Tuesday, March 30, 2010

Mortgage rates

For the last couple of weeks I have been looking into buying a house. The government is giving away $8,000 for first-time home owners who sign a contract by the end of April and close by the end of June. But I'm not sure how much of a reality that is--the question is can I pay off a mortgage based on student loans. (The answer is probably not now).

Although I was looking to see if I could get something done with the tax-credit, a consumerist article points out that the buyers' market is likely to continue for a while. Many homes that were unable to sell during the tax credit, when many customers were given $8,000 down free of charge, will go down in price as the tax credit expires. So I will continue to look for houses as long as the bull market continues.

I spoke with a representative for a big bank today about securing a mortgage. He quoted me around 4.25% for 15-year and around 5% for a 30-year with closing costs. The rep pressed hiking up my rate to 6% for the 30-year to cover closing costs (about $3,000). That hike would increase my expected mortgage payments by $7,000 every year. They would break even on covering closing costs within six months! What a scam.

Well that's all that I got for now.

3 comments:

brian hogan said...

That dude was a corporate tool! And not the good kind. :)

Reuben said...

a full percentage point for $3,000???? boy howdy! 4.25% will be pretty hard to beat, that's for sure....

Nate said...

4.25% is pretty nice. I gotta decide if I really want to commit to a house and Minnesota. Heaven knows I fear commitment.