Yeah, I think that's the only caveat. Technically my loan with KB Countrywide was immediately resold to Countrywide and I think my Coastal loan is technically owned by Fannie or Freddie. I wouldn't worry about it.

1/3/2012 2:39:01 PM

I have found out that the mortgage world is confusing to me... well at least complex... hard to compare different programs (maybe that's because I'm new to it).

How does 4% with no PMI and 3% down sound?

I'm trying to put down as little as possible, especially for banks that charge PMI.

This may be limiting me... but I prefer to bank where I can go into a branch and talk to people...

Oh yeh, before I get to far into this I want to check all credit scores/reports... got any advice on which service to use to get the best deal on this?

[Edited on January 5, 2012 at 5:50 PM. Reason : .]

1/5/2012 5:27:57 PM

If you are wanting to avoid PMI, then you want to put as much down as possible. You will pay PMI until you own 20% of the value of the home. There are some loans that require you to put money down - FHA is 3.5% and conventional loans are 5% down. USDA loans require no money down, but you end up financing more than 100% of the purchase price, as you have to roll either 1 or 2% of the purchase price up into the amount financed.

For us, PMI is going to be around 190/month. It sucks, but it is just a reality unless you have 20% to put down. There are some 80/20, or piggy back mortgages, where you finance 80% with one mortgage, then finance the other 20 with a second, but A) You usually have to have stellar credit and B) you have to have 10% to put down.

Some other things to be aware of - for FHA, you are required to pay a 1% funding fee. This can either be rolled up into the amount financed, or paid in full at closing. I would suggest getting the seller to give you at least 3000 in closing to cover a portion of this funding fee. You will also be required to pay 3-6 months worth of insurance and taxes up front, and it will be held in an escrow account by the lender. This will also be due at closing.

If you have good credit, there's no reason you shouldn't get a rate higher than 3.75 right now.

PM me for any other ?'s, as we're going through all of this right now.

[Edited on January 5, 2012 at 6:50 PM. Reason : sadlfs]

1/5/2012 6:49:54 PM

Quote :

"If you are wanting to avoid PMI, then you want to put as much down as possible. You will pay PMI until you own 20% of the value of the home. "

nope, this is not true in all cases. bbt first-time homebuyer mortgage let me finance 100% with no PMI. What you are talking about is true with a "conventional" loan.

1/5/2012 7:01:35 PM

Also FHA.

What type of loan did you get?

1/5/2012 7:21:49 PM

yeh, BB&T has a no PMI loan, which is the one I was talking about above.

I know that you have to reach 20% to get rid of PMI; however, I think it's a waste of money to put a small percentage down up front (i.e. no where close to reaching 20%) if it will take a chunk of savings. In my situation, I have a decent amount of savings, but with all of the upfront costs of buying a home, adding x% for a downpayment will really eat up my savings.

I'd like to limit the hit on that since I can't get near a 20% downpayment and reserve savings for upfront fees, etc.

To be honest, savings wise I'm probably not in the best situation to buy a house (from a downpayment perspective); however, cash flow wise I am (my total mortgage monthly payment will be similar, if not below, my current rent). With the housing market down, I'd like to get in a house and renting is pissing away money, so I feel that even though I can't do much for a downpayment, it's still a good idea to get in a house soon.

[Edited on January 5, 2012 at 8:39 PM. Reason : .]

1/5/2012 8:36:22 PM

Rent is often a better deal than buying. It certainly isn't "pissing away" money in most cases. There is usually a premium associated with owning.

1/5/2012 8:42:26 PM

What are you closing costs looking like?

1/5/2012 8:42:51 PM

^^yes, because renting will give me something valuable in the end
^talking to me? no clue; I'm just starting this process and trying to figure out how it works/what some generic numbers look like. I'm hoping to get the seller to pay whatever they can, but I don't know what all seller's usually/can pay for.

[Edited on January 5, 2012 at 8:49 PM. Reason : .]

