Home loan question

[Wolf359]

Originally Posted By: tenderloin
Why wouldn't a seller do a deal with them? My kids and friends I know closed within 45 days. Google Bob is the Oil Guy or most any company or organization and you will find complaints. I hope you spend more research finding your clients good deals instead of just closing a deal fast to get a check


If you read the complaints, the main problem is that they don't close or have lots of delays. No seller wants that. For that matter, many people hate BoA. I had a good rep with them a few years back and closed many deals with them. The rate I got from her was better than the ones they publish online. But eventually the closing department switched to a different location and the mortgage rep I was working with didn't have any pull with them. The last few deals I did with her, the closings were delayed. Everyone was mad. Seller even threaten to kill the deal and keep the deposit, but in the end they waited an extra week and it closed. It was sad because there was no reason for the delay, just that the closing department was too busy to generate the paperwork. That's totally the banks fault. Most other banks, you get the clear to close, you close in 3 days. Last few deals, got the clear to close and then no closing. That's no deal.

How many deals have you closed with NACA?

 

[JimPghPA]

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[dareo]

VA is the best if you qualify. USDA rural housing also loans 100% with area and income restrictions, higher rates and pmi.

Getting a good house in a good area at a good price is more important than the first loan you get on it.

 

[Wolf359]

Originally Posted By: dareo
VA is the best if you qualify. USDA rural housing also loans 100% with area and income restrictions, higher rates and pmi.

Getting a good house in a good area at a good price is more important than the first loan you get on it.


The VA is only the best if you don't have the money. They have funding fees which make it more expensive than conventional loans. If you have the 20% down payment a regular loan is cheaper.

 

[dareo]

True, VA has funding fees, but they are low for the 1st time use. We have 80k equity in 5 years from buying another house once my wife qualified for VA. Not one cent down. When we buy again we wont go VA, but a large down conventional. 2nd VA is 3.3% right now.

 

[kmcavin]

Originally Posted By: Wolf359
Originally Posted By: dareo
VA is the best if you qualify. USDA rural housing also loans 100% with area and income restrictions, higher rates and pmi.

Getting a good house in a good area at a good price is more important than the first loan you get on it.


The VA is only the best if you don't have the money. They have funding fees which make it more expensive than conventional loans. If you have the 20% down payment a regular loan is cheaper.


The VA funding fees are in place of PMI and they are also reduced with a down payment. In addition, those funding fees are waived for veterans who receive or are eligible to receive compensation for a service-connected disability.

I had more than enough for a 20% down payment, but I'm getting a better return in stocks and mutual funds than the 3.25% I'm paying on the mortgage.

 

[dareo]

VA funding fees are not really in place of PMI since they are so low. Fha has upfront and monthly pmi that is far higher. I think we paid 2.4% VA on our house. That was a few thousand bucks, got us into an awesome house that is now worth tons more today.

Conventional loans often have origination fees, .5 or 1%, so a VA funding fee is small potatoes. BIG thanks to all military people!

 

[Wolf359]

Originally Posted By: dareo
VA funding fees are not really in place of PMI since they are so low. Fha has upfront and monthly pmi that is far higher. I think we paid 2.4% VA on our house. That was a few thousand bucks, got us into an awesome house that is now worth tons more today.

Conventional loans often have origination fees, .5 or 1%, so a VA funding fee is small potatoes. BIG thanks to all military people!


You have to shop around. Most of my buyers never pay any type of origination fee. One thing I liked about BoA was that they just charged a $595 fee, no other origination fee. Other lenders are typically in that $400-$1000 range as a flat rate fee and no other origination fee.

 

[bubbatime]

OP. They build houses. They want to sell you a house. They dont make money when they are not selling houses. They finance in house, or with lenders that can get a lot of folks into a house.

If you qualify, a VA loan is good.

Also, if you qualify, the US Dept of Agriculture rural loans are excellent. My dad has been a USDA loan officer for many years and he admits that it is one of, if not the best home loan scenario in the country for those that qualify. Low rates, up to 100% financing, sometimes no money down, etc. They get an annual budget of money they can loan/spend, and they are under pressure to loan out ALL of their allotted money otherwise they could lose funding the next year, so they are eager to loan money when they have not used the yearly allotted amount, from what I understand.

http://www.rd.usda.gov/programs-services/single-family-housing-direct-home-loans

http://www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program

 

[Mr Nice]

Originally Posted By: JHZR2
If you cant afford 20%, chances are you cant really afford the home, or will be stretched too thin to do other responsible financial things. Never one size fits all, but these classic rules of thumb exist for reasons...

Im sure the lender is making out and covering their risk one way or another...


Very few people have 20% cash saved up to purchase a house.

 

[Wolf359]

Originally Posted By: Mr Nice
Originally Posted By: JHZR2
If you cant afford 20%, chances are you cant really afford the home, or will be stretched too thin to do other responsible financial things. Never one size fits all, but these classic rules of thumb exist for reasons...

Im sure the lender is making out and covering their risk one way or another...


Very few people have 20% cash saved up to purchase a house.


Very few people you know have 20% cash saved up. I've sold many home where buyers had the 20%. Probably less than a 1/4 had less than 20%. A few even had cash. Those are the best offers to write, cash no contingencies.

 

[supton]

Doesn't it matter what age you are at? Hard for 20-somethings to have 20%. You'd think someone owning/paying a mortgage for 20 years though would have 20%, at least in equity.

I lucked out with 5% down, no PMI, but times were booming in 2005--so that's hardly an endorsement. I too agree with the sentiment of getting out of rent sooner; but technically it's a numbers exercise. Do you pay more money to PMI&interest buying with 5% down; or will you pay more renting & saving to hit 20% & then paying interest on a smaller amount? In my case, although I didn't run numbers, I think I did beat it--while I paid more than renting, it wasn't by much.

