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KLC77

Getting a Mortgage Sucks

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Holy crap. We're just starting to go through this. We're doing a preapproval through BoA and unfortunately have no other choice with banks. We're planning on doing 3.5% down for the preapproval letter but give them 5% at closing. If they raise it to anything higher we're screwed.

 

Mrs. Martin, we're looking for a house that costs as much as your downpayment!!! I guess that's the perk of not living in SoCal though.

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I'm going through the same thing! I was hoping to have that money for furniture and closing costs... but I guess we'll just have scrimp and save for the next year! (it's a new development, so we don't close until next June)... Good luck to you!

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Originally Posted by ~Melissa~ View Post
Yeah we just got pre-approved for a mortgage so i hope to avoid all this stuff. Did you get pre-approved as well kelly? And who did you go with if you don't mind me asking? We went with Wells Fargo and I'm hoping that was a wise choice. I guess it's just a pre-approval and we could always switch.
We got pre-approved to put as little as 3% down, but we are going thru a broker and not directly thru a lender. So, I know there's a difference there. Things just changed once they actually submitted the loan for approval.

Today, things have gotten worse and with the PMI payments we have a $4,000 fee/ penalty for having to have PMI. I'm a little confused as to what's that's for and have to call the broker in the morning. I'm still hoping it will work out, but I'm super stressed.

Thanks for all your support ladies! It nice to know we're not the only ones who've gone thru this.

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Is this your first home purchase? If so now's the time so just think you're getting an $8K credit! While the lenders are more strict this at least helps offset some of that..... Buying a home is so stressful, when it's all over you'll feel so much better.

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Man, Kelly, that really sucks! When will it all get figured out? Are you on a time crunch? I know things have to be filed and done within a certain amount of days and stuff like that...

 

Private Mortgage Insurance (PMI):Benefits, New Requirements, Homeowners' Protection Act, Terminating PMI, HPA Disclosures, and Home Value Increases - an FRBSF Brochure

"PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay PMI."

 

I think that you may be able to avoid this if you can get two mortgages, called a piggyback mortgage. I have only heard of them and have no first hand experience, but maybe someone else can give you some info on them. It would avoid the PMI payment and perhaps make the monthly payment lower (since there is no PMI).

 

Piggyback Mortgage Calculator - Calculate Piggyback loans - 80/20 Mortgage Calculator

80/20 Piggy Back Mortgage Comparison Calculator - A piggy back mortgage is when two mortgage loans are used simultaneous to purchase a home to avoid PMI (private mortgage insurance). This may be done as an 80/20, 80/15 or 80/10 mortgage. Use this mortgage calculator to view monthly mortgage payment differences between a piggy back loan and a traditional mortgage with PMI. Comparison assumes the same mortgage interest rate for both of the first mortgages.

 

Quote:
Originally Posted by KLC77 View Post
...Today, things have gotten worse and with the PMI payments we have a $4,000 fee/ penalty for having to have PMI. I'm a little confused as to what's that's for and have to call the broker in the morning. I'm still hoping it will work out, but I'm super stressed.

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Hope things are improving for you here. Just a thought ~ if you are a first time homebuyer you can withdraw from an IRA without penalty (just taxes). That may help you with the additional funds. DH and I are supposed to be closing on a house on 8/15 and we went with Wells Fargo. So far no big surprises but I can keep anyone interested up to date. I've heard most of the crap that happens is from the underwriters vs. the brokers, sometimes they don't even know what is going to happen or what the UWs will say regarding a loan. Everything I've read though says that if you can put a big down payment and avoid PMI you'll be happier in the long run.

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Originally Posted by CrystalM View Post
Mrs. Martin, we're looking for a house that costs as much as your downpayment!!! I guess that's the perk of not living in SoCal though.
Yeah, it's crazy expensive out here even during this economy. But, we still got the house for a steal though because it was previously sold in 2005 for $700K and we purchased it for $391K. So, it was a great price for what we got! Good luck with your house hunting!

Kelly- I was about to explain the PMI, but Carly explained it perfectly. That's exactly why we ended up having to put down 20%, it made a big difference.

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Quote:
Originally Posted by Mrs. Martin View Post
Yeah, it's crazy expensive out here even during this economy. But, we still got the house for a steal though because it was previously sold in 2005 for $700K and we purchased it for $391K. So, it was a great price for what we got! Good luck with your house hunting!
I know what you mean about the house prices, my fiance is from Sacramento. We were out there in March visiting family. We looked at houses and actually found a few in Granite Bay we could afford! He doesn't want to move back though - the politics.

Thanks! We need it!

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