OP
OP
Disagree. Paying off debt can potentially drop your credit score.
A good lender can tell you if there would be any benefit to paying things off and then submit a rapid rescore to the bureaus for free to have your report updated.
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Mortgages - 101 and Pro-Tips |OT
- Thread starter Hokahey
- Start date
Disagree. Paying off debt can potentially drop your credit score.
A good lender can tell you if there would be any benefit to paying things off and then submit a rapid rescore to the bureaus for free to have your report updated.
Can personally attest to this. Went from about 830s to 805 after paying off debt with the reason being "lack of recent loan installment info".
Hokahey you advised well previously and now have a contract. Mind if I PM you my overall closing cost numbers just to get idea if they're in the ballpark of being right?
OP
OP
Ok I think I sent one.
Also another general question that might help others... What options are there for someone giving a cash gift?
Basically a relative gave us some money but the underwriters wanted not only a gift letter, but bank statements of the person giving. Is this normal? Since your own documentation of assets seems to be 60 days max... if someone gives it to you 60 days before you apply can you skip the additional gift documentation?
It's normal. underwriters want to make sure this "gift" isn't coming from your coffers. If it's a condition of financing from the lender you won't get the monies forwarded if you don't submit that info.
OP
OP
This. And yes, if had been in your account for 2 months (seasoned) you would not have had to explain it.
Wait how would that matter if it came from you if you're the one applying for a loan?
OP
OP
If it came from you it should be easy indicated in your supporting documentation. If it isn't, that's a major red flag against you.
Underwriting is all about trust. The underwriters are getting to know you via your information to verify that you are a trustworthy person.
Let's say you hand a person $10K to "gift" you back. If an underwriter finds out about this a whole slew of new questions arises.
1. why lie?
2. What is the source of this income?
3. Is this income verifiable?
4. Why is this extra income not indicated in your tax info?
Among other questions. All of the monies you claim has to have a clear history. If the underwriter can't source your info, who's to say you didn't win that money with a scratch ticket and cannot replicate it? Who's to say your "gift" isn't secretly a loan? if an underwriter can't trust your info is solid, good luck getting that loan funded.
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I guess I'm just not thinking like a criminal. Makes sense but now I'm mystified by the alternative they provided...have the relative wire the money to the closing attorney and they claimed I wouldn't need that extra documentation. How is that any different?
The money is physically in the attorney's possession. Real, verifiable dollars.
They have the paper trail themselves then? I was just at a home buying workshop of the bank I work for, and they mentioned this as an option with gifts
Sorry for being dense but how would that be any different than the person transferring it to you and then you wiring it to the attorney?
The Solicitor reports to the underwriter that it came from you, signaling doubt that it was ever a gift at all.
I'm 2 years into a $192k house (3br/2b 2ksqft) on a 4.1% 5 year balloon (yea, I know) with 130k left. Mortgage with escrow right now is $994 and have been paying it down like crazy, but got the reno itch and started a 40k reno (25k of it heloc financed) that'll be completed in September. I'm secure in savings and emergency funds and feel like I could weather a downturn. That said, once I finish the reno, I'm going to be looking to get out of the balloon and roll in the reno into the mortgage sooner rather than later (2022). I guess my question would be since I'm sitting good on my current LTV with the original appraisal and if I get the average 68% ROI for the reno after a new appraisal to bring the value to around $220k, would I be able to roll up the 25k heloc into the new mortgage and not have to put anything down? I'd rather not use any more savings and I know that with the uncertainty of the prime rates going forward, I'd like to get everything rolled into a 15y at a comparable rate of what I'm at now.
Not my loan, I'm passing along the information as I am trying to help someone. Would really appreciate any help
Appreciate the thread, just got prequalified and are looking at lawyers now to go into contract. Inspection looked fine.
I have a mortgage guy from a small lender who came off really well, so I may end up going with him over the big bank guy who doesn't feel right. Still waiting on the rate he can offer, though.
I have a mortgage guy from a small lender who came off really well, so I may end up going with him over the big bank guy who doesn't feel right. Still waiting on the rate he can offer, though.
Uh... Most people get 30 year fixed rate, and historically 4.25 isn't "high".
I take it you mean, say, a 2 year fixed rate mortgage, over a 30 year term
no one fixes for 30 years, in fact, ive never seen a product advertised over 10 years fixed.
Are you not in the US? 30 years fixed rate is the most common. 90%+ of mortgages if I remember correctly.
Wow, thats a huge difference between the European markets and the US then.
Why on earth would anyone have a fixed mortgage for 30 years? You start with higher premiums and have no extra capability of paying it off early.
And those % interest, its about 1% in the UK!
