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First time home owner mortgage rates?

I'm looking to buy my first home, for $150,000.  I have 20% down, good credit, but my income is low right now so my dad's co-signing with me for the loan.  Together, we make well over $120,000/year.  The bank I talked to gave me a 5.6% rate last week (for both 15 and 30 year mortgages..I don't know why its not lower for 15), does that seem high?  Do first time home buyers usually have higher rates?  Shouldn't the fact that I have a co-signer help me out?
  • August 03 2009 - Nashville
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Answers (12)

With low income you can't afford the payment on a 15 yr loan. First time homebuyers don't have higher rates. You either qualify for the loan or not. The rate is determined by your credit score, property type, lock time, product and LTV. Co signer don't help on the rate, just on qualifying. You need a Fannier Mae 30 yr fixed rate. You should get 4 Good Faith Estimates. Don't give out your social security number until you have decided which lender to go with. They can e mail you a Good Faith Estimae. [content removed by moderator for being self promotional]
  • August 15 2009
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katieryan5, I would encourage you to take the advice of going the FHA route.  The 5.6 does seem a bit high but as mentioned previously may depend on what the lender is helping you out with in reference to the costs of the loan.  To answer your question about the first time homebuyer, no there shouldn't be any extra addons or fees for that.  My guess is you may be looking at higher rates on the 30 year due to credit scores?  If this seems to apply, then I would definitley suggest the FHA route which depends far less on credit scores and currently offers better rates.  Additionally, if the market improves ratewise then you always have the opportunity to "streamline" and get a better rate without the charges and hassle of income and value qualifying.
My advice - shop around, but not too much as you are then likely to end up with the best salesman and not exactly the best loan officer.
Hope this helps.
  • August 06 2009
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I agree the rates are extremely high.  I think you should get a couple more quotes and see if you can't do much better.  In Arizona realtors have to give two referrals for lenders.  Just to make sure the borrower isn't getting screwed.

 
  • August 06 2009
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There are first time homebuyer loans available especially in TN,,, THDA, Rural Housing... Please take advantage of these loans if you qualify by property location or by just being a first time homebuyer.  

THDA is a GRANT program, you do not pay it back.   With your down payment you could qualify for a THDA Great Rate program that is as low as 5.25 fixed..that does have a 1 point origination.(set by THDA )
  • August 06 2009
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There is no 'hit' or adjustment for being a first time home buyer. Rates came up a little today but you should still be to lock in 5.125-5.25% with one point. As David mentioned, rates on a 15 year should always be slightly better.
  • August 05 2009
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[content removed by moderator for being self promotional] If you can or want to pay points, these rates can go even lower.

[content removed by moderator for being self promotional]

Best of luck!
  • August 05 2009
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Travis, please don't mislead consumers here. I just checked every bank I deal with on the wholesale side along with numerous retail bank rates today. There is not one bank offering 5% or below on a 30 year fixed with zero points. Original poster, the fact that you have a co-signer helps you out when using income to qualify for the mortgage, however pricing for your loan is determined by a number of different variables. (the lowest of the 2 borrowers credit scores, loan program, loan size, property type, etc) You may be able to do a little better. I suggest placing a loan quote request and see what offers you come up with. Make sure to look at the total costs of the loan and don't just get hung up on the rate. Best of luck!
  • August 05 2009
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Yes tha rate seems extremely high. Todays rate on a purchase loan at a 30yr fixed rate should be 5% or lower. You should be able to get a rate at around 4.5% on a 15yr fixed. Please feel free to email if you have any additional questions. Have an awesome day!
  • August 05 2009
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Those rates you were quote do seem a little high. It does depend on your credit score though. Rates today are right at 5% so I would definitly look else where.
  • August 04 2009
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The 15 Year fixed should be slightly lower.
Put in a loan request on Zillow so you can see your options.
  • August 04 2009
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Those rates are competitive, your best bet is to shop around or at least check mortgage rates in your area [deleted due to self promotion]
  • August 03 2009
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The available loan products on the market right now have much stricter guidelines than the loans that were available just a year ago. First-Time Buyer loans also aren't really a "category" anymore. Most first-time buyers have very limited down-payment funds and opt for the FHA loan which only requires a 3.5% down-payment. Of course, FHA is available to any owner-occupant. Rates on FHA are about 5.375% today with 0% origination.
It is somewhat odd that the 15 year rate would be the same as the 30 year....
5.6% isn't super high - especially if you aren't paying points or origination. Always shop around though and get your Good Faith Estimates in writing.
p.s. In general rates are based on your average credit score. If you are up in the mid-700s you'll probably pay at a rate a bit higher that the advertised rate.
  • August 03 2009
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