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Old 04-06-2008, 07:01 PM
 
220 posts, read 694,388 times
Reputation: 74

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Quote:
Originally Posted by okaydorothy View Post
We jsut bought a vacation home with 20% down and a 30 year fixed rate. It is our fourth home that we have bought and we have always done a fixed rate.Nothing like knowing what your payment will be.

We also always have put down 20% so we have some equity in it from day one.
d
The problem is that no matter how much you put down, the market determines the amount of true equity in your home. We put down 30% and took out a 30-year fixed-rate mortgage, in 2005. Our house has depreciated. If we were to sell now, our equity -- the amount we'd actually receive after paying off the mortage -- would be far less than the cash we put down.

In addition to the 30% down we added CAC and did a bit of renovating, which would "normally" add to the value of the home.

Since the current market is what determines our home value, putting down 30% with a 5.85% fixed-rate mortage did not automatically give us equity. Even taking into account that it would typically take 5-7 years either to break even or see a gain on a home, we're still behind. We've been here three years, no longer have that huge lump of cash earning interest and own a home that we're just watching devalue. Important to us because we did want to move in that 7-year timeframe, which supposedly, and even on this thread people are saying, is typically safe. But not necessarily, not in this market.
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Old 04-07-2008, 12:55 AM
 
1,303 posts, read 2,147,850 times
Reputation: 329
Default Hold on now...

Quote:
Originally Posted by rocafeller05 View Post
Just thought I would throw out my 2 cents since Im doing the mortgage thing right now. Wow, how times have changed since the "melt down". I have excellent credit and this is what the banks want for the current rate(5.75%)

1) 20% down min.
2) 5% has to be your own $
3) 4 months of banking statements
4) 1 month of pay stubs

Im thinking these tough regulations are going to drop the LI real estate market a bit more. As I said before, I think next March will be the bottom.
These tough regulations are actually the norm. We have simply returned to it. I went through the same thing in 99/2000 and was told to expect as much. They are about to loan out hundreds of thousands of dollars, everything noted above in my opinion is completely reasonable. It was always 20% down, the banking statements confirm your savings rate and income flow, and one month of pay stubs should take a few minutes to pull together. Now the down payment can be quite a challenge, and I empathize, but every other request is pretty basic in my opinion.
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Old 04-09-2008, 01:08 PM
 
46 posts, read 127,814 times
Reputation: 27
Don't FHA loans only require around 2/3 percent for a down payment? Anyone have experience with these?
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Old 04-11-2008, 01:12 PM
 
Location: Rockville Centre
62 posts, read 149,841 times
Reputation: 15
I agree with jrprofess... if you're buying what you can truly afford, these requirements should be both expected and easy enough to fulfill -- except the classic challenge of coming up with that all-important 20% down payment.

FWIW to the OP, I closed a jumbo mortgage 3 weeks ago, and the entire process from application to closing took 29 days. Good advice of course is to SHOP. Feel free to PM for the company we used. Good luck!
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Old 04-11-2008, 01:44 PM
 
4,253 posts, read 324,468 times
Reputation: 2072
Even for heloc,s the banks are getting very fussy. We have a few properties and are applying for a heloc on one property. It will take approx 3 weeks, they want to see two years tax returns and also proof that one property is rented. There is no mortgage on this property at all.We are looking for a line of credit of approx $100,000 and the house is worth approx three times that. We have a fico score of over 750 and have never been bankrupt or even have any late payments.

d
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Old 04-16-2008, 07:33 AM
 
2 posts, read 1,190 times
Reputation: 10
Smile Depends on how long you stay in home

Quote:
Originally Posted by newtoli View Post
Horrible advice. Wow. Read the news! This is what got everyone into this big mortgage mess. Right now, people who got those ARM loans 5 years ago cannot refi because their house is worth less than they paid for it. They then cannot afford the adjusted payment and head into foreclosure.

An ARM only works if when it adjusts, you have equity in the home! People are losing houses left and right for this. Get a fixed loan!
A fixed rate mortgage is always the best way to go, however if your are in an area where the housing market is losing some value, even if you have a fixed rate mortgage, you may not have as much equity as you think.

An adjustable rate mortgage is great for those that don't plan on staying in their home for a long time. Most people tend to move in 7 years, so a 7/1 ARM is ok..

Just my opinion.
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Old 04-16-2008, 07:35 AM
 
2 posts, read 1,190 times
Reputation: 10
One more thing, the amount of foreclosures that we are seeing today, are not necessarily a product of the ARM adjusting. Keep in mind that many people that were not qualified to purchase a home in the first place elected to obtain the Pay Option Arm, this mortgage product gave people the opportunity to pay less then interest only. Yes, the housing market has gone belly up, however I tend to blame some of the mortgage brokers and borrowers that abused a product that was intended for buyers that had liquidity and wanted to invest money in other venues occassionally.
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Old 04-16-2008, 08:20 PM
 
245 posts, read 32,602 times
Reputation: 43
Default You are kidding!

Quote:
Originally Posted by Jrprofess View Post
These tough regulations are actually the norm. We have simply returned to it. I went through the same thing in 99/2000 and was told to expect as much. They are about to loan out hundreds of thousands of dollars, everything noted above in my opinion is completely reasonable. It was always 20% down, the banking statements confirm your savings rate and income flow, and one month of pay stubs should take a few minutes to pull together. Now the down payment can be quite a challenge, and I empathize, but every other request is pretty basic in my opinion.
Yes, right. This is standard. I've never had anything but 30 year fixed mortgages. I've always been asked for these things.
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