA you can put 2.25% down, and get a much lower rate than 7.125% on a 30yr fixed.

Caron · Posted: Mon Mar 10, 2008 3:28 am Post subject: RE: down payment on first home

Hi Berettafan,

Welcome to our forums.

20% is a good amount of cash no doubt and the amount you're paying for the discount rate is quite high. But you need not bother about the down payment.

You can discuss the issue with the lender as to why it is not that easy for you to pay the down payment. By the way, are you aware of down payment assistance programs? If the lender is not willing to negotiate with you, he may suggest that you go for down payment assistance programs and that's not a bad idea either. The more you put down, the less is your loan amount and hence lower the amount to be repaid.

Check out various down payment assistance options that you can make use of.

Good luck and do not hesitate to ask further queries. Smile

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

The rate that’s been offered to you at this point in time is a very good interest rate, considering the fact that it’s a jumbo loan. However, you might want to analyze how important is that 7.125% for you because I clearly see that the lender / broker is charging you 1.5 points to buy down the interest rate for you. Now, paying a one time $9000 for a good interest rate for the next 30 years is important or an 8.00% - 8.125% with a $6000 - $7000 closing cost puts your pocket at ease? It’s you who has to decide.

I must tell you that, there is a clear scope for some negotiation with the lender / broker on the loan origination fee, you might want to go back to them and understand the best that they can do for the loan origination fee. I feel they can go ahead and reduce at least $ 750 - $ 1000 from the entire closing cost.

I completely agree that 20% is a good amount of down-payment money that one needs to produce on a $750,000 loan. However, if you feel that you would be okay with paying a PMI (Private mortgage Insurance) until you have 20% equity on your home, you can always go back to your lender / broker and insist on doing a 90% financing.

FYI, there would be no adjustment to the interest rate whatsoever, irrespective of 20% or 10% down-payment. The minimum criterion for the best available interest rate is 5% down.

You might also want to shop around for the best available loan program with couple of lenders / brokers to be in a position to go with the best available deal

Hope we are able to help you. Let us know, if you have any further queries.

brad · Posted: Mon Mar 10, 2008 2:27 pm Post subject:

berettafan,

There are a few variables coming into play here. First of All what state and county are you purchasing this home? If you are in a so called "High Cost Area" FHA and Conforming rates have been raised. Some high cost areas all loans up to $729,750.00. If not you may want to just take an ARM for now either a 5/1 or 7/1 at a much lower rate. A 7/1 Arm is around 6.5% without paying points and at least it is fixed for 7 years.

Think about your options but there is no reason to pay a $9000 discount unless you are going to really benefit from this. Also let us know where you are located.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Hi berettafan002,

I am sure that there are better options that what you have been presented with. I would definately shop around.

enriko · Joined: 05 Mar 2008 Posts: 67 0.07 Dollars($)

yo berettafan002

i think that you should look around and im sure you could find more profitable options.

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Do I have to put down 20%?