Mortgage Rates (2 Viewers)

[Chadstroma]

Looking for some help. Wife and I are moving from San Diego to DC in July, and planning to put our house on the market in March (VA loan 2.25). Took a quick trip to DC this weekend and found a great house with an assumable VA loan at 2.6. We’d love to jump on it, but not sure if we can make it work before selling our current property. We have ~400k in equity in our current house. Thanks!

Yea... there are two big downsides of the assumable mortgage. The first is you have to make a difference in the sales prices to the balance of the loan. So, if you are buying at $400K and the balance on the loan is $200K, then you need to pay the $200K difference in cash plus your closing costs at closing. The second is the time frame. You are at the mercy of the lender that currently services that VA loan. How long will it take? The lender has no real incentive to be quick on doing it. Essentially, you still have to qualify for it so they will underwrite it accordingly, but they could very well take their time.

It is fairly standard that equity products that the property can not be for sale, at least for all the bank/credit union products I have seen in the past, I can reach out to my equity lender to see if they can do it (actually, just sent a message), that would be the only thing I can think of in terms of getting the cash out to settle the purchase before the sale. If so, I can help you with that as I am licensed in CA.

If that isn't an option, then is tapping into retirement funds with a loan against it possible (for the amount you need and what you have and if your retirement administrator does them)? Loans against your 401k are often very good terms and you can get a large sum and pay it back once you sell.

If all else fails, then I can help get you in touch with a good broker in DC for the regular route.

ETA: My lender AE just responded to me, the property could not be listed for sale but there is no seasoning (waiting) period to do that. So, that could be a route to go to make this work for you. Super easy and fast process on this product. Feel free to reach out to me if you want to explore it more or get going on that.

 

[Pole Cat]

Looking for some help. Wife and I are moving from San Diego to DC in July, and planning to put our house on the market in March (VA loan 2.25). Took a quick trip to DC this weekend and found a great house with an assumable VA loan at 2.6. We’d love to jump on it, but not sure if we can make it work before selling our current property. We have ~400k in equity in our current house. Thanks!

Yea... there are two big downsides of the assumable mortgage. The first is you have to make a difference in the sales prices to the balance of the loan. So, if you are buying at $400K and the balance on the loan is $200K, then you need to pay the $200K difference in cash plus your closing costs at closing. The second is the time frame. You are at the mercy of the lender that currently services that VA loan. How long will it take? The lender has no real incentive to be quick on doing it. Essentially, you still have to qualify for it so they will underwrite it accordingly, but they could very well take their time.

It is fairly standard that equity products that the property can not be for sale, at least for all the bank/credit union products I have seen in the past, I can reach out to my equity lender to see if they can do it (actually, just sent a message), that would be the only thing I can think of in terms of getting the cash out to settle the purchase before the sale. If so, I can help you with that as I am licensed in CA.

If that isn't an option, then is tapping into retirement funds with a loan against it possible (for the amount you need and what you have and if your retirement administrator does them)? Loans against your 401k are often very good terms and you can get a large sum and pay it back once you sell.

If all else fails, then I can help get you in touch with a good broker in DC for the regular route.

ETA: My lender AE just responded to me, the property could not be listed for sale but there is no seasoning (waiting) period to do that. So, that could be a route to go to make this work for you. Super easy and fast process on this product. Feel free to reach out to me if you want to explore it more or get going on that.

Thanks for the great feedback. Being pretty risk averse, we ended up just putting in a contingent offer. Not surprisingly, it failed.

Do you know anything about an AnnieMac product—Cash2Keys? Seems designed to address the exact problem we were dealing with. It also sounds too good to be true.

 

[Chadstroma]

Looking for some help. Wife and I are moving from San Diego to DC in July, and planning to put our house on the market in March (VA loan 2.25). Took a quick trip to DC this weekend and found a great house with an assumable VA loan at 2.6. We’d love to jump on it, but not sure if we can make it work before selling our current property. We have ~400k in equity in our current house. Thanks!

Yea... there are two big downsides of the assumable mortgage. The first is you have to make a difference in the sales prices to the balance of the loan. So, if you are buying at $400K and the balance on the loan is $200K, then you need to pay the $200K difference in cash plus your closing costs at closing. The second is the time frame. You are at the mercy of the lender that currently services that VA loan. How long will it take? The lender has no real incentive to be quick on doing it. Essentially, you still have to qualify for it so they will underwrite it accordingly, but they could very well take their time.

