Points?

[Flying_High]

Im thinking about buying a house not right now tho, what are the Points for? I now nothing about points,

[StartingOver10]

A point is equal to 1% of the loan amount.

Think of "points" as pre-paid interest. Points are used to reduce the interest rate on your note to a lower amount.

That is definitely one of the areas where there are differences between loans. When you are shopping rate, also get the closing costs and APR so you can compare the entire cost of the loan.

[tooleman694]

There also negative points, that raise the interest rate but they give you 1 percent towards closing costs.

[Flying_High]

Ok thank you so much, but how do I get more points or is that for them to diside?

[StartingOver10]

You discuss with your LO what you need. It sounds like you are willing to pay a little higher interest rate for the term of the loan in order to get some funds for closing costs, is that right?

It's math. Just work the figures. It is very costly to pay 30 years for a few thousand in closing costs so be careful here.

[tooleman694]

You need to talk to your LO about them. This convo comes up when you lock in the rate on the loan.

[Flying_High]

Got it talk to my LO.

No, I'm only wanting to get a house in price rang $60,000-$90,000 a house that is Forcloser I guess since they are cheap less years to pay off there's no way i'm doing 30years fix rate would like to do 15yrs and pay off sooner, with at least $20,000 down + pay closing cost.. I dont know how this whole thing works trying to dig up as much info as I can, I plan on buying in 2 years by then Myfico score should be around 700, right now since I just got new car & dirt bike it brought down my score to low 600's :0/ if im right 15 inqiries most are from car loan's and at lease 3 from dirt bike but most of the inqiries should be off by Mid next year. Another downfall I keep thinking about is I only make about $45,000 a year my wife is disable because of that I dont know if they will approve with just my income,

[StartingOver10]

Since you aren't looking to buy for two years, then save up the funds to close.

Two years is a long time. It is better to take a lower interest rate over the term of your mortgage rather than build in the costs to close.

Of course, we might have an entirely different market in two years, who knows?

[Flying_High]

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@StartingOver10 wrote:

Since you aren't looking to buy for two years, then save up the funds to close.

Two years is a long time. It is better to take a lower interest rate over the term of your mortgage rather than build in the costs to close.

Of course, we might have an entirely different market in two years, who knows?

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Yeah true depends on how high I can get my credit score up in 1 year I just might buy then,

Thanks for your help

[tooleman694]

If you have a 620 and 20 percent down, and can go conventional.