Loan Critique

[Tuscani]

My bro got quoted 7.375 on a 40 year, 100 percent financing with a 660 mid score. His DTI is around 50 percent. Does this sound ok?

[cgmiller63]

Is this a fixed rate?  If so, it sounds okay to me.

[Anonymous]

how much is the loan amount.

[Tuscani]

Yes it is fixed... loan amount is $225k.

Offers on the table thus far:

Option #1:

40yr, 7.375%, 225k, $0 down

Option #2:

6.375% on a 30 year fixed one point in cost. These would have PMI

6.75% No Point

Option #3:

Lender Paid MI

7% NO MI cost of one point

6.875% (if we can get a 680 mid score) NO MI cost of one point

Option #4:

7.5% NO MI no points

7.375% No MI (assume 680 score) No Points

FYI...

The house he wants to buy has been on and off of the market since 2005 and is currently in short sale.

Initially went on the market in 2005 at $330k. House is listed now as $219k. He was going to offer $209k, however it was recommended he offer $215k and ask for 3% seller credit. Taxable value is $236k.

Thoughts?

[Tuscani]

Here are the new numbers:

"

Fannie Mae level one.

On a loan amount of 227,000 total payment would be 2014.00 this includes everything.  Based on a interest rate of 7.25%

I also have it approved FHA now keep in mind that approval is based on your current assets and if we can get the overtime approved.

Total payment would be 1805.26 including everything. Based on a interest rate of 6.75% and of course this is with putting 3% down $ 6800"

[Anonymous]

You need a HUD-1 for each (supplied by each lender or for each program).

Keep in mind TOTAL closing costs, not just the payment and interest rate, also call a Tax attorney, CPA etc and get an idea of how each would help tax wise... perhaps the interest can drop them into a lower bracket overall.

[MidnightVoice]

The Fed are meeting next week and might be lowering rates - word is 0.25 or possibly 0.5%.

Will this affect mortgages?

[Anonymous]

From an email sent by a lender I refer to (I'm a Realtor) sent on Sep 10:

Economic Reports

"There are no economic reports set for release today, but the market could react to speeches from several different Fed members. Stock and Bond market Traders will be listening for any hints about rate cuts or what the Fed may do at the upcoming Fed Meeting on September 18th.

Fed rate cuts will help lower rates on Home Equity Lines of Credit, personal loans, auto loans and commercial paper, but a rate cut by the Fed may actually cause fixed rate mortgage rates to worsen. So we will pay close attention to the Fed comments at the next meeting.