I have 750 credit score, 120K ann. salary, buying home in 350-425K range w/100kdown- what kind of int. rate?

Looking for 30 year fixed but also would like to keep payments down. Interest only does not seem like a good option. We will most likely be in home for about 5 years. Our life savings, including retirement (401K, Roths) is about $200K. We will not be touching roths or 401K for down payment. Let me know what you think is best strategy to this purchase and best mortgage strategy (Type of mortgage) in this case. I know my income will go up a signicant percentage in 2 years and therefore will have more disposable income.

Public Comments

1. With your score interest rate would be around the 5% mark. The best way to structure a $400,000 loan would be to fix $340,000 for 30 years and have a fully drawn down HELOC or interest only second mortgage of $60,000. Pay your income directly into your HELOC; this reduces the amount that interest is based on. In your case, with a $10,000 per month income, until you started using the money, interest would be calculated on $50,000 no $60k. By using this system you can pay a 30 year mortgage down in approximately 14 years. (Imagine the interest saving!)
2. Assuming full documentation and a 75% loan to value a conforming loan is roughly at 6.125% with no points at a lot of lenders. Their are a ton of lenders available on the internet. Just watch the points and fees charged. Go to a bank and not a mortgage broker. FYI - the 30 year fixed is nowhere near 5% as one response suggests.
3. Banks and brokers will keep you in line at 6-6.25% at the LTV and loan product that would be best suited for your situation. I would make a suggestion that you look at interest-only and not use that much cash out of your saving account as this take away form your liquidity, which is key if something life changing was to happen. The 5% range on the rates is there but it will cost you more money than it would be worth. I my experience a 80/10/10 would be the best structure for this purchase, which would leave you with a 1st mortgage of $340K, based on the max purchase price, and a second of $60K. This will leave you 75K in the or where ever you may have it. I would do an interest-only 1st @6.25% with a interest-only payment of 1471. This is good to limit the amount you pay and increase for investments. The second will be about 584.
4. Let me ask you this, why is it not a good idea for a I.O. Loan if you plan on being there only 5 years? Mortgages are Front Loaded with Interest and over the first 5 years you are not going to pay dowm much on priciple so you are banking on the value of the house going up when you sell for the add'l equity. For the short term a I.O. is a good way to go and you can get a great fixed rate in case you change your mind and want to stay longer you have no worries about an ARM going higher. You can always pay money towards principle if you desire and it gives you a lower mothly payment. Feel free to contact me with any questions you might have.
5. I will be honest with you. You have a great credit score, you make enough money, and you have a great down payment. SO getting you qualified will not be a problem. However i find that it is not a good idea to have people quote you interest rate via phone or internet. I feel that the whole situation needs to be examined that way you can get numbers in front of you in black and white and you can hold the Loan officer accountable to his/her word. And to add.......yess i'm venting. However I am tired of losing business to reckless loan officers that quote rate and do not examine the entire situation. Please in the name of all things sacred. Find an LO that you trust that will look you in your eyes and give you everything in writting. YOu can't be too careful these days. Good luck sweetie. Email me if you have questions..........believe it or not I answer questions for free LOL classycntrptlo@yahoo.com