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Originally Posted by That Guy
those payment figures are on the money... a fixed rate loan is usually the best bet, since it can never go up and you can always refinance if the fed rate goes down. (and getting a place, i get calls for a 1.25% refinance all the time, problem is its 1.25% for 6 months then jumps to 7-10% and can't be paid off early - ALWAYS ignore those calls, its indian call centers being paid to look for suckers)
sometimes sellers will pay closing costs (not usually in a sellers market though) and the buyer just pays more into the price (this is another thing you can add to the contract but it'd make it less likely to win in a competition)...
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Agreed. In the mortgage business, if it sounds too good to be true, it ALWAYS is. There are lots of creative ways to finance a home at a very low rate initially. That initial rate is the one mortgage companies will advertise, but the rate will change on you. This type of financing can be good in certain situations, but you really have to make sure you identify the risks. Like if the rate is set to jump up to 10% after 5 years, then the deal may make sense for you if you're CERTAIN that you'll move within 5 years. But if you don't move, and you stay past 5 years, you get crushed with that 10% rate (or you're forced to refinance). I prefer a plain, vanilla, 30-year fixed mortgage. You know exactly what you're going to be paying as long as you own the house. Lots of stuff can happen in life: getting laid off, spouse dying (God forbid), taxes raised, etcetera. I'd rather know what my payment will be.