Hi all, I have several questions. First, I was told by my broker today that we (me and hubby) got a mortgage--two actually-- after more than a year of scrambling to clean up our credit. Our home is almost finished and we could possibly close at the end of the month. Of course, this is not the mortgage(s) we were looking for. We have VA eligibility, and our broker went two routes--submit one application to a VA-lender and then she got us a 90/10 loan. This means, some bank out there is willing to give us 90 percent of the home value, while the brokers' own investors will give us the additional 10. So that's two mortgages. The 90 is at 10.38% and we were told that is negotiable (two weeks ago, it was 11.85-geez!) and the 10 is at 13 %. The VA-lender hasn't gotten back to us yet, and I have a feeling the broker is trying to push us to go ahead and accept the 90/10. We had our doubts earlier whether they ever submitted for a VA loan. I don't want to be pushed. Obviously, if we get VA, we get much, MUCH, lower rates. 10.38 and 13 percent just seem unacceptable, given my husband's veteran status and given that rates are in decline in general. Questions: Is it common to have two mortgages of this type? I thought second mortgages were to help garner some money for whatever purpose--not to buy a house for the first time. We are first-timers, and I just think it's strange to have two mortgages. Given what you know about our situation and other brokers, is this course of action legitimate, or are they feeding us lines? What's been your broker experience? I guess we're also feeling a little bit of buyer's remorse. We're getting a brand new townhome. We love it, but we wonder if the price we're paying could get us a decent single-family (since we're expecting!). We're planning to do one round of searching this weekend--just to see what's out there. On the web, I saw a decent-looking single-family in the same area for just $9K more than we are paying for our townhome. Should we roll the dice again under these circumstances? What would you do? We live in MD, and development is all the rage here (good and bad). If you want a just built house, they are easy to find, so of course we got caught up. Somebody give me some advice. Please. CC
RE: Got Mortgage..Still Need H I don't know what your scores are like or even your credit history, but those sound like outrageous interest rates. Why not just do an FHA loan?
RE: Got Mortgage..Still Need H My advise is, If you have doubts about it now, then DON'T do it. Sounds like you haven't found what your are looking for anyways. I have always lived by the rule of sleeping on it. What were you looking for originally, was it a town house? or a single family home? Which one is going to suit your needs the most. Brokers are out to make money from other peoples mistakes and will try to talk you into something you don't really want. Be Careful.
RE: Got Mortgage..Still Need H I agree with Kim. Those interest rates sound horrible. The kicker is, will your property value increase at a rate to offset what you are paying in interest. As you go along, you may want to refinance and find out that you can't because your loan balance is higher than your property value due to your interest rate and have to put up even more money to refinance. All lenders who offer you a loan are not your friends. I just ditched my lender because he couldn't return phone calls. I later found out that he structured the loan with hidden fees. PLEASE think about this before you and your husband sign.
RE: Got Mortgage..Still Need H I agree those rate seem extremely high, I am in contact with a few mortgage lenders, email me and I can steer you their way, they may be able to explain this to you. Mom Airann23@aol.com
The other kicker With the 90/10 deal, there is a two-year prepayment penalty, meaning no selling or refinancing before two years. It's a horrible deal, I agree. We have decided we just can't accept those terms, but the broker's trying really hard to convince us otherwise. We'll just wait and see what the VA-lender has to say. Question: We've signed a purchase agreement already with the home builder and put $1K in the pot. If we don't get an acceptable loan, what recourse do we have? Mom, thanks. I'll e-mail you tonight. What state are you in? CC
RE: The other kicker There should be something in the contract that states if you can't get funding, the builder will refund the money. Most builders where I live require you to try at least 3 lenders before they refund the money.
RE: The other kicker Hmmm, when is the closing for this property? Usually you can get your money back if you can't secure a loan or if you don't have all the down payment money when it's time to close on the house. I don't know what to say about not accepting the terms of a loan because technically you have secured a loan, but you don't like the terms of the loan. I don't know if you'd be able to get your money back on that one. Your contract should indicate in which instances you will or will not be refunded your earnest money.
RE: Got Mortgage..Still Need H CCMAX, Sounds like a couple of things here. One, you lender may not be eligible to broker VA loans. Many brokers out there only now how to do the high rate stuff. Bad Training. You may want to double check to see if they are eligible. Also, based on your house price you may be able to get into some programs for Low to Mod income households. Some of these programs require 3% down some don't. Between 580-660 you'll probably need 3% down. Above 660 you get 100%. And the rates are around 7.875% for 620+ and 8.875 for the lower score. Kicker is if you pay on time for 24 months they lower your rate 1% if you started on the higher program. No prepays. Also, you current 90% first may be a 2yr ARM that they didn't mention. Get me some details on your particulars and Iâ??ll get you straight up answers. No fluff, no obligation. Ask Mom for a reference
RE: Got Mortgage..Still Need H George, Assuming your credit is solid and your loan amount is greater than $100,000 and your LTV is < 90%, and Conforming deal, your broker is making about 1.875% on your deal. This seems fairly reasonable as long as they are not charging you any origination or other points up front. Rates have come up a bit in the last week or so. If your looking for lower rate you may have to wait a bit as the market has allready priced in a .5% lowering by our Friend Allen on the 31st. If they only drop rates a .25% watch out as they market may react quite bad. Things should settel and trend down in Feb as the news will be absorbed and everyone will be looking to predict the next moves.