Maybe there is a difference between fixed in the US and fixed in Europe? Because in the US you do not commit to paying that amount of interest over the life of the loan. The monthly payment amount is fixed but the interest is calculated every day and added up before each monthly payment. So if you pay a little extra (with no penalty) in the middle of the month, the portion of the next payment going towards interest is automatically lower. If you keep paying extra consistently, your monthly payment does not change but you'll pay off the loan early.
Hi, I'm meeting a Mortgage Loan Officer tomorrow and I'm wondering what I'm in for? Trying to buy a home, and after applying on this officers website, I can see she has me down for the following stats:
LOAN NUMBER
REDACTED
BORROWER
REDACTED
CO-BORROWER
N/A
PROGRAM
Conf Fixed
PURPOSE
Purchase
LOAN TYPE
Conventional
AMOUNT
$164,900
TERM
30 years
CASH FROM/TO BORROWER
$-820
PURCHASE PRICE
$170,000
APPRAISED VALUE
$200,000
As I told her on the phone, I only have about $3k saved up for a down payment, but am thinking of dipping into my 401k which currently holds about $15k.
Just want to get you folks' thoughts on what to expect because honestly, this whole process is making my head spin.
LOAN NUMBER
REDACTED
BORROWER
REDACTED
CO-BORROWER
N/A
PROGRAM
Conf Fixed
PURPOSE
Purchase
LOAN TYPE
Conventional
AMOUNT
$164,900
TERM
30 years
CASH FROM/TO BORROWER
$-820
PURCHASE PRICE
$170,000
APPRAISED VALUE
$200,000
As I told her on the phone, I only have about $3k saved up for a down payment, but am thinking of dipping into my 401k which currently holds about $15k.
Just want to get you folks' thoughts on what to expect because honestly, this whole process is making my head spin.
I bought around this time last year at a 4.75% rate, which from what I've seen was about the average at the time in the area for a 30-year fixed (although I did have to buy 1 point to get it down from 5% to 4.75%).
I've been helping out some local friends going through the home buying process, and so I've seen the rates plummet, and I have thought about refinancing. That being said, wouldn't I have to re-pay closing costs on the new loan? That would be a pretty significant lump sum (my home is 380k), and I wonder if I wouldn't just be better served dumping that money in to the principal, or even just keeping it where it is (in long-term investments).
Fixed rate mortgages in the UK describe mortgage products where the interest rate on the remaining sum is calculated at a fixed rate for a certain period. The outcome is stability in terms of monthly repayments, but it's the percentage interest rate that's actually codified - not the monthly payment.
The 'typical' mortgage here is probably between 2% and 4% interest, fixed for 2-3 years, with a high loan-to-value ratio (90%). I don't think many mortgage lenders will offer a fixed term beyond 5 years, because of economic uncertainty.
Within those confines, you can usually overpay by 10% in a twelve-month period with no penalty, but exiting the loan any other way (either by selling the property and not transferring the mortgage to a new house, or by paying it back in a lump sum) can attract a hefty fine.
Right now I could remortgage my current house (loan to value ratio of about 52%) and get a three-year fixed product at about 1.5% interest. By comparison, Bank of England base rate interest is currently set at 0.75%.
OP
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Not likely at that rate. Your monthly savings would likely be around $200 a month, and a good lender should help minimize the cost. You'd possibly qualify for an appraisal waiver, and title costs should be much more inexpensive.
Question.
30 year fixed at 4.25%
28 years, 8 months left to pay
Current monthly payment just shy of $1500
Should I?
OP
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What is your loan amount and home value? Feel free to p.m. me if you prefer.
Hmm ok, I'll reach out to my current lender and start the conversation. Thanks as always for the advice and the push.
Question for everyone here. If a bank offers loans backed by Fannie and Freddie Mac are they required to follow the guidelines for conforming limits? There is a local credit union that offers 5% down programs for loans less than 484k while calling it a conforming loan. Then they classify everything above 484k as a jumbo loan requiring a 10% down payment. My county (high cost of living) has a conforming limit of up to 688k so it feels disingenuous for them to classify that as a jumbo loan if they are offering loans backed by Fannie and Freddie Mac...that is if they are required to following the conforming guidelines..
It was odd because when I explained this to the rep last night, they agreed and apologized for the confusion giving me a quote at 5% for a loan amount above 484k. Today, though, they (two different reps) are back to calling it a jumbo loan.
It was odd because when I explained this to the rep last night, they agreed and apologized for the confusion giving me a quote at 5% for a loan amount above 484k. Today, though, they (two different reps) are back to calling it a jumbo loan.
Where do you live?
California?
Also they don't know what they are talking about.