 

[Mr Nice]

Unless parents pay off their child's college debt..... or help with house down payment... it's hard for *most* Americans to save up 20%.

$60,000 down on a $300,000 house ?

 

[pandus13]

Originally Posted By: aquariuscsm
I've been schooled that you should always put down 20% on the purchase of a house. A friend of mine was telling me about these "custom home builders" that build you a brand new home with zero down. I just don't buy it. It goes against everything I've been told about home loans.

But I have to ask,what's the catch? Are these new custom home "deals" too good to be true? What could possibly be hidden in the fine print?

OP,
before even talking to them, i would make sure i have on my side a good title company and a good RE lawyer.
then how many other custom houses where built by the builder as the same entity
then talk to them.
now i just run my mind but: builder has access some type of grant funds for "development"; builder uses hard-money lender and needs volume to make sense = maybe your custom build are the end-of-the-year-i-need-to-sale-this-car kind of dealer

 

[stockrex]

You want to avoid paying PMI

get 80% conventional loan
then get another loan for the 20% (i.e. for the rest),
I did this for my first house I bought.
the danger is that if you house does NOT appreciate,you will be writing a FAT check when you sell it. Be ready for that,
I lost 30k on that transaction as I bought at the peak of the market.

Else, take out 2nd mortage after you close.

 

[aquariuscsm]

What my plan is,I have enough cash to put down 20% on a nice modest house. It's just for me,so I'm not looking for anything huge or fancy. The DFW suburb I'm relocating to has lots to chose from in the 130-150k range. My thoughts are if I'm going to permanently relocate,why pay $1000+ A month in marked up rent for a tiny apt when I can put down a good downpayment on a nice house and have very cheap house payments having the money going into something I own vs a landlord's pocket.

That 0 down "custom home" thing came from a friend of mine who'd suggested I look into that. I'd never heard of that and it just sounded like a bait and switch thing to me.

 

[Wolf359]

Originally Posted By: aquariuscsm
What my plan is,I have enough cash to put down 20% on a nice modest house. It's just for me,so I'm not looking for anything huge or fancy. The DFW suburb I'm relocating to has lots to chose from in the 130-150k range. My thoughts are if I'm going to permanently relocate,why pay $1000+ A month in marked up rent for a tiny apt when I can put down a good downpayment on a nice house and have very cheap house payments having the money going into something I own vs a landlord's pocket.

That 0 down "custom home" thing came from a friend of mine who'd suggested I look into that. I'd never heard of that and it just sounded like a bait and switch thing to me.


Usually the builder takes out a big loan with a bank. And the bank wants to be paid back so they will offer special financing in order to move the units that the builder has. The other problem in a development is that you run into fannie mae/freddie mac rules. Things like can't have more than 10% of the units own by an investor or builder, complex not complete, etc means that it doesn't qualify for conventional loans so the only way to move them is with special financing from the bank that bankrolled the development. Once all the units are sold, you'd be able to get a conventional loan. Builders typically aren't flexible on the price, but you can negotiate for additional amenities or pick the best unit. If they lower the price, they have to do that on all their other units. Throwing in an upgraded kitchen or extra parking spots doesn't really show up if everyone pays the same price.

 

[JustinH]

Talk to a highly rated loan broker. There are a lot of different programs. Just going to a standard 80/20 loan you may have a better option.

We did a FHA loan and put down 3 percent. On a 129k house we paid about 8k down. Interest rate is 4 percent on a 30 year fixed we are right around $1000 per month all in with insurance and taxes escrow.

Apartment around here is $1200-$1400 so it made sense for us.

We kept our money in the bank in case anything goes wrong with the house or we wanted to do some work on it.

With interest rates so low the 80/20 didn't make sense to us.

There was also a USDA loan, for "rural areas". That is a 0 down loan with good rates. It only applies to certain areas of certain counties, and our house was a few miles outside of the zone to get this type of loan.

15 minutes with a loan broker is worth your time. Take a look at one top rated on yelp.

 

[PandaBear]

Normally, investor who buy your home loan (bank, FannieMae, Saudi and Chinese government, Japanese housewives, etc) would not want to be the first one losing money, so they'd prefer a loan that is 80% of the market value or less (you can get real good interest rate if you have even more downpayment).

Some investors prefer higher return at higher risk, so you can borrow more with higher interest rate with PMI, or 2nd mortgage at higher interest rate, etc. You are probably not going to get a good deal vs renting and saving up, so that may not be a good choice to most people.

Also if you are bidding for a home in a hot market, sellers prefer higher down payment because the chance of a loan not getting approved is lower (they prefer all cash buyer of course, so they can close without any wait).

 

[PandaBear]

Originally Posted By: aquariuscsm
What my plan is,I have enough cash to put down 20% on a nice modest house. It's just for me,so I'm not looking for anything huge or fancy. The DFW suburb I'm relocating to has lots to chose from in the 130-150k range. My thoughts are if I'm going to permanently relocate,why pay $1000+ A month in marked up rent for a tiny apt when I can put down a good downpayment on a nice house and have very cheap house payments having the money going into something I own vs a landlord's pocket.

That 0 down "custom home" thing came from a friend of mine who'd suggested I look into that. I'd never heard of that and it just sounded like a bait and switch thing to me.


Renting is flexible, owning is not. If you decide to move because of local economy, many of your neighbors will be too, and the 130-150k homes may not worth the same at the time. I'm not saying owning is a bad choice, but you have to factor in how much risk you can take.

The 0 down custom home deal may inflate the price so you can get 0 down (like a 0% financing new car that you have to give up 1500 cash rebate for) , or at a higher interest rate.