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Updated about 9 years ago on .

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3
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0
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Mike Starks
  • Milwaukee, WI
0
Votes |
3
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First Home - Gut Check

Mike Starks
  • Milwaukee, WI
Posted

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