Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for Anukumar

Need Advice: First-time buyer, Credit Score 674, 195K home, downpayment 10%

Would I be better of  with a Fixed rate or ARM? Any chances of getting interest only mortgages for me to build my reserves for 20% downpayment to get a lower rate 30 yr fixed mortgage? 

Thanks in advance for your advise.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009 - Greenville
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (9)

Best Answer

If you try to get a conventional interest only arm, i dont think you will qualify with a 674 score, plus the rate is much HIGHER than a fixed rate 30 yr. A portfolio arm will generally require 20% down and rates about the same as 30 Yr fixed. 
Compare: 30 Yr at 5.25% = 969/month
    5 Yr I/O at 6% = 877/mo interest payment
Cash flow savings = $91/mo or only $1100 / year. That does not get you the extra $19,000  needed to get to 80% LTV.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Anukumar, the banks in my area go to 85%, some only 80%, and want at least a 720 score to get a piggyback Heloc. When you have 2 loans, the cost of the 1st mortgage goes up due to another adjustment for the combined loan to value, on top of the score adjustment. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Profile picture for Anukumar
Thanks very much for your suggestions. I will go the fixed rate route. Waht would my chances of getting a small home equity for the 10% gap. In otherwords can I get 2 loans one for 80% of the value and the other for 10%. The idea being we can repay the smaller loan faster and not be struck with a higher payments for 30 yrs. Plus save money on refinancing.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
CB--



You can only give the illustrious "Best Answer" designation if you had asked a 'question' not started a 'discussion'.  Your'e SOL buddy.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Thats right! Plastic Baby Rules, unless plan B has to be put into action. Anukumar, thanks for the best answer, that's a 1st. BTW, how do you give that, I need to give best answer to someone else on another thread and cant figure it out, LOL.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Profile picture for Entitlements R Us

Thats right, rates are near historic lows and according to the plastic baby, they will be at historic lows again sometime in the next two weeks

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Profile picture for Anukumar
I was wondering if I could have a low interest loan by doing a ARM or Interest only so that by the end of the year i would have the remaining 10% and hopefully my credit score would be 700+ for me to refinance at low fixed rates. 
Would this be a worthwhile considering all the closing costs?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Not sure what you mean about the interest only and reserves? If you are buying with 10% down and 674 fico, then go FHA. If you can wait until you build your reserves ( best ) to 20%, then you can get a conventional loan with no MI and it also gives you time to get your score over 700. DO NOT get an interest only loan, probably not available to you anyway.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
Take a fixed rate loan. Rates are near historic lows.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 01 2009
 
Related Questions
Is it Possible to get a VA loan with poor credit Greenville, SC?
Profile picture for Adam Huntington
Latest answer by Adam Huntington
April 16 | 5 answers
Mortgage approval in upstate SC?
Profile picture for Lowell Sterling
Latest answer by Lowell Sterling
March 03 | 1 answers
Is our situation hopeless?
Profile picture for Brian Nguyen
Latest answer by Brian Nguyen
February 21 | 8 answers
What can I do to get more (or better) quotes for my loan request ZR-TNFYCHT?
Profile picture for Joe Cafiero
Latest answer by Joe Cafiero
December 27 2013 | 1 answers
  • Asked by claudettelakhram
  • In Mortgage
  • December 27 2013
What can I do to get more (or better) quotes for my loan request ZR-KLKCCDN?
Profile picture for wetdawgs
Latest answer by wetdawgs
October 26 2013 | 1 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 121 Josie Creek Dr, Piedmont, SC Home For Sale
    121 Josie Creek Dr, Piedmont, SC 29673

     For Sale: $29,900

    • Beds: 0
    • Sqft: --
    • Baths: --
    • Lot: 26571
  2. 161 Oakvale Road A & # B, Greenville, SC Home For Sale
    161 Oakvale Road A & # B, Greenville, SC 29611

     For Sale: $59,000

    • Beds: 2
    • Sqft: --
    • Baths: --
    • Lot: 15246
  3. 247 Lowndes Ave, Greenville, SC Home For Sale
    247 Lowndes Ave, Greenville, SC 29607

     For Sale: $154,900

    • Beds: 4
    • Sqft: 2430
    • Baths: 2.5
    • Lot: 14374