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My loan officer was telling me about one loan. He said i put 5% down, and the 80 part is 6.125% and the 15 would be 8%. But he said something about a balloon payment at the end of 15 years if i am still in the house. That kind of freaked me out, We have already been pre-approved but for the 80/15 or the 100% the payments are just alot higher than i want to have, and he was telling me about this option. another thing, what is the cut off for debt to income ratio to qualify for a good loan. It looks like ours is 35% What exactly do they factor in? Are they talking about my current house payment or the future house payment? I know that it factors in car payments,loans.credit cards...but do I need to factor in grocries ,insurance,utilities,etc..?

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

If your loan has balloon payment then what happens is that the rate remains fixed for 15 years & the payments you need to make are amortized over the 30 year term, meaning the payments you needed to make if it were a 30 yr loan. Such option helps in providing you with lower monthly payments. And you will have to pay down the balance on the loan at the end of 15 yrs. or refinance.

Guest

"I know that it factors in car payments,loans.credit cards...but do I need to factor in grocries ,insurance,utilities,etc..?"

Groceries and the like are not included in the calculation of dti jonyrff, and your dti looks to be ok at 35%

colin · Posted: Fri Jun 08, 2007 2:25 pm Post subject:

Hi Jonyrff,

Welcome to Mortgagefit forum.

Instead of looking at 80/15/5 I would say going with a 100% would be much better as you will have only one loan to manage. What rate are you getting on the 100% one?

About debt to income ratios, it takes into account your payments towards debts like car loans, child support, card bills, student loans & similar debts. Mainly all recurring debts are considered which are not going to be paid off within a short period of time say 6-7 months.

Colin

carnahandavid · Joined: 21 Dec 2006 Posts: 238 58.41 Dollars($)

Tell us more about your income, credit score, reserves...

It can be possible that you do not need to take out two mortgages and qualify for a single mortgage. From your post it seems that you are prepared to make 5% down, if it is so then fha can be an option where down required is even less at 3%, apart from fha there are many other loans which can be for zero down, like the ones I can think of now from BofA, Fannie Mae...

But as I said tell us more about your financial status so that we can evaluate if you can qualify for these loans.

David

helping_user

First of all, jonyrff, let me ask you what exactly you mean by a good loan. Is that a loan which can offers you special benefits such as discount in interest rate or may be help you to qualify with low income? Or is it a loan with low closing costs or interest rate? And, if there is a balloon payment then I think it will be on the 80% mortgage and not on the 15% loan. This is because the 80% loan will require you to pay a fixed rate of interest whereas the 15% would be a variable rate loan. What I shall suggest is, get this verified with the lender; and is it with only one lender that you're getting two loans?

Moreover, if making the payments will be difficult for you, then you have the option to discuss it with the lender and request him to help you with a different option.

Thanks.

ezmortgageloanz · Posted: Sun Jun 10, 2007 9:15 pm Post subject:

Your broker suggested this combo loan configuration so that you could, 1) Avoid the need for PMI (PMI isn't necessarily a bad thing, particularly this year [PMI is a tax deductible line item assuming you meet the income cutoff]), 2) Increase affordability for the first 15 years.

As another poster has indicated, there are other 1 loan programs that would allow you to finance up to 95-100% of your home that could be lower then the blended rate/payment you have been offered (FHA would be a very strong contender by this criteria).

I should caution you that the rates you have posted are no longer available---the market has posted interest rate increases for the last four weeks and the market avg for a 30 YR FXD will be around 6.75% next week (up about .50 since May 14th).

Unless you have locked the rate in (and it sounds like you haven't), you will need to go back to the drawing board on this one...

Regards,

Scott Miller

Posted: Mon Jun 11, 2007 5:14 am Post subject: RE: Interest rate on home loans

Scott, that's a pretty high rise in interest rates. Jonyff would have to pursue the higher rate if he hasn't locked in the rate. And, I am interested to know about the second mortgage, that is, the loan against 15% of his home value.

Scott, what do you think, will the interest on the second loan be higher just like the first? At least I presume that's the scenario.

Interest rates on fixed rate mortgages are on the rise for the 6th cxonsecutive week till now. Even ARMs rates have also been hiked. As such, Jonyff may have to consider some other option. He may make use of the right of rescission. But Scott, does that work for everyone and for each and every loan?

Jessica · Posted: Mon Jun 11, 2007 5:20 am Post subject:

That's me Scott, posting as guest; just not logged in. Smile

ezmortgageloanz · Posted: Mon Jun 11, 2007 5:48 am Post subject:

One could undoubtedly expect for a 2nd mortgage to come with a higher interest rate then that of the primary.

Regards,

Scott Miller

ezmortgageloanz · Posted: Wed Jun 13, 2007 1:03 am Post subject:

The national avg today for a 30 YR FXD was 6.53% with .4 in orgination fees---I rec'd three intraday interest rate change notifications from one lender today (all annoucing rate increases)...sadly, the initial prediction is in sight...

Regards,

Scott Miller

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