AngryBMW Posted October 19, 2015 Report Share Posted October 19, 2015 4.125 Not terrible. Equity position? I have 3.75% on any term you want between 20-30 years (can keep the same payoff if you'd like) with minimal costs. -Marc Quote Link to comment Share on other sites More sharing options...
RS69 Posted October 20, 2015 Report Share Posted October 20, 2015 I would be more than happy to have an in-depth conversation with you regarding your situation and financing options. Feel free to shoot me an email at mstock@usavingsbank.com and I will do my best to give you more information that you may ever want about the home buying process. Thanks! Marc Listen to Marc and take his advise. I personally don't know,him but he makes very good posts in regards to this. I have shopped around and Union Savings offered the best mortgages in my opinion and they have mine. Quote Link to comment Share on other sites More sharing options...
street pilot Posted October 21, 2015 Report Share Posted October 21, 2015 Not being a jerk...I'd love to hear more about this... They do still require a down payment...just not 20%. And it is an adjustable rate program if I remember correctly. -Marc Yes, as little as 5% down. My main goal here was to dispel the belief a buyer MUST put at least 20% down to avoid private mortgage insurance. It's simply not true. As of a couple years ago this particular program was available in a 30-year fixed rate format. What additional information do you want? There's not much to it. Quote Link to comment Share on other sites More sharing options...
AngryBMW Posted October 21, 2015 Report Share Posted October 21, 2015 Yes, as little as 5% down. My main goal here was to dispel the belief a buyer MUST put at least 20% down to avoid private mortgage insurance. It's simply not true. As of a couple years ago this particular program was available in a 30-year fixed rate format. What additional information do you want? There's not much to it. I called my buddy at State and got the run down. It is a decent program but they of course penalize you with the rate. There are other options as well which include LPMI or BPMI to avoid the monthly cost. If you will live there longer than 5 years, either of those options are better than monthly MI. Remember that MI is also a write off. Trust me, I am in the business and HATE MI. It does nothing for the consumer and I would love to get rid of it in general...but that isn't a reality. If you want to avoid it, the BEST option is to save up and put 20% down. -Marc Quote Link to comment Share on other sites More sharing options...
street pilot Posted October 21, 2015 Report Share Posted October 21, 2015 I called my buddy at State and got the run down. It is a decent program but they of course penalize you with the rate. There are other options as well which include LPMI or BPMI to avoid the monthly cost. If you will live there longer than 5 years, either of those options are better than monthly MI. Remember that MI is also a write off. Trust me, I am in the business and HATE MI. It does nothing for the consumer and I would love to get rid of it in general...but that isn't a reality. If you want to avoid it, the BEST option is to save up and put 20% down. -Marc When I was shopping, the rate "penalty" made more financial sense than a loan with PMI. As a result, I disagree with your statement - the best option is not always to put 20% down. The best option is not always FHA. The best option depends on the individual situation of the buyer. There's an opportunity cost involved with renting while you save up for a 20% downpayment, and there is also a risk of interest rates rising while you build a nice savings. It sounds like for the original poster a 20% downpayment won't be a problem, so that may be his/her best option. Others may need to evaluate their options. Quote Link to comment Share on other sites More sharing options...
AngryBMW Posted October 21, 2015 Report Share Posted October 21, 2015 When I was shopping, the rate "penalty" made more financial sense than a loan with PMI. As a result, I disagree with your statement - the best option is not always to put 20% down. The best option is not always FHA. The best option depends on the individual situation of the buyer. There's an opportunity cost involved with renting while you save up for a 20% downpayment, and there is also a risk of interest rates rising while you build a nice savings. It sounds like for the original poster a 20% downpayment won't be a problem, so that may be his/her best option. Others may need to evaluate their options. I will respectfully disagree with you on most points. Conventional financing is always better than FHA if you can come up with 5% down as opposed to the FHA requirement of 3.5% down. That is a fact, not an opinion. Yes, it is true that every situation is different but if you compare apples to apples, an FHA loan is more expensive in every way compared to a conventional loan. PMI eventually drops off...even though it does take a long time if you go with the monthly option and do not accelerate your principal payment(s). Your rate stays the same for the life of the loan. The only way to drop you rate would be to refinance which of course also has a cost. Unless you refinance with my bank, you will end up paying 1500-3000 just to refinance...again, what is the 'no mi' worth? The penalty in a higher rate will ultimately cost you more than the amount you will pay with mortgage insurance; be it in monthly or an upfront bulk payment. Let's be conservative and probably quite unrealistic and say the 5% down no MI option would be a .25% difference in interest rate (.25% higher than par). Assuming 95% LTV and 740+ credit on a 100k loan amount, that would be $4500 in monthly PMI if you paid it to term. Or, if you paid upfront, that would be $2150. Conversely, the .25% higher rate would cost you almost $6000 more in interest. Not saying you made a poor financial decision...but you may have. Food for thought. -Marc Quote Link to comment Share on other sites More sharing options...
