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In the process of applying for a Mortgage right now, Figured I would ask some questions. Obviously understanding no one here knows how things will go, just general advice or answers would be appreciated.
Me and the wife are buying a home, but due to the wife having no credit at all, only I am applying for the mortgage. We are putting about 31% Down, some of which is due to a gift. We Gross 1/3 of the homes cost every year, but if you only count me I gross about 1/5 of the homes cost every year.
So we are putting down a large down payment, make more than enough to pay the mortgage off, Have ZERO debt, BUT heres the but, my credit is only middling. Not terrible but not great either.
How much should we be worried?
We were given 4.1% as the rate, but were told we could purchase points to bring it down to 3.875% but at the cost of around $2750. Seeing as how the 4.1% rate is only $30 more per month and we would like to have some money to improve somethings with we are going for the slightly higher rate. Going lower does save us a net $9k or so long term, but we feel we can use that $3k better now.
So I guess the question is, if you had to guess what is our prognosis? Did we make the right call with the points? Was it right to apply with just me?
look into going FHA - talk to a broker in your area and have them compare for you - you may also look at a 15 year FHA where your rate would be so much lower.
Talk to some lenders in your area. Honestly, I would be surprised if you could qualify based on your income alone if it's only 1/5 of the house's cost. I qualified on one income for the house I am currently buying but it's only about 2.5 times my annual income, not 5 times!
If you want your wife's income to count, which it may need to in order for you to qualify, I would think that would also mean that she needs to be on the application. But again, check with lenders in your area.
Also, if a big chunk of your down payment is coming from a gift, the person who gave you the gift will have to be able to verify funds. Again, any lender you choose will have info for you on this.
Talk to some lenders in your area. Honestly, I would be surprised if you could qualify based on your income alone if it's only 1/5 of the house's cost. I qualified on one income for the house I am currently buying but it's only about 2.5 times my annual income, not 5 times!
If you want your wife's income to count, which it may need to in order for you to qualify, I would think that would also mean that she needs to be on the application. But again, check with lenders in your area.
Also, if a big chunk of your down payment is coming from a gift, the person who gave you the gift will have to be able to verify funds. Again, any lender you choose will have info for you on this.
I think you missed a couple of the OP's ponits. One the 1/5th is of the home's price (not loan amount) and he is putting 31% down. Second, he mentions that he has no other debt. This makes it likely that he would qualify for it on his own income.
In the process of applying for a Mortgage right now, Figured I would ask some questions. Obviously understanding no one here knows how things will go, just general advice or answers would be appreciated.
Me and the wife are buying a home, but due to the wife having no credit at all, only I am applying for the mortgage. We are putting about 31% Down, some of which is due to a gift. We Gross 1/3 of the homes cost every year, but if you only count me I gross about 1/5 of the homes cost every year.
So we are putting down a large down payment, make more than enough to pay the mortgage off, Have ZERO debt, BUT heres the but, my credit is only middling. Not terrible but not great either.
How much should we be worried?
We were given 4.1% as the rate, but were told we could purchase points to bring it down to 3.875% but at the cost of around $2750. Seeing as how the 4.1% rate is only $30 more per month and we would like to have some money to improve somethings with we are going for the slightly higher rate. Going lower does save us a net $9k or so long term, but we feel we can use that $3k better now.
So I guess the question is, if you had to guess what is our prognosis? Did we make the right call with the points? Was it right to apply with just me?
Any general thoughts? Thanks all.
Yes, just you is the ticket. I would get your wife some credit going though after the purchase is closed. As far as buying it down, that would depend on how long you think you will be in this house/loan. Ask you loan officer to figure out a break even for you.
Yea he broke it down for us. Basically it came out to pay $1500 now to save like 7 grand over 30 years or pay $3000 to save $12000 over 30 years. Neither seemed like huge savings, we thought we could use the money better now or even invest the $3k now and get a better return on it later.
If it helps I make close to $60K, The House is $322, but the loan is for $222, so I make about 1/4 of the LOAN price every year.
Our gift giver is ready to verify funds, thats not a problem.
You should have no problems. 100% gift is fine, but you will need to show reserves, most likely 2 months somewhere that is liquid. Be prepared to obtain current statments on your 401ks.
you should fight for 4% but don't pay point to lower further. You need about 8 years to break even for the points you pay. You can save that ~$2800 and use it for refi for 15years afterward.
I have the same situation as you, $300k, and paid 1/3 down, and I refi after only 2 years. From 4.375% 30yrs to 3.25% 15 years.
You can fight for a lower rate without paying for points? I thought the numbers were the numbers, I didn't realize you could negotiate. He made it seem like the numbers were the numbers and based on my credit score thats what we could do.
Is 4.125% terrible right now?
How early can we refi? Does it cost to refi?
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