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Old 04-30-2017, 11:24 AM
 
Location: IL/IN/FL/CA/KY/FL/KY/WA
1,264 posts, read 1,410,684 times
Reputation: 1645

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Hi everyone,

My wife and I are beginning our search for our first home (I've owned once before but my ex and I built a place in 2001 and sold it in 2007. I'm a bit rusty with the search stuff).

We live in Louisville, KY and are looking for homes either here in Jefferson County or in neighboring Shelby County. We're trying to stick under $250k for a decent sized property and are going to look at a few options today.

Our local credit union offers what sounds like a great deal up front, but I'd like to weigh it against the other options and am not sure which is the most financially sound decision for us. Looking for the cheapest monthly payment with the following caveats:

I'm 41 and we want to own a house free and clear before I'm 60.
We have roughly 5% to put down
Property Taxes in the area appear to max out around $2,800/yr
Assuming insurance annually of around $1000.

The CU offers a 15/15 ARM product. Because of the 5% down payment, the rate is 4.375% rather than the 3.875 that they promote as the lowest rate, which I assume is for 20% down. However, No PMI is required despite the high LTV with only 5% down.

They have closing costs of around $3,000 which is $450 origination and the rest is the standard appraisal and title fees.

I prefer the longer term loans to offer the flexibility of a lower payment in months that it's needed (my wife is self-employed, so her income fluctuates month to month though I'm the breadwinner and my income is stable).

Considering our goals, it seems like this the cheapest when comparing to other options, but would appreciate the perspective of others who have been in the mortgage trenches longer than me.
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Old 04-30-2017, 09:00 PM
 
Location: UNMC Area
749 posts, read 726,212 times
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I think you took a right first step by talking to your Credit Union. CUs tend to be a little more flexible and creative with mortgage loans.

Beyond that, I'd suggest you start talking seriously with the mortgage loan officer to see what options you have available. Everything from your credit score to your debt-to-asset balance will come into play.

You might want to consider a straight 30-year mortgage, with the lowest monthly rate possible (because of your wife's fluctuating income) and, when she has a big money month, pay a big chunk toward the principle. The key is to always pay extra toward principle.
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Old 05-07-2017, 08:51 PM
 
Location: IL/IN/FL/CA/KY/FL/KY/WA
1,264 posts, read 1,410,684 times
Reputation: 1645
I was able to find a 15/15 ARM with a different CU for 3.5% at 3% down. In this market, that's outstanding. Now, to find a property!
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Old 05-08-2017, 07:09 AM
 
Location: MID ATLANTIC
8,643 posts, read 22,790,328 times
Reputation: 10461
Quote:
Originally Posted by ServoMiff View Post
I was able to find a 15/15 ARM with a different CU for 3.5% at 3% down. In this market, that's outstanding. Now, to find a property!
With PMI in the rate or not?

I just want to point out a subtle fact you may not be aware of......just because your payment doesn't reflect PMI, it is present and requires approval from the PMI company. I am not a fan of the LPMI, only because it's a high probability that loan will be refinanced. If you are shopping credit unions, have you explored a combo loan, 80/15/5? After you pay off the 15% 2nd trust, you have a sweet payment, with little need to refi.

If your market is competitive, get pre-approved. This is a tough market, the further along you are the better your offer looks. Things are so competitive here, I pick up the phone and call the listing agent to point out one of their offers has a written loan commitment on file with us. So far, I am 8 for 8 when trying this. One offer that was accepted was not the highest offer, but selected because underwriting had been completed. Sellers are people too and hate surprises.
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Old 05-08-2017, 11:39 AM
 
Location: IL/IN/FL/CA/KY/FL/KY/WA
1,264 posts, read 1,410,684 times
Reputation: 1645
Quote:
Originally Posted by SmartMoney View Post
With PMI in the rate or not?

I just want to point out a subtle fact you may not be aware of......just because your payment doesn't reflect PMI, it is present and requires approval from the PMI company. I am not a fan of the LPMI, only because it's a high probability that loan will be refinanced. If you are shopping credit unions, have you explored a combo loan, 80/15/5? After you pay off the 15% 2nd trust, you have a sweet payment, with little need to refi.

If your market is competitive, get pre-approved. This is a tough market, the further along you are the better your offer looks. Things are so competitive here, I pick up the phone and call the listing agent to point out one of their offers has a written loan commitment on file with us. So far, I am 8 for 8 when trying this. One offer that was accepted was not the highest offer, but selected because underwriting had been completed. Sellers are people too and hate surprises.
The rate does not require PMI. They portfolio those loans which is why they don't require it.

I've already been pre-approved with another lender as of last week and really don't have concern about further approvals - Should I get pre-approved with this lender as well? I was trying to avoid the extra credit report hit until it was needed considering how tough we expect it to be to find the right place, but if it'll help in this hot market, I'm open to it.
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