It is fairly standard that equity products that the property can not be for sale, at least for all the bank/credit union products I have seen in the past, I can reach out to my equity lender to see if they can do it (actually, just sent a message), that would be the only thing I can think of in terms of getting the cash out to settle the purchase before the sale. If so, I can help you with that as I am licensed in CA.

If that isn't an option, then is tapping into retirement funds with a loan against it possible (for the amount you need and what you have and if your retirement administrator does them)? Loans against your 401k are often very good terms and you can get a large sum and pay it back once you sell.

If all else fails, then I can help get you in touch with a good broker in DC for the regular route.

ETA: My lender AE just responded to me, the property could not be listed for sale but there is no seasoning (waiting) period to do that. So, that could be a route to go to make this work for you. Super easy and fast process on this product. Feel free to reach out to me if you want to explore it more or get going on that.

Thanks for the great feedback. Being pretty risk averse, we ended up just putting in a contingent offer. Not surprisingly, it failed.

Do you know anything about an AnnieMac product—Cash2Keys? Seems designed to address the exact problem we were dealing with. It also sounds too good to be true.

I don't know anything about that specific program but AnnieMac has a rep as being very $$$. It sounds like one of the many cash offer programs that became popping up a lot a number of months back when the market was still hot and conventional buyers were getting beat out by cash offers a lot but I am just guessing based on the name and what has happened in the industry. I don't know that specific program one way or another, being AnnieMac, I would be willing to bet it would be pricey.

If you get an offer accepted, shoot me the Loan Estimate, I can take a peek at it for you to make sure you are getting a good deal.

 

[dkp993]

Thanks Chad. For us uneducated, what is a good deal? I currently have a HELOC that was set up by the broker we used when we bought the home a little over a year ago but it’s not with the CU I bank with (and have for 20+ yrs). Im thinking of making a switch but don’t really know what to look for especially with a HELOC transfer. Thanks

HELOCs are usually variable rate products (though there are products that allow you to fix rate in some way out there). The things you want to look at are the rate which is expressed as Prime + (I doubt you can find - these days) so, Prime +.25% would be whatever prime is plus .25%. Then what fees, so usually annual and any application/closing fees. Annual fees are pretty standard. Most loans will have minimal or no application/closing fees. The other thing you want to keep an eye on is the pre-payment penalty. In this case, that means if you close the line within a period of time you will be charged a fee. Most will have this especially if there were no application/closing fees.

You prob are looking for Prime + 0 as you best out there. And then look to get the least amount of fees.

Keep in mind, often they will give introductory rates which is great and all but don't compare an introductory rate to the real rate.

Chad, thanks for your help with this answer. But you mentioned in here prime +.25, as possible terms. I literally can’t see that anywhere. I have excellent credit, 750ish, and when we purchased the broker got us prime +2 1/2. My local credit union which I’ve been with for 20 years and has my car loans and had other mortgages with me is offering prime plus 1. Doesn’t loan to value factor into this too? I believe we’re in the 70 to 75% range with the HELOC. Thx

 

[Chadstroma]

Thanks Chad. For us uneducated, what is a good deal? I currently have a HELOC that was set up by the broker we used when we bought the home a little over a year ago but it’s not with the CU I bank with (and have for 20+ yrs). Im thinking of making a switch but don’t really know what to look for especially with a HELOC transfer. Thanks

HELOCs are usually variable rate products (though there are products that allow you to fix rate in some way out there). The things you want to look at are the rate which is expressed as Prime + (I doubt you can find - these days) so, Prime +.25% would be whatever prime is plus .25%. Then what fees, so usually annual and any application/closing fees. Annual fees are pretty standard. Most loans will have minimal or no application/closing fees. The other thing you want to keep an eye on is the pre-payment penalty. In this case, that means if you close the line within a period of time you will be charged a fee. Most will have this especially if there were no application/closing fees.

You prob are looking for Prime + 0 as you best out there. And then look to get the least amount of fees.

Keep in mind, often they will give introductory rates which is great and all but don't compare an introductory rate to the real rate.

Chad, thanks for your help with this answer. But you mentioned in here prime +.25, as possible terms. I literally can’t see that anywhere. I have excellent credit, 750ish, and when we purchased the broker got us prime +2 1/2. My local credit union which I’ve been with for 20 years and has my car loans and had other mortgages with me is offering prime plus 1. Doesn’t loan to value factor into this too. I believe we’re in the 70 to 75% range with the HELOC. Thx

Yea, to be honest... I haven't paid attention to equity products for years. The .25% I mentioned above was not meant as an example of what you can get but rather explaining how the variable pricing works which is an index (prime) which will go up or down and then a fixed margin which is added to the index for your current rate.

