With this whole "Subprime Mortage" blame...is it gonna be harder to get a house...

[Jamie 3:26]

I am in the market to try to purchase a home by oct. of this year.

I am cleaning up my credit now.

My issue is,if my score isn't up to par,is it going to be harder for me to get into a house,due to the whole subprime fallout?

This whole economy situation has me scared shitless.

Doe sit make since to wait?

I know they say it's a buyers market,but damn,can I even get one foot in the door?

[Rom]

Best thing to do is start the loan app process now, this way you'll know what you qualify for now and/or what you need to do to qualify by October. No offense to my mortgage brokers out there but you should talk to your bank first. Many banks are offering no closing cost loans now and this can save you several thousand if you can qualify. Its hard as hell to get 100% financing now as well so you may need 5% to 10% downpayment. Home prices have come down considerably and you can get a nice 3 bed brick southeast (chatham, avalon, pill valley) in the 180K to 250K range, depending on condition and/or desperation of seller lol. Not real different over southwest (ashburn, ep), 220K to 250K range. The market is flooded with 'fixer-upper' foreclosures right now so if a little rehab project doesnt botther you one can be had in the 80K to 120K range, depending on location and condition. Prices are still really strong in the Beverly/MP area and near north, south and west, especially for new construction but hit me up and I can give you a better idea of what you can expect to pay depending on your area of interest.

[SuzanneT]

I am in the market to try to purchase a home by oct. of this year.

I am cleaning up my credit now.

My issue is,if my score isn't up to par,is it going to be harder for me to get into a house,due to the whole subprime fallout?

This whole economy situation has me scared shitless.

Doe sit make since to wait?

I know they say it's a buyers market,but damn,can I even get one foot in the door?
Try looking at foreclosed homes 1st, just a suggestion.

[Bill Blake]

Research and wait Jamie, you don't want to buy while the property values might still be in decline.

[Big Ken]

I am in the market to try to purchase a home by oct. of this year.

I am cleaning up my credit now.

My issue is,if my score isn't up to par,is it going to be harder for me to get into a house,due to the whole subprime fallout?

This whole economy situation has me scared shitless.

Doe sit make since to wait?

I know they say it's a buyers market,but damn,can I even get one foot in the door?
What type of house you looking for and where. Putting my house on the market at some point this year.

[mhd]

Best thing to do is start the loan app process now, this way you'll know what you qualify for now and/or what you need to do to qualify by October. No offense to my mortgage brokers out there but you should talk to your bank first. Many banks are offering no closing cost loans now and this can save you several thousand if you can qualify. Its hard as hell to get 100% financing now as well so you may need 5% to 10% downpayment. Home prices have come down considerably and you can get a nice 3 bed brick southeast (chatham, avalon, pill valley) in the 180K to 250K range, depending on condition and/or desperation of seller lol. Not real different over southwest (ashburn, ep), 220K to 250K range. The market is flooded with 'fixer-upper' foreclosures right now so if a little rehab project doesnt botther you one can be had in the 80K to 120K range, depending on location and condition. Prices are still really strong in the Beverly/MP area and near north, south and west, especially for new construction but hit me up and I can give you a better idea of what you can expect to pay depending on your area of interest.

cosign, j, all you need to know right here, just to add, your credit is probably not as bad as you think, like rom said, start trying to get qualified now, i just gave the exact same advice to my nephew who is looking to buy next year, start now so you can plan with a specific goal in mind, prices are great now and money is stil relatively easy to get and sellers are more than eager to sell, imo, that is a perfect scenario, you are not a speculator or an investor, so by definition you are going to be in the house for a while, so forget about rising or declining values because you are going to get a great deal, especially if you holla at my man rom, lol, good luck, happy hunting, and congrats in advance

[The Buddy Love Show]

cosign, j, all you need to know right here, just to add, your credit is probably not as bad as you think, like rom said, start trying to get qualified now, i just gave the exact same advice to my nephew who is looking to buy next year, start now so you can plan with a specific goal in mind, prices are great now and money is stil relatively easy to get and sellers are more than eager to sell, imo, that is a perfect scenario, you are not a speculator or an investor, so by definition you are going to be in the house for a while, so forget about rising or declining values because you are going to get a great deal, especially if you holla at my man rom, lol, good luck, happy hunting, and congrats in advance

I am with you up to: "a while". I'm assuming you mean 5-10 years. If so, I'm with you (market location dependent, of course)

[liL Ray]

No offense to my mortgage brokers out there but you should talk to your bank first. if your credit score is under 680, the only thing your local bank is going to show you is the door.

[The Buddy Love Show]

if your credit score is under 680, the only thing your local bank is going to show you is the door.

can i buy the door?

gotta start somewhere

[mhd]

I am with you up to: "a while". I'm assuming you mean 5-10 years. If so, I'm with you (market location dependent, of course)

lol, exactly, i was gonna write 5 years, but did not want to introduce the concept of buying, selling, flipping your own residence for profit and tax purposes so early in the game for j, lets get this cat in a crib first then knowing him, he will figure it out himself and realize that if you can buy one you can buy three

[The Buddy Love Show]

lol, exactly, i was gonna write 5 years, but did not want to introduce the concept of buying, selling, flipping your own residence for profit and tax purposes so early in the game for j, lets get this cat in a crib first then knowing him, he will figure it out himself and realize that if you can buy one you can buy three

What the Bumba-Claaat is going on here? You and I been seeing eye to eye on multiple threads!!!!!!!

LOL

[mhd]

What the Bumba-Claaat is going on here? You and I been seeing eye to eye on multiple threads!!!!!!!

