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Question(s) on buying house/mortgage.

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No Lifer
EDIT: Skip to the two questions if you want to 😀

We just looked at some houses today and realized that a surprising number of lenders will allow for 0% down and no closing costs, so basically all you end up paying is under $1000 for some other crap that the person mentioned today. This shortens the time that we'd potentially try and get a house.

Now the question I have is that come June/July we're going to be of a certain immigrant status that I know at least one lender doesn't understand as to be legal (although it is; their policy is just short-sighted), so we're thinking that instead of waiting until we have this new status and then getting a house trying to get pre-approved for one in May/early June instead...thing is we don't actually want to "sign the dotted line" until we enter into this new status (for security's sake). So ideally we could get pre-approved on our existing status and then keep that, then once we change into the new status actually buy the house.

Question: How long does a mortgage pre-approval normally last for and what guidelines do you have or do they just say "OK you can spend 150k - go find something"?

Question: Are these no closing cost/100% finance deals normally associated with a specific house or houses on one street and are merely a deal between the builder of that street and a lender?

Obviously I should ask a mortgage counseller but I thought that before we get ahead of ourselves I could get some ideas here.
 
0% loans usually come with the dreaded PMI.😉

Usually a builder does work sweeter deals with lenders and that could be a way to go. There are also FHA loans that could be an option.

Typically if a first time buyer does a 0% down deal they actually are doing a 80/20 90/10 or something like that where you borrow the down payment in the form of a second mortgage. You also may be able to find a seller funded second were the seller will loan you the down.

There really is no such thing as a zero closing cost loan they just roll it into the loan. Sometime the buyer pays sometimes the seller pays depends on how it is negotiated. You could join the military and take advantage of the VA zero down program with NO PMI. But that does take a few years out of your life and means you could get shot at😉
 
Make sure lenders out there know that you and MrsSkoorb are not US citizens. Many of those zero down-zero closing costs deals are FHA's which may require that you be a citizen.

Answer to question one: mortgage approvals are typically good for 3 months. However, credit reports and income documentation have to be updated every 30 days.

Question two: could be all of the above or none of the above. For example, it's possible that one of those deals is from the builder paying your closing costs and down payment for you. Then the deal may be good for only one house or just the homes from that builder. Or it could be a special arrangement between builder and lender (although a builder can NEVER pay a lender for providing financing on his propeties, that would violate RESPA). But a lender could offer a special promotion on a builder's properties in exchange for being his "exclusive" or "preferred" lender. Or it could be a local government thing, special community development blah blah blah. Or it could just be a good ol' fashioned government FHA loan with seller-paid down payment via non-profit 3rd party.

Something to note: there are no "zero closing cost" loans. TANSTAAFL. If you don't pay for it in fee, you pay for it in a higher rate.
 
Yes it has a PMI. On a $118k house she said this was about $78 month for a total mortgage of $850 which is like $135 more than we pay for rent, so needless to say we need a freaking house soon! $118 was the lowest in the neighborhood with the most expensive around $25k more, but we really liked the homes. Perfect for us now.

You're right about the closing costs - somewhere it's being paid, but their house prices even including the closing cost were very very sweet for this area. She said she's sold a lot of them over the last while. I'd thought on the 80/20 and that's a possibility, but then we'll need to get a seperate loan for the 20% which will be at a higher interest rate. It's worth definitely considering though.

 
Many of those zero down-zero closing costs deals are FHA's which may require that you be a citizen.
Click to expand...
I checked and he said he's done it for some people on work permits 🙂

What is FHA?

The rate for a 30 year with nothing down was I think 5.75%
 
Consider the 80/20 option, Skoorb. The 2nd mortgage may have a higher rate, but PMI is not tax-deductible 😉
Anyway, check out the payments. If the 80/20 has a similar payment to the 100% PMI option, take the 80/20 and forget about the rate.
 
our credit union took about 3 weeks to pre-approve.

be careful if you pre-approve.... still insist on a financing contengency in your offer to buy.
 
Originally posted by: Skoorb
Many of those zero down-zero closing costs deals are FHA's which may require that you be a citizen.
Click to expand...
I checked and he said he's done it for some people on work permits 🙂

What is FHA?

The rate for a 30 year with nothing down was I think 5.75%
Click to expand...
FHA = Federal Housing Administration, a division of HUD, the Department of Housing and Urban Development. Under certain restrictions, they insure purchase-money mortgage loans made by lenders. FHA loans are similarly priced to VA loans (usually the same rate matrix), but with slightly stricter terms and guidelines, especially how FHA requires a 3% down payment (which, however, can be paid through gift funds from a non-relative) and mortgage insurance while VA does not.
That's a good rate, btw, but don't expect it if you dally around before buying a house. Mortgage rates are subject to daily changes in market conditions and the beginning of the end for low rates is close at hand.
 
Getting an <FONT face=Arial size=2>enema with firberglass is similar to obtaining the proper credit to become a home owner...

Ausm</FONT>
 
Originally posted by: Skoorb
EDIT: Skip to the two questions if you want to 😀

We just looked at some houses today and realized that a surprising number of lenders will allow for 0% down and no closing costs, so basically all you end up paying is under $1000 for some other crap that the person mentioned today. This shortens the time that we'd potentially try and get a house.

Now the question I have is that come June/July we're going to be of a certain immigrant status that I know at least one lender doesn't understand as to be legal (although it is; their policy is just short-sighted), so we're thinking that instead of waiting until we have this new status and then getting a house trying to get pre-approved for one in May/early June instead...thing is we don't actually want to "sign the dotted line" until we enter into this new status (for security's sake). So ideally we could get pre-approved on our existing status and then keep that, then once we change into the new status actually buy the house.

Question: How long does a mortgage pre-approval normally last for and what guidelines do you have or do they just say "OK you can spend 150k - go find something"?

Question: Are these no closing cost/100% finance deals normally associated with a specific house or houses on one street and are merely a deal between the builder of that street and a lender?

Obviously I should ask a mortgage counseller but I thought that before we get ahead of ourselves I could get some ideas here.
Click to expand...

With 100% financing you will still have some costs out of pocket. You could be responsable for property tax and insurance up front. Also these are based on your credit rating. To get 100% finance you will probably need a credit score of around 700.
 
Once you are approved, you are essentially approved forever unless your approval basis changes. (They verify that before closing.) You can then monitor the housing market and rates and lock in whenever you want to at the current rates. When you lock in, you can "buy" the lock in period. Most now seem to default to 60 days but you can get 90 days or whatever with an adjustment of rates and fees.

 
Originally posted by: yamahaXS
man, don't sweat the minor fluations in a rate. any rate under 7 is great!
Click to expand...
A voice of wisdom! 🙂
Rate in and of itself is relative anyway. The most important aspect in any financing is payment.
 
I ran some numbers. a 1/4 increase will cost us about $20/month. 1/4 is chump change but you get up to 1/2 and that's a cable bill right there! I can't see interest rates rising beyond 1/2 by the time we get around to it and they may just sit where they are. PMI is going to be punishing on the long term but really we have no way of getting 20% together this side of 2050, so unless we can also get a 20% loan I guess we gotta live with it.

What it all comes down to though is that it won't cost us more than like $200-250/month more than we're paying now for rent and we get a nice house!
 
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