What can I expect my mortgage rate range to be on a 130k home w/ 7k down? My average credit score is 640.?

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1. According to FICO, you fall within the 620 to 679 range which is seen as "okay" credit. The terms on your loan won't be too generous. You have to be on the look out for certain things because you won't be considered a prime borrower. For one, make sure they do not try to charge you excessively high points. This will make your APR jump. Points are what you pay to knock down the overall rate of your mortgage from the first step. The current market rate for prime borrowers for 30 year fixed mortgages is about 6.2%. You are coming in with 5% down so you also have to be on the look out for private mortgage insurance. All these things add up. So even though a company may offer you an attractive rate of say 6%, be on the look out for points, PMI, and other fees. Try going to WaMu, Wells Fargo, and BofA first. Then compare with mortgage brokers through places such as Bankrate or Lending Tree. Understand that the rate itself is only one factor in your overall monthly payment. But if you want a general idea, you'll probably be at 7.5 to 8% with 1 to 2 points most likely. Hope this helps. Dr. Housing Bubble http://drhousingbubble.blogspot.com
2. Typically, it costs $60 a month to borrow $10,000 with a 30 year mortgage, at the fairly average rate of 6%. So, if you need to borrow $123,000, you can estimate it's going to cost in the ballpark of $750 per month. Your credit rating is pretty good, but you should look at a few ways to improve it- reducing debt, making payments on time, etc. But- don't forget to factor in insurance and taxes. Insurance depends on the value of the house and is usually pretty inexpensive. On a $130k home, I'd guess around $50 a month, but you can always call some company and get a quick quote. Don't forget to see if you need flood insurance- especially if the house is listed as being in a flood plain. Taxes vary based on your locality's rates, but on average I'd add $100 a month, maybe less. This can fluctuate based on the value of your home increasing or decreasing, too. So, long answer short- it's going to cost you about $900 for a $123k mortgage. Not too shabby since you now also have a huge tax deduction (interest and taxes) and you get a place of your own!! One last thing- make sure you have cash on hand for closing costs, which can run thousands of dollars based on sale price and other costs. These can sometimes be rolled into your mortgage though. Best of luck and happy home hunting!!
3. If you go with an FHA loan, you can get a rate between 6.5-7%. I can help! msmith@premierloangroup.com Marty