street pilot Posted October 21, 2015 Report Share Posted October 21, 2015 I will respectfully disagree with you on most points. Conventional financing is always better than FHA if you can come up with 5% down as opposed to the FHA requirement of 3.5% down. That is a fact, not an opinion. Yes, it is true that every situation is different but if you compare apples to apples, an FHA loan is more expensive in every way compared to a conventional loan. PMI eventually drops off...even though it does take a long time if you go with the monthly option and do not accelerate your principal payment(s). Your rate stays the same for the life of the loan. The only way to drop you rate would be to refinance which of course also has a cost. Unless you refinance with my bank, you will end up paying 1500-3000 just to refinance...again, what is the 'no mi' worth? The penalty in a higher rate will ultimately cost you more than the amount you will pay with mortgage insurance; be it in monthly or an upfront bulk payment. Let's be conservative and probably quite unrealistic and say the 5% down no MI option would be a .25% difference in interest rate (.25% higher than par). Assuming 95% LTV and 740+ credit on a 100k loan amount, that would be $4500 in monthly PMI if you paid it to term. Or, if you paid upfront, that would be $2150. Conversely, the .25% higher rate would cost you almost $6000 more in interest. Not saying you made a poor financial decision...but you may have. Food for thought. -Marc Fair enough. As I mentioned, my main goal here was to establish 20% down is not needed to avoid PMI. Your calculations make a significant assumption that the homeowner will keep the mortgage for the entire term. I noticed you also did not allow for the cost of rent while a prospective buyer (who has ~5% but not 20% to put down) works toward a 20% lump sum. You did not address the concern of the rising interest rates during this savings period, and if your scenario requires a refinance the potential interest rate difference at that time. I appreciate your concern, but I am comfortable with the financial decisions I've made. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted October 21, 2015 Report Share Posted October 21, 2015 Not terrible. Equity position? I have 3.75% on any term you want between 20-30 years (can keep the same payoff if you'd like) with minimal costs. -Marc I'm at 3.625%. Anyone looking to refi, feel free to shoot me a PM. http://generator-meme.com/memes/oprah-you-get-a-car_55c3edba83e587940.jpg Quote Link to comment Share on other sites More sharing options...
coltboostin Posted October 21, 2015 Report Share Posted October 21, 2015 Real talk-I know Marc pays for advertising here so I wont step on his toes, but I can and often close Refi's and Purchases for people with 580 FICO, and sometimes less. Yes, you, the guy with poor credit everyone says cant approve you for a loan-I may be able to help! We have both helped a lot of CR members. Always defer to the experts! Quote Link to comment Share on other sites More sharing options...
AngryBMW Posted October 22, 2015 Report Share Posted October 22, 2015 Fair enough. As I mentioned, my main goal here was to establish 20% down is not needed to avoid PMI. Your calculations make a significant assumption that the homeowner will keep the mortgage for the entire term. I noticed you also did not allow for the cost of rent while a prospective buyer (who has ~5% but not 20% to put down) works toward a 20% lump sum. You did not address the concern of the rising interest rates during this savings period, and if your scenario requires a refinance the potential interest rate difference at that time. I appreciate your concern, but I am comfortable with the financial decisions I've made. I agree there are alternatives to paying mortgage insurance. I'm glad you pointed out the portfolio option...there are other lenders that offer it as opposed to State and at different down payment options. The point of my calculations was to show that the higher rate option is not always the best bet...and that even paying mortgage insurance you can save monthly. No one is arguing that MI is a good[i/] thing. I am also not suggesting that putting 20% down is the only smart way to buy a home. I easily could have put 20% down but I didn't...my money is earning more for me each month than the MI is costing me and I am quite happy with that. I would argue that renting is wasting money but, as you said, every person is in a different situation. I'm happy you are comfortable in your situation. I'm at 3.625%. Anyone looking to refi, feel free to shoot me a PM. I also have 3.625%...but 3.75% is at less than $400 in cost. -Marc Quote Link to comment Share on other sites More sharing options...
