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Shipon posted:It is almost always based on the original purchase price of the property. Thanks, that is helpful. But why even have an appraisal if it is based off original purchase price? e: looking over the PMI Removal Paperwork again "You will also need to obtain a certificate of Value (CoV) or an appraisal, at your expense, to confirm value of the property is at least equal to or greater than it was when the load closed". So does this mean, even though I have to pay only $8,000 to get to 80% LTV of the original loan, the fact my house has dropped precipitously in value means I won't even be able to pay it off till the market recovers (which it never will). CatchrNdRy fucked around with this message at 23:21 on Jun 17, 2011 |
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Jun 17, 2011 23:14
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CatchrNdRy posted:Does a new appraised value affect the LTV? Yes. They can require that you meet the 80% test on both the current and original values.
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Jun 19, 2011 18:31
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SlapActionJackson posted:Yes. They can require that you meet the 80% test on both the current and original values. and this is what confuses me. If my house has dropped in value, doesn't that increase the amount of money I have already invested in it? For example, if my house was 200,000 with 20,000 paid away it 10%, but if the new appraised value is 100,000 with 20,000 paid, why isn't 20%?
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Jun 19, 2011 18:50
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CatchrNdRy posted:and this is what confuses me. If my house has dropped in value, doesn't that increase the amount of money I have already invested in it? When you take a loan out, the bank pays cash for your house and then you owe them that money. Say it's 200k as in your example. So, you pay them 20k. Now you owe them 180k. Meanwhile, your house has dropped in value to 100k. So, you owe 180k on a house worth 100k. You have no equity - you're in the hole 80k. It doesn't matter that you've spent 20k... what matters is whether your equity level is high enough that the bank can accept the risk of default on your loan without it being insured. If you're not at 20% equity, the bank feels you need to insure your loan so that if you default, they'll be able to recover the full amount (after foreclosing and selling your house for whatever it's worth, the insurance would pay them the rest). So you see, they want you to re-appraise to be sure that you actually have sufficient equity. e. So to address your real question: as the value of your house drops, the length of time you will have to keep paying PMI increases, until at some point it'd be the full life of the loan (if your house could actually be worth zero dollars). This is one of the reasons why it's such a better practice to pay a 20% down payment when you buy; you avoid PMI entirely, and the bank doesn't re-appraise later to see if you should start paying it or something. Leperflesh fucked around with this message at 19:28 on Jun 19, 2011 |
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Jun 19, 2011 19:17
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Leperflesh posted:When you take a loan out, the bank pays cash for your house and then you owe them that money. Say it's 200k as in your example. So, you pay them 20k. Now you owe them 180k. Basically, always assume the worst.
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Jun 19, 2011 19:40
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CatchrNdRy posted:and this is what confuses me. If my house has dropped in value, doesn't that increase the amount of money I have already invested in it? Leperflesh did a pretty good job explaining it. It's not what you've paid vs what the house is worth, it's how much you owe vs what the house is worth. The bank wants you to owe less than 80% of what the house is worth, and in order for them to be conservative on "what the house is worth" they'll use the lower of your original purchase price or the current appraised price. For your situation this are the numbers as it seems from your post: Original Purchase: $153K Current Value (est): $123K Current Loan Bal: $130K 80% OLTV: $122K 80% CLTV: $98K So you'd need to pay down $8K based on the original purchase price, but $32K based on the current value.
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Jun 19, 2011 19:55
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Just checked out my house that is being built. Realized there are smaller HVAC returns in all 3 of the bedrooms and in the laundry room, but no main return that services the living/dining/kitchen/breakfast area. Poked my head in a few other houses and they all have a large rectangular return in the hallway ceiling near the entrance. Cannot wait to see how long this is going to take to rectify. Edit: I guess I should add the drywall is all taped, textured and painted already. hraringly bloingler fucked around with this message at 00:24 on Jun 20, 2011 |
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Jun 20, 2011 00:11
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Leperflesh posted:When you take a loan out, the bank pays cash for your house and then you owe them that money. Say it's 200k as in your example. So, you pay them 20k. Now you owe them 180k. SlapActionJackson posted:Leperflesh did a pretty good job explaining it. It's not what you've paid vs what the house is worth, it's how much you owe vs what the house is worth. The bank wants you to owe less than 80% of what the house is worth, and in order for them to be conservative on "what the house is worth" they'll use the lower of your original purchase price or the current appraised price. Thanks both. The principal of the actual loan vs. the actual value of the house worth was confusing was confusing me. Now I see, I'm screwed, but it could be worse. It seems like ordering an appraisal will be a waste of money, as an extra 22k is probably not worth saving a tax deductible $60 a month.
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Jun 20, 2011 00:37
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Bovine Delight posted:Just checked out my house that is being built. Realized there are smaller HVAC returns in all 3 of the bedrooms and in the laundry room, but no main return that services the living/dining/kitchen/breakfast area. Poked my head in a few other houses and they all have a large rectangular return in the hallway ceiling near the entrance. Cannot wait to see how long this is going to take to rectify. Are the bedrooms upstairs? If so, why would you want a return on the lower level of the house?
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Jun 20, 2011 00:59
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Cmdr. Shepard posted:Are the bedrooms upstairs? If so, why would you want a return on the lower level of the house? Single story.
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Jun 20, 2011 03:11
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Well, today was the big day. I closed on my very first house this afternoon. As soon as I closed, I went over and changed the locks, cracked open a bottle of Yuengling and basked in the glory of home ownership. Then within 2 minutes of standing there I counted out at least 10 other things I want to do sooner rather than later. And my Amazon better hurry up and get me my lawn mower, the previous occupant hasn't mowed in a while.
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Jun 21, 2011 03:05
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Can anyone here tell me more about what it means to go into underwriting?
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Jun 21, 2011 03:39
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It means the quality control department is reviewing your application and other paperwork. They have the final say on whether or not the loan gets approved.
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Jun 21, 2011 04:14
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Let me elaborate. My FICO is 700. We're applying for a Utah Housing loan, which requires 660+. My wife has no FICO but has established credit through a car loan (5 months old) and 2 credit cards (3 months old, 1 month old) and 4 alternative sources of credit (bills w/ her name on them with good payments for 12+ mos). The mortgage is through Wells Fargo. We're attempting to purchase a house for 228k and we make 100k a year between the both of us. I obviously have decent credit, but the problem is, she makes more than I, and has no credit score. Will the underwriters accept her alternative form of credit or are we hosed until they post a credit score which may, or may not be 660?
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Jun 21, 2011 04:19
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It sounds like you flunked the automatic underwriting because you need her income to qualify, but she has no score. So now a real human in the underwriting department will look at the file and see if you can be manually approved. It depends on the underwriting standard being used by that bank.
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Jun 21, 2011 05:10
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I wouldn't think you would have a problem getting through manual underwriting in your scenario. Worst case you go with an FHA loan instead. The FHA will need manual underwriting as well, but it should be easily approved. My sister shuns all forms of banking and has no credit score and she was able to get an FHA loan w/ alternative lines of credit with no issue.
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Jun 21, 2011 15:36
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hunter x az posted:Let me elaborate. What is your down payment?
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Jun 21, 2011 18:08
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Is anyone familiar with real estate in St. Louis (county areas)? My wife and I will be moving there soon (from Kansas City, about 250 miles away) for a job and we are having a poo poo time finding reasonable rentals and are now bringing buying in to consideration. Here's our stats:
Downpayment Available: ~$70,000 (~75% of our savings) FICO: ~660 and ~720 Debt: ~$3,000 (car) The major problem that we have with buying (outside of the normal DNB stuff) is that we are only planning on staying in St. Louis for around 3 years. We are definitely the type that will buy a home for the lifestyle benefits knowing full well the pitfalls, but we had always planned to stay in our first home for a much longer time. However, rental units that we've actually liked (which haven't been many) are relatively insane: $1800-$2200/mo for a 2 bed/2 bath within a reasonable distance of my place of employment. Our search effort is also complicated by having to drive back and forth to look for places. We'd be looking at houses at around the $300,000 mark and some help with the analysis if we were to go with a 5yr ARM would be great. Property taxes for houses around the areas we're looking would be about 1.1% and it's likely we'd have an HOA. Any advice? Do never buy?
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Jun 21, 2011 21:04
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entr0py posted:Is anyone familiar with real estate in St. Louis (county areas)? Well I think that you should try negotiating the rental prices with a longer term lease. The relator expense in selling a 300k house is going to be $21,000 assuming you can get what you pay for the house. That pays for one years worth of your 3 years lease.
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Jun 21, 2011 21:24
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A three-year time period is pretty horrible for buying a house. Even with an ARM, you have to consider the large transaction costs. When you sell, for example, you will have to pay 6% of the sale price in commissions, on top of other potential costs. When you buy, you'll pay a bunch of money in various fees and costs. I think you'd be crazy to risk 75% of your savings on an asset that costs so much to buy and sell, which is also quite likely to (continue to) depreciate. Rent may be really high, but it's also risk-free. But sit down and do all the math. Figure out what your sunk costs will be, estimate your mortgage + taxes + insurance + utilities, add in anything else you'd need when buying a house (furniture, appliances, etc.), add a reasonable budget for maintenance of the house, and then figure out the cost of selling. Then divide that by 36 months and see how it compares to rent. Then weigh the risk factors - what if you buy a $300k house and then it declines in value by $40k? Does that make rent more attractive, or is the house still more attractive? I suspect that you'll find rent to be the better option.
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Jun 21, 2011 21:25
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Exactly how low are you expecting a $300,000 mortgage to be? With a 20% down payment at 4.5% that is still $1200/mo in principal and interest, $300 for taxes, and with insurance and HOA fees you are probably looking at close to the $1800/mo rentals. Only $300 of that is actually going towards your principal for the first few years anyways. Not to mention you will be eating 6% in realtor fees ($18,000) when you move in 3 years that is essentially $500/mo more being thrown away. Plus the risk of the house decreasing in value. Or taking a while to sell. You are risking a lot of money purchasing for only 3 years. And what the gently caress St. Louis, $1800/mo for a 2 bed/2 bath? Is that what $300,000 getting you as well or do you get a proper house for that? Are there no "For Rent" signs up in the neighborhoods you would be looking to purchase in?
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Jun 21, 2011 21:27
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I'm thinking maybe he's only looking at glossy pamphelets or newspaper listings or something, because even just a glance at the St. Louis craigslist apts/housing for rent list shows that prices aren't nearly that high.
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Jun 21, 2011 21:31
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entr0py posted:Is anyone familiar with real estate in St. Louis (county areas)? My wife and I will be moving there soon (from Kansas City, about 250 miles away) for a job and we are having a poo poo time finding reasonable rentals and are now bringing buying in to consideration. Here's our stats: You would have to have an incredibly distorted buy/rent disparity in the area for it to make sense to buy.
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Jun 21, 2011 21:42
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Leperflesh posted:I'm thinking maybe he's only looking at glossy pamphelets or newspaper listings or something, because even just a glance at the St. Louis craigslist apts/housing for rent list shows that prices aren't nearly that high. I would guess that St Louis is similar to Atlanta where there is a huge suburban housing market but also some business districts that command a premium and he wants to live in one of those for a short commute.
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Jun 21, 2011 21:44
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Arzakon posted:I would guess that St Louis is similar to Atlanta where there is a huge suburban housing market but also some business districts that command a premium and he wants to live in one of those for a short commute. It's this combined with the fact that we don't really have a desire to live like college students. St. Louis traffic is a loving nightmare and 10 mile commutes are around 30-45 minutes on the routes I'd be taking. A 5/1 ARM would be closer to 3.1% which makes the totals much closer to the cost of renting in the range we're looking at for 3 years, even with transactional fees factored in. That much house would be a step up from the rentals we've seen, but that alone isn't a major factor. I also don't want to speculate on the market, and depreciation is always a possibility. I'm probably just projecting my frustration with finding a rental at this point and just wanted to explore the idea of buying. DNB (probably).
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Jun 21, 2011 22:17
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3.1% would get you knocked down into $1500-1600 PITI range with $400 of that going to principal. The 6% base transaction costs are what are going to be what murders your ability to break even with renting. Not to mention betting your $60,000 down payment that the housing market stays stable in your area 3 years down the road. If your job is stable and you realize that this may be a terrible financial decision its up to you to decide whether you want to lose the extra money for the lifestyle. You can clearly afford it with your income.
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Jun 21, 2011 23:31
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entr0py posted:Is anyone familiar with real estate in St. Louis (county areas)? My wife and I will be moving there soon (from Kansas City, about 250 miles away) for a job and we are having a poo poo time finding reasonable rentals and are now bringing buying in to consideration. Here's our stats: The other thing to consider, if you're dead set on buying and living somewhere for only 3 years, with the knowledge that you are going to be sacrificing some of your down payment & risking more - I would consider looking for a house at a lower price point than you were originally planning, if that's feasible in the area.
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Jun 21, 2011 23:53
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Possible to rent a house? It will likely cost less than buying and reselling. Also less risk involved if the market continues to drop.
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Jun 22, 2011 00:02
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NM, Thanks!
