First Home Buyers Grant

phil answers:

When you buy a house, your first home buyer mortgage is secured (guaranteed) by collateral aka the house. Your lender won’t give you money for anything other than the collateral. If you are making a down payment and/or you have built in equity (buying below appraised value), you have the potential to refinance your mortgage or take out a home equity line of credit (HELOC), but I highly discourage you from doing either.

The issue with taking equity out of your home is that you are removing the cushion that can save you in times like these. I’ll use a real world example of someone I know: purchased home in 1998 for $92K. Refinanced and took out a HELOC making total owed on house $160K by 2005 (at that point they had virtually no equity). In 2006, ran into trouble keep up with mortgage payments. Tried to sell home for $145K, bank refused. Lost home to foreclosure. If those same people had left their original mortgage alone, and still tried to sell in 2006, they would have made $53K before commissions. Instead, their credit is destroyed and they lost the place they called home for nine years.

This article does a good job of summing it up: http://mortgages.weblogsinc.com/2006/07/26/using-home-equity-to-pay-off-credit-debt/

phil answers:

Bank of America would have many of the same “First Home Buyer Mortgage” programs that every other lender that utilizes Fannie Mae/Freddie Mac loan products does. To get into some of the really good FTHB programs, consult with your state housing authority. In Iowa and Wisconsin, for example, the programs are administered by IFA (Iowa Finance Autority) and WHEDA(similar agency). Many of these are true First  home buyer mortgage programs; down-payment assistance loans/grants, very attractive interest rates and caps on closing costs. Most of the major lenders in your area would know about what your state has to offer and that’s where I would ask first; your Primary Financial Institution (Credit Union or Bank or reputable Mortgage Banker/Broker).

Many people get hung up on First Home Buyer Mortgage programs  and ask for it up front. In truth, this can be an open invitation to an unscrupulous mortgage person to put you into the same loan as they would anyone else and charge you a higher Origination/Discount/Broker fee for their “extra” trouble. Do not be fooled with this. Having been in the mortgage business myself for many years, I have seen this first hand.

Bank of America is going through some major changes. A few months ago, B.O.A. Became a major share holder in Countrywide, with the backing of Berkshire/Hathaway and Warren Buffet (Geico man). Most recently B.O.A. Expressed interest in aquiring an even bigger stake in Countrywide and many insiders believe they will end up with a huge chunk of CW.

Ultimately, you should look and your Primary financial Institution first for your mortgage advice (not a realtor for heavens sake) and for first home buyer mortgage as it is about who you have a relationship with and who you trust. If that is B.O.A., then go there. If not, go to your credit union or bank where you have your other accounts. Chances are they will help you as much as anyone make the best financial decisions.

phil answers:

There are a few things that can happen, but normally if you have reached this stage of the approval, you would normally be ok.

You should and have the responsibility to stay abreast of the procedures as they unfold. So you should get the telephone numbers or all the professionals involved in your transaction. The title company, escrow closing agent, loan consultant, real estate agent, insurance agent and any other you have had contact with.

Make sure that if there are things needed from you, make sure you get them to the requesting party immediately. This will prevent unnecessary delays in your Transaction.

Always ask if things are going ok and if there is anything necessary for you to do. Find out when the loan docs are to be prepared and ready for your signature.

Make sure when you do sign loan docs you have spoke with your loan consultant to find out the interest, length of the mortgage, monthly mortgage payment, late penalty.

Now when you sign your loan docs they should match exactly what you and your loan consultant discussed. If not please don not sign the loan docs, call your loan consultant and discuss t his discrepancy with him/her.

Signing the loan docs will lock you into the first home buyer mortgage with no way out. So make sure everything is correct on the loan docs.

Once the loan docs have been signed you should find out when the loan will fund that this the day the lender will wire the mortgage to the title company.

You should make sure you are in contact with with your closing agent to set up a date and time for your closing.

The main thing is to stay in constant contact with those that are helping you and not wait for them to call you. They are working for you and you are paying them in the form of fees and points.

I hope this has been of some use to you looking for first home buyer mortgage, good luck.

“FIGHT ON”

phil answers:

If you could get a FHA loan the minimum required down is a 3.5% out of $140K that would be $4900. On a $140,000 loan the monthly payments would be with a 7% (worst case scenerio) fix interest rate would be is $931.42. You have to add taxes to that $931.42 monthly payment which vary froms state to state. In CA it is about 2% which would be aroud $230 extra a month. So you guys are probably seeing a total of about $1200 a month. That is totally duable with both your incomes. Ask yourself if one of you guys loses their work can the other one make the payment? Good luck.

Also you may have to get Private Mortgage Insurance (PMI).
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.

phil answers:

Yes there is a way, some banks allow you to do what they call “stated income, stated assets” that is a program that allows the borrower to state their income to whatever (within reason) to make them qualify for the loan. The down side is the intrest rate is a little higher than normal usually about .50 of a %. With that kind of down payment I could get him into a home fairly easy, and depending on his credit score he may not have to put all of his money down. Email me if you are intrested, i can give you more advise or even help you out with it.

phil answers:

Now there will probably be many that will disagree with me but here goes….

I’m a Realtor and I have experience first hand as the market and the mortgage industry was changing. The brokers were not able to close deals as often (didn’t say they couldn’t) as they could in the past.

Brokers shop for loan products and lenders already have them. And most of all, the brokers which are able to get you a loan through a traditional lender, has their cut in the process fees.

My advice is to get through an online site such as bankrate.com (I’m sure there’s others) and see who has the best rate and go talk with them about their closing cost fees to compare. It’s a little work, but you will save in the end.

Lastly, as I represent sellers and an offer has a pre-approval from a mortgage company, I don’t give it the same consideration as a direct lender.

phil answers:

No. An investment mortgage is regular. If it is not owner occupied it is an investment, pretty simple to understand.

phil answers:

Try to get information on the internet for a 100% loan and for first home buyer mortgage.