90degree

well.. I noticed Bob's post in regards to Trading.. and thought I may be able to contribute a bit with Mortgage related information.. there might not be quite as many questions about it.. hehe.. but that may not be such a bad thing.





I have been a Loan Officer for about 5.5 years or so.

I have done all types of paper related to Residential Lending.

rogue49

What lowers your score, what raises it?

90degree

well.... Open accounts are good. Open accounts with balances close to the max are not. Such as, Credit cards.. .. good to have a few with a good history... not good to have alot close to the max available.

that is really it.

It is not good to live by cash alone... it is very important to have active lines of credit.

hope that helpz.. if you need more specific info.. just ask

denim

Okay, let me give you a hypothetical situation.

Joe has recently gotten out of all debt. He maintains a credit card, but it gets paid off each month. He has a long credit history which contains a few late payments over the years, but nothing recent.

He makes in the area of US$70K/year (plus or minus US$20K), has one source of income, no properties of interest, no woman, and no kids.

What does a mortgage broker see in Joe? Please express your answer as a range, given the broad sweep of his possible income.

cheerios

wow denim, way to ask something hard!
here's a softball for ya, man... what's a Mortgage Broker do?

90degree

joe needs to open at least 2 more accounts. ((depending on what his prior credit history is)) Keep them for at least a year... (for the best consideration) .. have no lates.. .. obviously.. (if he has lates.. that may be fine as well.. but it may cause him to not qualify for quite as much financing.. or.. a bit higher rate of interest) ..

Joe needs to have DTI (debt to income ratio) .. not to exceed 45-47% of his income (for the best rates) .. it can be as high as 55% for subprime rates. This is a calculation of both the proposed payment of the new Mortgage.. combined with any back end monthly debt payments.. (credit card, car, furniture loans.. etc)

if i had my financial calc with me tonight i would work u up an actual amount joe could qualify for with the info you have given me.. of course there would me some questions I would need to ask actually....such as how long renting at current residence, would the income be derived from W2'd job or self employment... etc..

Joe could get himself a 100% financing and walk away with a pad for about 1500 or so out of pocket most likely.. \


and as answer to cheerios : I am actually not a 'Broker'.. i work for a broker.. would be a more truthfull statement.. I am a Mortgage Loan Officer... I help people finance the purchase of Real Estate.

:]

denim

Of what sort? Joe has many accounts, maybe. I only mentioned the ones which seemed relevant.


So that means that the mortgage payment, including any mortgage insurance, must be under 47% of his income?


Assume 5 years at current location and no self-employment income (all W-2) with no significant 1099 income,.


That strikes me as quite a lot, actually.

Cynthetiq

damn... had I seen this a bit ago...

okay.. I'm working with a mortgage broker... she's been great.. she filled in all the forms for us (one of them asked us to do it all ourselves) and our office has a rebate from this broker so I'll come out with an additional $500 at the end of closing.

We told her about some other loans that some other brokers mentioned and that helped her find us a better loan because of the building we are buying into has been census tracked for a number of years.

We will be setting our closing date soon, our property is in NYC, and I assume it will be different from state to state. What should I expect?

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90degree

denim.. i will answer your question when i get to the office today and have my finance calculator...


Cynthetiq... I actually do not finance loans in NY... they have some different guidelines than other states... sorry i cannot be of help.

bobmsmythe

All right, I already (basically) know the answer to this question but I'm gonna take the opportunity to vent:

How come you guys don't take into account the reduced transportation costs when assessing applications for city mortgages? That is, if somebody buys a house out in the burbs, the land is cheaper, but they've gotta pay for auto costs. If you live in the city, at least in MY city and where I live, you don't.

Bob

BigBlueWrecking

I think the answer is that legally they have to use the same criteria for everyone. That would be too subjective and you would run into serious problems.

You would be surprised at some of the stuff you can get around with credit reports. There are certain lenders that don't report. One of my clients got a B paper loan even though she was in foreclosure on a different house because The Money Store does not report on credit. Since it was a different house, no VOM was needed.

90degree

umm... big blue.. would that not show on title? .. or be documented somewhere? seems like a major slip up somewhere. ... heh.

