Ditech.com

[HoleshotHolset]

Just got an email: "Hello, This is Xxxxx Xxxxx, I will be your loan officer at Ditech.com/GMAC Mortgage. "



This further confirms that Ditech.com really is GMAC... makes no difference to me.



Matt

 

[HoleshotHolset]

So - what does everyone think about 100% financing? :-laf



Ditech requires 5% minimum...



Matt

 

[TGreschuk]

Hey Matt,

Just remember one thing when you buy your home... Someday, you are going to sell it. When you are looking at a property be mindful of the this fact. For example it may be very convenient to buy a home that is constructed beside an auto repair shop ;o) but you may be disappointed in 10 years if a similar home in a better neighborhood appreciated 50% and yours didn't. My advice is to buy the best home you can afford... even if it is a little stretch. An extra few thousand right now, might seem like a lot, but in 10 years if you are in a home that you love instead of settling for the one that you think is "just ok" you won't have saved a nickel.

Good Luck,

Trent

 

[HoleshotHolset]

Trent:



That's good advice. I can't afford much of a house... so a lot of the places I'm looking for aren't where I'd like to be... or have the amount of land I'd eventually like to have.



BUT - I'll be building equity... instead of making my apartment complex's owner richer by the day.



Matt

 

[BarryG]

You mentioned you don't have much to put down and will have to pay PMI. Another option to paying that is to take out a second mortgage right up front and use it to put down on the first mortgage. Make it just enough to lose the PMI. Your buyers agent or loan officer should be able to give you the details on how and if it will be a good option for you. The payment probably wont be any cheaper but at least it is going towards your equity instead of some insurance companies pocket.

 

[HoleshotHolset]

Barry: I have heard of people doing something like that when refinancing... but never with their first home purchase.



How can I take out a second mortgage when I don't have any equity in a house I just bought?



I'm looking at the zero-down loans... they don't seem to be that bad of a deal. I'm already planning on putting at least an extra $100/month into the house... I ran the numbers and it shaves off a TON of payments over the course of 30 years... and helps to keep the interest down.



Matt

 

[BarryG]

You will want to talk to a lender for sure on this but for example you want a house that cost 100k. You get a first for 80k and a second for 20k (not sure what ratio the PMI drops off where you are at but many places it is 20% equity). You are still maxed out at 100% you may have a little difficulty getting 100% financed house but never hurts to look or ask. I have seen adds for 105% loan value, don't know if the interest rate would be worth it though have never checked into one of those before. Usually the higher the loan to value ratio the higher the interest rate. This is one thing that a buyer agent can help with, they can't get it done but they can direct you to the right resources and answer questions. It may not work for you but well worth the effort to find out.



On paying extra on the house make sure and do the math. Yes it does save a bunch of interest but you also have to look at if you invested that money else where you can get more than mortgage interest rate. Not in a savings account ( at least right now) but 401k which is pretax and then you pay tax on it when you pull it out, a roth ira which is post tax but all the earnings are tax free and being young as you are that can sure add up and lets not forget stocks and bonds and mutual funds. I think I read somewhere that the stock market overall for the last x number years has netted upwards of over 10% a year (not to say there aren't bad ones in there but over the long haul net much better than the 6% or so mortgage that you are going to be paying off. So paying off 6% early or making 10+%, in this case by not paying you do 4% better(which is 67% better). Also I read that making one extra house payment in January saves just as much as making extra contributions each month or also setting up your mortgage so it is paid biweekly (making a half payment every 2 weeks instead of 1 regular a month) actually equals 13 payments a year instead of 12 and will save a bunch of interest over 30 years. Best bet at this point is to get in touch with some reputable finance people and find out what options are open for you. Get with more than one for sure to get different perspectives.

 

[Rman]

The 80-20 split loans are really common but in the end don't save an incredible amount. The 20% loan is at a higher interest rate, but then again you're not paying the PMI on the 80% loan, so in does make you payment better.



Doubling the principle in the early stages of the loan (i. e. first 5 years) will drop a FULL payment off the end of the loan. So really, 100 bucks now will buy you 1000 in 30 years. Accounting for inflation that still decent return I'd say.



Just becareful Matt, the business is littered with crooks looking for your money now and don't care about what happens to you the day after you close your loan. I'm fortunate to have people that looked out for me when I got my loan, and even then I felt like I was getting bent over. Good Luck!!!

 

[HoleshotHolset]

Seems like most places have PMI under 20% equity... I have even found some loans that don't have PMI at all...



This whole process couldn't possibly be any more frustrating or confusing... thanks for putting it into terms that a financial idiot like me can understand.



There sure does seem to be a lot of crooks out there. The only way I won't get bent over too badly is by putting down a hefty down payment. By the time I save up even a little down payment - the rates are bound to go up and winter will be upon us.



Am I foolish for even considering paying PMI and a higher interest rate because I don't have a big down payment? I'm happy with my apartment - but not having a garage (and making my landlord rich... ) really bothers me. I suppose running the numbers on both situations would yield some of my answers...



In my head = "... must buy real estate!!... . must have garage!!"

Reality = "Save up for a good down payment and quit your b*tching!!"



Matt

 

[JPope]

Out of curiosity on home mortages, how many of you guys have run into the mortage paper being sold to another firm, sometimes within the first year?

Had that happen once and the firm tried to get me to sign new papers (bet they wanted to change something in the fine print to there advantage!!!!). They got a little pushy, we had a nice chat, I explained that I had signed papers that were binding on both, and that they could do something up a rope.

Actually that is how I ended up with GMAC this time (they bought the mortage from another company, was sold to others 3 times in 3 years, then GMAC), and has not been sold in quite a few years now, and GMAC has been great to deal with including a refinance. Several people in the business have said that GMAC does not sell mortages like other companies do, but don't know about that?

 

[TnLRacing]

http://houseandhome.msn.com/homes/RepresentingtheBuyer.aspx



Saw this on the other day, thought of you MAtt

 

[ropinfool2]

TnL, great info. Thanks for posting it. JPope, I am on my 6th house, 5 of them have been sold. A couple before I even closed (I got the notice at closing). Doesn't bother me, they can't change the condition of the loan and it normally ends up with a name lender (except my current one, never heard of the lender). John

 

[HoleshotHolset]

TnLRacing: AWESOME link, man. That really puts things into perspective for me as far as the agents go...



I'm quickly finding out that I can not roll my closing costs into the mortgage... unless it is a "103%" mortgage... but they still whack you with a higher rate and more fees.



I found one loan - 15 years (fixed), 0% points, 5. 875%/6. 519% APR, 100% (no money down), and $2200 in total "cash @ closing" costs... this sounds pretty darn good to me.



Matt

 

[TnLRacing]

Have you looked into any of the FHA loans?? I put 3% down on my house, and rolled all the other costs right into the loan. That was with Countrywide Home loans.