mortgage question - rates and second mortgage

[spidey07]

Just got a call from my mortgage company (countrywide) and they're looking for business. I have a seooncd "piggy back" mortgage through another lendor that is variable (prime +.5).

I was quoted 7.5% fixed for 15 years for this second mortgage. Doesn't seem too bad, but there's 700 bucks in closing cost.

So I guess I would have to work the numbers to see when the 700 bucks would break even and at what time. Then again looking into a crystal ball to predict prime lending rate over the next 2-4 years might be difficult.

Does 7.5 seem decent these days? I "thought" second mortgages were generally higher rates than primary mortgages.

 

[alkemyst]

Originally posted by: spidey07
Just got a call from my mortgage company (countrywide) and they're looking for business. I have a seooncd "piggy back" mortgage through another lendor that is variable (prime +.5).

I was quoted 7.5% fixed for 15 years for this second mortgage. Doesn't seem too bad, but there's 700 bucks in closing cost.

So I guess I would have to work the numbers to see when the 700 bucks would break even and at what time. Then again looking into a crystal ball to predict prime lending rate over the next 2-4 years might be difficult.

Does 7.5 seem decent these days? I "thought" second mortgages were generally higher rates than primary mortgages.

No one can tell you rate without knowing your credit score and liabilities.

This is how mortgage companies entice home buyers. They advertise a best rate that only a few would qualify for.

The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

7.5 for a second fixed with $700 in closing doesn't sound bad. I'd push as a former customer or current customer to have that dropped to only the 'hard' costs.

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[spidey07]

That brings up another good point, I need to ask them if this will count as revolving credit being used. The current one is, so on a credit report is shows a good chunk of my reloving creidt. But overall credit is very good with about 90K in revolving credit.

Eitherway they're sending me a package and I'll at least take a look at it.

I guess I just don't know what a "good" rate on a second one is.

 

[Vic]

7.5% is a good rate for a fixed 2nd mortgage right now. OTOH, the Fed is likely to start lowering the Prime next year...

 

[spidey07]

thanks for the head check Vic.

Decisions, decisions. It's like looking into a crystal ball.

I haven't run the numbers but off the top of my head if prime stays constant it will take me a few years just to break even with the 700 in closing costs. I may just keep talking to them to see if they'll drop those fees lower. Nothing to lose.

Any comment on 2nd mortgages being counted as revolving credit? It seems to me like they treat it like a HELOC.

 

[alkemyst]

Originally posted by: spidey07
thanks for the head check Vic.

Decisions, decisions. It's like looking into a crystal ball.

I haven't run the numbers but off the top of my head if prime stays constant it will take me a few years just to break even with the 700 in closing costs. I may just keep talking to them to see if they'll drop those fees lower. Nothing to lose.

Any comment on 2nd mortgages being counted as revolving credit? It seems to me like they treat it like a HELOC.

What kind of 2nd mortgage are you getting? Lump sum or one that you can draw from.

Lump sum products should be looked at the same as a regular mortgage...the draw type ones are revolving as you can pay off and re-debt yourself over a certain period.

 

[HomeAppraiser]

Originally posted by: Vic
7.5% is a good rate for a fixed 2nd mortgage right now. OTOH, the Fed is likely to start lowering the Prime next year...

Holy crap! Vic and I finally agree on something!

spidey07 since CountryWide holds your first mortgage, they know your FICO score, the number of cards/accounts you have and their balances.

Is the $700 going towards and appraisal or just closing costs?

Is there a prepayment penalty for the loan?

More answers at: Bankrate.com article.

 

[spidey07]

Originally posted by: alkemyst
What kind of 2nd mortgage are you getting? Lump sum or one that you can draw from.

Lump sum products should be looked at the same as a regular mortgage...the draw type ones are revolving as you can pay off and re-debt yourself over a certain period.

to tell you the truth, don't know. It was a "get her name off your finances/the house STAT!" kind of move.

It was basically a re-finance/restructuring and in doing so I opted to avoid PMI and have a lesser monthly out - a 80/15/5 kind of stucture with the 15 being the second mortgage.

 

[msparish]

Originally posted by: alkemyst

Originally posted by: spidey07
Just got a call from my mortgage company (countrywide) and they're looking for business. I have a seooncd "piggy back" mortgage through another lendor that is variable (prime +.5).

I was quoted 7.5% fixed for 15 years for this second mortgage. Doesn't seem too bad, but there's 700 bucks in closing cost.

So I guess I would have to work the numbers to see when the 700 bucks would break even and at what time. Then again looking into a crystal ball to predict prime lending rate over the next 2-4 years might be difficult.

Does 7.5 seem decent these days? I "thought" second mortgages were generally higher rates than primary mortgages.