One time to NOT go to a mortgage broker is to get a vanilla equity loan or line of credit. Simply put, the rates we have suck. They are not going to be competitive cost wise compared to banks/CU's. Many brokers don't go equities at all. The only time I do equities is to fill a need that banks/CU's will not do such as lower credit scores, higher CLTV, higher limt/loan amount, higher DTI, etc. Otherwise, I won't do them because I won't be able to sleep at night if I did.

For the CLTV (combined loan to value), it may or may not matter depending on the particular lender.

For equities, if it is just a vanilla loan looking for a good rate, a lot of the time I refer them to my wife.... or rather, I refer it to her and then she has one of her employees at one of her branches reach out as she is a regional manager for a small regional bank. I can offer to do that if you want to DM me your contact info but other than that it is just going to be shopping around. Other than brokers, the other place I would skip shopping would be the bigger banks such as Chase, Wells, BofA, etc. usually their terms are dog poo. Smaller banks and CU's are your best bets.

 

[dkp993]

Thanks Chad. For us uneducated, what is a good deal? I currently have a HELOC that was set up by the broker we used when we bought the home a little over a year ago but it’s not with the CU I bank with (and have for 20+ yrs). Im thinking of making a switch but don’t really know what to look for especially with a HELOC transfer. Thanks

HELOCs are usually variable rate products (though there are products that allow you to fix rate in some way out there). The things you want to look at are the rate which is expressed as Prime + (I doubt you can find - these days) so, Prime +.25% would be whatever prime is plus .25%. Then what fees, so usually annual and any application/closing fees. Annual fees are pretty standard. Most loans will have minimal or no application/closing fees. The other thing you want to keep an eye on is the pre-payment penalty. In this case, that means if you close the line within a period of time you will be charged a fee. Most will have this especially if there were no application/closing fees.

You prob are looking for Prime + 0 as you best out there. And then look to get the least amount of fees.

Keep in mind, often they will give introductory rates which is great and all but don't compare an introductory rate to the real rate.

Chad, thanks for your help with this answer. But you mentioned in here prime +.25, as possible terms. I literally can’t see that anywhere. I have excellent credit, 750ish, and when we purchased the broker got us prime +2 1/2. My local credit union which I’ve been with for 20 years and has my car loans and had other mortgages with me is offering prime plus 1. Doesn’t loan to value factor into this too. I believe we’re in the 70 to 75% range with the HELOC. Thx

Yea, to be honest... I haven't paid attention to equity products for years. The .25% I mentioned above was not meant as an example of what you can get but rather explaining how the variable pricing works which is an index (prime) which will go up or down and then a fixed margin which is added to the index for your current rate.

One time to NOT go to a mortgage broker is to get a vanilla equity loan or line of credit. Simply put, the rates we have suck. They are not going to be competitive cost wise compared to banks/CU's. Many brokers don't go equities at all. The only time I do equities is to fill a need that banks/CU's will not do such as lower credit scores, higher CLTV, higher limt/loan amount, higher DTI, etc. Otherwise, I won't do them because I won't be able to sleep at night if I did.

For the CLTV (combined loan to value), it may or may not matter depending on the particular lender.

For equities, if it is just a vanilla loan looking for a good rate, a lot of the time I refer them to my wife.... or rather, I refer it to her and then she has one of her employees at one of her branches reach out as she is a regional manager for a small regional bank. I can offer to do that if you want to DM me your contact info but other than that it is just going to be shopping around. Other than brokers, the other place I would skip shopping would be the bigger banks such as Chase, Wells, BofA, etc. usually their terms are dog poo. Smaller banks and CU's are your best bets.

You‘re the man. Thanks for the advice.

 

[Harry Frogfish]

I would like to buy a home all cash and hoping this interest rate environment helps me. I actually drove by a home I really like today and the owner happened to be outside. I asked politely as possible if he or anybody he knew in this particular neighborhood had any interest in a cash offer. Unsurprisingly, he didn't.

I have a realtor who knows the area better but she has come up with nothing. There are basically only 5 homes for sale and a couple of them are well above our budget. I'd be willing to wait 6 months or so on a move-in date.

I'd like to go door-to-door but can't bring myself to do it. I've thought about sending out some letters but I'm sure they'd all go in the trash. With the realtor coming up with literally nothing for two months now, I'm at a loss, aside from the hope that things correct in the meantime. Any other ideas?

