[Daddys///M3]

Originally Posted by Tiger Beer

Interesting thread.

I'm actually thinking of a 2-bedroom condo...and that GV at 65,000 sounds real interesting.

However, someone else in this thread mentioned it is outrageous to take out a housing loan now, as they would charge high interest rates, you'll need to cover most of it? Anyone else want to confirm that?

Not true. Although some lenders do have a pricing hit for loans under $100,000, others do not. If the lender does the rate would be around 7.25%, based on an FHA loan with 3% down and a credit score of 680+. The lender that does not shows a rate of around 6.5%. This is an owner occupied scenario though, so if the purchase is an investment than that does not apply.

Originally Posted by barryhussein

It's going to be a lot harder than normal. If you have great employment history w/2 years tax returns, and FICO 750+, and a 20% down payment, and find one in a decent hood, you will be alright. They may try to get you for 7.5% or so. If anyone knows differently, by all means, let us know.

Definitely not true. Conventional loans can be had with 10% down from a 680+ FICO, FHA loans can be had with 3% down from a 580 FICO, and VA loans don't require any money down and similar credit requirements to FHA loans. Keep in mind that there may be pricing hits for condo property types, and that the development must be Fannie Mae or FHA approved, depending on which loan program. Again, this is for owner occupied properties. Investment properties will require 20% down, but better pricing will be had with 25% down.

Originally Posted by Tiger Beer

I always wonder, what if a guy had very steady employment for YEARS but outside of the United States.

I've been teaching English in Korea and Japan the last seven or eight years. So two years of recent tax returns is a bit problematic, but I do have excellent credit having paid off a couple hefty school loans and 0 owed on many much-used American credit cards over the years!

Perhaps I'll have to inquire once I'm visiting the States this Winter.

I think that presents more of a problem than the small loan amount. What is the plan regarding employment once back in the states? Are you planning on remaining overseas and renting the place out? Second/vacation home?

[barryhussein]

Originally Posted by lvkewlkid

how do you know Jose doesn't have a SSN? Was that information (his SSN status) even relevant?

Apparently it is in Nevada. The escrow officer had to sign a statement acknowledging this fact, that became a part of the deed.

[eggman67]

What a great post!

I learned a lot on that one.

[olecapt]

Originally Posted by barryhussein

Apparently it is in Nevada. The escrow officer had to sign a statement acknowledging this fact, that became a part of the deed.

Gotta be a legal resident at least to sell without witholding. Normally ignored in the hispanic areas. Is the legal thing to do though.

[Tiger Beer]

Originally Posted by Daddys///M3

I think that presents more of a problem than the small loan amount. What is the plan regarding employment once back in the states? Are you planning on remaining overseas and renting the place out? Second/vacation home?

If it is easier to get a loan while being gainfully employed abroad, then I would strongly consider getting a loan to buy something with the idea of it being a vacation home or renting the place out.

But, at some time, I would be coming home from living abroad, and would want to live in it, and a bit unsure about who my employer might be at that time.

I guess I'll have to inquire a bit on the possibilities when I'm in Vegas on my Vegas visit later this winter.

[Daddys///M3]

Originally Posted by Tiger Beer

If it is easier to get a loan while being gainfully employed abroad, then I would strongly consider getting a loan to buy something with the idea of it being a vacation home or renting the place out.

But, at some time, I would be coming home from living abroad, and would want to live in it, and a bit unsure about who my employer might be at that time.

I guess I'll have to inquire a bit on the possibilities when I'm in Vegas on my Vegas visit later this winter.

Vacation home would be easier than an investment property. The rate and terms would be better as well.

However, in all honesty if you were to come back to live and could find employment it would be easiest to structure it as an owner occupied residence. It might take some work, proving work history abroad and whatnot, but income calculations could be made off of the current employment with little to no consideration of income made abroad or taxes paid or not paid.


EDIT: I also wanted to add that I just noticed that barryhussein mentioned something about the desirability of the neighborhood in his analysis of current underwriting guidelines. Aside from a condo or townhome being FNMA or FHA approved and warrantable, the neighborhood does not matter. We are absolutely not allowed to base underwriting decisions on the location of a property, with very few exceptions. The HUD good neighbors next door program requires the property to be located in certain revitalization areas and USDA rural loans require properties to be located in rural areas, other than that location cannot even be a consideration.

