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Like many of the people on this forum I look at homes for sale on many different sites like realtor.com, etc. I also go on Craigslist and I keep seeing this add on Craigslist for "1st Metropolitan Mortgage in Raleigh." They state "Best Loan in America - 30 year fixed loan, no PMI." They have houses from listers such as ReMax United. Have any of you heard of them or dealt with them? And this thing about no PMI?? (My understading was if you put down less than 30% than you pay PMI.) How is their standing/rating in the world of mortgages? They kind of seem like the bait & switch or flim flam kind of company to me. Or are they just telling you of financing or help out there that I can get any place? Come on realtors, let's hear your opinions. I know you got'em.
Me? With an opinion? Oh my Char! I'm soooo excited that SOMEONE actually WANTS my opinion! Ok, ok...I am suppossed to be working and then I have a luncheon to go to so let me see how fast I can throw in my 2 cents' worth!
I'm not a lender (my disclosure) but...no PMI? Maybe they are referring to an 80/20 loan? Or an 80/10/10? Or maybe by saying "No PMI", they are assuming that you HAVE the 20% to put down? There is an FHA loan out there that has no PMI but there are other fees associated with that loan.
There are lenders out there that advertise "no closing costs". By bumping up the rate a bit, you don't pay closing costs but you do still pay for your escrows. Depending on how much they "bump" the rate up, you make that decision if its worth it. It requires math skills!
Here is my advise (only since you asked!) when checking out lenders...go with someone in the town you are buying. That way, when some issue comes up, your Realtor can go to their office and make it right! Make sure you always get a Good Faith Estimate. Most lenders charge certain fees, like processing fee and committment fee but not an extra $1,000 worth! There is a reason they are called "junk fees"!
Thank you Vicki - first through the starting gate - lol- let me see if I can type what the have in their little ad sqaure, which is in the listing for the house, and there are many.
"Best Loan in America"
"30 year fixed loan, no PMI"
"$125,000 Purchase"
"Borrower must contribute $500 toward the purchase"
"No down, 100% in one loan no PMI"
"30 year fixed $957"
"interest only $907"
"5% Down, $118,750 loan, one loan no PMI"
"30 year fixed $876"
"interest only $818"
(some of the print is so small I can't read it, but I think is says taxes and interest included)
"1st Metropolitan Mortgage in Raleigh"
then a whole paragraph in such tiny print I enlarged it and it blurred so much, I think it says something about - "APR andThis is not a committment to lend approval can only come from underwriting, 1st Metropolitan is licensed in North Carolina."
"The community Re-investment act of 1977 allows borrowers who are "low to middle income" to purchase properties as a reduced interest reate, with a low down payment and very liberal credit terms."
"In Wake County, borrowers making less than $57,280. per year, 80% of the HUD median family income, qualify for this loan program. There is no income limit if the property lies within a 'low income census tract."
Explain PLEASE!! Are they the actual lender or the government or what ?
BB&T calls theirs a "CHIP Loan."
http://www.bbt.com/bbt/personal/products/chip/default.html (broken link)
The website says 97% loan, but I know they had raised it to 100% last year. With tightening due to sub-prime defaults, I don't know their current limit.
They lend to Fannie Mae standards and keep the loan in house, aka, a "portfolio loan."
It can be a very nice opportunity for lower income buyers to get into a house.
And there is no PMI.
JUSTCHAR,
I tried working with this broker and man you have got to really beware of this guy. We filled out all of the paperwork and were in constant contact with him and then three days beffore closing we called him to see why he never contacts us and low and behold something is wrong and he can't get the loan promised and we'll have to push back closing. We are of course upset but we try and remain composed and ask to get the next steps in writing which is refused everything was filled with lies from the power is out to I have a doctors appointment. You definitely cannot trust this company!!!!
Bank of America now offers a no fee mortgage. The idea is that they have so much money available to them, they are financing it internally giving them ability to eliminate things like PMI. Also, I think I was just reading something recently where some of the rules are changing for lower income families, eliminating PMI.
It appears after checking online that they are a mortgage broker as opposed to a lender.
There's a program fanniemae offers that is called "my community" It has income limits and offers all the other criteria stated in the ad. ie 100%, low rate, 500 down, The loan however does have pmi, but some lenders can use the seller contributions to closing costs to pay money up front so that there is no monthly payment.
Other lenders will offer similar products but have the pmi paid by the lender through the rate.
The other option is what is mentioned above in the posts for the loan being kept in house and not sold to Fannie, and therefore they can do whatever they choose their requirements to be.
Bank of America now offers a no fee mortgage. The idea is that they have so much money available to them, they are financing it internally giving them ability to eliminate things like PMI. Also, I think I was just reading something recently where some of the rules are changing for lower income families, eliminating PMI.
I've seen this one as well - it's a VERY attractive rate, 100% financing, no PMI, with an income cap (I believe) of around $53k.
Also, keep in mind all of you who are loan shopping that PMI is now tax deductible, which takes a little of the sting out of it if you still have to have it. (I still wouldn't want to pay it, either, though! )
[quote=Also, keep in mind all of you who are loan shopping that PMI is now tax deductible, which takes a little of the sting out of it if you still have to have it. (I still wouldn't want to pay it, either, though! )[/QUOTE]
That's what I think I was reading. The part about it being tax deductible. But I think it only applies to loans which are from 2007 or newer.
I am a mortgage planner for a local broker in the area. The program that !st metro is promoting is a USDA loan. It offers a very competitive rate with no PMI. I is very similar to a FHA loan and has a upfront fee vs PMI. Buyers should look at what the rate is compared what the upfront fee is and calculate your "break point'- how long you must remain in the home to benefit from the lower rate vs the upfront fee.
The previous post was correct, PMI is only tax deductible for loans made in 2007 and it is only deductible for families making less than 100,000 per year. Another option to avoid PMI is to let your lender pay for it. They will increase your rate but usually this is the best choice vs actually paying the pmi amount.
With the current changes in the market, it is really hard to find 80/20 to avoid pmi. You can still do a 80/10/10 but almost no one will do a 80/20. I hope all this info helps.
Last edited by SunnyKayak; 09-01-2007 at 01:51 PM..
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