Mortgage Lenders

Down Payment Assistance Programs Explained

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Technorati Tags: buying a home, down payment assistance, first time home buyer, mortgage

I’m looking at being able to put a cash payment for 75% of a house. I really don’t want to go through all the expenses of a mortgage when I probably will be paying it off in 3 months. I was wondering if I could do a home equity loan on the property from the git go and avoid all the mortgage costs. Is this allowed? Any other suggestions?

As a previous poster mentioned, you can;t get an equity loan until you have equity in the property- and if you don’t yet own the property… well I’m sure you get it.

If you have the other 25% – why not buy the house in cash- and then get an equity loan after you’ve closed.

Getting an equity loan will be a snap with that percentage of equity- even in this economy. While there are very few lenders that allow no income or asset verification loans anymore, a loan with a Loan to Value of 25% is probably one of them.

My husband and I are going in to meet with a mortgage program. He is one of the participating lenders with the state that can help us with a special loan that the state gives for teachers. Should he run our credit? What if we don’t like him and want to use someone else, and they have to run our credit? Also, at what point do I ask him for that good faith estimate sheet? I am reading books on it, but this is all really overwhelming and I don’t want to be taken advantage of.

I am sure that there are many lenders on the list. Call a few and see who you feel most comfortable talking to. Be sure you are qualified for the program in terms of income limits, etc. before you allow anyone to pull credit.

Yes, it is necessary to have your credit pulled once you find someone you want to work with and, no, you are not commited to use anyone just because they pulled your credit or gave you a GFE.

If you have your credit pulled by any number of mortgage lenders within a 2 week time frame, the inquiries should be scored as 1. This is the case because the credit bureaus understand that people will shop for credit so don’t be too afraid to shop with a couple of lenders. Just do it quickly.

I can pre-qualify someone based on a conversation and provide a GFE that is subject to verification of the information they provided me so pulling credit is not a must, but if you want to avoid any surprises it would be a good thing to allow the lender(s) you choose to pull it.

The bond money program in Ohio is a great first time buyer program. It has a special discount for teachers (0.25% better rate) and there is really no competition in terms of rate. For instance, if the basic bond money rate is 5.875% with 1% origination, teachers get 5.625%. The only difference from one lender to another might be the "junk fees". Appraisals cost what they cost, title insurance is required, there might be a commitment fee, closing fee, recording fees, doc prep charges, etc.

Be sure to inquire about income and purchase price limits. Most of these programs have them. You certainly don’t want to get too far in to the process and then discover you make too much money.

You shouldn’t need to read a bunch of books. Just find one trust worthy, experienced loan officer and you will be in good hands. Ask friends and family who they have used and whether they would recommend them. Ask your Realtor if they have anyone they would recommend that provides that program you are interested in. Let them take the mystery out of the process. It is really not that complicated.

Bring your tax returns, W-2’s and pay stubs, bank statements and any other information the lender needs to the initial appointment so that they can double check everything before you go out and write a contract. This will save you a lot of back and forth through the process and ultimately make it a less stressful process for everyone.

Good luck.

My loan is supposed to close in a few days. My first payment is showing as due in March. What happened to February payment?

Thanks!

That’s standard. We closed on our house July 30 and our first payment wasn’t due until September 1.

Just trying to find out. Of course the first month that our moortgage payment is due, some crazy stuff happens to where we cant pay it until 3 weeks over due.. what happens?
We will be less then 30 days late.. only about 12 days. Will that show on our credit?

I managed this stuff for a national lender and here’s how it goes:

First of all, 12days won’t be on credit. 30+ days will only.

Second, they won’t do anything. They can, but they won’t. If you have a mobile home and are with a large company, you may get a call, but if you keep it under 30 days, you are ok. If you are with a brick and mortar company, you’ll get put on autodialer for a couple days, which is useless.

That 90 days statement is crap (no offense to that person). Technically, you are in default 1 day past due, but no lender will actually do anything.

1) If they did issue a notice, you’d cure it before it gets to your house.
2) The notice wouldn’t look good for them if they tried to pursue you. A judge would call that predatory and tell them to screw off.

Moral of the story. Pay it under 30 days late and you’re cool!

Iv been for a job interview this morning, for an 11month maternity leave cover, with the chance but not promise of a permanent contract. Im hoping to buy my first house in the next year, and although i can afford it, would the temporary job stop me getting a mortgage? It would be a joint mortgage

You may not get as much money as you would like because with the crackdown on subprime lending, companies are getting more picky on who they lend to. Make sure your credit is above average- buy all three scores from a source such as myfico.com and see if there is anything you can spend time clearing up now. You ideally want to be over 720ish, but over 680 is a must to get the best deals from a reputable lender. Save for a larger down payment and make sure you still have "liquid" assests on top of your down payment (savings, money market, they even counted my 401k) that would cover several months of mortgage payments should the job end.

In reality, you may only qualify for what your co-signer could get without your income because it’s not a steady job and you’ll have been there less than a year. For example, I have a job where 70% of my pay is base and 30% is commission. Because I got my mortgage just a year after getting my job, they wouldn’t take into account my commission (there had to be two year proof that I would make the variable income at that level) and I was only able to get approved up to my base pay level. The mortgage lender wasn’t thrilled that I had been at my job only a year, but it was long enough to be off my probation period and I have a history of long employment periods with two previous employers with no gaps in career.

This isn’t to discourage you from trying, but just make the rest of your situation as good as it can be and be prepared to not get as much money as you would think!

i’m on 3 month trial on my second mortgage when i apply for the second do they put me on a 3 month trial as well?

They will not do anything, they are a cash loan, not your primary. They will not modify anything, they are the same as your credit cards.

I have a 1st mortgage of about $100,000 on a condo valued at approx. $380,000. I have a home equity line of credit ( $20,000) that is interest only with no pre pay penalties. Can I refinance for a 15 or 20 year fixed?

Yes, but i’d go 30 years with a fixed rate and open end which means you can pay down the morthage anytime. Also request an amortization so you’ll have a break down between the principle/ interest.

I am buying a house on May 29th and have taken out my mortgage from Alliance and Leicester. I was just wondering if anyone knew if I would be expected to make a payment right away on completion day as soon as i get the money or if it will be the month after in June?
I hope its the latter obviously!

The first payment will be day of closing,, Interest will be charged for that month to the first of the month or date of payment.. Your payments could be on any day of the month, as you set up your loan, you should ask for a date best for you… Many people would rather pay on the 15th than the first. So you would be charged at closing for the days from the 29th to the following 15th..

Every bank is a bit different,,, easy to just make a phone call to find out,, every answer here is just plain guessing and speculation.

I want to look at an investment property that is only listed at $15,000. Would the bank just laugh at me if I went in and asked for a mortgage on this property?

No, there is normally no minimum, but it may not be worth it because most of the closing costs are fixed (application fees, processing fees, title search, etc). So you pay the same dollar amount on these fixed closing items on a $10,000 mortgage as as a $100,000 one and that would be a big percentage of your costs.

Check with banks, because closing costs will vary area to area as well as lender to lender.