Home buying thread

Question for you gents. I"m in the process of buying out my parents" mortgage on a duplex that they own with my brother, so that they can retire somewhere. They"re gifting me the equity in the place, and my brother and I are splitting 50/50 on the remainder due.

The tricky part is that we"re converting it into condos, so that we can hang out here for a few years and then either sell when the market"s back up, or rent them out. We"ve got an attorney doing most of the condo paperwork for us for $1500, which seems pretty solid.

We both have great credit, and are prequalified for well above the cost of the place at 4.375 fixed from Citizens. I have very little debt ($3000 or so), but he has a fuckton. I"m using 20% of the equity as my DP/PMI-avoider, but unfortunately my brother has a mountain of debt that he"s looking to unload and roll in. (He"s paid down the mortgage on the place for the last 10+ years, so it"s his equity).

The loan agent that we"re working with is telling him that he can go FHA and do 85% LTV, and since it"s a condo, only one of us can go FHA so I have to stay at 20%. Not a big deal for me, but it"s a pretty decent size chunk of change that he"d like to roll in. His credit score is something around 740 FICO, but the last round of credit-card-fuckeveryone shit all over him, and they jacked all of his rates up to the 20% range on pretty huge balances.

I was under the impression that FHA was 3.5% LTV, and that he should be able to roll in everything so that the mortgage is ~95% LTV with an FHA loan, but the lender is telling me that"s not the case. Is there a different ruleset for condos as opposed to single family homes, or are we being misled?

I"ve already shelled out $2500 to surveyors to draw up floorplans, and am going to be paying the lawyer, appraisal fees, closing costs, and (I think) a bit for a market analysis. I"m basically hemorrhaging money right now and want to make sure that we"re not headed down the wrong path.

Seventh said:

Question for you gents. I"m in the process of buying out my parents" mortgage on a duplex that they own with my brother, so that they can retire somewhere. They"re gifting me the equity in the place, and my brother and I are splitting 50/50 on the remainder due.

The tricky part is that we"re converting it into condos, so that we can hang out here for a few years and then either sell when the market"s back up, or rent them out. We"ve got an attorney doing most of the condo paperwork for us for $1500, which seems pretty solid.

We both have great credit, and are prequalified for well above the cost of the place at 4.375 fixed from Citizens. I have very little debt ($3000 or so), but he has a fuckton. I"m using 20% of the equity as my DP/PMI-avoider, but unfortunately my brother has a mountain of debt that he"s looking to unload and roll in. (He"s paid down the mortgage on the place for the last 10+ years, so it"s his equity).

The loan agent that we"re working with is telling him that he can go FHA and do 85% LTV, and since it"s a condo, only one of us can go FHA so I have to stay at 20%. Not a big deal for me, but it"s a pretty decent size chunk of change that he"d like to roll in. His credit score is something around 740 FICO, but the last round of credit-card-fuckeveryone shit all over him, and they jacked all of his rates up to the 20% range on pretty huge balances.

I was under the impression that FHA was 3.5% LTV, and that he should be able to roll in everything so that the mortgage is ~95% LTV with an FHA loan, but the lender is telling me that"s not the case. Is there a different ruleset for condos as opposed to single family homes, or are we being misled?

I"ve already shelled out $2500 to surveyors to draw up floorplans, and am going to be paying the lawyer, appraisal fees, closing costs, and (I think) a bit for a market analysis. I"m basically hemorrhaging money right now and want to make sure that we"re not headed down the wrong path.

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I believe that cash out FHA needs more money down than a standard FHA loan. They must be considering it a cash out refi for him even though it"s a purchase. I can"t see any other way you can get a loan for more than the house is selling for.

FHA Loans - Cash Out Refinance Mortgage

Thanks man. It"s not that he wants a loan for more than the house is selling for - he"s looking for a LTV of above 80%, somewhere around 90-95. For example, if the house is worth 200k, and he owes 135 on the mortgage, he"d like to roll in 45k of debt, have the loan be 185, and maintain 10% equity or an LTV of 90%.

Does that make sense?

Yeah but he is getting a loan for more than he"s paying for the house. That makes it cash out. And that"s going to be rough in this market.

Yeah, that"s exactly what I was getting missing. Thanks man.

A useful tool for mortgage payers:Where's the Note? | Demand to see your mortgage note.

Itzena said:

A useful tool for mortgage payers:Where's the Note? | Demand to see your mortgage note.

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This is starting to become a big issue, a lot of the bank"s out there forcing foreclosures don"t even have the actual loan paper to legally be able to evict somebody. Many states and banks have had to halt all foreclosures until this gets investigated. I"m guessing they"re probably all in China, wall street wrapped them all up as mortgage backed securities and sold them to investors overseas.

Well, you"ll have to pay your mortgage tosomeoneat some point. Asking your current holder if, you know, they actually have any legal right to ask your for money is moderately important.

So confused. Went to pay my mortgage, and it went up $200 ($1050 -> $1260) due to escrow stuff... but looking at December 2009 statements the figures didn"t really change. I called BofA and at the end of the call my monthly payment has now decreased $20 ($1030).