LOL

i'm getting a little nervous

[Jamie 3:26]

Thanks for the advice folks.

I will let folks know how it goes.

I mos def will be signing up for first time homeowner classes.

I know folks who got got bad and I do not want to be in that type of situation.

[liL Ray]

Many banks are offering no closing cost loans now and this can save you several thousand if you can qualify. Its hard as hell to get 100% financing now as well so you may need 5% to 10% downpayment. Home prices have come down considerably and you can get a nice 3 bed brick southeast (chatham, avalon, pill valley) in the 180K to 250K range, depending on condition and/or desperation of seller lol. Not real different over southwest (ashburn, ep), 220K to 250K range. The market is flooded with 'fixer-upper' foreclosures right now so if a little rehab project doesnt botther you one can be had in the 80K to 120K range, depending on location and condition. Prices are still really strong in the Beverly/MP area and near north, south and west, especially for new construction but hit me up and I can give you a better idea of what you can expect to pay depending on your area of interest.
I typed a long reply to this and hit some button and it disappear...aaaarrrrrrrggghhh!

I will start again.

[Rom]

if your credit score is under 680, the only thing your local bank is going to show you is the door.

Not always true, some community lenders like Marquette Bank and 5/3rd Bank have programs for first time home buyers in the 650 to 680 range. They also have credit repair programs to get you into the 650 and up range over a period of time. Then theres programs like NACA (Neighborhood Assistance Corp of America). www.naca.com This is specifically for bad credit, low income situations and it takes time, anywhere from 3 months to 12 months but if you can get financed through NACA then theres no downpayment, no closing costs and maybe even 100% LTV. No offense to NACA but this is a not for profit type org so the efficiency there is kind of bad. To be honest, you pretty much have to lean on them constantly to get your file processed but if you get done, you're good.

[liL Ray]

can i buy the door?

gotta start somewhereyou can open an account for your PITI reserves.

[mhd]

Not always true, some community lenders like Marquette Bank and 5/3rd Bank have programs for first time home buyers in the 650 to 680 range. They also have credit repair programs to get you into the 650 and up range over a period of time. Then theres programs like NACA (Neighborhood Assistance Corp of America). www.naca.com This is specifically for bad credit, low income situations and it takes time, anywhere from 3 months to 12 months but if you can get financed through NACA then theres no downpayment, no closing costs and maybe even 100% LTV. No offense to NACA but this is a not for profit type org so the efficiency there is kind of bad. To be honest, you pretty much have to lean on them constantly to get your file processed but if you get done, you're good.

cosign again, also gave the naca info to folks all the time, great program but takes a helluva long time

[DeesKo]

Thanks for the advice folks.

I will let folks know how it goes.

I mos def will be signing up for first time homeowner classes.

I know folks who got got bad and I do not want to be in that type of situation.


1. If you find THE house, the one that has every single thing you wanted and it's in your price range, go ahead and move forward. If it's not PERFECT, keep looking. Prices are not going to be rebounding any time in the next 6 months (I would venture to say a year + but I'm being conservative) so you got time in this market.

2. Hire your own home inspector and make the time to walk through the house with him when you do the inspection. Ask questions. Ask him what he's looking at, why, and how it looks to him. Make him explain things so you have a very clear idea of what you're getting into as far as the structure of the house is concerned.

3. Negotiate with your real estate agent (unless you're using one of your boys already) so you don't pay the full commission. They need business just like you need a house.

4. If your agent requires an exclusive contract, try to avoid it at first, if it's REQUIRED and you can't get away from it, don't sign one for longer than 60-90 days MAX. You can always extend an exclusive deal, but you can't end one early.

5. When it comes time for you to get your loan, pay attention to your closing costs. When they give you your Good Faith agreement, MAKE SURE they give you one that includes the escrow and the courier fees and the tax stamp fees and the filing fees etc etc. Don't let them give you a purposely dumbed down GFA to make the deal look better to you.

Haggle and fight to bring your points down. Question every single courier's fee. Call the city to verify the tax stamp fees and the filing fees. Anything on the HUD form isn't called Escrow, taxes, or filing fees is a place where lenders can try to "get over" and make more money than you realize you're paying them.

6. If you end up using a Mortgate Broker.... Broker fees... they BETTER NOT say 3%, they shouldn't even start @ 2% but you'll be doing damn good if you negotiate to 1%. HAGGLE. There are multiple places to hide lender/broker payment, not just in that Broker Fee section so pay attention.

7. Do NOT use a service like Lending Tree. They take your info and immediately pass it to at least 4 different lenders who all run your credit, and every time a lender runs your credit, your score takes a hit. You use lending tree and it could cost you 10-20 points on your credit.

8. Do not shop yourself to a bunch of banks, over and over. Again, every time they run your credit, you loose points. You don't want to hit 4-5 different banks and let them run your credit before telling you no, and at the end of the day you don't have a loan AND you're score is lower than it was when you started.

9. If you find a house you like, do some research on the area and see if you can find out what the city plan is for that area down the road. Try to find out about road construction, school construction, etc etc etc. Try to see what (if anything) is planned for the future for that area.

10. Pay your mortgage on time. Every time. No matter what. Nothing will kill your credit faster than a mortgage with rolling 30 or 60's.

11. Before you put an offer in, make sure you know what your annual real estate taxes are going to be on the house, and whether there is a home owners or condo fee with the property and factor those into your mortgage payment.

