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Updated about 9 years ago on .
First Home - Gut Check
Hey everyone.
My girlfriend and I are looking to buy our first home. Our current lease runs until the end of April, so our goal is to find a place in the next few months (although I don't mind extending the lease if we don't find the right place).
I submitted an application through Quicken Loans and would like to run the information by some more experienced buyers as a gut check to make sure everything we have been told so far makes sense.
We have been pre-approved for $310,000. This is fine since we are only looking to spend between $200,000 and $250,000 to keep our payments near or below $1,600 per month.
Our median credit scores are around 770, and 730. Based on this Quicken Loans informed us that they expect the interest rate to be in the upper 3% to lower 4% range. Does this seem about right? Based on what I have read online this seems to be the average going rate.
We are looking to put 5% down (say $12,500 for a $250,000 house). Where I really had questions was in terms of the additional fees. The agent explained it to us as follows:
Down Payment: $12,500
Third Party Cost: $3,000-$3,500 (what does this typically include?)
Home Owners/Escrow: $5,500-$6,000 (again, what does this mean?)
Seller Concession: -$7,500 (3% generally paid by the seller)
Total: $14,500
Does what we have been told seem to make sense? Where I am unsure is when it comes to the third party costs, and the home owners/escrow cost. What is the money used for, and are the values shown above reasonable?
Reading reviews online it seems that Quicken Loans received pretty good reviews. The pro that I have read are that you generally get a slightly lower interest rate. The con is that you don't get the face to face interaction. I have heard that many real estate agents prefer not to work with these online companies. Why is this the case?
Sorry for all of the questions. My girlfriend and I are new to the home buying process so I thought I would do a bit of digging before I call Quicken Loans back.
Thanks!
Mike