 

[Chadstroma]

I would like to buy a home all cash and hoping this interest rate environment helps me. I actually drove by a home I really like today and the owner happened to be outside. I asked politely as possible if he or anybody he knew in this particular neighborhood had any interest in a cash offer. Unsurprisingly, he didn't.

I have a realtor who knows the area better but she has come up with nothing. There are basically only 5 homes for sale and a couple of them are well above our budget. I'd be willing to wait 6 months or so on a move-in date.

I'd like to go door-to-door but can't bring myself to do it. I've thought about sending out some letters but I'm sure they'd all go in the trash. With the realtor coming up with literally nothing for two months now, I'm at a loss, aside from the hope that things correct in the meantime. Any other ideas?

A different neighborhood?

You can look.... gawd help me.... on Zillow for FSBO. If a FSBO does not pay to get it on MLS then it will not show up under MLS searches (and FSBO most often have no idea what they are doing) and Zillow does a decent job (the only thing they do a decent job of) is getting third party listings like this and showing... also auctions I think. So, when you do a search for the area, check "other listings" and it will show them. On the negative side, you will have to deal with a FSBO transaction which often sucks because they have no idea what they are doing.

Also, you can do a delayed financing deal where you pay cash and then do a mortgage on the back end as a purchase mortgage rates. That way all your money isn't locked into equity. Just in case that might be of interest.

 

[Zegras11]

I would like to buy a home all cash and hoping this interest rate environment helps me. I actually drove by a home I really like today and the owner happened to be outside. I asked politely as possible if he or anybody he knew in this particular neighborhood had any interest in a cash offer. Unsurprisingly, he didn't.

I have a realtor who knows the area better but she has come up with nothing. There are basically only 5 homes for sale and a couple of them are well above our budget. I'd be willing to wait 6 months or so on a move-in date.

I'd like to go door-to-door but can't bring myself to do it. I've thought about sending out some letters but I'm sure they'd all go in the trash. With the realtor coming up with literally nothing for two months now, I'm at a loss, aside from the hope that things correct in the meantime. Any other ideas?

send a large, 5x8 post card. People read those.

 

[Chadstroma]

If you do the postcards, you can do a drop off at the local USPS for a particular route. Cheaper than actually mailing it too.

 

[Chadstroma]

Fed increases by 50 bps and mortgage rates slightly lower.

 

[Chadstroma]

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I wish they would have let Barry talk more.... maybe they would have learned more.

 

[Pole Cat]

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

 

[Chadstroma]

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

 

[Pole Cat]

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

 

[-OZ-]

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

No rating? (Or are you still in?)
That thing saves $$$

Just curious on the math - .5% less and no down payment might make the VA worthwhile even with the funding fee.

 

[Chadstroma]

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Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

You are closing today on the sell but haven't bought yet? If I am understanding that right... when you get the house and the locked estimate, shoot it over to me and I will double check it for you to make sure you are getting a good deal. Good luck on the search!

 

[Chadstroma]

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Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

No rating? (Or are you still in?)
That thing saves $$$

Just curious on the math - .5% less and no down payment might make the VA worthwhile even with the funding fee.

VA loans are freaking awesome.

Talked to a couple two days ago. Husband has been following me for a while and improving his credit... wife not so much. Normally, it would be a lot of work on her credit to be able to have the green light. VA loans actually have no minimum credit score requirement so as a broker who can go to lenders with no overlays, I can make it work. Turns out they have a couple of months on their current lease so I have them doing a few things to get her credit up but in so many ways, VA loans are the best.

 

[Capella]

1. VA loan. 5.75%. 11k funding fee

If you are service connected, make sure you get your funding fee refunded.

 

[Pole Cat]

1. VA loan. 5.75%. 11k funding fee

If you are service connected, make sure you get your funding fee refunded.

On active duty. Refunded in what way? Way I’ve always seen it is the fee gets lumped into the mortgage.

 

[Pole Cat]

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Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

No rating? (Or are you still in?)
That thing saves $$$

Just curious on the math - .5% less and no down payment might make the VA worthwhile even with the funding fee.

VA loans are freaking awesome.

Talked to a couple two days ago. Husband has been following me for a while and improving his credit... wife not so much. Normally, it would be a lot of work on her credit to be able to have the green light. VA loans actually have no minimum credit score requirement so as a broker who can go to lenders with no overlays, I can make it work. Turns out they have a couple of months on their current lease so I have them doing a few things to get her credit up but in so many ways, VA loans are the best.

