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Hi all-hope someone out there could give us advice..We are selling our home here in NJ and moving to Raleigh NC area. My husband will re-establish his home improvements business he has had here in NJ for 35 + years in NC. I am on SS Disibility for 6 years now. We DO NOT want another mortgage and will pay off ALL bills with the sale of our home and start a new!! YIPEEEEEEE So what we want to do is put at least 30% ($75,000)down on say a $250,000 home. We want to buy the home there ASAP so there will be about a 4-5 month delay until closing on our home we are selling here in NJ. Our closing date now is April 1, 2008. I know we will have to get a mortgage for the new house, I hear bridge loans are not good..The $75,000 deposit down on the new house will come from a home equity line we recently got (for that reason) -NOT locked in. I believe right now it is 5 .75%. How do we go about getting a mortgage for the next home. What would you do.? We have excellent credit scores also. Is there any programs from the good old US Government since I am on SS Disibility? Any ideas on what we can do? Will lenders lend us money knowing we are going to pay the whole mortgage off on the new home in a few months? Please, any advice is greatly appreciated. We don't want to pay any outrageous fees. Please keep in mind we do not want any mortgage EVER AGAIN!!!!! Hope to hear from you soon
Well your main problem is going to be the employment/income. This is a situation for a no doc loan unless your disability income alone can support the payment plus your debt.
You can't prove his income/employment as he will not technically have employment here, and you would have to qualify for all the debt load.
You'd have to supply the contract showing the house in NJ is selling so that you can take this loan as a primary residence, but the lender still might want to qualify you using both mortgages in the meantime.
So, back to the no doc; That would be my suggestion, Simplest, fastest, and less fuss, especially if you're not looking to keep the mortgage forever. Make sure you won't have a prepayment penalty because in NC it's only banned below $150,000 for primary residences. Moderator cut: no solicitation
Last edited by SunnyKayak; 11-04-2007 at 03:44 PM..
Thanks a million Chip..I was wondering about his income because he won't have a job when we get there. My measley SS benefits (YOU HEAR THAT UNCLE SAM!) LOL won't cover it. I have to re-read your post so I understand better. I don't understand the pre-payment penalty. YES, I want no fuss and fast, but not so fast it costs a mint. Please, if you can think of anything else let me know and thanks again!
Well your main problem is going to be the employment/income. This is a situation for a no doc loan unless your disability income alone can support the payment plus your debt.
You can't prove his income/employment as he will not technically have employment here, and you would have to qualify for all the debt load.
You'd have to supply the contract showing the house in NJ is selling so that you can take this loan as a primary residence, but the lender still might want to qualify you using both mortgages in the meantime.
So, back to the no doc; That would be my suggestion, Simplest, fastest, and less fuss, especially if you're not looking to keep the mortgage forever. Make sure you won't have a prepayment penalty because in NC it's only banned below $150,000 for primary residences. pm me if you need any further help.
How much are pre-payment penalites?..I don't understand that part
Ok, I'm not a lender but I didn't think mortgage loans had a pre payment penalty unless you were doing a re fi. We really do need a good mortgage lender on this forum!!!
I am a mortgage lender in the Raleigh area and have many years of experience. ChipL pretty much has it right. Here's the deal:
First of all, pre-payment penalties are less common now with the problems in the market, however, unless you are going to need a subprime loan (and it appears you will not), just make sure you tell your lender you don't want to have one. Also for VickiR, pre-payment penalties could be on a purchase as well as a refi. In my mind there really shouldn't be any reason to accept a prepayment penalty on a loan unless it is a subprime loan where you don't have choice, but again, these are becoming less and less common in the market.
Secondly, it sounds to me like you intend to close on the home here in NC and move now; not in Apr 2008 when your other home sells. If that is true and your husband is re-establishing a new business here in NC when you move you will definitely have to do a "NO DOC" loan. Be careful also, because these loans which are commonly referred to as "ALT A" loans, are also becoming more scarce. Still available but not as many choices. This is a loan where you don't have to disclose any income, assets, or employment. The loan is based solely on your credit history and the amount of money you are putting down. The interest rate you will be charged on this type of loan will be higher than a standard conventional loan where you fully document everything. The good thing for you is since you intend to pay the loan off in 4 to 5 months the interest rate you're paying is not as crucial as simply being able to get the loan.
The less you put down and the lower your credit score the higher the rate and vice versa. If you can put 35% down you will get a better rate than 30% down for this type of loan assuming excellent credit. For your information, you're probably looking at interest rates somewhere in the high 7's to low 8's percent range for this "NO DOC" type of loan.