** this is where a lot of people get got...

TYPICALLY when a lender/broker quotes you a mortgage, they're giving you the principal and interest payment on your loan. That's NOT going to be your actual mortgage payment. Your mortgage payment is going to include money for escrow for your taxes, and possibly something called PMI, which is what a lot of people get stuck with when they can't put 20% down on a house. PMI is a percentage based number, so MAKE SURE you ask your lender/broker what your final actual loan payment will look like after you add in taxes, PMI, etc.

12. Find out if the loan being offered has a pre-payment penalty or not, and whether it's "soft" or "hard". Try your best to shoot for no pre-payment penalty, but if you can't get the loan without it, it isn't necessarily a deal-breaker.

13. If you can't get away from having PMI added into your loan, find out whether the lender will remove the PMI once you have built up 20% equity in the house, or whether they work strictly on a # of years basis and find out what documentation they need to remove the PMI (most of the time it's just having an actual appraisal showing the loan to value is 80% or better).

14. If it's a condo, make sure you know EXACTLY what the condo association is responsible for maintenance/repair wise before putting an offer. Make sure you also know exactly what utilities they provide, and which you have to pay for out of pocket. Get a copy of the by-laws and make sure they don't have some crazy shit in there that is going to grate your last nerve every month when you have to deal with it.

15. Take a deep breath. It's a headache, it can be intimidating, but trust brah, you got so many people on this board willing to hear what you got going and give you advice it's not even funny. You're already walking into the situation better than most.

Good luck!

Peace

[Fletch]

If it's not PERFECT, keep looking.
Why is that?

[mhd]

buyers market

[liL Ray]

Its hard as hell to get 100% financing now as well so you may need 5% to 10% downpayment. Home prices have come down considerably and you can get a nice 3 bed brick southeast (chatham, avalon, pill valley) in the 180K to 250K range, depending on condition and/or desperation of seller lol. Not real different over southwest (ashburn, ep), 220K to 250K range. The market is flooded with 'fixer-upper' foreclosures right now so if a little rehab project doesnt botther you one can be had in the 80K to 120K range, depending on location and condition. Prices are still really strong in the Beverly/MP area and near north, south and west, especially for new construction but hit me up and I can give you a better idea of what you can expect to pay depending on your area of interest.


ok, let's try this again...oops, I will be back...there are a few other things I want to add for those reading and lurking, and could use the same advice......

What ROM is saying is so true...

I will have to type my answer later...things are heating up and getting busy all of a sudden.

[Eric Miles]

I have begun to work with NACA (https://www.naca.com/index_main.jsp) with regards to finding a property that I can afford - that is very important as there are lots of people caught up in ARMs & there are others who can afford the mortgage but lose their homes to not being able to pay the taxes. With NACA, there are no closing costs, no down payments, no application fees, no PMI (this really is a GREAT THING) & they will try to gain additional funds for you to reduce the interest rate which is usually 1 to 5 percent below market. The program is available to all who ARE NOT CURRENTLY PROPERTY OWNERS & is NOT credit based! I am very encouraged & hope to have my property within 6 months. Jamie, let me know if you would like more information on this - I went to my 1st meeting over the weekend & have my 1st meeting with my counselor to go thru my paperwork! I am hyped!

[DeesKo]

Why is that?

Like mhd pointed out, this is a buyers market and there's no need to feel rushed into buying something. Prices aren't going to start rising dramatically in the next 4 days or anything. He's got time.

Now, obviously, if he DOES buy something in the next 2 months, it's still going to be a good investment, it's still going to rise in value over the next 5-10 yrs and he'll be fine.... it's just that IMHO he doesn't need to feel rushed into something like there's some dramatic deadline looming.

Peace

[Mr.I]

[QUOTE=Eric Miles;]no PMI (this really is a GREAT THING) QUOTE]

True that.. When I bought my first house I lucked up and found this program for first time homebuyers. ALL I had to do to get rid of the PMI was to attend this 1 hour seminar and listen to this guy talk about the importance of paying your mortgage on time.

[Fletch]

Like mhd pointed out, this is a buyers market and there's no need to feel rushed into buying something. Prices aren't going to start rising dramatically in the next 4 days or anything. He's got time.

Now, obviously, if he DOES buy something in the next 2 months, it's still going to be a good investment, it's still going to rise in value over the next 5-10 yrs and he'll be fine.... it's just that IMHO he doesn't need to feel rushed into something like there's some dramatic deadline looming.

PeaceNo one is saying rush. Not at all. But people have this definition of PERFECT that I have some disagreements with. See Dave Russell's comments below, at the 1:42 mark........

http://deephousepage.com/ubb/ultimatebb.php?ubb=get_topic;f=39;t=001294#000000

[Eric Miles]

Man - I am telling you - not too many people are up on this program but it is truly a GODSEND. It is based on your affordability - NOT YOUR CREDIT. That is the biggest hinderance for individuals attempting to get their own place. They will even work to help people get out of predatory lending situations. They are getting people 3 - 5%!!!!!!!! For the first time in a WHILE, I see my family getting something nice and with it being a buyer's market, when I get preapproved, that check in my pocket will be just like cash. Plus they do ALL the work!



[QUOTE=Eric Miles;]no PMI (this really is a GREAT THING) QUOTE]

True that.. When I bought my first house I lucked up and found this program for first time homebuyers. ALL I had to do to get rid of the PMI was to attend this 1 hour seminar and listen to this guy talk about the importance of paying your mortgage on time.

[DeesKo]

No one is saying rush. Not at all. But people have this definition of PERFECT that I have some disagreements with. See Dave Russell's comments below, at the 1:42 mark........

http://deephousepage.com/ubb/ultimatebb.php?ubb=get_topic;f=39;t=001294#000000

I scanned your link but I don't really see how Dave once again being condescending topped with a side of sarcastic really relates to this convo.

