Can someone explain to me this mortgage scenario? I have been approved for mortgage & would like to qualify for more money. I am somewhat nervous in the fact that I am not going to be able to afford a house in the price range of 108,000 to 117,000. I know that I want to go FHA b/c they are not really score driven, and most importantly, I want to be in a house by Oct. I know that my scores are not good enough to go conventional. My scores are 639/632/615. thanks!
Normally it's and 80 percent mortgage amount of the price of the home and a 20 percent instant line of credit to keep you from paying PMI. The amount is still 100% financed but you won't have to deal with PMI. Most of the brokers I talked to stated if you were over 620 on at least two of your scores, which you are, you can get a competitive rate on a conventional loan. Hope this helps...
we did fha, but we pay pmi. Total pmnt including taxes/ins in 1045 on 130K Middle score was 550 and 7% interest (bought before the rates dropped)
HOMEN2004 An 80/20 mortgage is an 80% First mortgage and a 20% 2nd mortgage. The second can be either a HELOC or a regular 2nd. BTW, with the scores you are showing, there are conventional lenders that will lend you a single 100% loan and there are a couple that will even allow you to avoid PMI by increasing your interest rate by about 1%. Hope this helps. fla-tan
On the same line - has anyone ever heard of doing a "silent second"? Is this legal? From the way I understand it, to the lender on the 1st mortgage it looks like you're doing an 80/20 so they lend you the 80% with virtually no questions asked, and you cut the seller a check for the extra 20 at closing which he proceeds to tear up because the two of you have agreed beforehand to an artificially high sale price. Is this description correct?
Re: Re: 80/20 Uh, I assume this is obvious, but the REASON they wont lend you more is because your income doesn't support it! You can always do a loan that is NINA... no income or assets.... or do you have other sources where you can pay a higher mortgage from? (rental?? that's usually figured into the amount you quailfy for... 75% of the rental income.) If not, maybe you should consider a duplex. that way youll be approved for more.
Re: Re: Re: 80/20 Well, many times the Value is there.. I mean, different appraisers can come to a difference of 15% in value between them.... and the'll both be right.... Appraisal is an art, not a science. It's like a a painting.. different people will appraise it in the same range, but the difference betwwen the high end and low end of the range can be significant...
Re: Re: Re: 80/20 The "Great Flat-tan" has spoken!! haha. I was hoping that you would respond. I value your feedback. I was thinking of going conventional, but from previous research, that applying for this type of loan requires prime scores. I have collections on my CR, but they are paid, & it's not like they are coming off anytime soon, as I have tried everything. I will continue to research more, and I think I may apply at my credit union. The rates are really great there & they also have a company that handles FHA loans for credit unions. So, I think that is a plus.
Re: Re: Re: Re: 80/20 1*different appraisers can come to a difference of 15% in value between them... and the'll both be right.... 2*Appraisal is an art, not a science. It's like a a painting. different people will appraise it in the same range, but the difference between the high end and low end of the range can be significant... Nestea =================== 1*Thje amount of an appraisal can vary depending on who is getting it done and or the intended purpose of the appraisal. 2*What I'm saying is if the appraisal is for 100000 the bank is only going to finance 80000 on a 80% loan no matter what the selling price is. You can't set the price at say 140000 and expect to get a 112000 loan because the 100000 appraisal will shoot it down. The END ************************* LB 59
Re: Re: Re: Re: 80/20 What you arer saying is correct about a purchase. on a refi, Appraised value is what matters. see above. Fla-tan? Am I right?
Re: Re: Re: Re: Re: 80/20 Nestea I would love to answer, but I am not sure what questuion I would be answering to. If I read you correctly, you are asking me if, when refiing, that lenders go strictly by appraised value. If that is what you are asking, then that is correct. fla-tan
Re: Re: Re: Re: 80/20 Nestea While I will agree with you that appraising is as much art as science, I will also state that an good (and honest) appraisal will be easily supportable. If the appraisal raises eyebrows, then I would question that appraisal. There have been instances where I have actually required an appraisor to provide further documentation to support their findings. On a couple of occasions, I have actually refused to accept the appraisal, the valuations were way out of line with reality. The borrowers weren't to happy, but in the end realized that I was trying to protect them. I have also had borrowers walk on me because I would not be party to them trying to get an inflated appraisal so they could get more out of their house when refiing. fla-tan
Re: Re: Re: Re: Re: 80/20 100% Agree with that. But, as per the original poster, if the appraisal came in, after his new fireplace, and different appraiser, realistically at 80-90% LTV, he hould get a mortgage at a low rate without PMI. Right?
