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I just had a USDA loan approved for 4 5/8% and no money down. The credit requirement is 620 minnimum, and you have to buy a home in a rural area. But this covers all of Johnston count and much of the other counties in the state. There is a 3 and 1/2 5 fee to use this loan. But considering there is no money down and no PMI required, it's a pretty good deal. I will say that most lenders were not writing this kind of loan because the pool of money the USDA had for this program had been depleted, but my lender was working with Chase Mortgages who was still writing loans in anticipation of the fund being replenished. I understand that this fund was just replenished today, so you may be able to access this loan through your lender.
I just had a USDA loan approved for 4 5/8% and no money down. The credit requirement is 620 minnimum, and you have to buy a home in a rural area. But this covers all of Johnston count and much of the other counties in the state. There is a 3 and 1/2 5 fee to use this loan. But considering there is no money down and no PMI required, it's a pretty good deal. I will say that most lenders were not writing this kind of loan because the pool of money the USDA had for this program had been depleted, but my lender was working with Chase Mortgages who was still writing loans in anticipation of the fund being replenished. I understand that this fund was just replenished today, so you may be able to access this loan through your lender.
The shortcoming of the loan is the points. 3 1/2 can be a chunk of change. I know the loan is good for you but I also know people are critical of the eligibility requirements and not needing to have any skin in the game. It is a loan that if taken with no money down would appear to guarantee being upside down in the loan for awhile.
Recently bought a second home (recently began working in downtown Raleigh, but haven't sold our first home elsewhere). Fast, very easy closing. Low fixed interest rate. Got a good bit off the selling price AND total closing costs AND several months HOA fees included. Very motivated seller and the condo had been on the market for a while. Now if we could just sell our other home...
The shortcoming of the loan is the points. 3 1/2 can be a chunk of change. I know the loan is good for you but I also know people are critical of the eligibility requirements and not needing to have any skin in the game. It is a loan that if taken with no money down would appear to guarantee being upside down in the loan for awhile.
Granted, it is akin to where we were a couple of years ago in sub prime loans, but this does work forme and my situation. It is a much better choice than lewasing, as I am now.
Granted, it is akin to where we were a couple of years ago in sub prime loans, but this does work forme and my situation. It is a much better choice than lewasing, as I am now.
There seems to be several posts on this forum regarding the RDU housing market and its' volatility. I am interested in hearing of recent home buyers experiences with obtaining a home loan. I understand it is much more difficult to get a loan than in previous years (when the banks seemed to hand out money to anyone; even those who could not afford the loan!). How difficult was it to get the loan? How long did the closing period take? Have any experienced the lender "pulling out" at the last minute? Are more buyers expecting sellers to assist with closing costs, etc.?
I am asking these questions from a possible sellers' point of view. Most of the opinions on here seem to say that if you do not HAVE to sell right now, don't! But if you want to downsize your present home and take advantage of the buyers market, what should the seller expect from the lenders?
We had no problem w/closing in about 45 days on our recent home purchase in Durham. Got a 15 year fixed at a very fair rate. We had a very nice downpayment on the purchase which I think helped w/the rate & length.
What I did find was the paperwork was insane.
Last time we applied for a mortgage I don't remember half of what we had this time. This time around they wanted copies of pay stubs for the last couple months, credit card statements, prior year tax returns, since the move involved me transfering to a new office I had to have a letter from my supervisor indicating I had a cube/job in the new city, 3 months of bank statements (including the statement for our health savings account), stock statements (including the employee stock program @ work), 401K, Roth, and regular IRA statements, and then all the documents from our lawyer & realtor since our purchase was contingent on sale of our prior home.
I would bet I eneded up giving them 250 to 300 pages of copies of things before all was said & done. We started w/a 2 page list of items to send them and every time we turned around they needed one more thing.
I guess it is good if they are really making sure people can afford the loan they are getting, but seriously, some of it just seemed way over the top. And our poor fax machine was exhausted by the time all was said & done.
We had a great experience with our FHA loan. We decided to put down the minimum and use our cash to pay off all our other debts. We are probably upside down right now but hopefully will turn that around in a year. With no other debts to pay we are able to pay extra on the mortgage every month.
I think the key is to keep your mortgage balance below double your annual household income.
We had no problem w/closing in about 45 days on our recent home purchase in Durham. Got a 15 year fixed at a very fair rate. We had a very nice downpayment on the purchase which I think helped w/the rate & length.
What I did find was the paperwork was insane.
Last time we applied for a mortgage I don't remember half of what we had this time. This time around they wanted copies of pay stubs for the last couple months, credit card statements, prior year tax returns, since the move involved me transfering to a new office I had to have a letter from my supervisor indicating I had a cube/job in the new city, 3 months of bank statements (including the statement for our health savings account), stock statements (including the employee stock program @ work), 401K, Roth, and regular IRA statements, and then all the documents from our lawyer & realtor since our purchase was contingent on sale of our prior home.
I would bet I eneded up giving them 250 to 300 pages of copies of things before all was said & done. We started w/a 2 page list of items to send them and every time we turned around they needed one more thing.
I guess it is good if they are really making sure people can afford the loan they are getting, but seriously, some of it just seemed way over the top. And our poor fax machine was exhausted by the time all was said & done.
We were fortunate and only had to submit minimal paper work. I did get the sense that having a pension is more valuable than having a job (contrary to the news headlines). What I would say to other pensioners is that getting a loan going into retirement may be more of a challenge. If retirement means any reduction in income they may want to see how you adjust to living on that new income. I would suspect the same might be relevant if you changed jobs and relocated to a new city with a lower family income. The new house might be the same as your old house was as a percentage of income. They may want to know how you handle bills over all. I suspect this process has become very individual centered.
I think the key is to keep your mortgage balance below double your annual household income.
I've heard (and we're using this advice) the mortgage payment on a 15 year should be 25% or less than your monthly income. That would translate differently in the sales price based on interest rate. For us, it means that we are higher than twice our annual income for the principle balance, but because we don't have other debt we can also pay down more quickly. Because we are at a fairly low annual income, it is very hard to find a house that is less than twice our income, even in the current economy.
I've heard (and we're using this advice) the mortgage payment on a 15 year should be 25% or less than your monthly income. That would translate differently in the sales price based on interest rate. For us, it means that we are higher than twice our annual income for the principle balance, but because we don't have other debt we can also pay down more quickly. Because we are at a fairly low annual income, it is very hard to find a house that is less than twice our income, even in the current economy.
From what have learned the biggest thing is what is your track record for managing money. You seem to have a very clear head on your shoulders regarding your personal finances. That probably came through and you were rewarded the mortgage for having a good credit history. Again congrats!
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