Anonymous Posted January 6, 2003 Report Share Posted January 6, 2003 With a score of 630 what would the chances of getting a descent mortgage if the home we are buying is being purchased at significantly below appraisal value...by about 25,000-30,000 in instant equity??? and our income is double what the mortage would be for? Just curious...any thoughts or observations? Thanks Link to comment Share on other sites More sharing options...
Anonymous Posted February 21, 2003 Author Report Share Posted February 21, 2003 See your other thread for more info, but...http://www.debt-consolidation-credit-repair-service.com/cgi-local/cutecast/cutecast.pl?forum=8&thread=2986The lender isn't concerned about how much equity your going to have in your home once you move in.Loan to Value, (LTV), is how much you owe on the home comparted to the market value.Lenders, in the event of a forclosure, expect to only recover about 80% of the market value. Which is why they make you pay PMI to cover the amount you owe if over 80%LTV, to insure that money so they aren't going in the whole, sometimes, it makes sure they come out a little ahead.Getting a new home loan is a little different.The LTV is the same compared to the market value of the home, but for new loans for a home, they 'compute' things a little different.If you make a down payment of 20% of the purchase price, they consider that 80%LTV for getting qualified for a home loan, regardless of market value.20% down, ensures you'll get the best rate.Lenders (typ) consider 5% money down, as a 95% LTV loan, which you'll get a bit of a higher rate; regardless of market value. You may purchase the home for 100k, and it would be worth 200k, but the lender considers that new purchase loan as a 95%LTV LOAN with a 5% down payment.100% finace. OR 0% down, is in the lenders eyes, a 100% LTV loan, and your rate is going to be a bit higher becuase of that.I'm not at the office, and rates vary from lender to lender, with only knowing your beacon score, if your getting a "conforming" 30 year FIXED rate loan, and your rate is over 6.25-7.5%F, consider getting a GFE from another company.Just be careful not to get your credit pulled a bunch of times from shopping around, it may drop your score even more.Those rates are not quotes based on your score, and are not the best rates of the day.Conforming or not, get a GFE from another company that will compete for your buisness.Be sure they are open, comfitable, and willing to disclose closing costs and 3rd party fees to you once you get the GFE from them. Link to comment Share on other sites More sharing options...
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