15yr Mortgage... Where to begin?
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re: 15yr Mortgage... Where to begin?
Posted by Ace Midnight on 6/25 at 11:19 am to Cold Cous Cous
quote:

5% is, historically, a good rate.


I didn't mean to suggest it isn't. It's just going to be sticker shock for people who have been used to this long stretch of cheap money.

I guess the logical consequence will be a hit to housing prices, which will allow some more affordability at the entry level.



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Posted by hawkeye007 on 6/25 at 11:21 am to Ace Midnight
there is know logic because house prices are on the rise and so are interest rates...


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Posted by Ace Midnight on 6/25 at 11:23 am to hawkeye007
quote:

because house prices are on the rise and so are interest rates...


Yeah, but interest rates will eventually slow or halt the housing price growth. That is inevitable.



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Posted by tiger94gop on 6/25 at 8:58 pm to Ace Midnight
Whole lot of fuzzy information in this. Here is what I see.

1. Most important is you are self-employed.
a. You also lost money last year from the prior year, so that is a flag also.
b. You have to make actual money and the returns have to show it. They will average the last two years from your schedule E, add back certain deductions and that is your income.
C. They will look at what you claimed and wrote off. This is a killer. Paying big truck notes on the business, and other things, still count as debt, if you are a sole proprietor,you are responsible.

2. Rates are low, historically low and any rate below 8% is a "good rate", if you can lower yours by 2% and plan on being in the home for more than 5 years, it is worth the cost to refi. Your parents borrowed at 12-18, so don't complain about 3-4.

3. I understand there are a lot of people quoting rates here, but brokers almost always have better rates than banks, if yours doesn't offer you a lower rate, then they are not shopping your loan or just trying to make a lot of money. Banks don't have to disclose as much, their fees could be lower (sometimes not the case), and are limited in their offerings.
A broker is basically a wholesaler. They can and should offer you a lower rate than a bank, if not call someone else.

3. You have equity, but from your posts, you either know you have a low score or have had issues. The score they tell you on FreeCreditReport.com is not the same rate lenders use. It is also not the same report. You may get a better score,or could get worse. The rate adjustments are not huge, some are "pricing" adjustments; meaning adjustments to what a bank/broker makes, so they have to offer a higher rate to make the same money. The other is to the rate, meaning the risk factors at that credit profile are so strong you are being charged a premium to get a loan,thus a higher rate, you don't pay points,you just get a higher rate.

4. If you score is below a 640, no one will touch you with a FNMA/FHLMC loan. So you will have to go to a local bank who will keep your loan in house, they usually offer a 5 year balloon/ with 15 or 30 year amortization. Meaning your loan will have to be redone at the prevailing rate every 5 years. They are usually harder to get than FHA/FNMA/FHLMC. That is old school where they go in front of the bank's board to get approval. You could also look at credit unions. Sometime their criteria is lower, but their rate are usually a little higher, fees can be lower also.

What Hawk isn't telling you is that all banks are just big brokers, they don't keep the loans either. Chase/CapOne, etc.;still sell the loan,sometime to a different company under the same name or a different division, they just retain servicing, but still sell the bonds. The local broker puts you with a bank that will do the exact same thing. Selling your loan isn't bad, the terms don't change, just where you send your payment.

Overall if you want to save, now is the time to try. You may be able to do a HARP loan and not have to prove income or have an appraisal. If your current loan is a FNMA, then you should meet the criteria. You may have more leeway on a HARP.
Also, HARP rates are lower than standard Conventional products because there are less hits to the rate for credit, etc.

Look up the criteria for a HARP loan and you can tell if you qualify.

Now is the time to refi, income may be a problem, but you should have options unless you have major credit issues. If you can refi, do it, because even with rate adjustments for credit, income, etc.; you would still be better than 7%, especially on a 15 or 20.



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Posted by Zephyrius on 6/25 at 11:58 pm to tiger94gop
quote:

You have equity, but from your posts, you either know you have a low score or have had issues. The score they tell you on FreeCreditReport.com is not the same rate lenders use. It is also not the same report.


Yeah... I'm not sure how real my 711 score is but its an experian score. It's from their monthly service which I used to keep track of my credit score. I've been rehabilitating my credit due to my business owner endeavor not working out.

My debt to credit on my last statement was 14%(meaning I have 86% unused credit). I recently received a new rewards card which I was approved immediately online. I applied for the same card 18months ago and was denied.

My only debt note is my mortgage(I have no car note).

Like I stated earlier my worry for an ideal rate is my inconsistent income as I showed a negative after deductions in 2012 but positive overall as I file jointly with the wife. My 2yr average adjusted income (after deductions) alone should be healthy for the amount I'm looking to refinance. 3yr average is even better.

I plan to begin shopping for a rate tomorrow...



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Posted by ItNeverRains on 6/26 at 9:25 am to Ace Midnight
quote:

Yeah, but interest rates will eventually slow or halt the housing price growth. That is inevitable.


I just don't see it.

Cost of materials has gone up, most every market in US as a whole is below peak boom prices or just starting to get back there, and rates on 30 year fixed loans are in the mid 4's.

I remember my parents locking at 9.5% and taking us out for steaks to celebrate!

Edit: LINK


This post was edited on 6/26 at 9:28 am

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Posted by hawkeye007 on 6/26 at 9:31 am to tiger94gop
some banks are big brokers..the bank i work for is both! we have what we call secondary products that are sold to chase,wells etc..then we have our inhouse products..our in house products we service ourselves. we can do anyloan except a 30yr fixed in house. thats why i enjoy working for the bank because our in house products have common sense underwriting and that can make my life a little easier


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Posted by hawkeye007 on 6/26 at 9:36 am to ItNeverRains
i am with you i dont see housing prices becoming lower because of interest rates rising.. when i first started out in mortgages circa 2003 rates were 5-6% and home values were alot higher and people bought them like hot cakes..


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Posted by tiger94gop on 6/26 at 11:02 am to Zephyrius
If your wife has w-2 income, then she should do the loan. You will sign the mortgage, but the note will be under her name. She wil turn in her w-2's, check stubs, etc. Way easier. It doesn't matter if you make more money. As long as she doesn't have a lot of debt. send me an email and I will put you in touch with someone who can help you.


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