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Old 01-11-2010, 09:53 PM
 
4 posts, read 8,573 times
Reputation: 10

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I was considering to purchase a town house in atlantic station (the one on 16th street). Since this will be my first home purchase, my wife and I spent almost over half a year to look for our dream home. We were ready to put an offer, so I asked my loan officer to prepare me a loan commitment letter that I planned to submit with my offer. However, the loan officer told me that the lenders stopped funding the loans to all Atlantic Station properties starting 2009 summer/fall due to recent staggering numbers of loan defaults in this area. That's even with 20% down payment

Is this true??

I haven't talked with any other loan officers yet... i figured out that city-data forum members will have answers and some advices as well.
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Old 01-11-2010, 10:40 PM
 
1,114 posts, read 1,989,857 times
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Quote:
Originally Posted by tjrcs View Post
I was considering to purchase a town house in atlantic station (the one on 16th street). Since this will be my first home purchase, my wife and I spent almost over half a year to look for our dream home. We were ready to put an offer, so I asked my loan officer to prepare me a loan commitment letter that I planned to submit with my offer. However, the loan officer told me that the lenders stopped funding the loans to all Atlantic Station properties starting 2009 summer/fall due to recent staggering numbers of loan defaults in this area. That's even with 20% down payment

Is this true??

I haven't talked with any other loan officers yet... i figured out that city-data forum members will have answers and some advices as well.
A question...why do you need an FHA loan on 20% down? When I was looking, the FHA loans were only good if I was bringing under 10% down.

Take a peek at some of the nearby units that were recently sold on Zillow. I've seen units in Twelve go for 30% of what they last sold for in '05-'06. Even the federal gov't doesn't want to dip their toes in that train wreck. If you can't find a 30 yr traditional at reasonable rates, then maybe the area is too toxic for anybody's taste and you should re-evaluate your offer.
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Old 01-12-2010, 07:37 AM
 
2,683 posts, read 5,198,547 times
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Best bet is to call a mortgage broker who work with several lenders and is up to date on the current guidelines and see what they say.
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Old 01-12-2010, 09:44 AM
 
4 posts, read 8,573 times
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I prefer to have minimum down payment to minimize the sunken cost since there is still possibility that RE market could continue to decline. Hence, putting down 3.75% (~$7k)is far less risky than putting down 20% (~$45k) that took me 3-5 years to save up.

I am very aware that the Atlantic Station area will be surely risky investment. But I like the location (very close to my work even tho I travel often to different metro area from time to time) and the size of the townhouse (perfect for married couple w/o children). My plan is to live here for about 5-7yr and move to suburb when kids become old enough for preschool. Then, rent out this townhouse for side income.

I'll get a second opinion from different loan broker regarding loan availability in Atlantic Station area tho.
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Old 01-12-2010, 09:55 AM
 
9,124 posts, read 32,738,423 times
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Quote:
Originally Posted by tjrcs View Post
I prefer to have minimum down payment to minimize the sunken cost since there is still possibility that RE market could continue to decline. Hence, putting down 3.75% (~$7k)is far less risky than putting down 20% (~$45k) that took me 3-5 years to save up.
How is having a lower DP and higher mortgage balance any less risky unless you plan to default on the loan and walk away? If values continue to decline and you have to sell at a loss in the future, you either lose the DP $$ or you have to come out of pocket to pay off a loan thats higher than the sale proceeds- in either case you're out the $$.

Of course, if you're worried about risk, the simple fact that FHA won't write a loan there should be a red flag for you either way.
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Old 01-12-2010, 10:33 AM
 
1,114 posts, read 1,989,857 times
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I agree w/ Bob...planning for failure should give you pause on this decision. If you don't want to risk your money and FHA doesn't want to risk their money, the place is still overpriced. If all else fails, use it as a negotiation tactic.

If you only have $45k in savings, definitely don't put it all on the house. But rather than increase your leverage w/ a FHA loan, why not look for something 30-40k cheaper? I'm not sure if you're looking at the smaller 1,200 sqft ones or the 1,600 sqft version but they have all taken a crushing drop in prices I'm sure there are homes that fit your needs where you're not contemplating abandoning before you sign the papers.

Looking on Zillow, the 1,600 sqft places that went for 400k+ ~'04 are now in the low 200's. You may pick up one at that price but now you have a neighbor that paid 200k more than you. Every penny they they put toward principle goes into the ether for the next 2 decades. The few that did put any money down saw that vanish by end of '07. Each house that sells at 200k cements the reset price and the remaining owners are now looking for exit strategies which usually involve dumping it on the bank and letting them sort it out. Unless you're positive all the original homeowners are gone or modified their loans down, you're still only a foreclosure or two away from $170k price points.
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