Question Details

Jen, Home Buyer in

I am new to the morgage process- I got approved for an FHA loan. Can someone explain what morgage points are?

Asked by Jen, Thu Jul 31, 2008

and do I shop around for interests rates? Does FHA loans have there own interest rates? Very confused

Help the community by answering this question:

Answers

4
Jen,
Don't pay points, unless your credit is bad. this is a form of prepaid interest and will take you at least 7 years to recoup.
0 votes Thank Flag Link Thu Jul 31, 2008
Jen,

Both are correct and my office is in the area in Cupertino close to Campbell and I can spend some time discussing these and other loans. FHA has certain requiements that must be the way they want it. FHA loans are a lot easier to work with than years ago.

Let me know if I can help you with your search and getting you into your property.

Bill Moody
408-802-1792
0 votes Thank Flag Link Thu Jul 31, 2008
The points are the costs to get a loan. 1 point =1% of the loan amount. If you get a loan for $100,000 and the cost is 1 point, you would pay $1,000 to get the loan. You can shop yourself to compare interest rates, but you'd be wiser to find a real estate agent who can recommend a reputable mortgage broker to do that for you & explain all the different programs, costs & rates to you. FHA has various loan programs w/various interest rates & terms. It's very confusing if you are not familiar with the loan process. Do find an agent you can trust who will refer you to a loan rep he/she trusts.
Web Reference: http://www.brendaflick.com
0 votes Thank Flag Link Thu Jul 31, 2008
In a nutshell, points are a percentage of the total transaction value. They can often be paid by the seller. Higher points = lower monthly payments and a lower interest rate. You can shop around by calling several loan officers. FHA loans have higher than market rates.
0 votes Thank Flag Link Thu Jul 31, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer