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4/12/2010 9:10:18 AM
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topic:
2nd mortgage
MortgageMarvel
Posts 36
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If you want to take cash out of your property as part of the refinance, your transaction is going to be considered a cash-out refinance. Even if you do not take cash out to make improvements, your refinance will be considered a cash-out refinance unless the entire proceeds of your second mortgage were used to purchase the property. This is important because cash-out refinances typically require higher down payments.
Fannie Mae and Freddie Mac, who determine the eligibility requirements for most mortgages, limit the maximum loan-to-value (LTV) ratio on a cash-out refinance to 85% of the property value for a one unit, single family residence. Also, some of the mortgage insurance companies will not insure a cash-out refinance, so in those cases you are limited to a 80% LTV ratio because 80% is the maximum LTV ratio to avoid the mortgage insurance requirement. In addition, some lenders have either stopped making cash-out refinance loans or limit the maximum LTV ratio to something lower than 80%.
So, your options are a bit more limited in obtaining a cash-out refinance, but, if you have at least 20% equity in your property and can otherwise qualify for the loan (can document sufficient income, have good credit, etc.), you should be able to get cash-out financing up to an 85% LTV. The good news is that Mortgage Marvel takes all of these eligibility requirements into consideration. You can use the Advanced Search function on MortgageMarvel.com to enter the specifics of the transaction (be sure to select a Loan Purpose of Refinance with Cash Out) and receive accurate rate quotes from multiple lenders. Select the quote that is best for you, complete your application online, and you are off to the races.
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4/9/2010 8:06:54 PM
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topic:
2nd mortgage
voiceof1
Posts 1
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We have a second mortgage but would like to try for a lower rate while perhaps making a couple improvements. How do we procede?
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3/16/2010 1:27:09 PM
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topic:
convertible ARM's
MortgageMarvel
Posts 36
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Rate quotes for adjustable rate mortgages (ARMs) on Mortgage Marvel can include both convertible and non-convertible ARM products. If a lender has a conversion option for an ARM, it is typically disclosed on the ARM program disclosure. To access the ARM program disclosure in Mortgage Marvel, click on the magnifying glass icon that accompanies each ARM rate quote. At the bottom of the pop-up, there is text that reads, “For important details regarding the terms of this adjustable rate mortgage, click here to review the specific program disclosure.” Click on “click here” to access the ARM program disclosure.
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3/16/2010 10:46:20 AM
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topic:
convertible ARM's
bettyf@landmarkcu.com
Posts 1
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Should i assume that the ARM's quoted are NOT convertible?
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2/22/2010 9:43:56 AM
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topic:
Buying vs Renting when retiring
MortgageMarvel
Posts 36
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Lenders are not allowed to discriminate based on age, so you should not be concerned about whether they will lend to someone who is your age. They will, however, ensure that your income is likely to continue at current levels. Given your plan to retire within a year or so, most lenders will base their decision on your retirement income. You will need to be able to document the amount of your retirement income to their satisfaction.
Assuming you can document your retirement income and have good credit, you should not have trouble with your debt-to-income ratio. The principal and interest payment on a 30 year fixed rate for a $160,000 loan would be $858, about 19% of your retirement income. Adding in your current monthly debt of $700 would result in a total debt-to-income ratio of about 34%. This is within acceptable levels for someone with documentable income, good credit, sufficient cash reserves, and a reasonable down payment. Speaking of the down payment, you should, If possible, put down 20% of the purchase price so you can avoid the costly expense of mortgage insurance and the approval requirements of the mortgage insurers.
Any one of the Mortgage Marvel lenders should be able to help you understand your financing options. In fact, many of them will provide an automated underwriting assessment as part of your online application. So, if you qualify, you could get an online preapproval (an approval without knowing what house you are going to buy) that will let you shop for your retirement home with confidence about your financing options.
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2/11/2010 2:09:30 PM
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topic:
Buying vs Renting when retiring
RDelano
Posts 1
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We are planning on retiring in December of 2010 or June of 2011 when should we start applying for a loan we have contacted some real estate agents in the states that we are looking to retire in and they have been sending us homes the range from #159,000 to $180,000 we will have enough to put down 10-20% on homes in this range. My question is also would is it better to find a place to rent since we are in our 60's and some loaners my not want to loan money to people our age , our retirement income will be about $55,000-$60000 per year. Also we owned a home in the 70's but sold it when I retired from the military and the only debt we have now is a car payment and a installment card with the Military exchange system which is about $700.00 a month total for about 15%percent of our monthly income. Also which income would the bank or mortage company use my present income or my retirement income?