DrSeRRoD fucked around with this message at 11:21 on Jun 22, 2011 |
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Jun 22, 2011 00:06
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entr0py posted:we don't really have a desire to live like college students. What does this even mean? Not spending an arm and a leg on housing isn't just for college students.
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Jun 22, 2011 00:10
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Cmdr. Shepard posted:What does this even mean? Not spending an arm and a leg on housing isn't just for college students. It's window-dressing for "we want to live an upper-middle class lifestyle", which at $145k a year and with no debt, they can likely afford, but perhaps (and it's quite a conjecture based on one phrase) they're not being honest with themselves about. Or to be less glib: it suggests a fallacious binary-choice that is very common when making these kinds of decisions. "Either we must live in a slum, or we must live in a mansion" would be an exaggerated version. Whereas the reality is that there's a continuum of rental property between college dorms and palatial mansions, and somewhere on that continuum, entr0py should be able to find accommodations that are a good compromise between budget, convenience, size, and amenities. If he's only finding rents that are too high for his taste, he can adjust his criteria mildly to find a compromise without actually having to "live like college students".
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Jun 22, 2011 00:32
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Cmdr. Shepard posted:What does this even mean? Not spending an arm and a leg on housing isn't just for college students. I took it as him not wanting to live in a large style apartment complex. If I was this guy I would be looking for higher end downtown loft style apartments. I have no clue what St. Louis is like, but they should be able to find a nice 2/2 high end apartment in a trendy area for a reasonable price. There's no way in hell I would buy a house in his situation. If I was in a DINK situation I would totally be all over the downtown lifestyle (assuming my work was downtown as well)
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Jun 22, 2011 01:16
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skipdogg posted:If I was in a DINK situation I would totally be all over the downtown lifestyle (assuming my work was downtown as well) Just as a point, that is totally personal preference. Wife and I are in DINK situation and prefer to have more quiet, a yard, and other amenities not afforded even by the nicest of apartments.
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Jun 22, 2011 01:18
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alreadybeen posted:Just as a point, that is totally personal preference. Wife and I are in DINK situation and prefer to have more quiet, a yard, and other amenities not afforded even by the nicest of apartments. My husband and I are in a DINK situation, we rent, have a yard, quiet, and I think pretty much every amenity you get with a house (central air, garden, garage, etc) for less than what it would cost us to buy a comparable place with the added bonus of not having to pay for water, sewer, heat, lawn care, garbage, or snow removal!
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Jun 22, 2011 01:59
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sheri posted:My husband and I are in a DINK situation, we rent, have a yard, quiet, and I think pretty much every amenity you get with a house (central air, garden, garage, etc) for less than what it would cost us to buy a comparable place with the added bonus of not having to pay for water, sewer, heat, lawn care, garbage, or snow removal! Don't disagree, I would advocate he looks for a rental home!
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Jun 22, 2011 02:16
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alreadybeen posted:Don't disagree, I would advocate he looks for a rental home! This does sound like the perfect option. Three years is just too short a time.
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Jun 22, 2011 03:15
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skipdogg posted:I took it as him not wanting to live in a large style apartment complex. It's more this than anything else when I was referring to 'living like college students'. The affordable rentals we've looked at were largely dominated by buildings of this nature, and they're mostly century-old rehabs. We're going to loosen our constraints on the areas we are looking in and which gives us several options for rental homes.
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Jun 22, 2011 05:52
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MLS is probably the best place to look for rental homes/condos, if you aren't aware.
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Jun 22, 2011 14:51
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I'm interested in purchasing within the next 18 months, and my interests are narrow enough that it will take at least that long for the right opportunity to come up. I've exchanged a few emails with the lender a realtor I've been talking with recommended, and was hoping to get some perspective on evaluating lenders - what should I be looking for? What's the advantage of using a third-party lender instead of my current bank (ING)? If I fill out an application with this lender, does that commit me to anything or have any impact on my ability to choose a different lender going forward? Basically, I'd like to get a solid estimate from a lender so I know what price range I'm working with (yes, I've gotten estimates from all the online calculators) but not commit to a specific lender until I've got a bit more information on them and the potential transaction. If this has been answered before, let me know.
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Jun 22, 2011 19:33
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alreadybeen posted:What is your down payment? The down payment was 3.5%, but it's included in a fully financed loan as a second mortgage. Deal is off though. No way we can do that loan without having a FICO for my wife. We're going to have to do a regular FHA loan with the down payment ourselves out of pocket.
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Jun 22, 2011 22:07
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