gillbot Posted October 22, 2015 Report Share Posted October 22, 2015 Not terrible. Equity position? I have 3.75% on any term you want between 20-30 years (can keep the same payoff if you'd like) with minimal costs. -Marc I'm at 3.625%. Anyone looking to refi, feel free to shoot me a PM. http://generator-meme.com/memes/oprah-you-get-a-car_55c3edba83e587940.jpg[/] Marc, I never did get back with you on refi. Shit, I don't even remember what you needed now. When is the best time to get in touch with you? Quote Link to comment Share on other sites More sharing options...
AngryBMW Posted October 22, 2015 Report Share Posted October 22, 2015 Marc, I never did get back with you on refi. Shit, I don't even remember what you needed now. When is the best time to get in touch with you? Shoot me an email or call any time that works for you. 614-339-1206 or mstock@usavingsbank.com Thanks! Marc Quote Link to comment Share on other sites More sharing options...
SloSVTruck Posted October 23, 2015 Report Share Posted October 23, 2015 Hmmmmm i may have to get in touch with you, i purchased a house in april with a 203k loan and am paying PMI on my loan.... At some point i want to refinance to get rid of it.... my total loan is 128k, but the work we did to the place im thinking it should be worth around 140-150k now.... hoping that would be able to get rid of any PMI i am paying. At the same time i thought someone had told me i have to keep the loan for at least a year before i try to do anything with it??? Quote Link to comment Share on other sites More sharing options...
Turbs3000 Posted October 24, 2015 Report Share Posted October 24, 2015 Marc will be a good resource for you but my guess would be... Evan at a valuation of 150 you'd need to be at 120 to remove mi. You could go conventional so at least your MI will fall off on its own as I don't believe the current fha ones do anymore. Either option may kill you on costs and fees though. Assuming you can't make a large payment to your loan you may be best riding it out for a bit. What's your plans on staying in the house? Quote Link to comment Share on other sites More sharing options...
SloSVTruck Posted October 24, 2015 Report Share Posted October 24, 2015 Marc will be a good resource for you but my guess would be... Evan at a valuation of 150 you'd need to be at 120 to remove mi. You could go conventional so at least your MI will fall off on its own as I don't believe the current fha ones do anymore. Either option may kill you on costs and fees though. Assuming you can't make a large payment to your loan you may be best riding it out for a bit. What's your plans on staying in the house? Yea i was doing some math on that after i posted, wish i knew what the place was really worth now..... may have to do an appraisal at some point. Plan to stay for a while i think, my interest rate is at 3.75% right now im pretty sure.... which is good for the 203k loan. Just hate paying that stupid pmi. If it was worth 160k thatd be 20% and i would be good. But im not sure it would value that high.... Quote Link to comment Share on other sites More sharing options...
AngryBMW Posted October 24, 2015 Report Share Posted October 24, 2015 Yea i was doing some math on that after i posted, wish i knew what the place was really worth now..... may have to do an appraisal at some point. Plan to stay for a while i think, my interest rate is at 3.75% right now im pretty sure.... which is good for the 203k loan. Just hate paying that stupid pmi. If it was worth 160k thatd be 20% and i would be good. But im not sure it would value that high.... Feel free to give me a call or email and we can chat about your options. 614-339-1206 is my office or mstock@usavingsbank.com. The cost for our appraisal is only $250.00 and we will refund it to you at closing (assuming you close). That would be your biggest risk to see if it makes sense to refinance. Even if you don't have 20% equity, conventional PMI is less than FHA PMI so it may still make sense. -Marc Quote Link to comment Share on other sites More sharing options...
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