Thank You
Ray
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1/11/2010 4:05:33 PM
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topic:
Debt to Income - Purchase another Home
MortgageMarvel
Posts 36
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For the purposes of this response, we’ll focus on the income and expense factors of mortgage underwriting with the understanding that there are other factors that could impact your ability to get a loan that you haven’t shared, like down payment, credit history and length of employment. That said, there’s nothing about your scenario that will absolutely prevent you from getting a loan, but your ownership of additional properties may limit how much you can borrow.
Lenders will typically limit a borrower’s debt-to-income (DTI) ratio to 36-45% of his/her total income. Those with strong compensating factors (e.g. higher income, higher credit score, lower loan-to-value (LTV) ratio) would be allowed to have their monthly debt obligations closer to 45% of their gross income. In your case, your debt will include the monthly principal, interest, tax, and insurance (PITI) payments on your new property, your auto loans, and some portion, possibly 100%, of the PITI payments on your existing homes.
For the residence you share with your brother, as long as your obligated to the mortgage holder, your new lender is likely to include some portion of the payment in your DTI ratio even if your brother agrees to pay the full amount. If you can demonstrate that you have only been paying half of the monthly payment, a lender may only include that amount in your monthly obligations. If you transfer the property to your brother and he refinances the existing debt without you as a coborrower, a lender would typically exclude this debt from your monthly obligations.
Your wife’s current residence will be viewed as an investment property. With a signed lease and paid security deposit to rent the property once she vacates, a lender will typically offset the PITI payment on this debt with 75% of the gross rental income, if you have at least 30% equity in the property. If you do not have 30% equity in this property, the lender will not likely allow any credit for the rental income.
In a worst case scenario, a lender would include 100% of the PITI payment on all three properties and limit your monthly debt payments to 36% of your gross income. In this case, with gross monthly income of $14,166 ($170,000/12), the PITI payment on your new property would be limited to $5,100 ($14,166*0.36). Subtracting your current mortgage and auto payments ($5,100-$3,600) would leave $1,500 for the PITI payment on your new home.
Your best option would be to talk with a loan officer to get a better handle on how much financing might be available to you. You can easily find a competitive lender on www.MortgageMarvel.com by conducting an rate search that fits your transaction, then just click on the telephone icon below the name of your preferred lender. Call the number, ask for a loan officer, and you’re off to the races.
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1/11/2010 12:45:41 PM
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topic:
Debt to Income - Purchase another Home
tiltstickels
Posts 1
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Here's the situation.
My wife and I each own a house. I own my house with my brother (current loan is 220k, $1700 per month). Her current loan is 150k ($1200 per month). We both have no credit card debt and our only combined debt is 2 auto loans ($700 total per month).
My wife and I make 170k per year. We plan on renting her house in the next few months and shouldn't have any problem getting enough to make the monthly mortgage payment a "wash".
My wife and I would like to purchase a property together. Will you be able to get a loan? How is the rental income calculated?
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12/7/2009 3:33:44 PM
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topic:
Is it woth it to refinance?
MortgageMarvel
Posts 36
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Unfortunately, we can't specifically answer your question without more information about your current loan and your motivation for refinancing. As you know, going from a 30-year fixed rate to a 15-year will increase your payment, so your analysis is different than the more typical scenario where a borrower is looking to reduce his/her payment and wondering how long it will take to offset the closing costs.
If you can afford the higher payment, it is typically in your best interest to refinance from a 30-year fixed rate loan into a 15-year fixed rate loan with a lower interest rate. You will pay less interest and pay the loan down faster, reducing the overall cost of borrowing.
To further analyze your situation, we would suggest that you shop for competitive loan programs based on your transaction details by using the Advanced Quote feature on Mortgage Marvel. Then, enter the related information about your existing loan and the rate quote you select into our Refinance Breakeven Calculator. This will tell you how long it will take to breakeven based on your scenario.
We hope this helps! Thank you for using Mortgage Marvel!
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12/7/2009 9:48:32 AM
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topic:
Is it woth it to refinance?
ed.pabich
Posts 1
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I have 23 years left on my 30 year mortgage at 6%. I plan on selling the home that this mortgage is on in about 8 years. Would it pay to refinance to a 15 year loan at the current rates?
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10/9/2009 10:48:26 AM
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topic:
Federal VA loan rates
MortgageMarvel
Posts 36
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It’s certainly possible that some lenders offer a lower rate on a VA loan than on a conventional fixed rate, but our experience is that VA rates are typically equal to or slightly above (0.125-0.250% higher rate) conventional rates. The highest value that VA brings to the market is that it is one of the few remaining programs that provides for 100% financing. If you are putting little to no money down, a VA loan may be a great option. If you’re putting enough money down to get conventional financing (5% in most cases), then you’ll want to factor the difference between the cost of mortgage insurance (required if the loan-to-value ratio is over 80.0%) and the VA funding fee into your assessment of the cost of the loan. If the VA and conventional rates are the same, the conventional program may well be cheaper, particularly as the loan-to-value ratio gets lower.
Unfortunately, MortgageMarvel.com does not provide pricing on VA loans, but many of the participating lenders offer VA loans. I would suggest you shop for conventional pricing on Mortgage Marvel. You can then use the “%” icon to conduct your same rate search on any participating lender’s site and click on the button to change the search variables. If they offer VA loans online, VA will be presented as an option under the Financing Type. If you change the Financing Type to VA and conduct another search, you can see that lender’s pricing and fees for VA loans. The VA Funding Fee is typically presented on the Total Cost pop-up.
Thanks for using Mortgage Marvel and for your inquiry!
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10/8/2009 11:14:30 AM
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topic:
Federal VA loan rates
pacific20
Posts 1
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Is it true that most lenders working with Federal VA loans take another .5 to 1 percent off the conventional 30 year fixed rate because it's a Federal VA loan? Meaning, if the current rate was 5%, a customer going Federal VA could get a rate of 4.5 to 4%?
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8/10/2009 2:01:13 PM
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topic:
Downpayment for Investment Property
MortgageMarvel
Posts 36
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For most lenders, product parameters like the maximum loan-to-value ratio (LTV) for a certain loan purpose (purchase, refinance, cash-out refinance) and occupancy (primary residence, second home, investment property) are defined by the primary purchasers of mortgages, Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac's current guidelines will not allow the maximum LTV for a 2-4 unit investment property to be greater than 75%. Because most large lenders sell their loans to Fannie Mae and Freddie Mac, you should find the down payment requirement for the transaction you mentioned below (2-unit investment property) to be 25% of the purchase price.
There are a couple of reasons why you may be getting varying answers: (1) Product guidelines have changed rapidly in recent months because of the current issues in the real estate market. Not too long ago, Fannie Mae and Freddie Mac would allow an LTV of 85%, and before that even 95%, for a 2-unit investment property. Some lenders may still be trying to catch up with the industry's new requirements and could be reflecting outdated information; (2) There are also some lenders that hold loans in their portfolio, in which case they are not subject to Fannie Mae and Freddie Mac's requirements, but rather design products based on their internal risk tolerance. It's possible that some portfolio lenders will allow a higher LTV for a 2-unit investment property.
If you are considering applying with a lender and plan on putting down less than 25%, I would recommend that you call the lender before submitting your application to be sure they will complete the financing on the terms you are looking for.
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8/9/2009 12:51:40 AM
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topic:
Downpayment for Investment Property
catboy44106
Posts 2
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Hi,
As of Aug, 2009, what are the big lenders requiring as a downpayment (range, including all costs) for an investment property, such as a duplex in the Cleveland Heights, OH (as a % of the house)? Numbers seem all over the place, thanks!
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6/16/2009 8:35:04 AM
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topic:
rental property-liablty or asset ?
MortgageMarvel
Posts 36
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We don’t have all of the details to respond specifically to your scenario. In general terms, for a rental property like yours for which you can provide a history of income and expenses, lenders will typically take the net Income or loss from the tax return, add back the depreciation, taxes, interest and insurance, and then subtract the full mortgage payment for the investment property. The result is then used in calculating the debt-to-income ratio. If there is net income, it is added to income and, if there is a net loss, it is added to expenses.
Since the property is jointly owned with your spouse, it is likely that most lenders will include the entire net loss/gain regardless of whether you apply individually or jointly. If you apply together, the lender will consider income, debts, and credit for both. If you apply individually, the lender will consider your individual income, debt, and credit, and any joint debt in its entirety.
Once you have found a lender that you would like to work with, we would suggest that you talk to a loan officer about your situation to see how that specific lender will handle things. Without further obligation, a good loan officer should be able to tell you whether your rental property will help or harm your cause and how they will handle an individual vs. joint application.
Thank you for your question and for using Mortgage Marvel!
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6/13/2009 9:57:21 PM
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topic:
rental property-liablty or asset ?
catboy44106
Posts 2
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Hi, we would like to buy a primary residence but are having a hard time determining whether our rental property will be viewed as a liability or asset. Also, as the rental is joint titled, can you tell us how the liabilities would be determined if only one of us is applying for mortgage on the primary residence? We do not intend on selling the rental property.
Some background information on the rental property. It is a duplex rental property, valued ~180k (conservative) with ~130k outstanding. Mortgage is 675/month at 4.25%. Prop tax is ~400/month, home insurance~100/month. The property generates between 750-1575/month, with one long-term tenant at 100% occupancy rate for 2+ yrs, and the 2nd being rented at approx 50-75% occupancy rate. The incomes from both units can be verified with rental leases. Mortgage is current with no late pymts.