Jamie said he was worried about getting burned. I gave him my own personal advice that said unless you find your perfect home, don't feel pressured into buying quickly...

IMHO, anyone who buys in the next 6 months is going to walk into their home with very little equity at all (quite possibly with negative equity in the next 6 months) unless they're putting down major down payments.

Sure, in the long run it's going to pay off, without a doubt, and that's why I left wiggle room in my comments by saying if you find your perfect home... go for it but if it's not perfect, don't feel pressured into making a move RIGHT NOW because the market is down some.

Buying real estate, no matter when you buy, is an exercise in trade-offs. You trade off location for size, size for location, space for amenities, price for style, etc. In this market, one trade-off he may need to be prepared for is that he's going to trade off walking in with negative equity because he found a house with everything else he wanted.... or he may realize it DOESNT have everything he really wanted, so why sacrifice THAT stuff AND walk in owing more than it's worth?

I mean, it's just my opinion.




Peace

[djmarbll]

can i buy the door?

gotta start somewhere

:rofl5:
You might have to put a down payment on the door, lol.

[djmarbll]

Just to add to the great info already given: Jamie since you're in Chi-town, there used to be called Scavenger sales at City Hall where you could buy property just by paying of the property taxes if they hadn't been paid for over 5 years. I don't know if they still do this, but if you have connections to City Hall, now would be the time to use them. My uncle got rich off of scavenger sales because he bought over twenty buildings in Bronzeville in the '80s, when the crack epidemic started to devalue the area. Since then, those buildings have skyrocketed in value.

[The Buddy Love Show]

:rofl5:
You might have to put a down payment on the door, lol.

hahahahahahahaha!!

Where's James Evans? Times are hard

[MYOR]

Buyers dont pay real estate agent a thing.. The commission is payed by the "seller" so there is no negotiating for commission on they buyer side.. Exclusive to the agent means that s/he will be showing you the property and you will put in any offer thru them. THis is done b/c many buyer have one realtor show them the property and then turn around and put in the bid with someone else.. If this is done when you sign an agreement. The commission will go to the person who initially showed you the home.

[KBig]

i'm getting a little nervous

made my nips hard...

*sorry had a mhd,pww fantasy moment*

carry on.

[liL Ray]

Buyers dont pay real estate agent a thing.. The commission is payed by the "seller" so there is no negotiating for commission on they buyer side.. Exclusive to the agent means that s/he will be showing you the property and you will put in any offer thru them. THis is done b/c many buyer have one realtor show them the property and then turn around and put in the bid with someone else.. If this is done when you sign an agreement. The commission will go to the person who initially showed you the home.
however, there is a new move afoot by many of the bigger realtors to actually do a "seller's hold 2nd" for 5% just to get the deal done...they do this just so they can get the sale done and also they can hold 5% of the mortgage and make a little bit of interest for about 2 years or so.

I am not well versed in this yet (still learning) but I will find out more.

Also, keep in mind another way of getting the deal done is for the seller to agree to hold 5% of the mortgage as a second, as well as pay the closing costs. This way you may only have to come up with 5% of the downpayment and the seller or the realtor comes up with the other 5%, and the bank/lender lends the other 90%....you are responsible for 90% to the bank and a 5% loan, at a pre-determine interest rate, for maybe 2 years, to the seller or realtor....sometimes it can be as much as 10%. It is whatever you and the seller (attorneys) can work out, usually at the closing table. Keep in mind the Lender/Bank do not need to know about this deal....they just want to know/see (ahead of time) where the funds are coming from to close the deal.

People are working the edges out here until this whole thing (hopefully) turns around....

Also, as far as getting ready to own, i.e cleaning up your credit, as JMJ eluded to a month or so ago in another topic, you DO NOT want to go the route of the credit consolidation/counselling, where they the credit company work out a deal for all your payments and you just pay one set amount and then close all those accounts.

MYOR posted a great post back in Dec. (I believe), where it spoke about how to go about cleaning up your credit.

You want to make sure you have at least 3 to 5 open credit lines (car, credit card, etc) with at least 2 of them being $5,000 high limit....NOT Balance outstanding. You do not want to max out your credit...I think you want to keep it below 1/3 of that high limit. You also want them to be open for 12 to 24months....this shows that you can actually manage credit and pay bills on time...oh, wait, I did say you have to pay them ontime, correct....even though when it comes on to mortgages, the banks only care about lates when it comes on to mortgage payments, or they put more weight on that...

...in other words, if you are late on your car payments 2 times in the last year, but somehow, you still have a score above 680, they go by the score, and not really interested in the late payment. However, if you are going for a refi or buying another house and you were late on your mortgage 1 time in the last year, and your credit could be 750 (it happens), they will penalize on rate and LTV (LOan to Value or amount you can borrow) much more.

Whatever you do, DO NOT payoff your credit lines and close the account...the credit lines is very important...without them, forget it.

The Downpayment:
Count on having at least 10% down...or see what I typed above. Keep in mind you are also going to need at least 3 months PITI (Principal, Interest, Taxes, and (HO)Insurance)....some banks ask for 2 and some are asking for 6, especially if it is a investment property....those asking for 6, tell them FU, because you can do better.

As far as the downpayment and PITI, or as the bank calls it funds to close, if you can borrower it from a friend, relative, whomever, make sure you open an account at least 2 months before closing (60 days seasoning), and keep it there....after you close, you can do whatever with those funds (you didn't hear that from me). You will need to show this to the bank...gone are the days when all you needed was an escrow letter (letter from attorney) saying that the attorney is holding the cash in their account. The bank wants to "see" the funds via 2 months bank statements, IRA, CD, 401(k), annuity, sometimes even insurance policy cash value.

