My wife and I are planning on buying a new home soon (within 50 days).

I've never done anything but a little looking online to learn about mortgages.

Assuming I will not put any money down (this is not something I will reconsider).

I'm a Navy Federal member, and I am looking at getting one of their loans, but I have a few questions:

- VA or FHA?
- Points or no points?
- Origination Fee or none?

VA Loan Rates:
Interest Rate.....Points.........Origination Fee.....P&I Payment
4.000%............3.125%.......1.000%...............$1,360
4.125%............2.500%.......1.000%...............$1,381
4.250%............0.500%.......1.000%...............$1,402
4.375%............0.000%.......1.000%...............$1,422
4.625%............0.000%.......0.000%...............$1,465

5/7/2011 7:42:59 PM

Quote :

"Assuming I will not put any money down (this is not something I will reconsider)."

Reconsider.

5/7/2011 9:16:29 PM

It all comes out in the wash really. The comparison is: take the money you don't spend on points and calculate how much you can earn with it at some rate of return over the life of the loan and compare that to how much you would save in interest with a reduced rate.

If you think you can beat mortgage rate + inflation on the money you don't spend on points, then don't spend the points.

This is excluding other concerns like having liquid cash on hand not plowed into points, say, for an emergency fund or something.

And...ignore the people that are saying putting 0 down is a bad idea. If the bank will let you do it and you still get the best rates , then go for it.

5/7/2011 9:36:39 PM

http://www.realtor.com/realestateandhomes-detail/4400-Queen-Street_Suffolk_VA_23435_M57552-84912

First glance.

Thoughts?

5/8/2011 8:33:10 AM

looks meh, I wouldn't pay $250k for that. I don't know how the housing market is in VA though. Maybe that's all you can get for $250k.

5/8/2011 11:25:42 AM

If you can avoid PMI, it makes alot of sense to not make a big down payment. As mentioned above, it's better to save that down payment (use it for nest egg/paying off cars & CC's).

The points & origination argument come down to how long you expect to be in the home and what you expect to happen with interest rates. If you save money on closing, it's easier to refinance later if rates go down. If you pay alot up front, your rate will be better yes, but it normally takes about 7-8 years to break even with what you put into points & extra closing costs.

If you aren't pretty sure you will still own the home in at least 8 years, I would pay as little as possible up front.

5/8/2011 11:33:06 AM

Yeah, with the opportunity cost it will take about 8 years to break even. I'd take the $1,465 option.

5/8/2011 7:19:58 PM

Think I may have to shop around.

5.125% w/ 0.25% points. 0 down, possibly subject to a 1.75% funding fee.

Feels like buying a car...

5/10/2011 11:29:30 AM

Wtf is a funding fee?
Why would you not get a VA loan?

5/10/2011 12:28:56 PM

I just bought a house last year in Durham/RTP area. That same house would probably go for about $250K or a little more I'd say around here. I think it's a nice house.

5/10/2011 1:00:39 PM

If you can afford that, you probably will not qualify, but I got a CHIP loan from BB&T

3% down
No origination fee
No PMI
Rate was 4.25% at the end of November

Wells Fargo offered me a 3.5% down FHA with a $2k FHA fee, and a $2k origination fee - 4.125%

Quote :

"Community Homeownership Incentive Program (CHIP) loans puts the dream of homeownership within your reach. CHIP loans from BB&T have many attractive features to help borrowers along the path to owning their own home. Benefits CHIP loans offer home buyers the following benefits: * Up to 97% financing on the majority of allowed property types * First-time home buyers and previous homeowners eligible * Private mortgage insurance waived Recommended For A CHIP loan may be right for you if you: * Are unsure about qualifying income* * Are concerned about funding a large down payment * Lack of credit history Property Types The following types of property are eligible for CHIP loans: * Single family homes * Townhomes * Condos * Doublewide manufactured homes on permanent foundations Maximum loan amount varies depending on property location and is subject to change without notice. *Income cannot exceed 80% of your county median income. Consult your BB&T Mortgage Professional for details."

http://www.bbt.com/bbt/mortgage/first-time-home-buyer-loans.html




[Edited on May 10, 2011 at 1:31 PM. Reason : .]

5/10/2011 1:27:32 PM

correct me if i'm wrong but the current va funding fee is 2.15% of the loan amount - which just get's financed into the loan.

if you're most concerned about conserving your cash - look for a 97% program with no PMI - i do these all the time - you can get hte lender to pay your costs and if the seller is offering concessions, you could get the whole thing wrapped up with only 3% down.

per the va - 4.5 should be your no cost no origination scenario - i just checked rates and it's paying plenty.

