Bank of America mortgage cross-question.?
House price $420,000.Cash down $20,000.
Credit score (803)
I am likely to give any documentation asked for.
I don't want to hold a payment larger than $2,700. a month.
The loan officer spoke of (2) loans
(1) for $380,000.
(1) for $20,000.
I don't construe why (2) loans?
They are currently advertising "no closing costs/no PMI".
How do they do this?
Any insight would be greatly appreciatted.
Answers: The second loan is a "piggy-back" loan which covers the sundry costs associated with buying a house, properly there is no specific closing cost but in attendance are a lot of other costs they're sticking you next to. Save up more for your downpayment, try for at least $30k. In the meantime the house you want will probably become cheaper or a better one for alike price might come on the market.
They are splitting the mortgage between your primary and a equity mortgage. Watch the interest rate on your equity, it will probably be unreliable and make sure you budget for an increase (if they ever elevate rates again).
Brokers do this to avoid the PMI situation that could be caused by going to one guard for the whole file.
I went to mound rate.com (http://www.bankrate.com/gookeyword/mortg... and ran the natural numbers (400k (a)6% for 30 years), your payment would be around $2400 a month.
Don't forget to digit your property taxes AND house insurance/flood insurance.
Have to tell you that it is a huge red flag for me when someone is solely putting 5% down on such a big mortgage. Many people within foreclosure did the same item. Be careful and receive sure you can make your payments if you become on the dole or disabled.
Good luck
420,000 asking price, a 95% loan would be at 399,000
with 21,000 down. 1 loan. 6% rate = costs of 2392.21
not including Property taxes and homeowners insurance.
How is your income, for the payment? Lendes look at DTI (Debit to Income Ratio's). If you DTI is better, than you can go stated.
Lots of variables to consider beside the information give. And at hand are so many programs to consider. But next to your credit score you can capture a 1 loan at 100 percent. Or do what you are doing and put the 5 percent down.
1st...May I suggest...that if the loan officer didn't explain the 2 loan options clearly...to RUN...and run away briskly?
It sounds as if he/she is not doing their part surrounded by helping you feel comfortable near your investment.
Primarily, a mortgage will be broken up into 2 loans (just like yours) within order to set free you from having to foot Primary Mortgage Insurance (PMI).
PMI is "required" by most lenders if you finance contained by excess of 80% of the purchase price.
With what you've mentioned in your cross-question, there may be a much better way out for you. Your credit score is great - which resources you have option!
I would be happy to cooperate with you, if you would similar to another opinion. Feel free to email anytime!
Warm regard,
Josh Perrington
Josh(a)GatewayLoans.org
P.S. I'm a Mortgage Banker... :)
You may want to 'tune in' to Suze Orman and her TV show (or read her books). She has discussed this issue extensively.
First, in need 20% down, you will always hold to do one of the following:
1) pay PMI, or
2) win a second (piggy-back) loan at a much higher interest rate than the primary loan to 'cover' the 20% down.
Bottom vein, especially in today's loan environment and housing market, it is best to buy only near 20% down. Otherwise, you really cannot afford the house! If you must buy a house you can't afford, then ONLY do so by purchasing PMI and roll the total cost of PMI into the mortgage (do NOT spawn monthly PMI payments - buy the insurance 'outright').
Best wishes and good luck.
p.s. the mortgage broker 'forgot' to make clear to you the reason brokers 'push' 2 loans fairly than one loan with PMI, is they formulate a FAT COMMISSION on the second, high interest rate loan, and little or no commission on PMI.
One item at a time:
If you are going to have a mortgage of $400,000 your "total" pay is going to be approximately $4,000 per month. Assuming you are getting a 30-year loan at todays rate of 5.5% your principal and interest payment will be $2271.16 and presently you have to put in the monthly cost of insurance and taxes to get a total clearing.
Next: There is NO SUCH THING AS A ZERO CLOSING COST LOAN. You will be paying the hidden costs (and yes, they are contained by there) by not getting the 30-year rate of 5.5% that is available to borrowers today. Also, by have those closing costs hidden surrounded by the loan you will have the privilege of paying for them 3 times. Ask your BOA loan officer how long he/she have been contained by the home loan business, then ask them to pass you the “written” Good Faith Estimate (GFE) and the Truth In Lending (TIL) for this proposed loan. These forms are to be provided to you per the federal government. It’s the regulation. You will then be within a position to see for yourself what you are really getting. I will give you my 110% guarantee that you will not be seeing a 5.5% interest rate and not anything closing costs on either of those forms. Also, you can immediately take these forms to other lenders and or brokers to comparison shop. Good Luck
If you want extra help: wfsi(a)verizon.lattice
Wow!
Referring to a previous answer:
Congratulations W.E. you just sympathetically advertised to commit mortgage fraud. Telling them that if they don't get together DTI ratios that they can stir stated is exactly why the industry is a mess.
I cannot believe you actually said that. Fraud, fraud, fraud!
I urge EVERYONE to form note of this human being ad NEVER EVER do business wih her, or anyone resembling her!
I totally AGREE with the doctor. If you don't own at least 20% down, you shouldn't be buying this home. Foreclosure rates are skyrocketing, I hold never seen it this unpromising. You might lose your job, or God forbid become not at your best, how would you make that huge mortgage payoff. We are headed for a down turn surrounded by the economy. Please contemplate about it.
On a open house, who gets the commission if I chose to make an offer using another agent who was not there?
Answers: Typically the commission is split between the listing agent and the buyer's agent. How much of the split goes to each agent depends upon the contract between the seller and the broker.
If you want to work with the other agent...get them to show you the house and then make your offer. They may see things you did not and a second look couldn't hurt. They will split the commission but it will go over a lot better if they have shown you the house. Good Luck!
I'm thinking of buying a leave property and renting it out?
I was thinking of buying a condo contained by Orlando (to start). The idea is that we will own a place to stay while there and it will be rented out while we aren't at hand. I think realtors will feel the renting and upkeep. What should I watch out for? Any information from someone beside experience would be greatly appreciated.Answers: Can you afford to pay the mortgage, taxes, insurance, utilities, maintenance/repairs, and association dues short rental income? If not, what happens when you don't hold renters?
Can you afford the costs of major repairs if renters do serious violate to your property? (Hey, its not their condo, it's party time, their drunk, and who care? - AKA - renters from hell).
Lastly, there is a huge glut of unsold condos surrounded by Florida. Everyone will be trying to rent them to cover the payments. Thus, large supply and low emergency means: 1) few customers (renters) and 2) reduced rental prices.
So, what do you suppose. Does this sound resembling a good hypothesis?
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