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About choiceworthy

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  1. Congratulations! I agree that it should be smooth sailing here on out regarding the mortgage.
  2. I have seen many FSBO transactions proceed smoothly with no attorneys involved other than the title company. The problem with FSBO is finding a home! I have yet to see any FSBO site that can compete with the MLS database in any way, shape, or form.
  3. Disclosure is a wonderful thing, I wish they mentioned the caps and margin. When I read your description it seemed the loan might actually make sense for some situations until I read the next bit of fine print. The ad assumes the index (six mo libor?) will remain unchanged which is not a safe assumption in this environment. It appears to me the payments could skyrocket in a lot less than five years. Even the fine print makes it appear at first like they are getting a 5/6 ARM with a teaser rate which can work well for some people, but reading further it looks as though they are getting a 6 mo ARM which is a lot more scary even if it is I/O for five years.
  4. This will be an issue with any program offering a decent rate. Are you prepared to take legal action? I would get it going as soon as possible. At the very least I would demand the phone company who is reporting the derogatory information to produce documentation immediately or remove the information from the credit bureaus. You need to prove to the credit bureaus it is not your debt and you have no time to waste.
  5. What would your father's ratios be? DU will often give an approval with ratios pushing 65% if everything else is tight, and the rental income that firstsource mentioned does not usually need to be verified with any more than the appraiser's opionion of market rent value. If the down payment is coming from other family members you could deposit it in your father's name and let the money season a couple months since this is a private sale and it appears the seller might be willing to wait, or you could put your father on an existing account and provide a letter that the money is his to use at his discretion. The lender could order a VOD to show seasoning and it would not show how long your father has been on the account. As firstsource mentioned, if your father went Alt-A he would probably have to go no-doc because of his fixed income status but his credit scores might still possibly get a better rate than if the loan had to go subprime with everyone else on the it, and if you all can put 20% down a no-doc should be a slam dunk and no verification of anything needed. There are several investors who have no problem with putting people on the title that are not on the loan. If you all are putting less than 20% down and the credit issues are not from current derogatories, FHA might be something to take a look at also.
  6. It is all just rough guestimates. You actually cannot add the MI and rate together like that for an accurate number. When I split the numbers and input them properly the final sum is actually about eighty bucks higher corresponding closer to 10.5% overall. The point is the mortgage insurance is a determining factor in some situations and that is not usually negotiable. Hopefully your lender has a better rates available than MGIC for your situation and hopefully the 7% guess on the rate was on the high side so you can get into the sixes, especially if you are being charged loan origination fees or other points. That calculator is pretty quick and handy but they should have a field for inputting the hazard insurance. Do not forget to add that to the yearly tax estimate field for budgeting.
  7. 100k over FHA limits in most of NM would put you in the neighborhood of 270k. With that size loan with an EA3 approval you should be able to get a 30yr rate closer to 7%. The mortgage insurance (per MGIC quote) would be 2.9% with a credit score of 553. If you could get the determining credit score up to 575 it would reduce the MI to around 1.8%. Please understand the numbers are making a lot of assumptions and are very much guesswork. Going by them, though, you would need to figure a combined rate (rate plus MI) to be pushing 10% for budgeting purposes. You can often beat the cost by purchasing with a 2/28 or 3/27 subprime ARM that builds the MI into the rate which is often much lower. During the fixed period the intention is to rebuild your credit then refinance when you can get more favorable terms. There is many other things to consider and it is not for everyone but it is food for thought. Alternatively, you could consider purchasing in Santa Fe county. They have much higher FHA limits
  8. The expanded level initiative makes it possible for borrowers with past credit issues to get a conventional loan although with rates ranging up to around 1.5% over what you would get without a level. EA3 is the highest risk grade that is eligible for FNMA delivery. It is a wonderful program if you do not have to pay mortgage insurance. With a low credit score and a high LTV your biggest concern is not usually the rate, but what the mortgage insurance will cost. A- MI rates are usually based on credit score even if you get a reduced level. It can be astronomical on expanded programs. If you can qualify for FHA that is often the way to go, or failing that you can usually find a cost effective alternative in the subprime world utilizing no-mi rates.
  9. In the case of a borrower renting, they will want to see cancelled rent checks to verify the the current living expenses. In some cases they will want to see a twelve month history to verify rent has been current or will usually accept a Verifification of Rent from a qualified property management company. People who pay cash for a private rental often find themselves pissing against the wind when they go for a mortgage. Any evidence of fraud on the closing documents gives the lender the right to call the loan at their discretion. Sometimes a loan will close and the questions arise in post closing when the loan hits the secondary marketing table. If the investor does not wish to purchase it the lender will not want to keep it in their warehouse line. I have heard of issues arising that were actually the fault of the LO who greased the documents to get the loan closed. It still came back on the borrower because they also signed the incorrect documents. Regarding capital gains, you would need to consult with a qualified tax expert but I have heard it said that capital gain are shielded by rolling into the new house.
  10. It looks like that stepup program sets the rate and terms, and only the only plan available is the 30yr. The only thing I would add to the doctor letter is if you can get the doctor to specifically mention "significant improvement not expected within the next three years" or something of that nature. Underwriters can be real sticklers on that three year thing and are unwilling to make assumptions. It is very frustrating for someone in your position but in the big picture their strictness helps keep the program solid enough to keep it available. You have the system to deal with on both sides, the loan and the income. The frustration does not double. It is squared!
  11. Oops, I was brain-dead yesterday when I looked at your ratios. Removing the student loans would not put you inside of published guidelines, but they would still be within often acceptable AU findings.
  12. No. Whether or not you escrow, the taxes and insurance are still calculated into the ratios.
  13. Underwriting will want to verification of how much you pay for current living expenses. If you say your home is paid for, they will probably ask for proof. Assuming decent credit a DTI over 50 can still get a conventional approval on an investment home. I do not know whether you have taken it into consideration, but on an investment purchase you can also use 75% of the proposed rent (usually based on the appraiser's opinion of the market rent value) for qualifying income even if you decide not to rent it out right away after you purchase it.
  14. In this case disclosure is a moot point. It only needs to be on one report to get the underwriter's attention. Some lenders are willing to disregard judgements withing varying parameters of age and/or size but rate shopping can force a dramatic attitude adjustment when going with some of them.
  15. That pretty much sums it up. Disregarding academic discussions of who does what and when and where and why and how, I think we are all in agreement that the bottom line is that if a judgement exists it ultimately needs to be disclosed and dealt with. My very first comment in this thread was indulging in a bit of hypothetical conjecture of what a borrower might be able to get away with and by itself was incomplete and misleading. I appreciate the fact that subsequent discussion forced the relevant issues on the table.