Question by crzyaltego: What are current 30 year mortgage rates at?
If you get a cosigner with great credit can you get a much better deal than if you have a limited credit history.
Best answer:
Answer by Molly R
Check into an FHA mortgage
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The answer to your co-signer question is NOT as simple as people may tell you.
It will help you BUT many lenders will qualify you for the interest rate based on the lowest fico of the 2 applicants.
There are some that look at the primary wage earner’s fico so in this case your co-signer would have to earn the most money to have the lender consider his/her fico score over the person with the lowest fico score.
For current interest rates on 30yr fixed you can go to bankrate.com
You can do 30 year fixed at about 6.5%, assuming 20% down and 720+ credit score. Lower down payment or credit score will increase your rate.
Cosigner – long story short, unless that person intends to live there as their primary residence, then you’re out of luck. Most traditional banks want the cosigner to live there so they would face the possibility of losing their residence if the note doesn’t get paid.
Hi – yes you can get a better rate – and the rates are still GREAT – with out putting 20 percent down. You could get anywhere from 6.5 to 7.5 depends if you want a 100 percent loan or a 80/20 blended rate – There are alot of factors to consider on your behalf. Job time, Income, Rent History, etc. If your co-signer is a parent – they could purchase the property in their name as a investment or 2nd home, have you live there after signing a land contract, the contract has to be recorded at the court house. You would have to pay them by CHECK each month. The reasoning for the check – is in 1 year you can than refinance the home, in your name, and show 12 month cancelled checks as proof that you lived there. By that time, the property will have increased in value, your refiance, can have your closing costs rolled into your loan. That is one way of getting your home.
There are other factors to consider, besides credit. Medical Bills are Over looked buy underwriting (since medical is a un-forseen event), where as credit cards, are looked at (since you purchased items on a credit card.) Also, Job time of 2 years, Rental history for 2 years is looked at. What collections & judgements are on your credit report. Some collections may not have to be paid off. Judgements may need to be paid off – depends on the Lender and Their Underwriter. All of these are taken in as a factor on getting a home loan. Credit can be worked on, by adding alternative credit. If you are paying regularly on a cell phone, auto insurance, rent, etc – these are called alternative credit.. All is not HOPELESS – ok – take a deep breath. If your credit score is 500 or higher, anything is workable, with a seller second – etc the higher the credit score the better. Lenders look at the middle score…of the 3 scores. If you only have 1 score or 2 scores (have seen it), it is still workable….but unless a lender sees the whole picture – credit – income – job time, etc – than you will not have a “true” picture of what you can afford – Hope this helps – There are also Government programs out there, but they too are looking for job time, etc…..They are not so much looking a credit – but the other factors are taken into consideration. With a government loan – collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true….
Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now – (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 – This is just a estimate – ok – It greatly depends if you need help with closing cost, if you have money to bring into the table – so you do not have to borrow the full 100 percent. Rates are still in the 6’s but they are getting higher – ok. If your credit is in the 500’s to low 600’s than the rate would be higher – lots of factors to consider. Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a “hard” pull and it drags down your credit score. Try to find someone (broker) that will pull your credit one time, and submit your loan application to company’s that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only – not the final – but it does help you figure things out. Some companies want you to escrow you taxes and insurance. Other’s may not require it…Some companies add a .25 to the interest rate if you want to escrow waver…FHA loans have to escrow (at least they used to)
The Government Programs may be the way also: visit hud.gov
or
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Welcome to the USDA Income and Property Eligibility Site
1. This site is used to determine eligibility for certain USDA home loan programs. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.
To learn more about a USDA home loan program, click on the Loan Program Basics link on the left side of this screen and select one of USDA’s home loan programs.
To determine if a property is located in an eligible rural area, click on the Property Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate property eligibility screen for the Rural Development loan program you selected.
To determine income eligibility of an applicant/household, click on the Income Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate income eligibility screen for the Rural Development loan program you selected.
To find out how to apply for a Rural Development Loan, click on the Contact Us link on the left side of the screen and then select a Rural Development Loan program.
Rural Housing Direct Loans are loans that are directly funded by the Government. These loans are available for low- and very low-income households to obtain homeownership. Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas. Mortgage payments are based on the household’s adjusted income. These loans are commonly referred to as Section 502 Direct Loans.
2. Purpose: Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to review area income limits for this program. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant’s income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. Elderly and disabled persons applying for the program may have incomes up to 80 percent of area median income (AMI).
Terms: Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government’s cost of money. However, that interest rate is modified by payment assistance subsidy.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.
Approval: Rural Development officials should make a decision within 30 days of the Rural Development office’s receipt of the application.
Basic Instruction: 7 CFR Part 3550 and HB-1-3550
Section 502 Guaranteed Loan Program:
1. Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Approved lenders under the Single Family Housing Guaranteed Loan program include:
Any State housing agency;
Lenders approved by:
HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities;
the U.S. Veterans Administration as a qualified mortgagee;
Fannie Mae for participation in family mortgage loans;
Freddie Mac for participation in family mortgage loans;
Any FCS (Farm Credit System) institution with direct lending authority;
Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs.
Terms: Loans are for 30 years. The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.
Approval: Rural Development officials have the authority to approve most Section 502 loan guarantee requests.
Basic Instruction:7 CFR Part 1980.