Question:

Is this house payment a good one?

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We are under a contract for a house we just bought... well almost, our settlement date is the 26th of September. We are getting all the inspections done. We bought the house for $78,000 with $4,000 closing cost help, which equals to $82,000 being financed. We got a rate of 6.25% and a 30 year fixed term. Our monthly payments are $665 a month. The insurance is being quoted as $500 a month from the lender, but we have not heard back from our insurance company. The taxes for the property are just a little over $1,000. Everything is included in the $665 a month.

My questions is is this a good monthly payment and interest rate? We are first time home buyers and are going through a FHA loan.

Our current monthly spending is about $2,240. This is going drastic because we want to make sure that we can afford the home. I figured out that it would be a total of around $850 for all the home bills. My husband brings home 712.37 a week. Wich would be a little over $3,000 a month average.

I know that things will be tight until we pay one of the cars off, but like I said I averaged out everything a lot more than it actually is, well the stuff that I could, to make sure that we afford it.

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9 ANSWERS


  1. Yeah that's right.  Just keep an eye on your overall budget because it sounds like you got some other substantial expenses right now.  Your first house payment will be November 1st if you close on Sept 26th.  Congratulations!


  2. airjarro paying towards a home you keep is better than throwing your money away renting. I think you will be fine. Congratulations! Your living the dream. I can't wait for my turn. : )

  3. this is a very good loan, especially for first home buyers. have you looked into government grants for first homebuyers? depending on where you live you can get about 7,000 dollars to help you start off. also, if you were to pay off as much as you can per month (more than the 665) it would drastically reduce the time of the loan and would assist with the interest. i seriously recommend putting in all SPARE monies you can, asin the long run you will benefit greatly.

    hope all goes well!

  4. It is a good payment.

  5. Congratulations for buying your own place.

    6.25% rate 30yr fixed is not a bad loan.  The FHA loan allows you to have a lower downpayment than other conventional loans. The downside is you are have to pay mortgage insurance for now.  Once you reach a certain percent payoff of your total loan amount, you should be able to stop paying the mortgage insurance.  Check this with your mortgage broker/agent.

    2 items you will save money on:

    1. mortgage interest tax deductions

    2. tax CREDIT of $7500 for tax year 2008.  For details and qualifications see http://www.federalhousingtaxcredit.com/g...

      This is $7500 you can use immediately this year.  I would use that to pay off your high interest credit card debt or car loan.  The $7500 amounts to an interest free loan from the feds.  You will pay that off in 15 years in equal yearly installments (during tax time).  


  6. Ok.. Lets clear one thing up real fast. If they are offering you insurance at $500.00 per month. and a fixed rate of 6.25% as a first time buyer. The interest is great! The $500.00 per month must be a typo as it may be $500.00 per year divide that by 12 months = $60.00 per month.

    I`m sure you are currently renting at this time. Just remember that your mortgage payments interest is tax deductible. Please see your tax man for this savings per year. What you will save on taxes each year will be worth that insurance coverage you pay per year. The deal is a good one. It is fixed. But please do your selves a favor. DO NOT refinance your home for a CAR. DO NOT even finance anything and put it under your home. Remember paying off a large loan on a home even at 6.5% would cost you more in interest over the life of that loan than a conventional loan. Just my opinion.

  7. How can your monthly insurance be $500 a month, but the total payment be $665 a month?  That makes no sense to me unless I'm misunderstanding what you are saying.  If you property taxes are included (escrowed) in your mortgage payment, maybe that's what's in your $665, otherwise your total monthly costs will be $1165 just for mortgage and insurance.  The interest rate is a good one.  Also keep in mind that if you are escrowing your property taxes, your mortgage payment will go up every year, since your tax bill goes up every year.  And you may want to check with your lender, since a lot of them require holding two months worth of payments at all times in the escrow account.

  8. In my experience, the monthly payment is fair and so is the interest rate (depending of course on what state you are in.)

    Pay off those cards with the highest interest rate first and then the cars since the cars probably don't have that high of an interest rate.

    Good luck


  9. At 665 a month over 30 years, you're going to be paying almost $240,000 for that house!

    Do YOU think paying 3 times its value is good?

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