1/5/2012 8:48:07 PM

^^^If you want to be in the given house long term(>7years), renting is pissing away money.

[Edited on January 5, 2012 at 8:52 PM. Reason : ]

1/5/2012 8:51:38 PM

^^

Make sure they aren't including origination fees in your closing costs estimates. I would ask for a good faith estimate right off the bat if you have an idea of how much you want to spend - that will give you a line by line explanation of all the charges, and will give you an estimated monthly payment.

Have you found a house you are interested in? If so, you should go ahead and get pre-qualified. Any bank that is worth a damn will not pull your credit for a pre-qualification. The big national lenders probably will though, so I would stay away from them for a pre-qualification (BoFA, Wells Fargo).

Typical items that incur costs at closing:

Prepaid interest
PMI premium for the first year (this may not apply to you)
Hazard insurance premium
Recording fee - 50-60
3 months of property tax
Settlement fee - 500-600
Title insurance - 350
First year of homeowners - 750-900
Origination - usually 1% of the loan

More will probably crop up, but these are the ones (minus the origination) that we're looking at paying. We are also paying 3.5% down, so if you're financing 100%, then you won't need to worry about that.

[Edited on January 5, 2012 at 9:02 PM. Reason : ads]

1/5/2012 9:02:14 PM

thanks! that's the clearest explanation I've gotten yet! haha

of all that, what can the seller cover? I've read that up to 3% of sales price is common, sometimes 6%... I didn't realize the seller's coverage was limited until today.

oh, why is the origination fee not considered in closing costs?

I don't have a house in mind yet, just been trying to see what's out there and then look at some loan numbers. Though, I do have an amount in mind based on some preliminary numbers/rates/etc.

I figure I'll take a day off of work and visit some local bank branches/mortgage companies to hear their sales pitches/programs, then based on those numbers, narrow down my house selections, then go get pre-qualified at the companies with the best deals, then go from there. I'll also get together with a real estate agent before pre-qualifying to really narrow things down.

Anyone have suggestions on how to/where to go to get all of my credit scores/reports? Just through one of the agency's deals? How do scores work now... each agency has their own score and then there's FICO... is that the same from each agency? but buying all scores from one agency, doesn't that agency use their scoring system on the other agency's reports?

[Edited on January 5, 2012 at 9:22 PM. Reason : x]

1/5/2012 9:05:30 PM

Origination is considered part of closing, I just said that because there are a lot of programs out there that don't charge origination. If they are giving you 4%, then I'm betting they're not charging you origination. You can typically get a lower rate if you pay 1% origination, but not with everyone. The seller can cover pretty much everything except for any down payment required, and the appraisal fee.

If you've never had your credit pulled - when you get serious with a lender, you can go to another bank to have your credit pulled, that way, if it turns out bad, you know what to tell you're preferred lender, and the other bank won't charge you for pulling your credit. You can have it pulled I think up to 3 times before points start being shaved from your score. As long as you have above 740, you usually won't have a problem, but they may have stricter rules for 100% financing.

I would definitely recommend a buyer's agent. What area are you thinking about buying?

1/5/2012 9:23:20 PM

My scores should be above 740, but I've a lot of inquires in the last year, so it could be close. Not sure on an area, I was hoping within Raleigh, but I'm having trouble finding affordable places that I like and I'm looking for at least a little bit of land (>1/2 ac, preferably 1ac). Most of what I've seen is apex, holly springs, garner, wendell, etc. Aren't real estate agents normally buyer's agents as well? I know a family friend who is a real estate agent, and I assume he does buyers as well (I went to him a few years ago when I was looking at buying a townhome).

1/5/2012 9:29:20 PM

The way it works is the two agents usually split the commission, or do something like 60/40 seller/buyer agent.

If you're looking in southern Wake County, we have been working with Karen Duke, of Becky Medlin realty. We found a nice neighborhood in Willow Springs. All the yards are about .61 acres or greater.