Conforming down payment required is 3% for anything below high balance.
Above high balance is 5% and Jumbo is 10%
If the high balance is up to $688K you should be clear at 5% depending on FICO score
OP
OP
This is not accurate. 3% down is a special program offered by Fannie/Freddie that has special qualifications. 5% down is the standard required for confirming conventional loans.
Its credit dependent. 5% is definitely the standard. Doesn't mean 3% isn't an option.
All 50 States:
680 FICO
Conventional, Wholesale, Purchase, Lender Paid, 680 FICO, 1 Unit in 92707, Single Family Primary, $469,480.00 @ 97% LTV
4.125%
$2,619.63 PMI $344.29
740 FICO
Conventional, Wholesale, Purchase, Lender Paid, 740 FICO, 1 Unit in 92707, Single Family Primary, $469,480.00 @ 97% LTV
3.750%
$2,369.86 PMI $195.62
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Middlesex County, MA
I called them again and the employee on the call said conforming limits are not based on area.
I like this bank a lot, they are very popular, but they do not seem to understand what a conforming limit is. Their website also seems to be an issue with regards to this.
Their website and they themselves on the phone say since my loan is above 480k, it is a jumbo loan regardless of area, and requires 10% down. I'm almost shocked how wrong they are, but I wanted to check in here..
The only reason I am pushing so hard for this bank is my wife is already a member there, and they generally are regarded as the best credit union in our area (DCU).
Looking at Freddie Mac's website it looks like this is considered a 'super conforming mortgage' which is where there might be a sticking point of misunderstanding. Maybe DCU just doesn't offer super conforming mortgages which would be a better answer than telling me this is a jumbo loan that doesn't meet conforming requirements.
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what are these numbers above and how would I find information for my county in Nj. I'm in the process of purchasing a home, and it seems like we just can't figure out the the best way to take the next step. I just need to know everything that we should have ready to go to make the offer and take the next steps.
We have looked at a few, but want to get the best rate (Fico around 805) .
Any help would be great.
Thanks.
OP
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It's not just credit dependent. Its 3 years since buying a home and income dependent as well.
Source: I'm a lender.
What is the zip code? And your FICO I'll look it up
Nice I'm a broker.
What is the zip code? And your FICO I'll look it up
Nice I'm a broker.
Awesome FICO. What is the down payment you are doing? The steps seem complicated because mortgages are a bit nutty. Most important thing is understanding that you and you alone are in control of your payment. Banks / Lenders and Financial Institutions are barely better than car salesman. Shop your rate just like you would shop your price when getting a new car. Especially with a credit score that high you have a lot of options. I'll give you a baseline rate based on where they are at today
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OP
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Then what 3% down program are you talking about that you think it's standard?
Zip code is 01826. Don't feel comfortable with the FICO part. I'll just say it is very..high.
I know I would be able to get it at another bank. This is more bewilderment at how sure they are about this being nonconforming.
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They're confused because different counties have different conforming loan limits. And some banks break up their programs by conforming Jumbo's that are under the standard loan limit and nonconforming Jumbo's that are under the county loan limit that may be higher.
Clearly whoever you were talking to is inexperienced and I would look in a different direction.
Did I screw up by getting my mortgage right before a possible recession? I was able to get a 3.375 interest rate but I am afraid I paid too much for my house if the market is about to crash. I would hate to think my house would actually decrease in value and I have to keep making home improvements on top of that.
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No. You got in when rates were fantastic if that's a 30-year. It's not likely we will see that get any lower.
Also, there's no guarantee a recession is coming. And if it does, it's not going to impact housing the way the last one did. Regardless, the market and the economy fluctuates and there's not much you can do about it. Unless you are into real estate investing or think you will not be in your house very long, there's no great reason to worry about it.
"possible recession" has been happening for the last 5 years
Based on the Zip you're in a Conventional High Balance as you rightly assumed.
Here is the rate options at 5% down with a Purchase Price of $688k
Conventional, Wholesale, Purchase, Lender Paid, 780 FICO, 1 Unit in 01826, Single Family Primary, $653,600.00 @ 95% LTV,
3.875% APR
Principal + Interest + PMI
$3,204
PMI $130.72
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OP
OP
To be clear, this is what you can offer. There are certainly other rates available depending on the lender.
You may also want to be careful quoting rates in public without ar minimum an APR, Equal Housing disclaimer, and NMLS number as required by law.
No that is an amazing rate. I think you actually bought at the perfect time. Recessions if they do or don't come isn't the real issue unless you're looking to flip in a specific time frame. Most important thing is making sure you can afford the monthly payment if that's the case time is on your side. Your home will increase in value