Lending Option Advice

Tips and Deals Forums Home Mortgage Lending Option Advice

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      We made an offer this weekend, and after some initial negotiating, received a “probable acceptance” from the seller’s agent (it was well after hours). I’m now mulling over some of the lending options I have to chose from, and would appreciate any advice. I think I have narrowed it down to 3 (all conventional):
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      Option 1:
      – No points
      – No closing costs
      – 30 year fixed
      – rate 4.375%
      – Estimated monthly P & I: $1802
      – Initial equity if earmarked closing costs rolled into downpayment: 15%
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      Option 2:
      – No points
      – Closing costs
      – 30 year fixed
      – rate 4.0%
      – Estimated monthly P & I: $1807
      – Initial equity 12.25%
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      Option 3:
      – 2 points
      – Closing costs
      – 30 year fixed
      – Rate 3.75%
      – Estimated monthly P & I: $1762
      – Initial equity 10.5%
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      I think I’ve tossed out #2, but am struggling to decide between #1 and #3. The 4.375% for option #1 is jarring, and Initially I was striving to minimize my monthly payment, but saving $40 a month seems stupid to pass up almost 5% of initial equity, so #3 seems best.
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      Any opinions? Thanks…

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