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Guest

We have planned to buy a second home. Our first time home is in California. We did a short sale on that and got around $50,000 less what he needed to pay to get out of the loan. Our credit is still ok though and we've started renting in newyork as there was a job shift on my husband's part. We were thinking of going for 30 year loans, fixed rate though because we wanted to wait for fed to lower the rates. Once that is over, do you think we will be able to get low rates? If possible we would buy within thenext 5-6 months, so when do we need to pre-qualify?

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

Hi Rene,

FED is not going to drop the interest rates in this October. As you know that interest rates fluctuate with the market, so you should take a close look on market and as soon as the interest rate goes down you can go for the loan. And yes if you take 30 years fixed rate, you will have a lower interest rate but still, it depends upon your credit report and debt to income ratio.

Guest

Hi,

The present rate for a 30 years fixed mortgage is a little above 6.1% and for 15 years it is something around 5.74%. Although this has increased from what it was in the last week but on an average it is quite low.
I think you can start shopping for your loan right away if you are planning to buy within 5-6 months. It takes time to get the whole thing done. And the rate which you can avail also depends on your credit score as well as credit history.

ckalvesmaki · Posted: Sat Oct 13, 2007 10:55 am Post subject:

Rene,

A short sale is considered a foreclosure under conforming guidelines......You will not be elgible for a conforming loan for three years...

livinginnky · Posted: Sun Oct 14, 2007 2:20 pm Post subject:

The fed lowering their rates doesn't have a direct effect on mortgage interest rates. Rates are low now and who knows where they will be in 6 months.

The best time to prequalify would be 2-3 months before you plan on purchasing. You will have to provide updated documentation right before closing though so be prepared. Also you can normally lock interest rates for up to 60 days although it costs a little more than a standard 15-30 day lock.

Guest

So, that means i cannot get a conforming loan for 3 years but there are chnaces of my pre-qualifying, if i would go by what Eric says, is it? and are there other options that I may look for?

livinginnky · Posted: Mon Oct 15, 2007 11:07 am Post subject:

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Should we get lower rates once FRM rates go down?