Posted on: 07th Feb, 2007 07:48 pm
ok well we are well underway to building a house now and we have a few decisions to make, the biggest is if we do a true 100% or if we do an 80/20 loan.
I know if we do the 100% then we have to get pmi, but if we get an 80/20 we might get a higher interest rate on the second 20% part but the total payment might be less.
can any one confirm this stuff and tell me anything else I may need to know? thanks
I know if we do the 100% then we have to get pmi, but if we get an 80/20 we might get a higher interest rate on the second 20% part but the total payment might be less.
can any one confirm this stuff and tell me anything else I may need to know? thanks
silentneko,
I currently cannot view the links since I am accessing this site from my phone. I will be able to view the site 4:30 pm (PST) and provide you my response.
Also, the national average for a 30 year fix is at 6.21%.
Thanks
I currently cannot view the links since I am accessing this site from my phone. I will be able to view the site 4:30 pm (PST) and provide you my response.
Also, the national average for a 30 year fix is at 6.21%.
Thanks
Hi,
To start with the GFE for the FRM.
1) Origination fee ($2049) -
They are charging you 6.75 and there is origination fee also. This is one of the items which can negotiated and brought down. For me it is too high.
2) Title Insurance Fees ($1899)
In Florida for a purchase price of $205000, the title insurance generally do not go higher than $1300.
Let me go through the rest of it.
Blue
To start with the GFE for the FRM.
1) Origination fee ($2049) -
They are charging you 6.75 and there is origination fee also. This is one of the items which can negotiated and brought down. For me it is too high.
2) Title Insurance Fees ($1899)
In Florida for a purchase price of $205000, the title insurance generally do not go higher than $1300.
Let me go through the rest of it.
Blue
good info guys keep it all coming
"I forgot to ask in my last post, but if I do a 100% FHA loan (if there is one) doesn't that get rid of PMI?"
With a FHA mortgage you would be able to avail downpayment assistance program from a non-profit organization.
With a FHA mortgage you would be able to avail downpayment assistance program from a non-profit organization.
silentneko, second mortgage in the 80-20 loan is a 10.875% & 2nd mortgage fees are listed as $1893. what's included in it? the second is a heloc?
Hi Silenneko,
In the items required to be paid in advance section -
One thing you should know is that prepaid interest is charged from the closing date to the end of the month. Suppose you close on 12th, you will have to pay 18 days of interest. Closing after 27th or 28th of the month or at the beginning can be quite different from the point of view of amount you have to pay.
Colin
In the items required to be paid in advance section -
One thing you should know is that prepaid interest is charged from the closing date to the end of the month. Suppose you close on 12th, you will have to pay 18 days of interest. Closing after 27th or 28th of the month or at the beginning can be quite different from the point of view of amount you have to pay.
Colin
ok I'm not familiar with certain terms, what is HELOC.
so what about the actuall monthly payment on the 100%, which is what I'm most concerned about. is it anywhere in the ball park? and is it me or does the PMI look a little high?
so what about the actuall monthly payment on the 100%, which is what I'm most concerned about. is it anywhere in the ball park? and is it me or does the PMI look a little high?
silentneko,
I'm working on an analysis of your two offers and will get that to you later tonight. I can tell you in the meantime that FHA doesn't offer 100% financing, only 97%. Furthermore, the FHA loan has a monthly mortgage insurance payment and also a lump sum amount which is added to your loan amount. FHA is a great program for people with less than perfect credit or very little credit. For your situation, I think there are better loan program choices.
I'm working on an analysis of your two offers and will get that to you later tonight. I can tell you in the meantime that FHA doesn't offer 100% financing, only 97%. Furthermore, the FHA loan has a monthly mortgage insurance payment and also a lump sum amount which is added to your loan amount. FHA is a great program for people with less than perfect credit or very little credit. For your situation, I think there are better loan program choices.
The answer to this depends on what you feel is important to you:
One Loan- one payment, one due date, possibly no PMI depending on the program---A little bit higher interest rate due to the fact No PMI would be on the loan, if its available. You can deduct interest and NOT PMI, but IRS is changing that this year--you may be able to.
