My husband and I are about to buy our first house (well, townhouse, actually). We’ve found a place we like and now we need to find a lender. I just want to find out if anyone has any clues as to what we can expect with regards to interest rates. We’ve already been preapproved and the sale price of the place we want to buy will be quite a bit less than the amount we’ve qualified for (by about $100k).
We’ve been talking with one lender who is offering us a 2/1 fixed/adjustable mortage (fixed for 2 years and adjustable by up to 1% each year afterwards) at 6.5% with a term of 40 years. Now, we’ve both got exceptional credit ratings, but we need to finance 100% so that might affect things a bit. My mom (a real estate broker in rural NC) tells me that national rates for 30-year fixed loans are at 6.5% so we should reasonably expect a much lower rate on an ARM than what we’re being offered. She thinks we should be able to qualify for a 30-year fixed mortgage with 0 points. (Of course, she’s also got me completely paranoid with talk of how common lending fraud is nowadays. Thanks Mom!)
Anyone have any useful experience or info they can share to help us out?
Oh, and we live in the Orange County area.
) and I wouldn’t consider anything other than fixed mortgage at the moment. Just wayyy too risky. At 100% financing you aren’t likely to get 6.5%, but zero points and under 7 for 30 years might be doable if you have a good enough credit score ( it was for me ). Regardless even 7.0% isn’t that bad, historically speaking. You’ll just feel jealous of your neighbors who have 5.5% ;).