Minimum to mortgage

[Anonymous]

I have been renting and loving it but the desire to get a house is overwhelming. I have been able to save up a bit and would not mind continuing to do so for a few years so long as I can put a large down payment (>50%) and then finance the rest. I am interested in a mortgage because I have heard that most 800+ FICOs have at least one mortgage on their credit. I'd hate to buy a house and not reap the benefits credit-wise. So is there any minimum that I should keep in mind when it comes to financing?

Message Edited by berraco58 on 12-27-2007 10:36 AM

[ShanetheMortgageMan]

I think it's just the sole fact of having a mortgage reporting to credit that gives you the diversity of trade lines needed to improve your score to the 800's, I don't think there is a minimum mortgage amount that is needed to accomplish it.  Although I do find it pretty amusing that you are buying a home/obtaining a mortgage to improve your credit scores

[Anonymous]

Yeah I know, I thought the same thing about it. I know the goal is to get the score up so that you can get the good rate on the mortgage. But shoot if I'm gonna get a house, I may as well get mortgage for as little bit as possible so that I can get a better score. Right? I mean all it can do is help me in the future if I ever decide to get another loan.

But actually my question wasn't a minimum mortgage amount to get a credit boost. I have read on other threads that a lender won't finance a car for less than 3 thousand (or something like that). So if you go to buy a car where the total for everything is 22k, you can't put more than 19k towards it and expect to finance the rest.

So my question was, is there a minimum finance amount on a 30 year mortgage. I mean really, if I wanted to buy a house that costs 160k and could put 145k down, would they let me get a 30 year (or 15 year mortgage) for the remaining 15k? Sorry for the odd questions, but I just like to get these questions in as they come to me.

[Anonymous]

One of my true ficos is over 800 (just a tiny bit hehehe) and I've never had a mortgage.  Tks Vicki

[ShanetheMortgageMan]

Ah I see what you are getting at now.  Generally lenders won't finance less than $20-25k, as the APR affecting fees on the loan would exceed max APR laws (7.99%), thus making it illegal to do.  Bank of America is the one lender I know that will go down to $10k though.

[Anonymous]

Check out the TAX benefits of having a mortgage and also the idea of making a payment in 5-10 years (inflation) using today's dollar.  Have it in the bank/savings/investment and go for as much mortgage as you feel comfy with (i.e. payment) - you can always draw from the bank/savings/investment to make the payment.

[Anonymous]

Thanks for the replies, they were exactly what I was looking for. As I've said, I am asking questions so that when the time comes and I'm ready to "make moves," I won't be scrambling trying to get all these questions in, so thank you for bearing with me. As far as investing, I'm staring that this next paycheck.

As far as the tax benefits, I've been looking into it and I still gotta look into it some more.

It seems like if I pay $10k in interest on a mortgage and $2k in real estate taxes and $2k in state income taxes (Im gonna neglect deductible PMI since I don't want to estimate it) and have my AGI (~$60k) deducted by $14k in place of the standard deduction $5350 (in 07) and subtract my one exemption $3400 (in 07) then my taxable income is roughly $42.6k instead of $51.25k. Which results in a tax of $7080 instead of $9243.

So although it looks pretty specific, this is a rough estimate and I might have left stuff out but in a nutshell, the banks are getting fat off of my $10k a year and all I have to show for it is a the fact that I'm paying $2.16k less in taxes? Personally I  would rather the government gets the money ... hopefuly they might grant my Christmas wish and give me that univeral healthcare I asked for.

I do get a house out of the deal though ... ahhh so much to think about!

[ShanetheMortgageMan]

berraco, definitely all good points to consider.