FHA route:
Jamie, since your price point for SFR and 2 family residence seems to fall withing FHA guidelines, you may also want to look into going with a FHA loan. You will have to qualify Full doc (2 paystubs and last 2 years W2s). They are not credit score driven, so having even a 520 score, and you making enough cheddar to afford the house as well as take care of your existing bills (under 50 DTI - Debt to Income). If you can qualify this way, you may find that you just have to come up with 3% downpayment and in some cases, nothing.

Hope this helps....pay me my fee in 3 round of drinks when you mofos close and y'all see me out!!!

Edit***

on a $250K mortgage at 6.5% (you maybe able to do better or worse, depending on your credit and other factors) for 30yr fixed, your payment will be $1580 a month for P&I...then you have to tack on the insurance and the taxes in your area...they can run from $200 to as high as over $500 a month...areas of NJ and Westchester, I have seen over $1000, but then again, you can't even find a $250K garage.

[MYOR]

however, there is a new move afoot by many of the bigger realtors to actually do a "seller's hold 2nd" for 5% just to get the deal done...they do this just so they can get the sale done and also they can hold 5% of the mortgage and make a little bit of interest for about 2 years or so.

I am not well versed in this yet (still learning) but I will find out more.

I'm gonna have to look into that myself.. Havent done much since I got preggo time to get back in the game...

[Fletch]

I scanned your link but I don't really see how Dave once again being condescending topped with a side of sarcastic really relates to this convo.

Jamie said he was worried about getting burned. I gave him my own personal advice that said unless you find your perfect home, don't feel pressured into buying quickly...

IMHO, anyone who buys in the next 6 months is going to walk into their home with very little equity at all (quite possibly with negative equity in the next 6 months) unless they're putting down major down payments.

Sure, in the long run it's going to pay off, without a doubt, and that's why I left wiggle room in my comments by saying if you find your perfect home... go for it but if it's not perfect, don't feel pressured into making a move RIGHT NOW because the market is down some.

Buying real estate, no matter when you buy, is an exercise in trade-offs. You trade off location for size, size for location, space for amenities, price for style, etc. In this market, one trade-off he may need to be prepared for is that he's going to trade off walking in with negative equity because he found a house with everything else he wanted.... or he may realize it DOESNT have everything he really wanted, so why sacrifice THAT stuff AND walk in owing more than it's worth?

I mean, it's just my opinion.




PeaceTradeoffs mean that it's not perfect. Correct?

Re: Dave's comments. What he meant was that the price would have to be almost down to zero for the property to be good to buy!

[liL Ray]

6. If you end up using a Mortgate Broker.... Broker fees... they BETTER NOT say 3%, they shouldn't even start @ 2% but you'll be doing damn good if you negotiate to 1%. HAGGLE. There are multiple places to hide lender/broker payment, not just in that Broker Fee section so pay attention.

why do folks want to devalue our living or what we do? lol

I am not putting all that work for no 1% unless it is a friend or the loan amount is over 700K...waay too much work for 1%

I got family and they got to eat!!! Don't hate me for choosing a career that actually pays.

[liL Ray]

I'm gonna have to look into that myself.. Havent done much since I got preggo time to get back in the game...If your company do this, please, let me know and let's get some business done!!!

[Fletch]

Did I do something wrong when I put zero down, with a 30-year fixed at 6% even? Everyone has had an issue with the 'zero down' phenomena during the boom! Since my bank had a community mortgage program where I was able to put zero down, I used my monies to pay closing costs.

I got another bank that is "offering to refinance" at 5.5%. Any thoughts?

(oh, yeah, my payments are on time!)

[Armento]

since the rate is projected to keep dropping just wait Fletch. I'm hoping to turn my 6.5 into a 4 and below. Your zero down is fine since it's a fixed lawn, IMUO (in my unprofessional opinion)

[DeesKo]

why do folks want to devalue our living or what we do? lol

I am not putting all that work for no 1% unless it is a friend or the loan amount is over 700K...waay too much work for 1%

I got family and they got to eat!!! Don't hate me for choosing a career that actually pays.

.. and don't hate consumers for knowing where all the fees are hidden and not being willing to pay 4.5 extra points for a loan.

hahahaha

In all seriousness, thats why I said you won't be likely to get it down to 1%, but cmon, 2% plus isn't bad for a relatively easy loan where someone has all their paperwork, gives it to you in order, answers their phone and signs on the dotted line.

Peace

[DeesKo]

Did I do something wrong when I put zero down, with a 30-year fixed at 6% even? Everyone has had an issue with the 'zero down' phenomena during the boom! Since my bank had a community mortgage program where I was able to put zero down, I used my monies to pay closing costs.

I got another bank that is "offering to refinance" at 5.5%. Any thoughts?

(oh, yeah, my payments are on time!)



IMHO, in this economy, right now, in this market, I would be highly suspicious if they are willing to re-fi you and roll the closing costs into the new loan because that would put you above 100% LTV...so if they're claiming they'll do this.... they're making a mint on you somewhere else.

Now, if it's all up and up, I wouldn't re-fi for only .5%... but the easy way to see if this would make sense is to figure a rough guess for the closing costs, then see how long it's going to take you to break even on that based on your monthly savings on your mortgage....

Ie.. it costs you $15k to re-fi, and you save $300 a month on your mortgage, so it's going to take you over 4 years to make that money back, meanwhile you've also put yourself 15k more in debt.