Definitely see the VA advantages. But, in this instance, we are definitely going to put down a significant amount to lower our monthly payment.

 

[Pole Cat]

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Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

You are closing today on the sell but haven't bought yet? If I am understanding that right... when you get the house and the locked estimate, shoot it over to me and I will double check it for you to make sure you are getting a good deal. Good luck on the search!

Yes. Closing on the sale of our current house in San Diego today. We have a rent back through June, and then we move to DC. Starting to look at properties in DC area now, and we’ll probably fly out over Easter to hopefully find something.

 

[Chadstroma]

1. VA loan. 5.75%. 11k funding fee

If you are service connected, make sure you get your funding fee refunded.

The only exemption for the funding fee is tied into service related disability. Refunds are only done if the disability rating has not been completed by the time the mortgage closes.

 

[Chadstroma]

- YouTube

Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

No rating? (Or are you still in?)
That thing saves $$$

Just curious on the math - .5% less and no down payment might make the VA worthwhile even with the funding fee.

VA loans are freaking awesome.

Talked to a couple two days ago. Husband has been following me for a while and improving his credit... wife not so much. Normally, it would be a lot of work on her credit to be able to have the green light. VA loans actually have no minimum credit score requirement so as a broker who can go to lenders with no overlays, I can make it work. Turns out they have a couple of months on their current lease so I have them doing a few things to get her credit up but in so many ways, VA loans are the best.

Definitely see the VA advantages. But, in this instance, we are definitely going to put down a significant amount to lower our monthly payment.

You can use the VA with a down payment.

 

[Capella]

1. VA loan. 5.75%. 11k funding fee

If you are service connected, make sure you get your funding fee refunded.

The only exemption for the funding fee is tied into service related disability. Refunds are only done if the disability rating has not been completed by the time the mortgage closes.

Service related disability is service connection. If he or she is service connected they shouldn’t be paying it.

Over the years a lot of funding fees were incorrectly processed and the money wasn’t returned to the vet. There are IG reports on it.

 

[Ministry of Pain]

23-yr old son is closing on his 1st house in St Pete
He is doing an FHA with no money down, he still has some out of pocket expenses

I was a little shocked at the interest rate when he showed it to me.
He is also doing some kind of down payment assistance that isn't paid back until he either refinances or sells the home

Anyone want to take a stab at his interest rate?
$275k home, under 1,000 sq ft, 2 Bed/1 Bath but lots of room to add on.
Unfinished carport and laundry room would bring this up to about 1,300-1,500 square feet

I'm very proud of him. Rent is running between $2,000-$2,500 a month, and his payment will be just a little bit over $2,000 so I'm supportive of his efforts in a tough market.
His grandfather and I are not helping him acquire the home but we are ready to assist in the expansion and getting contractor friends to help us out and give us an honest deal

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Go ahead and gasp and toss your lunch, I support him but wish this were more like 6%

 

[Capella]

1. VA loan. 5.75%. 11k funding fee

If you are service connected, make sure you get your funding fee refunded.

On active duty. Refunded in what way? Way I’ve always seen it is the fee gets lumped into the mortgage.

If you aren’t service connected you aren’t eligible. You can be S/C while on active duty with your benefits suspended.

 

[Schmeabs]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

 

[Buckna]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

Yeah and having a year or so of mortgage payments timely on his credit should really improve a young persons credit profile when he goes to refi.

 

[-OZ-]

- YouTube

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I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Rent the current one and buy an option?

We close tomorrow. So, a little late for that option But it was never really an option. We needed to sell to have a down payment on the next place. Quote I got today when getting pre-approved.
1. VA loan. 5.75%. 11k funding fee.
2. Jumbo. 6.25%.

Even w/ ~35% down, monthly payments are a little scary.

No rating? (Or are you still in?)
That thing saves $$$

Just curious on the math - .5% less and no down payment might make the VA worthwhile even with the funding fee.

VA loans are freaking awesome.

Talked to a couple two days ago. Husband has been following me for a while and improving his credit... wife not so much. Normally, it would be a lot of work on her credit to be able to have the green light. VA loans actually have no minimum credit score requirement so as a broker who can go to lenders with no overlays, I can make it work. Turns out they have a couple of months on their current lease so I have them doing a few things to get her credit up but in so many ways, VA loans are the best.

Definitely see the VA advantages. But, in this instance, we are definitely going to put down a significant amount to lower our monthly payment.