I feel like in a month or two this is going to fuck me.

This is potentially normal because of the estimation of taxes the first year and what they end up being I think? Before she reduced my payment it looked like maybe my shit just wasn"t set up well to begin with, as $100 of my now $450 (up from 260) Escrow was for shortage and the buffer stuff that"s required.

I"ve returned, I forgot I posted here - and some great info in this thread.

It seems they took away the multi-quote feature on the board? I"m going to try to address some of the things that I can recall.

My job is pretty secure. I came on at a time when things were severely understaffed. The amount of total employees is very low to begin with, and about 150 were hired after me, so if any cuts were to happen (which is doubtful, seeing as how recent hires didn"t even cover retirements) it wouldn"t even come close to axing me. Also, our contract is good at a bear minimum 4 years right now (brand new contract) and in the history they"ve never even walked away with a 0, let alone a cut (but given the current climate, who knows what could happen, that"s just historical)

I will not make 170k after 7 years or whatever it was, I will cap at approximately $110k @ 5 years base pay. Next month I will be making about $65k up from my 44k right now, that represents the biggest raise due to shift differentials being incorporated along with a linear raise. This only happens once. Subsequent it will be 11k annually, including an additional 11k in 7 months, for approximately $75k within the year. Anyway, that"s the more solid background story, only because it"s relevant for my options. Since I last posted I"ve noticed average mortgage rates have sunk very, very low.

Average mortgage rates and points in the top 10 metropolitan marketswe will say about 4% - my credit is perfect. Easy 750+ with a solid history of payments on all kinds of things, including two auto loans without a single late payment. I don"t anticipate having an issue , when the time comes, of qualifying for the lowest rates.

Now, i"m also looking atHousingTracker.net | Median Home Asking Price & Inventory Data for Long Island, New Yorkand this shows two trends in my area.

One, 25th percentile and median home sales have dropped significantly over the past five years. About 30% and 20% respectively. Inventory has remained , oddly, constant.

Two, the rapid downward trends seem to be easing, and perhaps stopping. Which, for me is troubling - as obviously the more things depreciate the better a situation I"m in.

Usinghttp://www.bankrate.com/calculators/...alculator.aspx

On a $250,000 mortgage, assuming 50k down (just throwing numbers out that were in line with what I was thinking - my gut tells me when push comes to shove the house I purchase will probably be more in the 25th percentile ie; 250k minus my down payment)

$1193.54 a month. This, obviously does not include whatever else they throw in there.

It"s insane to me, because when I originally started looking, the rates were around 7%, which means the same exact numbers would yield a $1663.26 payment, which obviously compounds with anything else tossed in there.

I need an idea, as well of what other things go into monthly payments. I know things like property tax (pretty insane here, for arguments sake i"ll say $8000 annually - so .. ugh.. $670 added. Utilities, which I could calculate on my own - then whatever else you guys could clue me in on that they like to tack on there. Escrow (whatever that is) etc. Also, closing costs are bundled into loan? Or paid upfront?

I figure with payment, property tax, plus leaving about $200 monthly for whatever other BS, it puts my bill @ 2k + utilities given the above numbers. I"m really just thinking via text here.

My gut tells me I"m going to wait to hit 50k saved.. which could be awhile (My savings haven"t moved right now, i"m actually down to about 17k - my salary is pretty difficult atm) and see what the market tells me. I"m just nervous I"m going to miss out on pretty historic lows in both housing prices and mortgage rates. Unfortunately, the market in my area has me bent over regardless, because despite the 20% depreciation the median house sold in my area is still $400k.

TheCutlery said:

...and I could still use more cash flow to do shit that needs to be done around here.

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This... keep in mind you"ll be spending 10 - 20% of your mortgage (yearly) in maintenance (yearly). And I"m not talking about the pretty flower beds and patios you want to put in to make the yard nice, I"m talking pipes, AC maintenance / replacement, water heater, roof, tiles, broken toilets, sinks etc.

Cad said:

Holy shit dude, break less stuff. This hasn"t been my experience and I"ve owned a home for 10 years.

10-20% of my mortgage yearly (assuming my house were financed) would be like $6-12k a year on broken shit in the house. You live with fucking Dennis the Menace or what?

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money pit!

TheCutlery said:

$8000 for property tax seems kinda whack. They really that high in NY? That"s fucking retarded. Mine is around $3000.

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The town we are currently living in (renting) just outside of Chicago, property taxes on a $350k house are somewhere around $10,000.

TheCutlery said:

Oh, thought of something else here. Mortgage guy told me that the best way to buy a house is to put down as little as possible. Starting to think he"s right. Here"s something for you to gnaw on.

I put down 3.5% on a 245k mortgage. Somewhere around 8-10k outta pocket. My P&I on the remaining 240k or so I financed is $1365. So you putting down the extra $40k nets you $170 off your payment.

Would you rather pay $170 a month, or have $40k in the bank to deal with shit when life comes up? I"d take the $40k in a heartbeat.

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I"d rather not waste money on PMI, but thats me.