As for you buying your place with $0 down, if it worked for you and you're in your place and you're happy, that's all that matters.

Peace

[Fletch]

IMHO, in this economy, right now, in this market, I would be highly suspicious if they are willing to re-fi you and roll the closing costs into the new loan because that would put you above 100% LTV...so if they're claiming they'll do this.... they're making a mint on you somewhere else.

Now, if it's all up and up, I wouldn't re-fi for only .5%... but the easy way to see if this would make sense is to figure a rough guess for the closing costs, then see how long it's going to take you to break even on that based on your monthly savings on your mortgage....

Ie.. it costs you $15k to re-fi, and you save $300 a month on your mortgage, so it's going to take you over 4 years to make that money back, meanwhile you've also put yourself 15k more in debt.

As for you buying your place with $0 down, if it worked for you and you're in your place and you're happy, that's all that matters.

PeaceLet me be clear. The zero down and the "monies to pay closing costs" were out of the original purchase of the home last May. The refi is a separate thing, and was just a thought. However, I don't plan on doing anything right now, other than just sit in the house and let that equity build!

Now, if the rates really sink 20,000 Leagues under the sea, I'll give it another thought!

[liL Ray]

Did I do something wrong when I put zero down, with a 30-year fixed at 6% even? Everyone has had an issue with the 'zero down' phenomena during the boom! Since my bank had a community mortgage program where I was able to put zero down, I used my monies to pay closing costs.

I got another bank that is "offering to refinance" at 5.5%. Any thoughts?

(oh, yeah, my payments are on time!)
I don't think you did anything wrong...

"offering to refi" when you just bought less than 1 year, is not going to happen at that rate...you need "seasoning"...at least 1 year in the house. You are being baited

Also, I will guarantee that you do not have enough equity in the house to refi anything....you were at 100% when you bought it...your home would have to have increased at least 15K to 25K just to cover the closing cost and for it to make any sense. You would have to take out a 80/20 where the 80 maybe (a big maybe) at 5.875 and the 20 will be at 8.5% or so...

just your ass down and enjoy the ride...this cut was not for you.

[liL Ray]

.. and don't hate consumers for knowing where all the fees are hidden and not being willing to pay 4.5 extra points for a loan.

hahahaha

In all seriousness, thats why I said you won't be likely to get it down to 1%, but cmon, 2% plus isn't bad for a relatively easy loan where someone has all their paperwork, gives it to you in order, answers their phone and signs on the dotted line.

PeaceI can live with 2%....

[Rom]

I'm gonna have to look into that myself.. Havent done much since I got preggo time to get back in the game...

We call these 'sellers seconds'. The seller kicks back a certain percentage of the profit from the sale at the closing to the buyer as a loan. These become the buyers funds at the closing and are typically half of a downpayment due. Most lenders are frowning on these now as this could be an indication of weakness on the buyer/borrower and/or and indication of inflated value of the property...(many times these are actually 'seller credits' or a discount to the buyer which is never even intended to be repaid, a way to get around the standard 3% seller credit cap, the note is then typically forgiven per agreement. this is all done of course just to get the property sold. we call this 'creative financing'. the purchase price is jacked up by the amount of the loan so its a no lose situation for the seller but a possible loss to the bank if the property value is inflated). In any case, it has to be disclosed up front to the primary lender who can deny it. This should be 'preapproved' via the primary lender before any negotiations to this effect occur.

Some typically more acceptable (to the lenders) 'down payment assistance' programs are programs like Ameridream www.ameridream.org , and Nehamiah www.nehemiahcorp.org . For a fee (something like 500 or 750) the seller can pay a portion of a buyers downpayment but the difference is the payment is a gift not a loan. These too have to be preapproved by the primary lender up front as well.

[liL Ray]

We call these 'sellers seconds'. The seller kicks back a certain percentage of the profit from the sale at the closing to the buyer as a loan. These become the buyers funds at the closing and are typically half of a downpayment due. Most lenders are frowning on these now as this could be an indication of weakness on the buyer/borrower and/or and indication of inflated value of the property...(many times these are actually 'seller credits' or a discount to the buyer which is never even intended to be repaid, a way to get around the standard 3% seller credit cap, the note is then typically forgiven per agreement. this is all done of course just to get the property sold. we call this 'creative financing'. the purchase price is jacked up by the amount of the loan so its a no lose situation for the seller but a possible loss to the bank if the property value is inflated). In any case, it has to be disclosed up front to the primary lender who can deny it. This should be 'preapproved' via the primary lender before any negotiations to this effect occur. true, on paper...

however, almost ever bank rep I have dealt with, residential and commercial, will tell me, they don't wanna know about it, just get it done.

that's the reality in the field.

[Rom]

true, on paper...

however, almost ever bank rep I have dealt with, residential and commercial, will tell me, they don't wanna know about it, just get it done.

that's the reality in the field.

Hmmm, whens the last deal you heard a bank rep say just get it done? Seems like the underwriters have taken over the process here in Chicago thanks to all the unscrupulous loan reps and their scofalaw attitudes...part of the reason we're in this subprime mess...but thats another topic.

Most lenders require you to have proof of funds that covers your downpayment before they will get anywhere near a closing table with you, if you dont have it, how you gonna make this work without the bank knowing about it? You either have your downpayment or you dont. If you dont, the bank wants to know where its comming from - second loan, seller second or gift, period. If a gift then it has to be seasoned no? The only gift programs that dont need seasoning are like the Ameridream example.