[barryhussein]

If they would loan in a neighborhood with a bunch of foreclosures, no wonder they have lost two trillion Dollars. Some places that are FHA approved, when they are built--aren't any longer. The loan guidelines change like the wind. Two years ago, Jose borrowed 160K on a condo, without an SSN. Today, you may not be able to borrow 20K, on the same unit. But, let's say you paid 60K and wanted to borrow 30K. They are going to charge you 400 for an appraisal, and their will be about a thousand worth of junk fees. Whether or not the appraiser actually goes inside will remain to be seen. Then they are going to add .5% for it being a condo, then they are going to suprise you at closing with an early payoff penalty. Just pay cash and demand a low price. Paying for the pimp and ***** party can be costly.

If the appraisers were legit, you wouldn't have places appraised at 140K, selling for 49K. BTW, the people at the Assessor's Office are supposed to be certified appraisers.

[olecapt]

Originally Posted by barryhussein

If they would loan in a neighborhood with a bunch of foreclosures, no wonder they have lost two trillion Dollars. Some places that are FHA approved, when they are built--aren't any longer. The loan guidelines change like the wind. Two years ago, Jose borrowed 160K on a condo, without an SSN. Today, you may not be able to borrow 20K, on the same unit. But, let's say you paid 60K and wanted to borrow 30K. They are going to charge you 400 for an appraisal, and their will be about a thousand worth of junk fees. Whether or not the appraiser actually goes inside will remain to be seen. Then they are going to add .5% for it being a condo, then they are going to suprise you at closing with an early payoff penalty. Just pay cash and demand a low price. Paying for the pimp and ***** party can be costly.

If the appraisers were legit, you wouldn't have places appraised at 140K, selling for 49K. BTW, the people at the Assessor's Office are supposed to be certified appraisers.

Nahh. Wive's tales mostly. Jose may have gotten taken a bit as the immigrant support systems sometimes get a little whacky. There is not and never was a requirement you have a SS number to buy a home.

If you are seriously into RE investment a little leverage is sensible. I don't see any problem at the moment with buying with 25% or 33% down. Same cash produces similar revenue but the appreciation is significantly better...and they will appreciate again. Maybe a year or even two but this is to will pass.

Most of the bad mortgage practices went aways with the option ARMs. Normal mortgages have rational costs.

In general the appraisers are OK. Only problem I have with them is a tendency to "get with it". In a down mark they start appraising down and in an up market they appraise up. Suppose to be on the market not leading it. And they should trail the market a percent or so based on how they are supposed to work.

I follow the literature in that industry and they worry about it. How do you appraise with REPOs and nonREPOs present in the same market? Price lines are at least 20% apart. Proper thing to do is blend it to represent what is selling in the neighborhood.

[Daddys///M3]

Originally Posted by barryhussein

If they would loan in a neighborhood with a bunch of foreclosures, no wonder they have lost two trillion Dollars. Some places that are FHA approved, when they are built--aren't any longer. The loan guidelines change like the wind. Two years ago, Jose borrowed 160K on a condo, without an SSN. Today, you may not be able to borrow 20K, on the same unit. But, let's say you paid 60K and wanted to borrow 30K. They are going to charge you 400 for an appraisal, and their will be about a thousand worth of junk fees. Whether or not the appraiser actually goes inside will remain to be seen. Then they are going to add .5% for it being a condo, then they are going to suprise you at closing with an early payoff penalty. Just pay cash and demand a low price. Paying for the pimp and ***** party can be costly.

If the appraisers were legit, you wouldn't have places appraised at 140K, selling for 49K. BTW, the people at the Assessor's Office are supposed to be certified appraisers.

With all due respect, who lost 2 trillion dollars? If we won't lend in a community with foreclosures, how will that neighborhood ever recover? You're not necessarily wrong about the warrantibility of a condo. I've seen a complex that is FHA approved but not FNMA approved which does not make sense. $400 is for an FHA appraisal, conventional appraisals can be as low as $300 or less. The appraiser always goes inside the property. The rates that I quoted earlier did not have any hits for property type. As far as junk fees go, what is a junk fee in your opinion? Do you have an aversion to people making money? If large commercial banks and mortgage lenders were legit, you would not have the large amount of REO inventory driving the price down, don't blame the appraiser.

I see you keep bringing up "Jose". Is this a real person? Why do you keep bringing him up? Do you know that it has been proven that illegal immigrants have a lower default rate on mortgages than citizens?

Olecapt is right regarding leverage. Put enough down to cash flow on the property but remain liqquid. Equity is just money that you cannot not use.

[barryhussein]

Jose is a real person. I never said he ways illegal. He just didn't have an SSN, and was able to buy a condo in GV for 160K. But if you don't think that the Hispanics are are a big part of the foreclosure mess; you must live in a cave.

If Freddie and Fannie marked their assets to market, they would show about a 2 trillion Dollar loss.
The US Banks have already written down 600 Billion, and the European Banks, about the same. They are holding thousands of REOs on their books at double what they are worth.