topic Re: Revelate's home buying - here we go! in Mortgage Loans

Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 00:32:45 GMT

So after many years of building credit and one prior mortgage bust (couldn't clear the FICO hurdle for jumbo loans out of the people I talked to), it's go time!

I know basically what I'm looking for, and I have done what education I can of myself for how mortgage underwriting works, but we'll see what I can get. I am going with multiple lenders since in the jumbo space, to quote someone mortgage smarter than I am: it's the Wild West show currently here in So Cal.

In order of filing documentation: Chase, Logix CU, Thebesthomeloans, and if I still need another, well we'll see: trifecta of lender types. Also if I wind up going cheaper because nothing works out, I can take my employer discount but the employer simply isn't competitive when looking to buy something nice... jumbo loans are deterrent priced for them and the .5% discount doesn't make it up. Actually their 417-625K high balance conventional product, is the same rate as I'm getting <1M from either lender on the preliminary details, and Chase is a little cheaper (relationship banking, more on that later).

Don't have an exact property in mind which apparently is a holdup these days; the Chase banker simply suggested that they weren't winning enough deals to really go forward without a firm committment (read, offer made on house) but he was happy to pull credit and take my statements with documentation forthcoming unlike what they used to do (full UW pre-offer so could remove the financing contingency) Logix was just an online app and a ballpark for all numbers.

Interesting tidbits so far: Chase does not distinguish between SFH and Condo in their jumbo product, unlike the standard conventional where >75% LTV, you pay a .250% penalty. Also Chase now has a 15% down jumbo which is an utterly sweet deal - the difference in interest rates between the 20% down and 15% down can be negated on an 850k mortgage on 1M by buying 3/8 of a point... which on calculator math works out to 3K based on today's pricing. I don't know why anyone would put down 20% with that deal there, the only downside is it's restricted to a FICO of 740 or better: I'm at a 725, and even my high score doesn't reach it. Don't think I ever get 740 on a mortgage trifecta until I'm clean in another 2.5 years but oh well, can't afford to wait that long.

There is a difference in their jumbo product at 650K and up vs lower than that as far as rate goes, which sort of dictates my shopping strata at 812.5K minimum with 20% down. Backend ratio for Chase jumbo here is 43%, with exceptions being made up to 50%... I don't need an exception hah, I can hit what I think I want around 36% so I clear that by enough. Frontend ratio apparently means squat.

Also I've been a Chase customer for the past several years as my primary depository institution - they have a customer reward if you autopay it out of a Chase account, I'd get back $40/month, which was what I was going to do anyway unless there was an arbitrage play with a credit card. Effective rate goes from 3.75 -> 3.67% by my numbers on that, every little bit helps and it was certainly implied that new checking account customers could get it as well. The rate may change if I wind up in a condo that has more than 4 floors... not sure what the penalty if any is on that, but the loan officer did suggest if I found another lender with a cheaper rate to let him know: nice to know they're willing to compete when the customer isn't just sole sourcing their mortgage app.

Also they were really pushing a free credit optimization service; um no, I can pretty much guaruntee you this is as good as it gets for me unless you can find a way for the State of California to remove my paid yet legitimate lien via public referendum which failed last time. I assure you Mr. LO, for once you have a customer that knows how credit scoring mostly works or at least the major points!

Logix: only went through their online application, was pretty easy to accomplish though I'm stuck till Monday apparently in being able to contact them. This was mostly a control case as I don't really have much of a relationship at all there of any type, but the cost of additional mortgage inquiries is nothing, and there I did toss in the 5+ story condo metric... couldn't really talk about different options for their loans (though I can't see getting a SFH in this school district right now, 1M is a fixer-upper according to Redfin and it's a worse commute, meh). 3.75% on a 680K mortgage.

I did do something dumb: they had a web form after pulling my credit report to ask which of my current obligations I was going to pay off (if any) pre-closing... and like an idiot, I pressed "Will Pay" on the Chase Freedom since I'd already paid it to zero the day before... and that $43 balance with a $20 obligation got written into the loan documentation as must be paid or the loan would be re-evaluated. SMH, that's the disadvantage to not talking to a human being I guess. Was nice to see they didn't count any of my $0 tradelines as requiring payment of any sort, not that it really mattered in my case anyway with near zero debt.

Going looking at a few places tomorrow, slumming through a series of open houses (I probably should've done this previously) to try to get a feel for the differences in prices among other things, and that likely will be my weekends for the next couple of weeks unless I get altogether luckier than I should be. Using Redfin as a realtor since I didn't know anyone out here and I've used their service for a while, we'll see how that goes. The local recommendations I got struck me as hobbiests, and that's not what I want. Make sure I don't do anything dumb on an offer and make sure ducks are in rows, we'll get along famously heh.