We have been doing a lot of upgrades/repairs over the last several years so the net income from the property is listed as an overall loss on our joint income tax.
I make 75k/yr, am a professional with a PhD, and get about a 4-6k bonus/yr and am in the pharma industry. My credit score is in the 780 range for all 3 agencies according to their website.
My wifes credit score got dinged a couple of years back due to some problems with one of her graduate student loans, which is currently paid off in full.
If I, myself alone, apply for the mortgage, how will the rental be viewed and if it is viewed as a liability, can you provide me with specific numbers? For example, will the mortgage, property tax, and insurance be split in half because the other half falls under the responsibility of my wife or is that an overly simplistic approach? I would like ballpark numbers so that I can input them into a mortgage calculator and determine how much I could qualify for. We also have about 15k for downpayment and 14k for closing costs.
Thank you very much for your time and analysis!
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6/11/2009 9:36:09 AM
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topic:
'Physicians Mortgage' with no PMI?
MortgageMarvel
Posts 36
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Many lenders used to offer “New Physicians” programs with the features you describe, typically to lure new doctors into their private banking practice. Our suspicion, however, is that many of these programs may have been eliminated as bankers tightened their credit standards. Much like you found, we did a search on Google for “new physicians mortgage” and did not find many current listings for lenders that make the type of loan you are looking for. This is likely due to the fact that few banks and credit unions offer such programs and, those that do, do not display them online, but rather provide them as a tool for their private bankers to use in establishing a relationship with a new physician.
We would suggest that you call the private banking area of several local banks or credit unions to see if they have any New Physician mortgage programs. You should also see if your realtor can point you to the lender that he or she is familiar with.
Thank you for your inquiry and compliment on the site!
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6/10/2009 5:37:29 AM
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topic:
'Physicians Mortgage' with no PMI?
rickjdion30
Posts 1
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I was hopng someone could clarify the 'Physicians Mortgage' for me. My partner is an anethesiologist in his 2nd year of residency. We have begun house hunting and our realtor told us about a mortgage tailor-fit for physicians which extends certain allowances such as; no PMI and med schools loans NOT factored as part of the debt-to-income ratio. We are assuming that this is all due to the liklihood of a higher starting salary and overall earning potential. Can anyone point us inteh right direction in terms of mearning more about this and/or which mortgage companies specialize in this type of mortgage? Internet search has not yielded many worthwhile sites. Thanks - new to this site and think it's great!
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5/4/2009 8:43:20 AM
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topic:
2nd mortgage
MortgageMarvel
Posts 36
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According to information provided by the US Department of the Treasury (located here: http://www.financialstability.gov/latest/pr04_28.html), the new program for 2nd mortgages announced by the Obama administration is to be used in tandem with a 1st lien modification under the Making Home Affordable program. (You can see the requirements for Making Home Affordable and assess if you will qualify at http://www.makinghomeaffordable.gov/about.html). When a first lien modification is initiated under Making Home Affordable, participating servicers will automatically reduce payments on the second lien according to pre-set formulas determined by the Treasury. Or, if your servicer is willing, the 2nd lien can be extinguished in return for a lump sum payment under a pre-set formula determined by the Treasury. (More details are available on the Treasury’s Fact Sheet at http://www.financialstability.gov/docs/042809SecondLienFactSheet.pdf.)
If you are underwater on your current loan, you may also want to consider the HOPE for Homeowners (H4H) program offered by FHA. With this program, your loan is converted to an FHA with 3.5% equity based on the current value of your home. This is accomplished by the current servicer of your loan accepting a payoff amount that is less than your current value. There are a couple of requirements to be eligible for this program:
* Your existing mortgage must have been originated on or before January 2008
* Your existing mortgage payment (as of March 1, 2008) must exceed 31 percent of your gross monthly income (the amount of income before deductions for taxes, 401K, etc)
* You must not have intentionally defaulted and cannot have ownership interest in any other residential real estate
* You must not have been convicted of fraud in the last 10 years
* You must not provide false information to obtain the H4H mortgage.
Keep in mind that this program requires sharing any profits due to appreciation with FHA when you sell your home. For more details on the H4H program visit http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTAL.
The first step for both the Making Home Affordable and Hope for Homeowners programs is to contact the current servicer of your loan, who is in the best position to assess which program is best for you.
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5/3/2009 7:55:50 AM
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topic:
2nd mortgage
wiseguys4
Posts 1
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i heard there was some new gov. help for people with 2nd mortgages or lines of credit. how does these programs work? specifically i would be interested in converting my 2nd which is a line of credit, to a fixed rate. Can I do this without refinancing my first thru this program? i would like to leave my 1st alone at 5.5 fixed. i am currently underwater in my home with my first being a fannie mae loan.
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