[MYOR]

We call these 'sellers seconds'. The seller kicks back a certain percentage of the profit from the sale at the closing to the buyer as a loan. These become the buyers funds at the closing and are typically half of a downpayment due. Most lenders are frowning on these now as this could be an indication of weakness on the buyer/borrower and/or and indication of inflated value of the property...(many times these are actually 'seller credits' or a discount to the buyer which is never even intended to be repaid, a way to get around the standard 3% seller credit cap, the note is then typically forgiven per agreement. this is all done of course just to get the property sold. we call this 'creative financing'. the purchase price is jacked up by the amount of the loan so its a no lose situation for the seller but a possible loss to the bank if the property value is inflated). In any case, it has to be disclosed up front to the primary lender who can deny it. This should be 'preapproved' via the primary lender before any negotiations to this effect occur.

Some typically more acceptable (to the lenders) 'down payment assistance' programs are programs like Ameridream www.ameridream.org (http://www.ameridream.org) , and Nehamiah www.nehemiahcorp.org (http://www.nehemiahcorp.org) . For a fee (something like 500 or 750) the seller can pay a portion of a buyers downpayment but the difference is the payment is a gift not a loan. These too have to be preapproved by the primary lender up front as well.
So basically its a sellers concession..

[jcapeverde]

Report: Subprime Mortgage Crisis Causing African Americans to Experience Greatest Loss of Wealth in Modern U.S. History

http://www.democracynow.org/2008/1/17/report_subprime_mortgage_crisis_causing_african (http://www.democracynow.org/2008/1/17/report_subprime_mortgage_crisis_causing_african)

Video Stream (http://play.rbn.com/?url=demnow/demnow/demand/2008/jan/video/dnB20080117a.rm&proto=rtsp&start=38:54)


A startling new report has predicted the subprime mortgage crisis will cause people of color to lose up to $213 billion, leading to the greatest loss of wealth in modern U.S. history. The figure appears in a new report from United for a Fair Economy called “Foreclosed: The State of the Dream 2008.” The group accuses mortgage lenders of deliberately targeting the poor and people of color with high-cost loans. We speak with Dedrick Muhammad, co-author of the report. [includes rush transcript]


Guest:

Dedrick Muhammad, Senior Organizer and Research Associate at the Institute for Policy Studies. He is the former coordinator of the Racial Wealth Gap project at United for a Fair Economy. He is co-author of new report “State of The Dream 2008.”

JUAN GONZALEZ: A startling new report has predicted the subprime mortgage crisis will cause people of color to lose up to $213 billion, leading to the greatest loss of wealth in modern US history.


The figure appears in a new report from United for a Fair Economy called “Foreclosed: The State of the Dream 2008.” The group accuses mortgage lenders of deliberately targeting the poor and people of color with high-cost loans.


According to federal data, people of color are more than three times more likely to have subprime loans. High-cost loans account for 55% of loans to African Americans, but only 17% of loans to whites.


AMY GOODMAN: Dedrick Muhammad is co-author of the report, senior organizer and research associate at the Institute for Policy Studies, former coordinator of the Racial Wealth Gap project at United for a Fair Economy, joining us from Washington, D.C.


Dedrick Muhammad, welcome to Democracy Now! Talk about your findings.


DEDRICK MUHAMMAD: Yes, Amy. Well, thank you for having me.


And I think in this time of—where there’s a lot of discussion about politics, what we are trying to reveal and what we think will be revealed over the next few years, just as Katrina a few years ago revealed the great wealth divide and how racialized this wealth divide is in this country, we’re going to see the subprime crisis do similar things.


As African Americans, Latino Americans, in particular, we’re trying to become homeowners, which is the number one source of wealth for most Americans. We see private companies taking advantage of African Americans and Latinos, putting them into loans that they could not afford, which will, in fact, actually take away the little wealth that African Americans and Latinos have been able to develop over these last thirty, forty years.


JUAN GONZALEZ: Now, the City of Baltimore recently filed a lawsuit related to some of this discrimination, didn’t they?


DEDRICK MUHAMMAD: Yes. Yes, sir. Yes, Juan. We had been in some contact actually with Mayor Dixon’s office, and what we’re seeing is that cities—and we’re going to see that states—around the country are going to realize what a dramatic effect it’s going to have on their areas, as well, because with the decrease in home value that is part of this subprime crisis, the subprime crisis is going to lead to mass foreclosures in many areas—Baltimore, D.C., in Michigan, as well, Nevada. It’s one of the—Las Vegas is one of the highest foreclosure rates. It’s bringing down the prices of homes substantially. And what that means is that property taxes are going down, so now cities and states are going to have less revenue to provide services to the people of those areas.


AMY GOODMAN: Cleveland, the mayor there also has filed suit.


DEDRICK MUHAMMAD: Oh, that’s absolutely right. And as I said, it’s going to be a national issue. And we’re already seeing some of the presidential candidates start talking about this issue. But what I haven’t heard them talk enough about is what type of policies are they going to do to support wealth-building for middle-income, working-class Americans, because over the last thirty, forty years, we’ve had policies that have really showered wealth upon the already-wealthy and have left the middle class and working class with stagnant wages and skyrocketing costs, like homeownership, like healthcare. And the middle class and working class have been looking for some way to try to cover those costs, and too many have been talked into refinancing their homes, refinancing their cars, into loans which they cannot afford, so they end up losing their homes, losing their cars and being in a worse economic situation than they were before they even started this process.


JUAN GONZALEZ: I’d like to ask you, almost a year ago, when I started doing some columns on this, on the whole subprime crisis, I was told by some business writers and also real-estate people that there was no racial discrimination involved, that this was just the reality that in the minority communities, there were a disproportionate number of people who had bad credit, and so they made the mistakes of taking out loans they couldn’t afford, and that there was no deliberate or conscious discrimination involved. Your response and what’s—and some of the evidence that’s come forth since then?