Ah well, I'm sure I'll be missing all sorts of stuff in this, I'm probably not fully ready for the full home w/yard ownership thing, but I can manage a condo... halfway house for all sorts of reasons in my life apparently, but realized the flop house really didn't make any sense, so trying to pick something with enough flexibility that can last me for a decade or longer if I get stuck there. Only downside would be potential resale but am expecting to live in LA for a while, that can be managed somehow later.

Anyway will keep this thread updated as I go through more things... greatly appreciate all the information and feedback I've gotten from here over time, and hopefully my meandering through this journey will help some others in the future.

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 00:35:55 GMT

As for an aside, the only monitoring solution out of MF, CK, CS to pick up the mortgage inquiries: CS.

Chase may have pulled credit twice according to monitoring solution, not sure on that one. Logix pulled via CBC Innovis as a 3rd party provider.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 00:33:00 GMT

Go get em rev. You could buy a city block for those numbers where my house is

CK will pick up the inquiries overnight. My fico still hasnt picked up the TU pulls on me from february or april. The others showed up about 4 days later.

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 00:34:42 GMT

@Anonymous wrote:
Go get em rev. You could buy a city block for those numbers where my house is
CK will pick up the inquiries overnight. My fico still hasnt picked up the TU pulls on me from february or april. The others showed up about 4 days later.

Yeah Socal sure is purty but it's expensive as hell.

It's not lost on me that if I pay this darned thing off w/in 30 years that even if I could resell it flat adjusting for inflation, I could pickup a nice place somewhere else in the country and likely fund most of my retirement out of the proceeds. Just simply goofy prices but it's where my life is.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 00:40:44 GMT

Yeah, my room mate's brother just sold a beautiful place in San Diego for 1.2. They got almost 2x as much house in washington state for 680k.

PS i think you just lost your shiny spade

Re: Revelate's home buying - here we go!

Its_Me — Sun, 31 May 2015 00:46:06 GMT

Best of luck - Keep us posted!

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 01:07:23 GMT

@Anonymous wrote:
Yeah, my room mate's brother just sold a beautiful place in San Diego for 1.2. They got almost 2x as much house in washington state for 680k.
PS i think you just lost your shiny spade

Hah right you are, Gardening fail!

And most of Washington State absolutely qualifies as a nice place to live as well, and it's not exactly cheap these days I don't think either other than my Cali and a few other places standards.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 02:35:05 GMT

I'm rooting for ya! Congratulations on starting your quest!

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 02:38:57 GMT

All the best- Keep us posted...

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 06:01:12 GMT

Found out a little more about the jumbo space, and apparently the big players with few exceptions have it sewn up.

Guess rolling with 2 lenders, both similar rates, as a hedge in case one of them screws the proverbial pooch and my employer as a backup in case the offer price doesn't fit in the jumbo range and I need a conforming / high balance conventional agency loan on whatever thing I throw an offer at (on the assumption it gets accepted). I took a second look at the broader market and I'm shopping at a really awkward price point; one would think there would be a linear price curve but there just isn't one across school district lines as near as I can discern here.

Sadly I've done myself a probable disservice and the location I'd picked out a couple months ago keeps getting more and more attractive from my own perspective to the point I think it's the most rational place for me, but most of the inventory there got snapped up in the last couple of months that I've been aware other than a recent no possible way can the market justify that price, and another which may still be priced beyond the market though that one I'm guessing is only 20ish thousand above (which admittedly is only 2% difference, though an additional 840/year doesn't sound like a good time if it can be avoided) after the seller switched listing agents and dropped it 25K already after being on the market for almost half a year... well guess that's where the professionals come in. On the plus side there's 6 sales within the last year so it should be an easy one to do if it's worth making an offer on.

Some comparisons get whacky, one had a 55' TV and Bose speakers installed apparently (750k condo and they put Bose in, le sigh) ... sort of strange unless it was installed into the wall I guess but since near water locale condos all appear to get priced on view first and everything else second, should be enough to go on.

Starting to see why folks get worried about the mortgage process, barely even started and I already have some concerns about being able to do this. Oh well, just have to remember if it ain't right, walk... there's always another home.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 10:38:53 GMT

@Revelate wrote:
Found out a little more
........

Starting to see why folks get worried about the mortgage process, barely even started and I already have some concerns about being able to do this. Oh well, just have to remember if it ain't right, walk... there's always another home.