It sounds like you know what you’re doing. I’ve always been of the mindset of put as little down as possible and go for the best rate at 30 and I didn’t really care about the monthly payment as long as we could afford it easily (which was prerequisite for the house in the first place) But then that probably made more sense with lower rates and before housing really took off.

 

[Ministry of Pain]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

Yeah and having a year or so of mortgage payments timely on his credit should really improve a young persons credit profile when he goes to refi.

You al think rates are going down? That would actually be good news because i would think in Florida where we are located, home prices are not falling thru the floor here
Quite frankly I have been eager for home prices to slide down a little since I always keep a certain amount of liquidity, doesn't jive with most investment guys in here.
I just like to have cash on hand for good deals, not always houses, can be a variety of things that have value if you think in terms of "Pickers" or whatever that show is.
Buy and Sell, pretty simple.

I actually don't think rates are going down, much of the talk I hear are about rates going up to battle inflation but you all might have better info than I tend to browse.

 

[-OZ-]

. You can be S/C while on active duty with your benefits suspended.

I might be misremembering but I thought this was only if you got out then back in, or reservists.

 

[Buckna]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

Yeah and having a year or so of mortgage payments timely on his credit should really improve a young persons credit profile when he goes to refi.

You al think rates are going down? That would actually be good news because i would think in Florida where we are located, home prices are not falling thru the floor here
Quite frankly I have been eager for home prices to slide down a little since I always keep a certain amount of liquidity, doesn't jive with most investment guys in here.
I just like to have cash on hand for good deals, not always houses, can be a variety of things that have value if you think in terms of "Pickers" or whatever that show is.
Buy and Sell, pretty simple.

I actually don't think rates are going down, much of the talk I hear are about rates going up to battle inflation but you all might have better info than I tend to browse.

I think they will eventually but it may not be as soon as many are hoping/predicting. As long as he can meet the current payment as you described he should be good. Then if rates do come down he should be able to take advantage of it at that time.

My main comment is nothing improves a persons credit like timely payments of a mortgage, especially a young person with a short credit history. If rates do come down, the house will likely go up or rebound above any decline we see for the near future and his credit will be massively better than it is now.

 

[Schmeabs]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

Yeah and having a year or so of mortgage payments timely on his credit should really improve a young persons credit profile when he goes to refi.

You al think rates are going down? That would actually be good news because i would think in Florida where we are located, home prices are not falling thru the floor here
Quite frankly I have been eager for home prices to slide down a little since I always keep a certain amount of liquidity, doesn't jive with most investment guys in here.
I just like to have cash on hand for good deals, not always houses, can be a variety of things that have value if you think in terms of "Pickers" or whatever that show is.
Buy and Sell, pretty simple.

I actually don't think rates are going down, much of the talk I hear are about rates going up to battle inflation but you all might have better info than I tend to browse.

Yes short term rates will likely go up a little more with the Fed raising rates. However, long term rates are what matters to mortgage rates and they have come down recently and I expect them to be lower at year end.

 

[Capella]

. You can be S/C while on active duty with your benefits suspended.

I might be misremembering but I thought this was only if you got out then back in, or reservists.

How do you mean. You can be service connected after you separate, then go back or get called up - then your comp benefits get paused. Didn’t mean to derail this thread with VA talk lol. But you should still be able to qualify for your ancillary benefits

Anybody can PM me if they have VA questions.

 

[Chadstroma]

23-yr old son is closing on his 1st house in St Pete
He is doing an FHA with no money down, he still has some out of pocket expenses

I was a little shocked at the interest rate when he showed it to me.
He is also doing some kind of down payment assistance that isn't paid back until he either refinances or sells the home

Anyone want to take a stab at his interest rate?
$275k home, under 1,000 sq ft, 2 Bed/1 Bath but lots of room to add on.
Unfinished carport and laundry room would bring this up to about 1,300-1,500 square feet

I'm very proud of him. Rent is running between $2,000-$2,500 a month, and his payment will be just a little bit over $2,000 so I'm supportive of his efforts in a tough market.
His grandfather and I are not helping him acquire the home but we are ready to assist in the expansion and getting contractor friends to help us out and give us an honest deal

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Go ahead and gasp and toss your lunch, I support him but wish this were more like 6%

Here is the thing with DPA... you need to know EXACTLY what the terms are. If there is any chance of getting 3.5% together then he can get a much better rate now and then when rates drop in the not too distant future... refinance. Many DPA require a long period of time to hold the loan or you have to pay all the money back (some prorate it). There are many forms of these but they are not free money.... if it is the only way forward then you are paying for it in the rate. You just need to know every angle and do not take the MLO's word for it. Also, you can shoot me the Loan Estimate and I would be happy to take a look at it for any pitfalls or if there is a better option out there.