1/5/2012 9:44:55 PM

Typically, renting is not pissing away money.

It depends on several factors but for the majority of people it is cheaper than buying.

1/5/2012 11:22:00 PM

Even with home repairs, if you plan on being in a house more than 5 years, buying is worth it, especially if you can find a no closing cost loan.

At least for the time being, the interest you pay on a mortgage is tax deductible, and for the first 5 years or so, most of your house payment is interest, so you get a tax break. Then your equity kicks in, and in a normal housing market, the value of your house is going to go up.

I know the housing market isn't currently stable, but when it is, renting is like putting money under your mattress - the money just sits there, whereas buying a house is investing.

1/6/2012 7:37:50 AM

^^^Oh, yeh, I know that the two agents split the commission; I just meant that I can walk into pretty much any real estate office and find a "buyer's agent".

and ignore ^^, he's doing some geniusboy type trolling in here.

1/6/2012 8:19:28 AM

Quote :

"for the first 5 years or so, most of your house payment is interest, so you get a tax break."

so you're not building much equity, you're shitting away money in interest, owe property taxes, and pay for maintenance/repairs/upkeep.

Unless ALL of that still works out to less than you'd pay to rent, then you're probably losing. It's not common that it would be the case either.

That said, buying a home needs to be thought of as a personal well-being decision and not an investment. This is more true in 2012 than ever before. Most, if not all of the old adages can be thrown out now.

1/6/2012 10:59:20 AM

Quote :

"you're shitting away money in interest, owe property taxes, and pay for maintenance/repairs/upkeep."

That's like saying you don't pay tax when you buy gas.

Quote :

"Unless ALL of that still works out to less than you'd pay to rent"

With today's prices, it does.. at least long term. Will your rent be the same in 10 years?

1/6/2012 11:46:08 AM

My costs are about about the same yearly, but I'd much rather live in a 2000 sqr ft house than a crappy apt.

1/6/2012 12:08:27 PM

^ apartments aren't the only alternative to renting an apt. With larger homes, there's a certain point where renting becomes cheaper.

Quote :

"With today's prices, it does.. at least long term. Will your rent be the same in 10 years?"

You can't make that claim as a blanket statement. It completely depends on the locale. certainly for a median priced home in the RTP area that's true.

As you get into larger homes, it often becomes cheaper to rent given the difficulty in selling, and the limited market for renting 3000+sqft homes (IOW supply/demand).

Again, they key factor in buying a home should be personal satisfaction/quality of life, not investment potential (unless you're buying rental properties of course).



[Edited on January 6, 2012 at 12:27 PM. Reason : .]

1/6/2012 12:18:32 PM

Well I just got my credit scores... better than before! Though still down from about 2 years ago Damn inquiries.

So, if I wanted to better compare my experian score to my tranuion/equifax FICO scores, would a simple linear calculation be close enough. I realize these scores are different metrics, but the two max out at 850 and experian maxes at 830... and my experian is the lowest, which I assume the lower high score/scale affects that. So if I take my score times 850/830, is that close? I assume it gives me a ballpark estimate if experian was based on a max of 850 (and this does give me an experian score in between my other two scores)

1/6/2012 1:23:41 PM

It really does depend on the situation but I think some people are too quick to bring up the argument of "you're pissing away money on interest, taxes, etc." when you are essentially pissing away 100% of your monthly rent payment. When running the numbers, you can certainly come out on top owning even if your house stays the same or slightly declines during the time you were living there. Especially if you have minimal(or no) closing costs negotiated.

The 1100 ft² apartment my wife and I were renting was only $150 less per month than our mortgage payment (including all taxes, insurance, PMI etc.) on the 2500 ft² house. Once you figure in the taxes and interest tax deduction the net effect of the $150 is lessened substantially. On top of that, those apartments have gone up $50 per month since we moved out two years ago AND because of having more space we now had room to setup our home gym meaning that we could save the money and time we were putting toward a gym membership (the apartment complex gym, while "nice" for an apartment complex was still lacking). All that considered, on a monthly cost-basis we are basically at a wash compared to the apartment 2 years down the road.

