Refinancing Home Mortgage
We are financing 95%LTV. The builder is paying all our downpayment and closing costs. Also, how likely is it that we can refinance after 2 years. Our credit score isnt really all that good now, but we expect that if we have no more late payments and 2 existing collections disppear that we might see an improvement in our FICO score.
This is about mortgage information questions.
2 Responses to MORTGAGE BROKES? Is an FHA 1 Year ARM loan at 5% a good deal? We are closing next month. ?
matzael
May 6th, 2010 at 1:42 pm
The interest rate is good, and the FHA adjustables aren’t nearly as bad as some of the others you’re hearing about in the news lately. Their interest rate increases are limited to 1% per year.
Do make sure you can afford the payments at the MAXIMUM interest rate for those years in case something happens and you’re not able to refinance.
If you keep your payments on time and have stable income and are able to save some money, it’s pretty likely you’ll be able to refinance in 2 years. Keep in mind that NO ONE can guarantee that, and no one knows for certain what terms will be available then.
FHA fixed rates aren’t much higher than the adjustables, you should price the difference and consider going with a fixed rate now, just in case the market conditions aren’t good in 2 years, or if something happens along the way that would hurt your chances of refinancing.
Congratulations on the home purchase and good luck with your new home!
Carolinahomerates.com
May 6th, 2010 at 2:32 pm
yes that’s good….but YEA RIGHT ON THE RATE…make sure you have somethign more than a Good Faith Estimate!!!
30yr fixed are at 6.5% for FHA….or it depends on the loan amount
Patty
May 6th, 2010 at 2:55 pm
Well, If you have a 1 year ARM, which means in 1 year, your rate will adjust. While you CAN afford the 5% interest NOW – what you should be worried about is in 1 year. If you wait 2 years to refi, in this crazy market we are in, who’s to say that the house will have enough equity TO refi. My suggestion: conforming 30 year fixed. FHA has those at good rates. I don’t know what state your in but it’s safe to say that the rates should be in the 6% range (with proper qualifications). Your better off doing that and BUYING down the rate if your determined to have a 5% rate. It will cost you some $$$ but will give you the payment you want and will keep you in a good spot. AND it will probably be cheaper than having to refinance in 2 years. If you must get an ARM – get one for no less than 5 years and a prepay that is no more than 2. Hope this helps!