 

[Chadstroma]

7.25% is the base rate-OUCH!!!
It's hard to swallow when my properties are sitting at under 3% or close to it
But you don't write the monthly check for 7.25% and that's what i keep stressing.
As rent rises, as homes continue to rise over time, I think he's making a bold move for his future when others are living in their parents basement

FHA-Nothing down, he's 23 and that's a risky loan for a bank.
He's buying the home with his fiance/future DIL, they have some liquidity and want to hold on to it
I taught him about OPM, other peoples money, he's not risking a lot buying this home IMHO and rates are projected to go up in the coming 12-24 months

Mortgage rates will likely be going down in the coming 12-24 months but he can always refinance. Congrats on his 1st home!

Yeah and having a year or so of mortgage payments timely on his credit should really improve a young persons credit profile when he goes to refi.

You al think rates are going down? That would actually be good news because i would think in Florida where we are located, home prices are not falling thru the floor here
Quite frankly I have been eager for home prices to slide down a little since I always keep a certain amount of liquidity, doesn't jive with most investment guys in here.
I just like to have cash on hand for good deals, not always houses, can be a variety of things that have value if you think in terms of "Pickers" or whatever that show is.
Buy and Sell, pretty simple.

I actually don't think rates are going down, much of the talk I hear are about rates going up to battle inflation but you all might have better info than I tend to browse.

Yes, rates will go down from where they are now. That does not mean they won't go before then.
A little not well known fact on stopping inflation.... the way that you stop that is by killing the economy. Then once you kill the economy, you have to get the economy going again which means rates are driven down.
The important thing for your son is with that DPA. Soooooooooo many people had DPA's that were stuck with their loans and could not refinance over the last few years when rates hit the ground floor. I had more than a couple of conversations with these people.

 

[-OZ-]

. You can be S/C while on active duty with your benefits suspended.

I might be misremembering but I thought this was only if you got out then back in, or reservists.

How do you mean. You can be service connected after you separate, then go back or get called up - then your comp benefits get paused. Didn’t mean to derail this thread with VA talk lol. But you should still be able to qualify for your ancillary benefits

Anybody can PM me if they have VA questions.

That’s almost literally what I said above.
If the person is active duty without having left at an earlier time, he isn’t eligible for a VA rating. I know some reservists who have ratings, but no “straight AD” types.

 

[Capella]

. You can be S/C while on active duty with your benefits suspended.

I might be misremembering but I thought this was only if you got out then back in, or reservists.

How do you mean. You can be service connected after you separate, then go back or get called up - then your comp benefits get paused. Didn’t mean to derail this thread with VA talk lol. But you should still be able to qualify for your ancillary benefits

Anybody can PM me if they have VA questions.

That’s almost literally what I said above.
If the person is active duty without having left at an earlier time, he isn’t eligible for a VA rating. I know some reservists who have ratings, but no “straight AD” types.

I don’t even know what we are talking about here but I was just trying to help the guy out above. He could be active duty now and still had been service connected previously if he had retired and went back or got called up from reserves or even if he was on drill for the weekend. I don’t know his situation.

 

[BassNBrew]

- YouTube

Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

www.youtube.com

I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Too late for Pole Cat but let’s not have any other fbgs walk away from 2.25% money. Get a 2nd mortgage set up and use that money for a down payment. The investors that got out from under the 2.25% loan are partying tonight.

 

[Harry Frogfish]

You al think rates are going down? That would actually be good news because i would think in Florida where we are located, home prices are not falling thru the floor here
Quite frankly I have been eager for home prices to slide down a little since I always keep a certain amount of liquidity, doesn't jive with most investment guys in here.
I just like to have cash on hand for good deals, not always houses, can be a variety of things that have value if you think in terms of "Pickers" or whatever that show is.
Buy and Sell, pretty simple.

"Jive" as in dancing like John Travolta?

LOL @ pretty simple, you must have gazillions, being such a genius timer and "Picker" and all.

BTW, I heard white, bedazzled jumpsuits have dropped in value, might be time for you to dive in, jive turkey.

 

[-OZ-]

- YouTube

Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube.

www.youtube.com

I wish they would have let Barry talk more.... maybe they would have learned more.

Didn’t watch the clip, but definitely feeling the pinch. Job relocation has us selling our current house at 2.25%. Next house will be most likely be over 6%. Even with a good chunk of equity, we’ll struggle to find a house anywhere near as nice as the one we’re leaving.