Yes, there will be some maintenance associated with the house that we would not have had with the apartment and yes you have to physically sell the house to get the value back out of it; however, a portion of our monthly payment on the house is also going toward equity. And, even if the value of the house declines slightly (which it has), there is still some value in our house from that equity via the monthly payments that we could potentially liquify if need be. Even if we can only recover 90-95% of the money that was actually put toward equity due to a 5% decline in value, that's still compared to 0% of the money we could get out of the apartment monthly rent we spent.

I don't think there is anything wrong with renting and I think now is a great time to rent (heck I'm considering buying a 2nd house for a rental property) and it makes sense for a huge majority of people, especially single folks. But, I just don't think the whole "pissing money away in interest, taxes, and repairs" is nearly as bad as some people make it out to be.

1/6/2012 1:56:54 PM

That was mainly in response to staying somewhere for 5 years. Given the current real estate market, closer to 10 years in the same home is probably more realistic to come out ahead, especially taking in amortization schedules in to account.

Admittedly, I'm a little sour based on current situation.

I bought my first house in 2003, sold it in 2008 at a 60k+ profit.
Bought our current house the same year, and will be putting it on the market in a few months due to an unforeseen move. I'm likely gonna be getting about 25k less than I bought it for based on the appraisal and won't see a dime out of the $25k+ we've put into it after the fact.

Over the long term we're slightly ahead, buuuut, given the amortization schedule, real-estate market since 2008, we'd have been much better off renting a similar sized home in terms of avoiding the loss, monthly payment, etc.

1/6/2012 2:34:06 PM

definitely understand that. It also probably helps right now that our house is not as expensive as yours and we aren't planning to sell anytime soon. It has gone down in value but the amount is not huge and I guess it doesn't bother me much since I'm not looking to sell. We would still certainly lose money if we had to sell it today though, no doubt, but I planned on being in the house at least 5 years and most likely longer depending on job situation at that point and unforeseen moves. Obviously if something unexpected pops up like it has for you I might be a little more sour as well.

One other thing that is annoying right now is that we really want to do the kitchen counters and hardwood floors on the main level, really for our own enjoyment; however, the way the market is really makes it less attractive to spend that kind of money on our house because I'd be worried about getting the value back for it if we did suddenly have to sell within the next few years.

[Edited on January 6, 2012 at 3:40 PM. Reason : ]

1/6/2012 3:32:06 PM

Yeah, I'm kind of in the same boat regarding your first paragraph.

1/6/2012 4:11:44 PM

you would certainly lose money.... yet renting is "pissing away money".


You aren't pissing away money by renting. You are paying for something you get value of just like when you purchase a house.

Renting is no more pissing away money than eating is. Unless you love camping outdoors.

[Edited on January 6, 2012 at 4:17 PM. Reason : a]

1/6/2012 4:16:32 PM

I agree you aren't actually pissing it away. I was just making a comparison for arguments sake within the definition other people had already set forth. I was simply pointing out that if someone considers every bit of your mortgage payment that isn't going to equity to be money pissed away then essentially you'd have to agree that rent is being pissed away as well.

In reality, neither really is, but there are obviously a ton of factors to consider, some of which are intangible like quality of life and what you enjoy/get out of where you live.

1/6/2012 4:21:05 PM

I contacted Wells Fargo (who i have now) about refinancing... i had a 30 year fixed FHA loan at 5.125%

The lady said I could do a streamline refinance with no closing cost or appraisal needed at 4.125%....after all the calculations, I'd end up saving ~$80 on my monthly payment...

However, I'm not sure I want to stretch it back out to 30 years... i'm 2.5 years in.