90degree

bobmsmythe :

i guess the guys out in the boonies get the deal on the house.... but have to pay out the nose for gas, car wear and tear etc... its always something.. heh.

as far as transportation costs are concerned.. I have never had a bank request figures on such a thing.. .. the only thing we care about is what is on title,(if a refi) and what is on the credit as monthly obligations.. .. and the mortgage payment .. of course.. hehe.

90degree

denim :

sorry bud.. i got to work and was busy all day.. i didnt even think about the forum once.. my appologies.. annnnddd.. i didnt bring my calc home.. soo.. ... *DOH

as far as $1,500 being alot to have to put down to get into a home.... HEHEHEHEHHAHAHAHAHA... .. no .. really though.. it is not.

and as for the lines of credit... Anything that has a monthly payment that shows up on your credit can be considered active credit and credit history. Some lenders will have a min. amount that the accounts need to be.. buuut .. there are plenty which do not consider it as much... it will become more of an issue when you are trying to get the high loan to value 2nd mortgage.

90degree

again... NYC is not really something that i can give good advice on .. they have different guidelines .. etc .. that govern lending...

perhaps they do consider travel expense .. for all I know..

denim

Sorry, I read that as $1500/month for the mortgage.

BigBlueWrecking

It would show on title, but it was for a second home. So the loan company never knew about it since it was not on the home the loan was on.

If the loan was on the same house, it would have shown up and never gotten done.

Frowning Budah

I understand the general rule is you have to shave at least 2 points off your interest rate to make refinancing a good deal. Is that still correct?

90degree

F.B : it really all depends, if you can knock out a bunch of credit card debt .. or pull the cash out that you need to do something to your property that will make it more of a home for you and increase its market value.. than getting less than two points off your current rate may not be the main consideration. It is all about what it does for ya 'overall' .. in my opinion... and besides.. if you have refi'd in the last year and a half..... you will never refi again under that rule... hehehe

Cynthetiq

because we have a new forum

*bump*

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phyzix525

Not at all. If you have a high loan amount, like say a few hundred thousand, then only a half point could make a differnce. It also matters how long you are going to be holding the note and how many years you want your new note. Also the total closeing costs of the new loan compared to how much it will save you a month will determine how long you have to hold the note till you break even. Assumming closing costs are around 3000 and and you are saving 200 a month it would take you 15 months to break even, if you hold the note longer then that you are saving money.

Sorry if I am stepping on whoever started this threads toes, i just thought I would throw my .02 in. I have been an LO now for about 2 years in Oklahoma.

Beefimator

Just a quick question about that. I own a small buisness, and the credit card that I use is an American Express Gold card with no limit. I was just told that cards with no limit will hurt your score. I guess my question is, why isn't that taken into account? Assuming that what I heard was true.

phyzix525

is the american express a card which you can pay off over time or is it a pay off every month type?

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Beefimator

Pay off every month.

onetime2

Not sure if you have any advice on this but I'll throw it out there. I'm looking at buying some land for a business. Looking at about the $160k figure. I know 20% down usually helps lenders feel really comfortable about loans. 20% down isn't an issue if I take out a HELOC on my existing home.

Do you know the typical terms of mortgages for strictly land purchases? How many years for payoff? Ratios for income versus monthly debt?

While it would be simple to get a mortgage for the land if I threw a house up on it, I know lenders aren't all that keen on loans for land purchases.

Any insight much appreciated as I know there are issues I haven't considered yet and another point of view may enlighten me on them. Thanks.

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90degree

sorry guys.. I have not kept track of this thread for awhile..


Your American express card is not hurting your credit.. being that it is something that is paid up every month.

In regards to the land purchase... it is not that much different than the regular residential purchase loan. The term however is generally 10 to 20 years if I am not mistaken.

If you would like more info on that matter I can check into it further for ya.

N.

I do not do the commercial side of things, only the residential.

griphiam

Is it possible to buy a apartment/house with no money down? I understand the more you can put down the better, because its less in interest over time.