80/20 Loan- lower rate on the first mortgage at 80% loan to value, lower payment and no PMI. 2nd loan higher rate but lower balance at 20% loan to value of the property. Two payments at the first of the month or they could have 2 seperate due dates. Two checks to be written each month.
Neither one, in my opinion is better than the other. It all depends on what is comfortable for you.
One Loan- one payment, one due date, possibly no PMI depending on the program---A little bit higher interest rate due to the fact No PMI would be on the loan, if its available. You can deduct interest and NOT PMI, but IRS is changing that this year--you may be able to.
80/20 Loan- lower rate on the first mortgage at 80% loan to value, lower payment and no PMI. 2nd loan higher rate but lower balance at 20% loan to value of the property. Two payments at the first of the month or they could have 2 seperate due dates. Two checks to be written each month.
Neither one, in my opinion is better than the other. It all depends on what is comfortable for you.
Hi Sharlee,
You mean to say one can go for 100% financing even without PMI but he may have to pay slightly higher interest rate. The PMI is deductible in the current year, so one has to pay less tax to the IRS. But one can also deduct mortgage interest on his tax return.
I think one has to compare how much he can save by deductions this year in both cases and then decide upon the right option. But one has to consider that the PMI may not be deductible for the entire loan term. Hence it may be advantageous to go with a single loan at slightly high rate of interest if at all one can find such a lender.
Thanks,
Sara
You mean to say one can go for 100% financing even without PMI but he may have to pay slightly higher interest rate. The PMI is deductible in the current year, so one has to pay less tax to the IRS. But one can also deduct mortgage interest on his tax return.
I think one has to compare how much he can save by deductions this year in both cases and then decide upon the right option. But one has to consider that the PMI may not be deductible for the entire loan term. Hence it may be advantageous to go with a single loan at slightly high rate of interest if at all one can find such a lender.
Thanks,
Sara
from looking at your scanned gfe's it looks like the 80/20 loan is 45.00 less than the 100% loan per month.
now ask yourself, would writing two checks be worth the $45.00 savings per month? most would say yes. the rates are not unreasonable. the fees are standard. its stressful buying a home, but once you have your piece of paradise to look at and live in every day, you'll be glad.
also, a mortgage is not a 'life sentence'. values go up, balances go down, you can refinance. have a nice glass of water and meditate for a few. you'll be fine. go for it!
now ask yourself, would writing two checks be worth the $45.00 savings per month? most would say yes. the rates are not unreasonable. the fees are standard. its stressful buying a home, but once you have your piece of paradise to look at and live in every day, you'll be glad.
also, a mortgage is not a 'life sentence'. values go up, balances go down, you can refinance. have a nice glass of water and meditate for a few. you'll be fine. go for it!
There are lenders who will do 100% without PMI. The rates are not as pretty as a 6.375%. There is a reason for PMI, it allows the person to get into a home without money down. PMI is an 'insurance' premium paid by the homeowner on behalf of the mortgage lender in case of foreclosure the loan is paid off by the PMI, however, the ex-homeowner has this reported on the credit report.
Here it is from a lender's perspective: a big part of this comes down to your FICO score - looking at your GFE's, I see two issues. A 30 year fixed rate should be lower than the rate of the first on the 80-20. Second, the rate on the second is too high - a rate of 10.875 usually applies to a non owner occupied property.
Fees look pretty normal. The idea of an 80-20 was to be able to write off all of your interest because PMI was not deductible. It is now, however. The 80-20 will always bring a lower payment unless you fall in a special first time buyer program.
You may ask your lender to check, but very often a 75-25 loan will work out even better. Good Luck!
Fees look pretty normal. The idea of an 80-20 was to be able to write off all of your interest because PMI was not deductible. It is now, however. The 80-20 will always bring a lower payment unless you fall in a special first time buyer program.
You may ask your lender to check, but very often a 75-25 loan will work out even better. Good Luck!
Post Your Comment