Being a first time home buyer I'm in the dark.  We are buying a new construction and have been told to go with a FHA mortgage loan through the builder (to get cash incentives about 7,500).  We will be closing about the first week of October 2009, so I have a few questions:

1.  Is it smart to go with a lender through the builder just for incentives?

2.  What mortgage rates will look like in September (I know it's almost impossible to know, but an educated guess why they might go higher or lower would help put things in perspective)?

3.  We really don't want to pay more than 2,000 in monthly mortgage payments due to possible children in the future (we have a combined 6,000 monthly salary after taxes) .  Are there any programs or tips to knock down monthly payments so we can sleep at night?  (as of know, 5.375 is the ceiling mortgage rate to achieve our goal without going over 2,000 a month)

Any advice would be great or suggestions of things I'm not thinking of to make this process easier would be appreciated.

Thanks

You will need 3.5% down so max LTV is 96.5% with FHA.  5.375 is the going FHA rate with NO points at this time.  Get a Good Faith Estimate from the builder's lender and show it to a broker to get a second opinion.

Another viable option may be USDA, which allows for 100% financing.  Rates are slightly higher than FHA, but saves you the 3.5% down. 

Check the USDA website for property qualification - http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Mr Jason

You can get 2nd lien behind FHA upto $7000.00. We are approved Broker for 2nd lien. 

USDA can do 100% Financing with todays rate of 5.5% no points