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Nevcorp18 · Joined: 27 Nov 2007 Posts: 6 3.58 Dollars($)

I am looking for a mortgage for about 160k. I make around 65k a year and have a base of 40k and with sales you never know how much you will make in a month. I have payments of about $450 a month. I am looking for a 0% down mortgage and with the lowest monthly payments. I went to a credit union and they offered me an 80/20% mortgage. The 80%was at 6.375 % and the 20% was at 8.125%. They said closing costs would be about 6500 then i asked more about it and they said it needs to be at least $4992.98 for everything but when you add property taxes and home owners insurance it comes to $6500. I was told this was expensive closing costs considering there are other costs assocaited with a home purchase. I was looking at a mortgage of 160k abd this is what was offered to me. I have about 10k to spend on ALL closing costs? Where should I look for the best deal? Please help me.

banker0679 · Posted: Tue Nov 27, 2007 9:19 pm Post subject:

depends on what state you're in........if you're in FL then your costs will be very high.

You have to break the closing costs down by
lender costs. (you can negotiate this with your lender)
title costs. (you can shop around for this...and MAYBE save a couple of hundreds)
prepaids. (usually 2months escrow for most lenders)

find a broker that can do MyCommunity.....it's one loan....but the rate maybe around 6.875% for 30yr fixed.
Also, try FHA ....you should get 6.5% or lower for 30yr fixed...and you will need 2.25% as a down payment.

Look into having the seller pay your closing costs....

Nevcorp18 · Joined: 27 Nov 2007 Posts: 6 3.58 Dollars($)

If I go with FHA do I only pay the 2.25% and no other costs like the 6500 that the credit union tried to charge me? Also what does it take to get a loan from the FHA? Who do I speak to?

Nevcorp18 · Joined: 27 Nov 2007 Posts: 6 3.58 Dollars($)

Also I'm in PA

banker0679 · Posted: Tue Nov 27, 2007 9:24 pm Post subject:

If you're not under contract then negotiate for the seller to pay the closing costs.

Most buyers negotiate it this way.

You agree on 100k for the home...and you raise it to 103k....the extra 3k will pay for your closing costs.

I placed 20% down on my home...and didnt have anything for closing costs. I structured my loan this way to avoid paying more out of my pocket.

I'm licensed in PA also

Nevcorp18 · Joined: 27 Nov 2007 Posts: 6 3.58 Dollars($)

Is it possibile for a person in my shoes to get a loan of 170k (if not more) with good credit (around 700), with 10k to spend out of pocket(on whatever need be), on a home with property taxes of $2000-2500 and have a total fixed mortgage monthly payment of about $1100 or less? If more how much more? And where do I start with( I know a little was explained earlier)

Posted: Wed Nov 28, 2007 5:43 am Post subject: ?

Is there anyone else that can give me an idea as if that the way that was mentioned is the right way to go?

evolovik26 · Posted: Wed Nov 28, 2007 9:07 am Post subject:

ok you got 2 options (neither of them is your credit union)
You can go with Flex 100 loan from a conforming lender or an FHA loan.
With Flex 100 loan you will need a pretty stellar and established credit (680+ and 2+yrs established) You would have a 100% loan with MI and you can have seller contribute 3-6% towards your closing costs depending on the lender. And you will likely have a lower closing costs and interest rate on your loan.
FHA allows you to get somewhat similar loan if you have less then stellar credit and not alot of it. Also FHA doesnt need assets. However there is 1.5% upfront MI stacked on your loan and you can only get 97% financing. Your seller can contribute 6% towards your closing costs and give 3% to a nonprofit organisation who can gift these funds to you to get the 3% downpayment.
If you have some assets and good credit id recomend Flex 100 as your first choice. FHA is great but it is setup for thuse who have less then perfect setup.
Expect rates of low to mid 6s on either of these loans.

banker0679 · Posted: Wed Nov 28, 2007 2:13 pm Post subject:

with Flex 100 you need a 620 to avoid High PMI.....your rate will be the same if you had 620, 680 or a 850.....it requires no reserves only a 500 contribution from the borrower and you can get 3% paid towards your closing costs from the seller.

FHA isnt just for those ppl who have 400 scores...it's also for ppl who can put 2.25% down payment...and have a MUCH LOWER PMI payment...and a lower interest rate. The 1.5% funding fee can be paid upfront or rolled into your loan amount.
97.75% will be the amount financed.....

rick · Posted: Wed Nov 28, 2007 3:07 pm Post subject:

There are a couple of lenders I'm aware of, (GB Home Equity and US Bank), who will go to 100%. Find a mortgage broker who is approved with them. Given your good FICO score, it looks like you would qualify for an 80% 1st (low 6s likely) and a 20% 2nd. Not a high loan amount - probably in the 8s. Zero down. Fixed payments shouldn't be much more than $1,000. No MI. I'm doing this exact program for a relative who is purchasing a home in CA. Good luck.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Nevcorp,

I think you should take a single loan instead of taking 80/20 loan. If you take 80/20 loan you have to pay higher interest rate on the second mortgage. But if you take a single loan you can be able to pay lower interest rates. If you cannot pay down payments, there are so many down payments assistance available. You can take advantage of those down payment assistance programs. Ameri Dreams and others can help for the down payment assistance.

Thanks,
Larry

rick · Posted: Thu Nov 29, 2007 10:29 am Post subject: One loan or two

Your mortgage broker should be able to determine whether one loan or two is the best deal for you. I always check the "blended," or weighted average interest rate. In your case, it should be about 6.5%. In my experience, paying the extra premium for one large loan has never made financial sense - but do the math with your mortgage broker and let that determine your answer.

Good luck!

evolovik26 · Posted: Mon Dec 03, 2007 9:31 pm Post subject:

Good point Rick

chrisburns · Posted: Tue Dec 04, 2007 5:22 pm Post subject:

FHA would get you very close to 100% financing. If you have a willing seller it will get you the loan with no money out of your pocket. The mortgage insurance will be cheaper and the rate competitive with My Community, Fannie Mae Flex, or Freddie Home Possible.

gmakerley · Posted: Mon Dec 10, 2007 10:28 am Post subject:

first of all, mortgage brokers are not the only option. mortgage lenders (affiliated generally with banks) are clearly a viable option. the credit union you cited is likely also a good option.

i agree that fha is a good choice. rates will run less on fha these days than on conforming loans, especially with some new guidelines that have only recently come out.

no doubt you can negotiate as much as 6% of the sales price for closing cost assistance from the seller, if they are amenable to it. this is a definite benefit to you. if you have an issue with the costs your credit union cited, then by all means, speak with another lender to do a comparison. keep in mind that a good faith estimate is just that - an estimate.

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