Is 6.25% a good mortgage interest rate for my situation?

[hrbatyfan]

Hi,

My mortgage broker today locked in a rate of 6.25% for my 30 year, fixed loan, no points, no money down. He felt it was a good time to lock considering I close in a week and he felt some news in the next few days might drive the rates up some.

I have:

1. Credit score in the 700s, forget exactly
2. 1 Visa card, 1.5 years old, never missed a full payment
3. 1 Amex card, 6 months old, never missed a full payment
4. $7,500 in an online savings account
5. ~$1,000 in a checking account for bills, etc
6. A few other small assets like $300 in a 401k

Based on my situation, do you guys think my rate is good, bad, or ugly?

[safari]

I have a few questions.

- What is the loan amount that you're getting? Have you calculated what the monthly payment is going to be, and whether it will put a strain on your budget? Also, don't forget to add property taxes.
- What are the closing costs? Will they be included into the loan?
- Are you planning to live in that house for at least 7 years? 30 year fixed rate may not be the best choice for you, depending on your situation.
- Are you financing 100% of the purchase price with a single loan? If yes, then you'll be paying PMI. In addition, it's not a good idea to buy a house without putting any money down because you may end up owing more to the lender than your house is worth, if the house prices go down. By looking at the assets that you listed, you don't have enough money for a downpayment. I'd think twice about buying a house if I were you.

6.25% may be a good rate for a 30 year fixed loan, but there are a lot of other things you have to consider.

[autoxer]

If you post your GFE on this board:
http://creditboards.com/forums/index.php?showforum=9

then it will get reviewed & criticized by many mortgage brokers. There is a lot more to it then just a good or bad rate.

[hrbatyfan]

Thanks for the help so far.

The loan amount is $140,000 for a condominium in a solid, appreciating area of Atlanta, Georgia. The payment, HOA fee, property taxes, condo insurance, PMI, utilities all make it in line with my salary of $40k + commission (will be at least 60k total for my first year out of college.

All of my closing costs are being paid for by the seller thank god, including setting up the 3 month escrow for taxes, insurance, etc.

I quite possibly might not be in the condo over 5-7 years, but at the same time I may fall in love with the area, love the payment once I start making even more money, and even if I leave before 5-7 years I can potentially selectively rent it out as it is a great location for that. I just wasn't willing to take a risk on a ARM, when I could get fixed money at a decent rate.

It is 100% financing, but not an interest only loan, etc. I had enough money for a down payment, but it wasn't enough to make a huge dent. I already can earn 5% on money in my money market with zero risk, not to mention other investment options can do better. In a perfect world I would have had 20% to put down, but I feel comfortable with what I am doing.

Thanks again for bringing up all these points as you have to look at home buying holistically.

[hrbatyfan]

Originally Posted by autoxer

If you post your GFE on this board:
http://creditboards.com/forums/index.php?showforum=9

then it will get reviewed & criticized by many mortgage brokers. There is a lot more to it then just a good or bad rate.

Thanks, I'll have to check this out.