DEDRICK MUHAMMAD: Well, I think what’s clear is that whether the intent was we are going to focus on African Americans and Latinos, what’s clear is that subprime industry was focusing on the weak in our society and was trying to take advantage of people who—most people do not have the opportunity to read through the long complicated forms that happen when you refinance or when you’re taking out a home loan. And so, because of historic racism in this country, African Americans have only about a tenth of the wealth of white Americans. And again, homeownership is a primary means of wealth development. And so, African Americans are trying to, for the first time, really become majority homeowners, and the subprime industry took advantage of that situation. So whether they had in their minds they’re going to take advantage of African Americans or not, the problem is that they were taking advantage of American citizens, and this disproportionately is impacting African Americans and Latinos, but it’s also going to impact millions of working-class and middle-class white Americans, as well.


AMY GOODMAN: Dedrick Muhammad, can you talk about the connection to Wall Street and the particular companies?


DEDRICK MUHAMMAD: Well, and the way the subprime crisis has been able to develop into the point that it’s at is that there was a great financial arrangement made between Wall Street and between mortgage lenders, where mortgage lenders would take out loans from a, let’s say, a Latino American family who made a good income but had very little wealth, and would steer them into a high-cost loan and for a property that they really could not afford. And now, oftentimes in the past, mortgage lenders wouldn’t sign on to something like this, because they would be concerned about getting their money back.


But the deal they worked out with Wall Street is that they could sell this debt to Wall Street, and then Wall Street could sell it again and again and again, and you have a whole bunch of different people at different layers making money off of bad loans. So it really became to a point where mortgage lenders didn’t even care if they were going to actually get the money back from the individual they lent it to, because they knew they were making their money off of the loans being sold over and over again in Wall Street, which is why now you’re seeing major financial institutions across the country shaking from this subprime crisis, because debt had to be paid back at some point. And even though many wealthy people have made much money off of this, at some point this debt had to be collected. And so, now we’re seeing major financial institutions suffering the consequences. But who’s going to suffer the worst consequences are those who are going to have their homes foreclosed, who are going to have their credit destroyed, and have already weakened financial communities in a much worse situation.


AMY GOODMAN: Dedrick Muhammad, we will link to your report, “Foreclosed"—senior organizer, research associate, Institute for Policy Studies, worked with United for a Fair Economy on this report, “Foreclosed: State of the Dream 2008.”


--------------------------------------------------------------------------------



Damn! This will have repercussions for generations! :jpshakehead:

[julian_kelly]

J...consider buying a forclosure because you can often get a property 30% + below market value -- thats instant equity off the top without doing anything and it protects you from potential market fluctuations.


Second, know the INDIVIDUAL MARKETS in your area and don't pay attention to the nationwide hype. Despite nationwide claims, there are still many markets that have been going up despite the 'crash'.

Third, consider a fixer-upper. It is major task to renovate a house -- especially for someone whos never done it before, but if you find one in an awesome area, you can buy it for well below market value and get some good equity as a result of fixing it up. But understand the if you go the renovation route, you HAVE to know what youre doing, or your can get jacked up.

Fourth, go here and research about credit www.creditboards.com

Dont be scared meng. Theres nothing to be scared about. The more informed you are the more confident youll be, so just do your research and youll be ok. Theres always a good house to buy.

[julian_kelly]

Report: Subprime Mortgage Crisis Causing African Americans to Experience Greatest Loss of Wealth in Modern U.S. History

...A startling new report has predicted the subprime mortgage crisis will cause people of color to lose up to $213 billion, leading to the greatest loss of wealth in modern U.S. history...

On the contrarian view, this present climate will provide some of the most amazing opportunities to create wealth for communitites who take advantage of it.

Buy low, sell high = investing rule #1. There are many properties to be had at bottom basement prices.


Folk need to learn how to profit from different economic cycles.

[mhd]

On the contrarian view, this present climate will provide some of the most amazing opportunities to create wealth for communitites who take advantage of it.



unprecedented opportunities

[Fletch]

unprecedented opportunities

A good related topic on citydata.com.........

http://www.city-data.com/forum/new-york-city/239375-foreclosures-how-play-game.html

[jcapeverde]

On the contrarian view, this present climate will provide some of the most amazing opportunities to create wealth for communitites who take advantage of it.

Buy low, sell high = investing rule #1. There are many properties to be had at bottom basement prices.


Folk need to learn how to profit from different economic cycles.

True, but again that depends on the area. A house down the block from me went for 500G's recently. The house behind my other one, went for 465G's last year. About twice a month, realtors put open house signs up on my corner, for homes down the block. Here, there are some small bungalows cheap (175-300G's) that can be fixed up & flipped or rented. Just watch out for the crack dealers & stick up kids though. Most properties with extra lots next to them like mine, are being built on. My other house has a large deep backyard & another house could be put there. That may be something I'll do later, since my kids are in their early 20's now.

[Light Skinted Wif Good Hur]

Also Jamie...look into something called a "Second First Mortgage" (don't let the name scare you). They give you a second loan to add to your down payment that together will equal 20% of your home value. Thus your down payment on your primary mortgage is 20% and you avoid paying Private Mortgage Insurance (PMI). You pay the Second First loan back within five years...but you have no set payback amount except the simple interest per month. So...if something comes up one month or it's Christmas or something...you can just pay the interest that month. Gotta have the whole amount in 5 yrs though....or they will roll it back into your mortgage and penalize the hell out of your ass! Call me if you need some more info!