Posted on: 06th Oct, 2008 11:59 am
Hello everyone,
My fiance and I are looking to buy our first condo and we are not sure what we should do. I'll try to give as much detail as possible without boring everyone so here goes...
We're looking at a brand new construction condo in Brooklyn NY for approx 525K that won't be finished until December of this year. We were planning on putting 10-15% down and estimate closing cost to be about 30K with the transfer taxes etc... The seller estimates that we would be able to close at around Feb 2009 once they get the CO approved but everyone I've spoken to said thats being very optimistic. They don't think the CO would be done so fast and April/May is more realistic.
My problem is this. We would need to borrow about 475K from the bank which as of today is still considered a non confirming loan but not jumbo due to the economic stimulus plan. I've spoken to CHASE and they are no longer offering that to customers unless they could close by 12/1/08 so he would be enrolling me into a Jumbo loan which we were approved for at 7.4%. Our loan officer said this will only be temporarily to satisfy the seller and we would enroll in the new plans once they know what they are at the end of the year. My problem is that with new construction condos there isn't a mortgage contingency clause in there and its a bit risky no knowing exactly what plan is going to available next year and if the rates will go up or down when i close. Theres no word that congress will extend the current stimulus plan so that my loan of 475 won't be considered jumbo. Another problem is that with everything going on in the news recently banks are changing their requirements weekly. At first 10% was a min. down payment and now its 15% for Chase with atlwast 50% of the condo complex already sold. HSBC told us that whey wouldn't even consider a mortgage unless 90% of the condo complex is already sold. Two different banks telling us two very different things. We don't want to sign the contract without any mortgage contingency in there and risk losing 50K if we can't get a mortgage 6 months down the line. Any advice guys?
Thanks,
Alan
My fiance and I are looking to buy our first condo and we are not sure what we should do. I'll try to give as much detail as possible without boring everyone so here goes...
We're looking at a brand new construction condo in Brooklyn NY for approx 525K that won't be finished until December of this year. We were planning on putting 10-15% down and estimate closing cost to be about 30K with the transfer taxes etc... The seller estimates that we would be able to close at around Feb 2009 once they get the CO approved but everyone I've spoken to said thats being very optimistic. They don't think the CO would be done so fast and April/May is more realistic.
My problem is this. We would need to borrow about 475K from the bank which as of today is still considered a non confirming loan but not jumbo due to the economic stimulus plan. I've spoken to CHASE and they are no longer offering that to customers unless they could close by 12/1/08 so he would be enrolling me into a Jumbo loan which we were approved for at 7.4%. Our loan officer said this will only be temporarily to satisfy the seller and we would enroll in the new plans once they know what they are at the end of the year. My problem is that with new construction condos there isn't a mortgage contingency clause in there and its a bit risky no knowing exactly what plan is going to available next year and if the rates will go up or down when i close. Theres no word that congress will extend the current stimulus plan so that my loan of 475 won't be considered jumbo. Another problem is that with everything going on in the news recently banks are changing their requirements weekly. At first 10% was a min. down payment and now its 15% for Chase with atlwast 50% of the condo complex already sold. HSBC told us that whey wouldn't even consider a mortgage unless 90% of the condo complex is already sold. Two different banks telling us two very different things. We don't want to sign the contract without any mortgage contingency in there and risk losing 50K if we can't get a mortgage 6 months down the line. Any advice guys?
Thanks,
Alan
hi ak,
welcome to our forums.
do you mean that the loan officer intends to enroll you for a jumbo and then he'll ask you to refinance into a non-conforming loan? well, i agree with you that it's not easy to know what rates you'll get next year and whether you can afford the new plan. so, what i feel is, this whole transaction looks a bit messed up. and obviously not all banks would consider the same criteria for lending. so, yes, they'll say different things to you. it won't be a good idea to lose the $50k after all. and when you don't know whether you'll get a mortgage, things look pretty tough.
the best thing is to look out for a home in which the construction is complete by now. trying for a mortgage on such a home is much easier. at least you won't be concerned about when the construction would be complete.
good luck
welcome to our forums.
do you mean that the loan officer intends to enroll you for a jumbo and then he'll ask you to refinance into a non-conforming loan? well, i agree with you that it's not easy to know what rates you'll get next year and whether you can afford the new plan. so, what i feel is, this whole transaction looks a bit messed up. and obviously not all banks would consider the same criteria for lending. so, yes, they'll say different things to you. it won't be a good idea to lose the $50k after all. and when you don't know whether you'll get a mortgage, things look pretty tough.
the best thing is to look out for a home in which the construction is complete by now. trying for a mortgage on such a home is much easier. at least you won't be concerned about when the construction would be complete.
good luck
thanks for the info.
My guy at Chase said since I'm borrowing more than 417 but I won't be able to close to get the non conforming rate that Bush passed he'll have to enroll me in a jumbo loan for now since the seller is going to want to see a commitment letter from the bank 45 days after we sign the contract. We wouldn't actually close with this jumbo loan in hopes that they'll extend the stimulus plan into 09 or that they raise the conforming limit higher than 417.
Has anybody heard anything for 09 yet? When does this information usually come out to the public?
Thanks
Alan
My guy at Chase said since I'm borrowing more than 417 but I won't be able to close to get the non conforming rate that Bush passed he'll have to enroll me in a jumbo loan for now since the seller is going to want to see a commitment letter from the bank 45 days after we sign the contract. We wouldn't actually close with this jumbo loan in hopes that they'll extend the stimulus plan into 09 or that they raise the conforming limit higher than 417.
Has anybody heard anything for 09 yet? When does this information usually come out to the public?
Thanks
Alan