5/10/2011 1:42:54 PM

Update...my credit score is in the 800s, so its not the approval I'm worried about...the rate they were going to get me to apply for was a 5.125%/0.25% points with a possible 1.75% additional funding fee. Looking around, I"m pretty sure I can get a better deal almost anywhere. And I think I may end up getting a VA loan. I spent some time last night running some excel programs with a spread of some of the VA rates and they look better overall. I'm just a little worried about the timing. I've heard VA loans take a little longr.

5/11/2011 11:42:10 AM

^nah - i've done plenty in a 30day window - you just have to be quick with the upfront requirements - get your cert of elig and your DD214 beforehand.

the whole .25%points with a 5.125 is rape status imo

5/11/2011 11:47:14 AM

Navy Fed mortgage called today and asked why I didn't want the VA loan (4.5% w/ nothing but the 2.15% VA fee).

I told her I had looked around and did want to change my application.

So now all I ahve to do is find a good REALTOR, go down to VA, find a house, start the process of negotiating the price, get a contract, activate the loan, buy the house, finish the school I'm in, arrange for my family to move down, arrange for my things to get down, leave CT, report to my new boat, start my new job.

From here until 1 July.

5/12/2011 5:23:20 PM

Today is the first time I've heard of a difference between a mortgage broker and a traditional loan officer. So far my limited experience has been with Wells Fargo and Fonville Morrisey's brokerage arm. It's been over 48 hours seen I initially contacted Wells Fargo and I've yet to get anything except automated responses. I contacted a broker from FM and within 2 hours was already preapproved, have scheduled a face to face meeting for Monday morning, and got the Dwight Schrute availability pitch (Home, Beeper, AND the cell).

Anyone have experiences to share in using the two forms of getting a mortgage? Any local lenders anyone can suggest?

For background:
- First time home buyer
- More than 10% down
- High "B" Vantage Score, haven't gotten an actual FICO score, but no worries.
- SECU ruled out as they weren't competitive with rates.
- Plan on being here a long time.

7/22/2011 6:21:40 PM

You said your boat, so you will deff be working in Norfolk...My question is...Why Suffolk? sure you get more sq ft for your buck, but you are driving a long fucking way...I have a house in Chesapeake, VA and that is with no traffic a 20 min drive to base...with traffic is 45 mins to 1 hr 15 mins on a good day...have you considered Chesapeake, VA Beach? etc etc...Ive known two people to live in Suffolk and work in Norfolk...ALWAYS complained about the drive.

When I bought my house, I used Long and Foster. I liked them.

I am also using Wells Fargo for my Mortgage. VA loan.

7/22/2011 6:33:42 PM

^^ Income level and the location of the property are important as well. Depending on your income you may qualify for the CHIP loan that has been previously mentioned. If the house is away from urban areas you may be able to get a USDA loan. I personally went with a credit union. Put 0 down, no PMI, little bit higher of an interest rate. Nice thing about it is I'm not locked into any type of minimum time requirement.

7/22/2011 10:21:16 PM

Well, a few things have changed since May.

First, I was planning on going down to VA during a weekend to look at the houses that my realtor was helping me find. Two days before it happened, my wife ran a half-marathon and had a re-occurrence of serious intestinal problems. We had to take her to the ER, and then get a follow up colonoscopy.

That cancelled those plans, and with the limited amount of time between when I had to leave and when I had to be on my boat, we decided to find a place to rent and later on (when we had time and were local) look for a place to buy.

That was the beginning of this month. We're in Newport News (Kiln Creek) area, as my boat is in the SY up here on the peninsula.

Well...things have changed again.

Last week, I had my own emergency re-emergence of chronic (and this time acute) lower back pain. I haven't been on the boat since last Thursday (the day before I was supposed to relieve as Combat Systems Officer).

A few X-rays and MRIs later, and I have a "moderate to severe" disc herniation of the L4-L5 lumbar disc, with "radicular symptoms."

This will now require me to see a spinal surgeon and thus end my career serving on submarines (I am hoping to still be able to support them, albiet from a permanent shore job).

Talk about the blow of a lifetime. I've been doing this for around 14 years (enlisted July 11, 2011).

Anyway...that's what's going on, and that's why we didn't get a place in Norfolk.

7/23/2011 12:05:57 AM