LOAN DOWN PAYMENT, the more the better?

michelleshack · #1 (**permalink**) 10-16-2009, 03:14 AM

im a newbie here...

me and my husband just qualified for a 450,000 FHA loan. Our lender advices us to put down 33,000 to bring down the loan to 417,000 so that we can avail of the lower interest rate for a 3o yr loan. otherwise we will be getting the jumbo loan(with is 1% difference from the regular one) if we only put down 3.5% as down payment.

im confused, i dont know what to do....

some people say we're stupid to put down a big amount of money when its not even required...

sapphirecapital · #2 (**permalink**) 10-16-2009, 02:09 PM

its not a downpayment per se, it is in your own pocket, you own the real estate, if you have it do it, however if the amount is for buying down the interest rate, than the money goes to the lender and you need to calculate how long you need to keep the loan to make it make sense, but the way you explain it you put the money in your real estate , its part of the price and well worth it; with interest rates low in a longterm environment lock in the lowest rate if you can

michelleshack · #3 (**permalink**) 10-16-2009, 05:28 PM

Quote:

Originally Posted by sapphirecapital

its not a downpayment per se, it is in your own pocket, you own the real estate, if you have it do it, however if the amount is for buying down the interest rate, than the money goes to the lender and you need to calculate how long you need to keep the loan to make it make sense, but the way you explain it you put the money in your real estate , its part of the price and well worth it; with interest rates low in a longterm environment lock in the lowest rate if you can

Yes, the purpose of the money is to lower the price itself. Thank you for your advice.
does the lender have the sole control over locking me in an interest rate? i mean they choose and the lock me in right? how do i take control of that? i know the interest rate fluctuates in a day. where do i check the fluctuation? how would i know?

Sponsors