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[SIZE=2]I recently applied for a 30 year fixed rate mortgage at 6 1/4 % with 2 points and 10% down.
This is a two unit investment property so I won't be living there. I'll be renting it out. I also own 4 other two units that are rented out. My credit score is 815 my husbands score is 801.
We applied for the MTG and all was fine....we are set to close in three days.
BANG----the MTG company calls me this morning and says they won't do the deal now unless we put down 15% instead of agreed 10% down.
They contend the that the market is "declining". (OF COURSE IT IS....That's why I'm in buyers mode....) This is the only reason they give for wanting to change the terms at this late date. The appraisal on the property came back at 20 grand more then the asking price so that was no problem.
I feel like I am being strong armed and I do not like changing the terms so late in the game without there having ever been a hint of it before this.
What do you guys think? Should I be doing business with this MTG company or should I walk away and let the deal die? (I guess I would be out the 500 bucks for the appraisal that I paid for already.)
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first of all....asking more for closing costs will be ripping you off.
asking more for a down payment will go towards your loan amount...so you're not losing this money.
with investment properties...you shouldnt try to pay points....take a higher rate...and avoid the points. less 'costs' towards an investment is the way to go.
also, the lenders are getting stricter with investment properties..and they usually ask for 20% down for 2unit properties.
purchase price vs appraised value...lenders use the LESSER of the two values
I decided to pay points on this property since I plan on keeping it for about 10 years. The appraised value came back at only a $1000.00 above the purchase price so they are very close. I am upset with the change in down payment when we had already agreeded this would be 10% down and they now three days befor close decided to change that.
I have the cash and I could do the 15% down. However I'm just so mad that they are telling me this now three days before closing. Why would you offer a client something that you know you can't deliver? (you in general I mean )
It all just seems dishonest to me.
Rates should be dropping in the next year...if they do drop...then you wasted money by paying points upfront. 2 points is a lot of money.
No lender can guarantee the delivery of funds....if any lender tells you that they can then they are lying. Many lenders have went out of business the same day ppl were supposed to close. Thousands couldnt close this year because of that. No loan officers know what is going on with the upper management..or if their company will be open tomorrow. Every lender has been changing guidelines...and as an investor you should've heard on the news that there was a credit crunch.
Dishonesty would be if they charged you more fees...
Quote:
Originally Posted by PinkysHouse
I decided to pay points on this property since I plan on keeping it for about 10 years. The appraised value came back at only a $1000.00 above the purchase price so they are very close. I am upset with the change in down payment when we had already agreeded this would be 10% down and they now three days befor close decided to change that.
I have the cash and I could do the 15% down. However I'm just so mad that they are telling me this now three days before closing. Why would you offer a client something that you know you can't deliver? (you in general I mean )
It all just seems dishonest to me.
That extra 5% down payment hit in declining markjets is something I've been running up against for about 3 months now. Certain parts of the country, basically, the parts that saw the big run-ups, have now been labled declining markets because values there are expected to keep dropping. This concept is independent of a current appraisal
Not sure who the underlying lender is, but Washington Mutual just came out last week where they will set their own standards for declining markets taking effect immediately on loans that have not yet closed. Bottom line, don't know how long your lender knew this, but from what I've seen during this mortgage mess, it's very possible they just found out about it themselves.
Last edited by ChipL; 11-13-2007 at 04:52 PM..
Reason: can't spell
Rates should be dropping in the next year...if they do drop...then you wasted money by paying points upfront. 2 points is a lot of money.
No lender can guarantee the delivery of funds....if any lender tells you that they can then they are lying. Many lenders have went out of business the same day ppl were supposed to close. Thousands couldnt close this year because of that. No loan officers know what is going on with the upper management..or if their company will be open tomorrow. Every lender has been changing guidelines...and as an investor you should've heard on the news that there was a credit crunch.
Dishonesty would be if they charged you more fees...
Why do you think rates will be dropping in the next year? Would love it if it's true!!
When the FED tries to stimulate the market it's because something huge is happening or will happen.
The Subprime chaos isn't over yet...
Another thing is that Country financed a lot of 'option arm' mortgages which will come due next year. As we all know when the market crashes...then the mortgage rates drop.
The market has been inflated for quite a while now...
Another thing is that a lot of baby boomers will soon be cashing in on their stocks/mutual funds. When their are thousands of withdrawals from the market...it starts scaring folks!
Quote:
Originally Posted by Go Blue 99
Why do you think rates will be dropping in the next year? Would love it if it's true!!
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