1/6/2012 10:04:31 PM

How about if you refinance and continue to pay the $80 extra each month? Figure out how long it would take to pay off your house at that rate versus the old rate and how much less interest you'd pay over time. Also, could you refi to a 20 year mortgage and only pay a little more than you are now and still get the house faster? You'd get an even lower interest rate that way and save even more and own your house even sooner.

[Edited on January 7, 2012 at 12:16 AM. Reason : I'm guessing their 20 year would be 3.875-4% for you.]

1/7/2012 12:16:26 AM

That's definitely something to consider. Thanks

1/7/2012 7:50:07 AM

I am trying to refinance to lower my monthly payment. When checking with my current lender (GMAC) they say I will have an estimated closing cost of $1500 to refinance.

Does anyone have any advice on how to avoid the closing cost like the poster above mentioned?

Also, what other lenders should I contact to get a better rate?

1/7/2012 9:13:01 PM

^ Ask if they can give you a slightly higher rate with no closing costs?

1/7/2012 9:56:29 PM

I just contacted my current bank, Provident Funding, for a quote to refinance.

I am getting my 15 year fixed rate dropped from 4.25% to 3.375% with 2% of the loan being applied to my closing costs as a rebate (I was also offered 3.25% with 1.375% of the loan being applied to closing costs). Going with the higher interest rate since it would take 9 years for me to recoup the difference in closing costs (and I'll likely have my house paid off by then). Nothing like getting a drop in rate for $300

Went much better than expected

[Edited on January 10, 2012 at 4:11 PM. Reason : ]

1/10/2012 4:11:01 PM

I just got an ARM at 2.875 fixed for 7 years, after 7 years it goes off the LIBOR, the most it can go up is an additional 5% meaning the highest the rate can go to is 7.875.

I do not think that is too much of a risk all things considered. The maximum payment is still affordable for us, the payment that is fixed for 7 years is psycho low.

1/10/2012 9:11:31 PM

So let me see if I run these calculations right. I'll use 200k as the loan amount and I'll use amerisave as it generates payment info along with interest rates and use the rate that gives the closest to zero closing costs (I'm going to ignore taxes and potential ROI on the money saved in these calculations, which could both be moderately significant in the end).

If I select a 30 yr fixed at 3.75%, payment is $926/mnth, $364 CC
If I select the 7 yr ARM fixed at 2.875%, payment is $830 $-346 CC

So, after 7 years you will have saved $104*12*7 + 346+364 = $9446 in payment over the 30 yr fixed. This is quite a chunk. However, I like to look at the worst case scenarios. What happens if that far out inflation has gotten really out of control after all the money printing they've done and your rate resets at the max? If I've done the math right you'd have ~130000 left to pay off and if we reset to 23/yrs then you'd be paying ~$1023/mnth now. In 4 years all that benefit gained will be wiped out and then you'll start eating it.

Now...who the shit knows what is going to happen 7-11 years from now and if you feel pretty good that you'll sale the home before your ARM resets anyway then I'd say you have made a really good decision.

1/10/2012 9:46:04 PM

Yes, so if you're still in the house in 11+ years and inflation is in double digits then you'd start losing money. I'm looking at going with an arm too. We shall see.

1/11/2012 9:06:39 AM

Just called my current lender (Wells Fargo) and was offered 3.25% for 15 years. Coming from a 30-year at 4.5%. About $1500 in closing costs, but I'm going to try and talk them down when the paperwork shows up.

This move saves me right around $40k in interest over the life of the loan.

[Edited on January 11, 2012 at 11:23 AM. Reason : d]

1/11/2012 11:22:04 AM

I was thinking about checking out HARP. Anyone familiar with it?

http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

1/11/2012 3:01:15 PM

Sweet. Apparently I can refi with my bank sans pmi even if the appraisal causes the ltv to be over 80%.

1/11/2012 4:22:33 PM

I, too, am debating 30-year fixed vs 5 or 7 year ARM.