The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

Å

You appear to have no clue what you are talking about.

 

[alkemyst]

Originally posted by: msparish
The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

Å

You appear to have no clue what you are talking about.
[/quote]

how so? It always helps to back up such a comment....uh..you know.

I will say there can be exceptions, but for most of those applying for mortgages the outline above is what I have seen.

Someone brings in 7 figures a year, things sort of change.

 

[T9D]

How much to totally refinance the whole house? The fixed rate is about 6.25 right now. Seems better and safer in the long run.

 

[dmcowen674]

Why would you even need a 2nd mortgage when the economy is booming so well and wages are highest ever???

 

[alkemyst]

Originally posted by: dmcowen674
Why would you even need a 2nd mortgage when the economy is booming so well and wages are highest ever???

[pitched fork]back to P&N...back...back...back[/pitched fork]

 

[Britboy]

Originally posted by: alkemyst

Originally posted by: msparish
The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

Å

You appear to have no clue what you are talking about.

how so? It always helps to back up such a comment....uh..you know.

I will say there can be exceptions, but for most of those applying for mortgages the outline above is what I have seen.

Someone brings in 7 figures a year, things sort of change.[/quote]

Have to agree with msparish. I don't know where you got your information from and I would certainly appreciate you posting the source, but I think you are dead wrong about credit scores.

The only way the number of cards can impact you is if you opened a lot of them recently, taking your average life down, and if some of them are from crappy lenders.

What is really important is your credit utilization. If you have more cards you likely have a higher total credit line and lower utilization which helps your score. Basic rules are never go over 90% on any one line and don't go over 50% total.

I got my info from fatwallet finance forums.

 

[alkemyst]

Originally posted by: Britboy

Originally posted by: alkemyst

Originally posted by: msparish
The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

Å

You appear to have no clue what you are talking about.

how so? It always helps to back up such a comment....uh..you know.

I will say there can be exceptions, but for most of those applying for mortgages the outline above is what I have seen.

Someone brings in 7 figures a year, things sort of change.

Have to agree with msparish. I don't know where you got your information from and I would certainly appreciate you posting the source, but I think you are dead wrong about credit scores.

The only way the number of cards can impact you is if you opened a lot of them recently, taking your average life down, and if some of them are from crappy lenders.

What is really important is your credit utilization. If you have more cards you likely have a higher total credit line and lower utilization which helps your score. Basic rules are never go over 90% on any one line and don't go over 50% total.

I got my info from fatwallet finance forums.[/quote]

I have been working in the mortgage industry since I was 12 which was back in 1983.

I was talking about those I have seen that approached a credit score of 800 though.

I said those usually in the the high 700's and those in the below 700's, dont have an insane amount of CC's.

 

[spidey07]

Originally posted by: dmcowen674
Why would you even need a 2nd mortgage when the economy is booming so well and wages are highest ever???

hey dumbass, some of us are already milliionaires (thanks to this booming economy/wages) and want to leverage our money in the best means possible.

back to P&N troll.

 

[msparish]

Originally posted by: alkemyst

Originally posted by: Britboy

Originally posted by: alkemyst

Originally posted by: msparish
The only borrowers I have seen with credit scores approaching 800 are those with one credit card (usually a decent limit), their car payments and a mortgage.

Those with higher 700's usually have only added a few more credit cards.

Those below 700 can have a perfect credit history, but simply have 15-20 credit cards out there, mostly doing nothing. This hurts them as FICO looks at the potential you can add $30k in debt (revolving CC type) to your financial snap shot.

Å

You appear to have no clue what you are talking about.

how so? It always helps to back up such a comment....uh..you know.

I will say there can be exceptions, but for most of those applying for mortgages the outline above is what I have seen.

Someone brings in 7 figures a year, things sort of change.

Have to agree with msparish. I don't know where you got your information from and I would certainly appreciate you posting the source, but I think you are dead wrong about credit scores.

The only way the number of cards can impact you is if you opened a lot of them recently, taking your average life down, and if some of them are from crappy lenders.

What is really important is your credit utilization. If you have more cards you likely have a higher total credit line and lower utilization which helps your score. Basic rules are never go over 90% on any one line and don't go over 50% total.

I got my info from fatwallet finance forums.

I have been working in the mortgage industry since I was 12 which was back in 1983.

I was talking about those I have seen that approached a credit score of 800 though.

I said those usually in the the high 700's and those in the below 700's, dont have an insane amount of CC's.

[/quote]

Sorry for the delayed response, but the number of credit cards you have has absolutely nothing to do with your credit score. It isn't factored into the formulas that spit out the numbers. Concerning credit cards, the average length of time they have been open and the credit utilization percentage are what is used. You can have 20 credit cards and a score of 800.