We're looking to be in the area about 2 to 2.5 years, and have been renting the past 9 months and would rather put that rent money into our own place. Is this a good idea?

Can I take what I currently pay in rent per month and translate that into what price range I can afford?

Thanks!

90degree

sorry I have not responded sooner...

Yes there are ..'next to no money down' programs.. It does help to have been renting for a 12 month period too show a 12 month payment history.

As far as figuring out how much you would qualify for... I could help ya with that if you would like to give me a call.. I have pm'd you my # here at the office.. feel free to give me a call and I will do my best to if nothing else give ya some good advice.

phyzix525

Just a thought, but if you are only going ot be there for a couple more years, think about what it is going to cost you in the long run. Yes you will not have to pay anything up front, but you are going to want to sell it again in 2 years. if you are lookling at a 100K dollar house you might be making a payment toward the priciple of 100$ a month. so you will have reduced your payoff about 2400 in two years. now you will have to sell the propery which if you are in a hurry to go somewhere else may be difficult. you will have to pay a realtor about 5-7 thousand to sell the house. you would be out a few grand even if the property does appreciate some. also you will be responsible for everything that goes wrong with the place. depending on your credit you may actually end up spending more a month for the same thing that you are renting. not always is it better to own a house. Just make sure you are getting a really good deal. also depending on where you are, the aprtment idea may be a bad idea cause usually they do not appreciate as fast as a single family dwelling.

__________________
It's hard to remember we're alive for the first time
It's hard to remember we're alive for the last time
It's hard to remember to live before you die
It's hard to remember that our lives are such a short time
It's hard to remember when it takes such a long time

Hurricane1

I bought a house 6 months ago. I had absolutely no money to put down on a house...but I had terrific credit.

I received an 80/20 loan. Lets say you want a 100k home. Your first mortgage would be for 80% or 80k and then they put together a 'home equity line of credit' for the other 20% or 20k. The great thing about that was that I did not have to pay PMI !! Because they used that 20% line of credit towards the down payment (sorry, I really don't know the lingo)

FYI - The loan officer advised me that I needed at least a 680 credit score for an 80/20. Go to myfico.com and check your scores.

I asked the sellers to pay 3% of my closing costs, which usually covers it all. I did have to come up with the earnest money for the contract... but at closing I received all of my earnest money back minus 13.50! Yep, I bought my home for 13.50 out of pocket money.

****
As far as only having your home for 2.5 years. I believe you need to own it for at least two years before there are tax implications involved... Check with your tax man.

In 6 months of owning my home, I have seen other comparable homes in my neighborhood selling for 50 to 60k over what I paid for (whew, hope it keeps going)

****
Also, I know there are programs available for 103% to 107%. Meaning loans will be for 3 to 7% above the loan, for repairs and what not, just realize by taking these kinds of loans that you will be paying PMI (private mortgage insurance) due to not putting 20% down. This will raise your payments substantially.

****

There are tons of 'mortgage calculators' on the net, do a google search, to see what you can afford. They are usually pretty realistic. Be careful and stick with your budget. My loan officer advised me I could buy up to this rediculous number (which I know I could definitely not afford)

I am certainly no expert, but I did do my research ;-)

Flyguy

How is student loan debt seen as to qualifying for a mortgage?

cocounselor23

HELP! Wife and I are looking at getting a credit line up to 100% of home value. Wife recently had surgery and has been unable to work, so we have maxed out our credit. FICO score is about 630, I have been getting all kinds of different offers and not sure what to do. Home is worth at least $290k and existing mortgage balance is $262k. We have about 20k in revolving debt and I was really just looking to consolidat that. Some companies have offered to refinance the entire loan, which is fixed at 5.5%. I know the interest rate will go up if I do this, but these companies are also proposing to get rid of mortgage insurance (right now we pay $150 a month for this). The idea would be to improve credit score and do another refinance in a year or so. Have been quoted a 2/28 loan (fixed for 2 years and adjustable thereafter) with interest rate of 6.4%. This company claims it can value my house at over $300k but I know that is high. The would loan 302k, which would pay off the first loan, all credit cards and even give us about $5k cash out to pay some of our legal bills. The loan discount/origination fee is VERy high at 3.4% (over $10,000!!). I definitely have reservations of this loan for both the overstated value of our home's value and the high loan fees. I know I am going to pay a little bit more due to lower FICO score. I feel more comfortable just doing a second. What do you think? Thanks for your help.

