Mortgage calculations

[ICRS]

You can get a subordinate loan if you don't want PMI. You can usually get $5000-$10000 subordinate loan with an interest rate lower than your 1st loan. Kind of amazes me how easy it is to get mortgage with a CLTV (Sub + 1st loan) of over 100% in todays market. You can get a 95% 1st and a 7% sub loan for a CLTV of 102% with not much difficulty today.

 

[alkemyst]

Originally posted by: Pale Rider

Originally posted by: Scarpozzi

Originally posted by: Pale Rider
If you don't want to pay PMI then you need an additional loan for 20% of the mortgage to use as a down payment. Either that or pay the 20% in cash (best thing to do, if you can't afford the 20% then maybe you shouldn't be buying a house).

Edit: QED beat me to it.

The problem with the 20% additional loan is that it's going to be high interest unless you put your house on it....then you're actually borrowing against your house and, depending on the lender, you might not get a break at all.

Make sure you know what their rules are. I went through a credit union for my home loan and they had all kinds of screwy loans to make sure they got the PMI. If you are able to pay off as much of your loan as possible just to eliminate the PMI, you could actually cut back your payments AFTER you get it paid down. I want to say PMI on my home only added another $100 or so to my monthly payment...but that adds up over time. It's a total scam.

Oh I agree it isn't a good solution but it's often cheaper than paying the PMI. I have known people who got the loan from family or a CC.

Like I said it's not ideal but some people do it. Again I think if you can't afford the 20% to begin with you might want to keep saving your $$$.

The problem is no one in America saves anymore. They just want instant gratification. Hence the interest only, no down payment loan was born.

This is fodder of the poor. When the restrictions of requiring 20% were no longer necessary even the ultra wealthy put down less usually.

For most of the average saps taking their entire savings and pouring it into a home when they didn't have too is the fool's move so they can brag about it over Pabst Blue Ribbon at the bowling alley.

 

[AtlantaBob]

Originally posted by: Pale Rider

Originally posted by: Scarpozzi

...

...

Oh I agree it isn't a good solution but it's often cheaper than paying the PMI. I have known people who got the loan from family or a CC.

Like I said it's not ideal but some people do it. Again I think if you can't afford the 20% to begin with you might want to keep saving your $$$.

The problem is no one in America saves anymore. They just want instant gratification. Hence the interest only, no down payment loan was born.

I work for a law firm (part-time paralegal) and I can't tell you how many of these types of loans go into foreclosure. Everyone wants to buy a house, but without 20% down, (and 3-6 months living expenses in the bank) you're asking to have a medical emergency, a car repair or some other issue that will cost you the house. I'm not talking about large amounts of money either--people are getting foreclosed on for missing payments of about $1300-$1500 a month.

While we're at it, take a look at Dave Ramsey's Website.. He's got some good things to say about this.

 

[Rage187]

You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

 

[Vic]

Why get an 80/20 (or any other kind of piggyback combo over 80%) when MI is now tax deductible?

 

[AndrewR]

Originally posted by: db
By contract (between you and lender) PMI is usually mandatory for the first 2 years, no matter what. It sucks. One of many ways the real estate and mortgage industries suck your blood and there's basically nothing you can do about it. This is the power of special interest groups influencing your lawmakers (to keep hands off).

Not mandatory for a VA loan.

 

[alkemyst]

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

 

[alkemyst]

Originally posted by: AndrewR

Originally posted by: db
By contract (between you and lender) PMI is usually mandatory for the first 2 years, no matter what. It sucks. One of many ways the real estate and mortgage industries suck your blood and there's basically nothing you can do about it. This is the power of special interest groups influencing your lawmakers (to keep hands off).

Not mandatory for a VA loan.

while not called PMI, the loan is still being guaranteed by an agency.

 

[jersiq]

Originally posted by: alkemyst

Originally posted by: AndrewR

Originally posted by: db
By contract (between you and lender) PMI is usually mandatory for the first 2 years, no matter what. It sucks. One of many ways the real estate and mortgage industries suck your blood and there's basically nothing you can do about it. This is the power of special interest groups influencing your lawmakers (to keep hands off).

Not mandatory for a VA loan.

while not called PMI, the loan is still being guaranteed by an agency.

Yes, the VA, and without 20% down on your first house you still pay a funding fee.
For your second house without anything down, you pay a higher percentage on your funding fee.

 

[Rage187]

Originally posted by: alkemyst

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

we refied in March so I just went through all this and was offered several different 80/20, 80/15/5 combos.

 

[alkemyst]

Originally posted by: Rage187

Originally posted by: alkemyst

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

we refied in March so I just went through all this and was offered several different 80/20, 80/15/5 combos.

piggy backs are extremely rare to get to 100%LTV's right now. You must have had special circumstances.

When you say 'we' is this something that you were actively involved in signing final docs or just along for the ride and may not know exactly what was signed....like having PMI wrapped into the rate?

 

[CrimsonChaos]

Just so you know, sometimes you are able to obtain conventional loans without 20% down and without PMI.

 

[alkemyst]

Originally posted by: CrimsonChaos
Just so you know, sometimes you are able to obtain conventional loans without 20% down and without PMI.

