[???] Looking into a mortgage loan ... what should I know?

• O-Trap

  

  LJ;1348436 wrote:Inspection would be money back, that can get iffy. I think underwriters are usually ok with up to 3% of the contract price for closing costs.

  I think it's up to 6%, per the loan officer. I could have misunderstood that, I suppose, though.
• LJ

  

  O-Trap;1348558 wrote:I think it's up to 6%, per the loan officer. I could have misunderstood that, I suppose, though.

  
  Could be for a specific loan program or because it is under a certain amount.
• O-Trap

  

  LJ;1348565 wrote:Could be for a specific loan program or because it is under a certain amount.

  Fair enough.
• SportsAndLady

  

  O-Trap;1343498 wrote:Sure, I get that part. Just seems like if a person has a good record of paying their rent (haven't missed a payment in the 5 years we've been married), they're pretty dependable.

  I wish I could use this when I write these types of loans. Unfortunately, I cannot. They'll only look at credit scores/history, DTI ratio, W2's, and bank statements. I've honestly had to turn down people before with an 800 credit score and make 100k a year; because they have 200k in student loan debt that's driving their DTI way up.
  

  O-Trap;1348417 wrote:I got pre-approved today. Given the price, my wife and I are going to offer the asking price on the condition that the seller covers closing costs and the inspection fee. Does that sound reasonable?

  
  Good news on the pre approval. As for the closing costs..depends which institution pre-approved you, honestly. I know where I work (a decently sized financial institution), we wouldn't even think about covering closing costs on a 35k loan. However, keep in mind there are certain restrictions on % of fees compared to the size of your loan. I'm in Illinois, but I believe in Ohio the fees/costs of the loan can't exceed somewhere around 5%.
  
  Basically, you'll need to get an exception on the closing costs...exceptions are subjective, and when you're looking at a 35k loan, it's doubtful they'll allow it.
  
  Good luck though..if you need any additional information, you can PM me. I can always ask my loan officer.
• derek bomar

  

  why the fuck are you worrying about a $35k loan? Do a 30 yr Fixed FHA @ 3.8, pay the PMI and your monthly payment will be smaller than my junk. Which is tiny.
  
  Edit: your payment would be like $200 a month. Cell phone plans cost more than that. Jesus
• O-Trap

  

  derek bomar;1348701 wrote:why the fuck are you worrying about a $35k loan? Do a 30 yr Fixed FHA @ 3.8, pay the PMI and your monthly payment will be smaller than my junk. Which is tiny.
  
  Edit: your payment would be like $200 a month. Cell phone plans cost more than that. Jesus

  Whoa. Easy, there. Nobody pissed in your Wheaties in here.
  
  I didn't know what a PMI was prior to looking into this. I didn't know what kind of interest to expect. I figured it'd be cheaper, but I didn't know what additional factors I'd need to take into account (closing costs, documentation, time frame, etc).
  
  So I figured I'd come on here and ask. I'm not sure why that evoked such a seemingly hostile response.
• gut

  $50 a month might not sound like much, but I think $600 a year does.
  
  If you only plan to be in it 5 years, a point lower on a 5-yr ARM saves you approx $280 a year in interest. PMI might be another $25 a month, so that's another $300 a year.
• O-Trap

  

  gut;1348749 wrote:$50 a month might not sound like much, but I think $600 a year does.
  
  If you only plan to be in it 5 years, a point lower on a 5-yr ARM saves you approx $280 a year in interest. PMI might be another $25 a month, so that's another $300 a year.

  We plan on living here a long time. Granted, plans change, but that's the goal right now.
• gut

  O-Trap;1348763 wrote:We plan on living here a long time. Granted, plans change, but that's the goal right now.

  That's a much tougher call. Locking-in the 30yr rate saves you money in the long-run, because rates will eventually go back up to at least 5% (and more realistically 6-7%). But rates aren't going much of anywhere until at least 2015.
  
  If you plan on being there a long time, I'd probably go with the 30-yr. But is that really the case? It's big enough for when you have kids? You like the schools there?
  
  The flip side is, even if you decide to move at some point, you may be able to rent it and cover all your costs (plus a few bucks) if you get 3.8%.
• O-Trap

  

  gut;1348767 wrote:That's a much tougher call. Locking-in the 30yr rate saves you money in the long-run, because rates will eventually go back up to at least 5% (and more realistically 6-7%). But rates aren't going much of anywhere until at least 2015.
  
  If you plan on being there a long time, I'd probably go with the 30-yr. But is that really the case? It's big enough for when you have kids? You like the schools there?
  
  The flip side is, even if you decide to move at some point, you may be able to rent it and cover all your costs (plus a few bucks) if you get 3.8%.

  It is big enough, yeah. As for the schools ... they're not great, but we have other options on that.
• kayo

  I think the single most important thing you can do is find a bank (and moreso a loan officer) that you feel comfortable with and can trust. Obviously that's not something that can be quantified, but if you feel as if you're not getting answers you can understand, you may want to try another bank. I'm biased, but I would suggest a smaller community bank or perhaps a credit union.
  
  One more suggestion: There is something called the Welcome Home Program that assists borrowers with down payment money. You can get up to a $5,000 grant with almost no strings attached. You must be below income guidelines (roughly $60-70K/year for you and your wife combined) and attend a homebuyer counseling class, but that's pretty much it.
  
  Not all banks offer this program, but it doesn't hurt to ask. The only caveat is that it is only available until the money runs out. Last year the program ran only during March, but if you can wait a little while this may be something to consider.
• O-Trap

  

  kayo;1348994 wrote:I think the single most important thing you can do is find a bank (and moreso a loan officer) that you feel comfortable with and can trust. Obviously that's not something that can be quantified, but if you feel as if you're not getting answers you can understand, you may want to try another bank. I'm biased, but I would suggest a smaller community bank or perhaps a credit union.
  
  One more suggestion: There is something called the Welcome Home Program that assists borrowers with down payment money. You can get up to a $5,000 grant with almost no strings attached. You must be below income guidelines (roughly $60-70K/year for you and your wife combined) and attend a homebuyer counseling class, but that's pretty much it.
  
  Not all banks offer this program, but it doesn't hurt to ask. The only caveat is that it is only available until the money runs out. Last year the program ran only during March, but if you can wait a little while this may be something to consider.

  We actually have the money for an FHA down-payment.
  
  As for a loan officer, yeah, we're on our third one, but this one came as a referral from my mother who (a) is in banking and recommends his bank for mortgage loans over her own, (b) bought a house with him as her loan officer, and (c) has offered to help with ancillary costs as they may arise if we use this guy, since she trusts him that much.
  
  He's with a big bank (Wells-Fargo), but she's been in banking for over 20 years, and I trust her judgment.
• Con_Alma

  O-Trap;1348777 wrote:It is big enough, yeah. As for the schools ... they're not great, but we have other options on that.

  Imagine that....someone not making a housing decision not based on the educational services provided in that district!
  
  Good for you O-trap.