90degree

Flyguy...

as long as you are in school.. student debt is not considered due to you not having to pay it during the time you are a student.. they will consider 3 yrs span.. so you must be set up to be in classes for at least three years for them not to use that payment in your debt to income ratio.

90degree

I pm'd cocounselor

oncetherewasabo

Don't know if this thread is still active or not, but I got a question. I'm a college sophomore (20 years young), looking to buy a house to live in with other roommates who are charged rent. I found a 5 bedroom house for $69,000 list (probably could get cheaper), I can get roughly $220 per person (times four = $880 per month). Now between that and maybe a few dollars the mortage wouldn't be a problem at all. However, the problem lies in that the only credit I have is a credit card I've had for a year (pay it off in full every month). I also made $6,000 in 2003. Due to scholarships and financial aide my school is completely covered including room and board. If I move off campus I'll receive roughly $2300 a semester, or $4600 a year for living expenses. What I'm getting at is that I know I can afford the mortage if I could get one. However, it seems like I have everything going against me as far as getting one. Any ideas? Thanks.

90degree

hmm.. there is no date on these threads so I am not sure when 'oncetherewasabo' posted that question.. but the answer would be...

Build more credit.. at least two more credit cards of some kind.. do not pay all of them off every month.. let one or two carry balances.. that will build your credit score up.

As far as the purchase of the real estate.. umm.. you may need a co-signer at this point.. mom and dad would be best... or.. have them purchase it outright .. then two years later.. when your credit is better.. your parents can switch it to your name and you will then carry the mortgage.

Sho Nuff

My mother is on a fixed income. I make a decent living, but only recently have I paid off all my major debts aside from a couple grand in credit card balance (no where near my limits) and a monster student loan. I only have a about $2000 in cash, but my month are about a third of my cash flow so I can build quickly. I am currently renting at $650 a month including utilities. I am considering:

1) buying an investment property in an area with low property value but upside potential and renting it out to cover mortgage while building wealth.

2) buying a single family home and moving into it while renting out rooms to help cover rent.

3) Buying my family home from my mother and paying the mortgage while she helps with some rent money.

4) Putting my name on the family home and pay part of the mortgage.

How would each decision effect my tax liability vs write-off status. Are there any pros/cons that I may not see right away?

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Cynthetiq

If my wife is a co-buyer of a property how does that affect our liabilities when we decide to purchase future properties?

Scenario is that my wife and MIL buy a place together, wife may or may not be on the mortgage. What are the ramifications or consequences in the future for your availalbe ability to buy other properties?

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NoSoup

Quick question for you Cynthetiq, do you know if New York (I believe that's the state you live in) is a "Marital Property State?"

You would likely be able to find out by calling a local lender and asking them - I checked around a bit online and found conflicting information...

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Just in case you were wondering...

Hirare

I'm not sure if this is a question for you or not, but here goes.

I'm looking a buying a house with my sister. Something around 250K that is in a good neighborhood and is a bit of a fixer upper. We both have 25k to put down as the 20% downpayment.

Here's where it gets complicated, she is living out of state and is only planning on investing money in the house to make a profit out of it. I on the other hand will be living in the house and probably doing the majority of the remodeling on it. We are trying to figure out a fair way for us both to pay a portion of the mortgage so that when we sell the house 3 or so year the profit is split 50/50.

It was suggested to me that since I was living in the house I would pay whatever the fair market value for rent on the house was plus 50% of the difference between the the rent and the mortgage paymen and she would pay the other 50%. i.e. If the house would rent for $900 and our morgage payment was $1300, I would pay $1100 and she would pay $200.

All remodeling would be split 50/50 and any work I did would be given an hourly wage that would be deducted from the cost of supplies.

I hope that's clear enough. Like I said at the beginning, I'm not sure if you'd be able to help or have heard of anything like this, but any input would be much appreciated.