Too late for Pole Cat but let’s not have any other fbgs walk away from 2.25% money. Get a 2nd mortgage set up and use that money for a down payment. The investors that got out from under the 2.25% loan are partying tonight.

The “accidental landlord” has definitely become a thing.
Not everyone qualifies for a second mortgage, so that will be a factor.

We fully plan to move when our youngest graduates (Granted that’s a decade away). Hoping one or more of our kids want to stay in the area and we’ll rent to them. If not, it will be a tough choice between taking the gains (currently just over 1/4M) or renting it out.

 

[The Z Machine]

So... how much of your gross income is too much to spend on mortgage + prop taxes + insurance?

There's a house that could be our "forever" house, checks all the boxes but is $100k more than I really would like to pay. Getting the budget to work out is... daunting. I don't want to be house poor, but these opportunities don't come along very often and I fear missing this chance. Sucks that interest rates are so high. I'd be walking away from my 2.75% in my current loan...

 

[supermike80]

So... how much of your gross income is too much to spend on mortgage + prop taxes + insurance?

There's a house that could be our "forever" house, checks all the boxes but is $100k more than I really would like to pay. Getting the budget to work out is... daunting. I don't want to be house poor, but these opportunities don't come along very often and I fear missing this chance. Sucks that interest rates are so high. I'd be walking away from my 2.75% in my current loan...

Isn't the "guidance" 28% of your gross? Don't quote me. I'm not a professional!

 

[Chadstroma]

So... how much of your gross income is too much to spend on mortgage + prop taxes + insurance?

There's a house that could be our "forever" house, checks all the boxes but is $100k more than I really would like to pay. Getting the budget to work out is... daunting. I don't want to be house poor, but these opportunities don't come along very often and I fear missing this chance. Sucks that interest rates are so high. I'd be walking away from my 2.75% in my current loan...

There is a front end and back end ratios or in other words the housing ration which is what you are asking here on the PITI (principal, interest, taxes and insurance) HOA would be added if any. Then there is the DTI (debt to income ratio), or the back end, is the PITI plus all other minimum monthly debt obligations (loans and credit cards).

Front end for Freddie Mac is 28% max. Fannie Mae doesn't seem to have one. I looked it up before answering to check for any changes as 99 out of 100 times the DTI is the ratio that matters.

You can go up to 50% in some circumstances on the back end ratio.

 

[The Z Machine]

Thanks, @Chadstroma . How do you calculate the DTI, and is that gross income or net income after taxes, retirement, insurance, college fund, etc.?

Also, the debt is the anticipated mortgage debt + car loans + CC debt + student loans? Say I'm looking at a note of $500k and my income is $100k after taxes and $150k before taxes and the other stuff listed above.

 

[Chadstroma]

Thanks, @Chadstroma . How do you calculate the DTI, and is that gross income or net income after taxes, retirement, insurance, college fund, etc.?

Also, the debt is the anticipated mortgage debt + car loans + CC debt + student loans? Say I'm looking at a note of $500k and my income is $100k after taxes and $150k before taxes and the other stuff listed above.

Gross.

$150K/12 = $12500 a month.

Add PITI + car + min CC payments + student loans = your monthly debt obligations. For conventional, you really want to be under 36% but with strong credit, good reserves, etc that can get pushed up to an absolute max of 49.99%.

 

[The Z Machine]

We passed on this house. Was $100k over our budget. Despite how awesome the house was, it just wasn't the smart thing to do financially. Sure we were under the metrics that Chad outlined, but the new mortgage would be like 75% higher than our current one. It was just untenable.

Thanks a lot COVID for jacking up the interest rates!

 

[Snotbubbles]

We passed on this house. Was $100k over our budget. Despite how awesome the house was, it just wasn't the smart thing to do financially. Sure we were under the metrics that Chad outlined, but the new mortgage would be like 75% higher than our current one. It was just untenable.

Thanks a lot COVID for jacking up the interest rates!

Marry the house, date the interest rate.

 

[The Z Machine]

We passed on this house. Was $100k over our budget. Despite how awesome the house was, it just wasn't the smart thing to do financially. Sure we were under the metrics that Chad outlined, but the new mortgage would be like 75% higher than our current one. It was just untenable.

Thanks a lot COVID for jacking up the interest rates!

Marry the house, date the interest rate.

Still can't afford it. I might regret this decision, but I do need to support my kids' college funds and not be house-poor so we can't take vacations.