The nearer problem is that now I find out that I can't fucking close a loan without providing the last 2 years of tax returns, and I haven't bothered to file 2010 yet. Even if I filed tomorrow, it will be another month or two before I can close. Fuuuuuuuck. Yet another month or two of living in a fucking hotel; I just hope they'll extend the contract to a later closing date and I don't lose the house.

1/11/2012 6:34:05 PM

banks suck right now. we have not sold our house in charleston yet but have a renter. i am trying to buy a house in charlotte but they will not count any income i make in commission towards my adjusted gross income so with comissions on paper i make enough to buy the house here and still pay the one there with NO renter but they dont care. they will not count a 3yr lease i have with my renter as income because she has not been renting from me of over 2 years. bottom line is why do people who did stated income and still paid their bills get penalized for the asshats who did stated income and defaulted. i wish i could get some kind of loan based on just history.

1/11/2012 10:08:24 PM

I was selling houses during the whole thing and pretty much here is what happened.

Stated Income and No-Doc Loans were designed for people who are self employed/1099 and don't qualify under conventional guidelines. Plenty of people were getting loans like this responsibly.

Lenders/Developers Etc started to figure out they could use these loans to get people in to more house than they qualify for, and in many cases charge higher interest rates, etc. Since mortgage loans are originated and quickly sold off to another investor or financial institution it was not really anyone's problem how well they performed over the long term. The originator got paid and moved on to the next loan.

The easy financing allowed property values to skyrocked exponentially faster than incomes in many areas, creating a bubble in home values that was unsustainable.

Fast forward a few years and you who may make a decent income are going to have a really hard time getting a loan unless you report every dime you make on your tax returns and do not deduct business expenses that reduce how much you make below what you need to qualify.

They used to have loans that would qualify you off how much money cycled through your checking account (also circumventing using your tax returns) but those have gone away as well.

I think what your lender is looking for is two years tax returns reporting that rental income, that would offset the payment on that other property. If all you make is commission they are going to want to see that with two year history as well.

I have a guy you can contact who is very good at working around issues like that. I am not sure if there is a solution but if there is he will find it. I sent his number to you by PM.

1/11/2012 10:26:08 PM

Quote :

"Sweet. Apparently I can refi with my bank sans pmi even if the appraisal causes the ltv to be over 80%. "

I should've mentioned, I'm doing my refi using HARP.
You won't need PMI as long as your current loan doesn't have it. If you current loan has it, your new loan will too.

Wells Fargo used the Automated Valuation Model (AVM) for my house, which saves me the need for an appraisal (and $400 in closing costs).

1/12/2012 8:47:36 AM

My current loan does not have it. Is your existing mortgage with WF? How were you able to get out of doing the following?

Quote :

"I would just need you to tell me when you are ready to lock and I would need a credit card number for the appraisal and credit report fees which are $417. If you have any other questions - just let me know. AMY SIMMERING Mortgage Consultant NMLSR ID 447757 Wells Fargo Home Mortgage"

1/12/2012 11:59:48 AM

Yes, my current is with WF. It's one of the new provisions in HARP 2.0. Fannie and Freddie have these AVMs that the lender must use in lieu of an appraisal, if it's available for your house.

I did mine over the phone, nice lady punched in my address, told me my new LTV was 90% and that was that.

[Edited on January 12, 2012 at 12:30 PM. Reason : o]

1/12/2012 12:27:05 PM

fyi: http://www.wral.com/business/story/10591109/

1/12/2012 3:15:21 PM

Does wells Fargo give any incentive to refinance with them if they currently do your mortgage?

1/12/2012 4:19:57 PM

Quote :

"I have a guy you can contact who is very good at working around issues like that. I am not sure if there is a solution but if there is he will find it. I sent his number to you by PM."

gonna call him tomorrow. thanks

1/12/2012 8:37:43 PM