Please explain...

 

[ICRS]

Originally posted by: alkemyst

Originally posted by: Rage187

Originally posted by: alkemyst

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

we refied in March so I just went through all this and was offered several different 80/20, 80/15/5 combos.

piggy backs are extremely rare to get to 100%LTV's right now. You must have had special circumstances.

When you say 'we' is this something that you were actively involved in signing final docs or just along for the ride and may not know exactly what was signed....like having PMI wrapped into the rate?

Huh, it isn't hard at all to get over 100% CLTV, 100%LTV yes, but CLTV no.

 

[alkemyst]

Originally posted by: ICRS


Huh, it isn't hard at all to get over 100% CLTV, 100%LTV yes, but CLTV no.

orly? you talking about today's market?

 

[ICRS]

Originally posted by: alkemyst

Originally posted by: ICRS


Huh, it isn't hard at all to get over 100% CLTV, 100%LTV yes, but CLTV no.

orly? you talking about today's market?

I know someone who was able to get a 1st loan of 95%, and a subordinate loan of 7% for a CLTV of 102%. There was nothing special about them.

 

[alkemyst]

Originally posted by: ICRS

Originally posted by: alkemyst

Originally posted by: ICRS


Huh, it isn't hard at all to get over 100% CLTV, 100%LTV yes, but CLTV no.

orly? you talking about today's market?

I know someone who was able to get a 1st loan of 95%, and a subordinate loan of 7% for a CLTV of 102%. There was nothing special about them.

again...not in today's market. 103% LTV loans were EXTREMELY common in the recent past.

Also unless you were the one signing the papers I have found people overstate the deals they get or misunderstand them.

 

[Linux23]

Originally posted by: alkemyst

Originally posted by: CrimsonChaos
Just so you know, sometimes you are able to obtain conventional loans without 20% down and without PMI.

Please explain...

yes

 

[SearchMaster]

Originally posted by: Vic
Why get an 80/20 (or any other kind of piggyback combo over 80%) when MI is now tax deductible?

Isn't that like saying "would you rather have $1000 or the tax on $1000?"

 

[ICRS]

Interest on a subordinate home loan is also tax deductible I believe.

 

[Rage187]

Originally posted by: alkemyst

Originally posted by: Rage187

Originally posted by: alkemyst

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

we refied in March so I just went through all this and was offered several different 80/20, 80/15/5 combos.

piggy backs are extremely rare to get to 100%LTV's right now. You must have had special circumstances.

When you say 'we' is this something that you were actively involved in signing final docs or just along for the ride and may not know exactly what was signed....like having PMI wrapped into the rate?

As in I; myself and my wife. I did all the mortgage shopping and this was our 5 mortgage over 12 years.

The only special circumstance was we have excellent credit.

EDIT: I also see your in FL. Big difference in your state with the bottom falling out of it and SC.

 

[alkemyst]

Originally posted by: Rage187

Originally posted by: alkemyst

Originally posted by: Rage187

Originally posted by: alkemyst

Originally posted by: Rage187
You can also do 100% financing, but lenders are making the loans harder to get.

80% at 6% ish for 30 years
20% at 9.5% for 10 years, at the end of the ten years the whole 20% is due. The idea here is that you keep the house until it gains enough equity and then refi into a single loan.

who is doing 100% financing right now?

I don't think you know the current market.

FHA is about the best the average joe can hope for in today's market. 3% down + PMI.

Piggy backs and the rest are hard to get an investor to pick up. Even many PMI companies won't write on 97% LTV in declining markets anymore.

Many condos are almost impossible to finance without more than 20% down.

It's a whole different beast out there.

we refied in March so I just went through all this and was offered several different 80/20, 80/15/5 combos.

piggy backs are extremely rare to get to 100%LTV's right now. You must have had special circumstances.

When you say 'we' is this something that you were actively involved in signing final docs or just along for the ride and may not know exactly what was signed....like having PMI wrapped into the rate?

As in I; myself and my wife. I did all the mortgage shopping and this was our 5 mortgage over 12 years.

The only special circumstance was we have excellent credit.

EDIT: I also see your in FL. Big difference in your state with the bottom falling out of it and SC.

being offered something and finally closing on it are two different things in the mortgage market. It doesn't matter state really in this, no investors are willing to buy these things anymore.

I closed last June (2007) at really higher than 103% in a single loan. No way I could do that now. I had $20k coming back at closing to play with, while I couldn't take it as cash...I paid down debt, covered my first years insurance, covered repairs....

However, for me to tell someone this should be the norm would be idiotic.

 

[ICRS]

The people I know got their mortgage through the state of california. The state is their lender. The state does allow up to 103% CLTV for medium and low income and up to 110% for teachers in target areas.

 

[alkemyst]

Originally posted by: ICRS
The people I know got their mortgage through the state of california. The state is their lender. The state does allow up to 103% CLTV for medium and low income and up to 110% for teachers in target areas.

I'd love to see this.

 

[Fritzo]

We have nearly the same amount financed but our rate is 6%, and our payment is close to $1700/month with taxes and insurance rolled in.