Also, be careful, you typically need to have a minimum number of active tradelines for the past 24 months (meaning credit accounts you've been using and paying back regularly) and typically that number is 4. Also, perfect 12 month housing payment history that can be documented.
Good luck, and you probably need to hook yourself up with an experienced mortgage professional to help guide you. Get recommendations from someone you trust.
I am a mortgage lender in the Raleigh area and have many years of experience. ChipL pretty much has it right. Here's the deal:
First of all, pre-payment penalties are less common now with the problems in the market, however, unless you are going to need a subprime loan (and it appears you will not), just make sure you tell your lender you don't want to have one. Also for VickiR, pre-payment penalties could be on a purchase as well as a refi. In my mind there really shouldn't be any reason to accept a prepayment penalty on a loan unless it is a subprime loan where you don't have choice, but again, these are becoming less and less common in the market.
Secondly, it sounds to me like you intend to close on the home here in NC and move now; not in Apr 2008 when your other home sells. If that is true and your husband is re-establishing a new business here in NC when you move you will definitely have to do a "NO DOC" loan. Be careful also, because these loans which are commonly referred to as "ALT A" loans, are also becoming more scarce. Still available but not as many choices. This is a loan where you don't have to disclose any income, assets, or employment. The loan is based solely on your credit history and the amount of money you are putting down. The interest rate you will be charged on this type of loan will be higher than a standard conventional loan where you fully document everything. The good thing for you is since you intend to pay the loan off in 4 to 5 months the interest rate you're paying is not as crucial as simply being able to get the loan.
The less you put down and the lower your credit score the higher the rate and vice versa. If you can put 35% down you will get a better rate than 30% down for this type of loan assuming excellent credit. For your information, you're probably looking at interest rates somewhere in the high 7's to low 8's percent range for this "NO DOC" type of loan.
Also, be careful, you typically need to have a minimum number of active tradelines for the past 24 months (meaning credit accounts you've been using and paying back regularly) and typically that number is 4. Also, perfect 12 month housing payment history that can be documented.
Good luck, and you probably need to hook yourself up with an experienced mortgage professional to help guide you. Get recommendations from someone you trust.
THANKS!!!! This was wonderful information and I can't thank you enough. You too Chip. I am so glad I posted on here. Would you happen to know about any taxes we would have to pay after we close. What I mean is the home we live in now was bought in 1985. My husband and his ex-wife bought it in the mid 70's. He bought her out in 1985 after their divorce. Is he considered a 2nd time home buyer now? I am on this mortgage here in NJ so it is my first home. Would this home be considered a second home for him? How does that work with taxes? HELP AGAIN!!!!
Yes, technically they are not allowed in NC for loans on primary residences under 150,000, other than that they are fair game, so you want to make sure if you are planning on paying it off prior to the prepay date then you don't want one.
Some lenders don't allow prepays at all on any loan in NC just to cover themselves so there are no mistakes, many lenders follow the letter of the law, and others are exempt from the 150,000 due to federal reguations as opposed to state regulations.
So, it's just something to keep aware of.
For Debaroo, a prepay penalty is a fee that the lender will charge the borrower for paying off the loan in full in less than 3, 2 or 1 years depending on the penalty time-line. There is a good reason for the prepay, the lenders don't want to lose money on the deal, and if the borrower pays it off too soon, that's exactly what can happen, so they make that charge applicable to the borrower. You'd just have to make it clear to the broker that that is something you want to avoid, and it is easily enough avoided in most cases.
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..We are selling our home here in NJ and moving to Raleigh NC area. My husband will re-establish his home improvements business he has had here in NJ for 35 + years in NC. I am on SS Disibility for 6 years now. We DO NOT want another mortgage and will pay off ALL bills with the sale of our home and start a new!! YIPEEEEEEE So what we want to do is put at least 30% ($75,000)down on say a $250,000 home. We want to buy the home there ASAP so there will be about a 4-5 month delay until closing on our home we are selling here in NJ. Our closing date now is April 1, 2008. I know we will have to get a mortgage for the new house, I hear bridge loans are not good..The $75,000 deposit down on the new house will come from a home equity line we recently got (for that reason) -NOT locked in. I believe right now it is 5 .75%. How do we go about getting a mortgage for the next home. What would you do.? We have excellent credit scores also. Is there any programs from the good old US Government since I am on SS Disibility? Any ideas on what we can do? Will lenders lend us money knowing we are going to pay the whole mortgage off on the new home in a few months? Please, any advice is greatly appreciated. We don't want to pay any outrageous fees. Please keep in mind we do not want any mortgage EVER AGAIN!!!!! Hope to hear from you soon
Thanks A Million
