Posted on: 08th Aug, 2010 07:23 pm
help!! i need to refi my current home in order to bring my dti in line for a construction - perm loan. current home details are 135,000 first mortgage +
110,000 second home equity loan, current payoff for 1st & 2nd combined is 213,000, home appraised at 250,000 even, with no pmi on current loan.
you've probably already guessed where i'm headed with this, but the thought of spending 8-9,000 in closing costs due to added 4,500 worth of pmi makes me sick especially when you consider this house will most likly be sold once new construction is complete in about a year. but wait, i've got it the perfect solution . that never been touched 54,000 line of credit on the above same house. i'll write myself a check for 25,000 from the credit line & put it in my savings until closing. at closing i can use that 25k to pay for all closing costs plus buy down the first mortgage from 213k - 199k bringing it in line for a conventional loan. we will subordinate the 25k line of credit and cap it mooving it from third position to second. briliant, it's the old piggy back loan to avoid pmi trick but better since there's no additional closing cost for the line of credit just a small subordination fee. my friend chris who owns a small loan brokerage firm made a few calls and agreed the plan was solid. at this point i should fill in some blanks. my median fica is 787, my wifes is 775, & our dti is not an issue. after sending them our complete financial autobiograghy (full doc and then some) the underwriter called chris and said nice try, but sorry you'll have to do an fha (pmi) on this one. i'm about to blow a gasket . if i were an iresponsible moron there would be several special programs to choose from, but it seems when trying to act in a responsible financialy prudent manner the federal guidlines are loaded with additional fees and regulatory bs. please help i don't understand why the more expensive version of a piggy back loan is ok yet the above more efficiant & logical version is not? is there actually a guidline preventing this or was it more likely an individual underwriter decision?
110,000 second home equity loan, current payoff for 1st & 2nd combined is 213,000, home appraised at 250,000 even, with no pmi on current loan.
you've probably already guessed where i'm headed with this, but the thought of spending 8-9,000 in closing costs due to added 4,500 worth of pmi makes me sick especially when you consider this house will most likly be sold once new construction is complete in about a year. but wait, i've got it the perfect solution . that never been touched 54,000 line of credit on the above same house. i'll write myself a check for 25,000 from the credit line & put it in my savings until closing. at closing i can use that 25k to pay for all closing costs plus buy down the first mortgage from 213k - 199k bringing it in line for a conventional loan. we will subordinate the 25k line of credit and cap it mooving it from third position to second. briliant, it's the old piggy back loan to avoid pmi trick but better since there's no additional closing cost for the line of credit just a small subordination fee. my friend chris who owns a small loan brokerage firm made a few calls and agreed the plan was solid. at this point i should fill in some blanks. my median fica is 787, my wifes is 775, & our dti is not an issue. after sending them our complete financial autobiograghy (full doc and then some) the underwriter called chris and said nice try, but sorry you'll have to do an fha (pmi) on this one. i'm about to blow a gasket . if i were an iresponsible moron there would be several special programs to choose from, but it seems when trying to act in a responsible financialy prudent manner the federal guidlines are loaded with additional fees and regulatory bs. please help i don't understand why the more expensive version of a piggy back loan is ok yet the above more efficiant & logical version is not? is there actually a guidline preventing this or was it more likely an individual underwriter decision?
What reason did the undewritier give for not being able to do a conventional loan?
You gave us the entire scenario minus the reason a conventional loan can not be done. We could spend hours guessing why. Just tell us.
You gave us the entire scenario minus the reason a conventional loan can not be done. We could spend hours guessing why. Just tell us.