How much will this home cost me?
Writing by Ryan on Thursday, 23 of August , 2007 at 1:55 am
As you may already know with all the rah rah about sub prime loans defaulting and big banks losing billions - banks are tightening loan guidelines. If your going to borrow with a high loan to value 90%+ you must have solid credit 700+. You can check by going to 1 of the 3 credit agencies. To get an accurate score check all 3 and pick the middle score. The alt-a and sub prime loan (bad-okay credit) divisions of many big mortgage companies are shutting their doors down because of the greed the past few years and now they are paying a hefty price. I’m sure there are other companies out there who are willing to lend at high risk but beware of high interest rates and points that you pay at closing. If your going to do 100% financing make sure the property will appraise for that much or the loan won’t close.
***Make sure your loan officer is being compensated only on the loan being funded. Loan officer’s should not be making money on the ‘yield spread’ the percent they give you vs. the actual rate sheet percent or points given you have excellent credit. Always ask about the back end the points you don’t see until closing. 1 point is about 1 percent of the loan which can buy down the rate.
Let’s take the conventional 30 year fixed at 6.25% including real estate taxes excluding insurance & HOA.
Examples:
- 600,000 purchase price with 20% down w/$10K taxes/yr - 2955+834 = $3,789/month
@ 100% financing = $4,528/month - 300,000 purchase price with 20% down w/$5K taxes/yr - 1477+417 = $1,894/month
@ 100% financing = $2,265/month
Category: Real Estate
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