One step at a time friend, and you'll get there. For about a year before I started househunting I was watching all those real estate TV shows, you know, Househunters, Househunters International, Love it or List it, etc etc. I don't know if you've ever watched any of those, but they basically follow people through the homebuying process. The realtor takes them around to 3 or 4 places (or more) within their budget and then the buyers hem and haw and agonize on which one to choose. After finally deciding which property they want, the show wraps up with them moved in and loving their new place. Ha. Not.the.way.it.works. At.all.

In a span of about three months I looked at probably about 30 houses. Should have been easy to just pick one, buy it (my financing was already in place), and move on in. That is not what happened, at all. Several times I was prepared to make an offer only to find that the property just went under contract to someone else (this actually happened once while I was literally standing in the house with my agent). I finally made it to escrow on one house, had a closing date, inspections all done, repairs done, insurance obtained, etc etc, only for the appraisal to come in too low and seller refused to budge. I was out $750 on inspections and appraisal fees when that deal fell apart. Started looking again. Sent my agent a list of possibles every few days - again with the "just went under contract" on half of those. Made an offer on another, which was accepted. Home inspection revealed $25,000 problem with foundation settling (which seller knew about but failed to disclose, but that's another story), seller refused to fix, deal failed. Out $350 for the inspection on that one. At that point I was already $1100 poorer with nothing to show for it. Another few weeks followed the same pattern; ready to make an offer, property just went under contract. I can't count the number of times that happened. It was such a roller coaster of excitement followed by disappointment that I was ready to throw in the towel quite a few times. My agent was such a fantastic man and when my spirits lagged he was always there to tell me that my house would come and when the right one came along everything would fall perfectly into place. He was one of those "what is meant to happen will happen" kind of people. And it turns out, he was right.

One day while checking new listings, which I did every day, I spotted a new listing for house in the exact neighborhood I wanted, just the right size, just the right floor plan, just the right landscaping, just the right price. I called my oh-so-patient realtor right on the spot (it was 6:00 a.m.!!!) and told him we needed to see that house that very day. He called me back at noon and told me the house was owner listed (no selling agent to deal with) and the owner would be happy to meet with us at 4 p.m. that day for a showing. We were the first to view the home, which was perfect, perfect, perfect. We sat down at her kitchen table, just the three of us, came to an agreement, and signed a contract and picked a closing date right on the spot. That weekend the sellers (who were moving out of state) signed a contract on their new house in the new state, which they found their first day of looking, and were set to close two days after our closing. Within the next two weeks inspections/repairs were completed, appraisal came in fine, insurance obtained, and we closed right on time.

What I'm saying is that this process requires patience, perserverence, a good agent, a good LO, and the ability to roll with punches and get up the next morning and start all over again if you have to. For me, circumstances intervened many times and prevented a deal that, in retrospect, was not supposed to happen anyway. I am so happy now that all those other houses fell through because I am now in the house that feels like it was made just for me. It is perfect and it felt like home the very first time I walked in.

Keep your chin up. "Your" house will come along; maybe not exactly when you want it to, any maybe not without some stumbles along the way, but it will come.

I wish you the best.

Marlena

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 16:56:35 GMT

Thank you for sharing Marlena!

Rather puts things in perspective for me; I never did watch any of those home buying shows (or much of any TV in my adult life heh). Not certain the market here is that competitive right now, wonder if there's a disconnect (sellers too high, buyers too low) or something as looking at some history some places are moving lickety split (listing date vs. sold date) and the prices are across the board more reasonable for similar places.

Guess that is the market comparison right there now that I think about it.

How common is for sale by owner? I've looked at Redfin off and on for the past couple of years and only saw the pink house listing once. I'd think it'd be more frequent in some respect.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 17:19:06 GMT

What part of SoCal are you in rev? My roommates sister in law was in the RE biz, they never even let the house hit MLS, pocket listing. It showed up on MLS after it went under contract, you might be seeing the same thing. If you are in SD I can get you some names of agents who can prob help. They were here a couple weeks ago and she said it was becoming more and more common, keeps the riffraff from house gawking at places they can't afford.

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 17:39:39 GMT

@Anonymous wrote:
What part of SoCal are you in rev? My roommates sister in law was in the RE biz, they never even let the house hit MLS, pocket listing. It showed up on MLS after it went under contract, you might be seeing the same thing. If you are in SD I can get you some names of agents who can prob help. They were here a couple weeks ago and she said it was becoming more and more common, keeps the riffraff from house gawking at places they can't afford.

Hrm, qualified maybe. What's the lag time in the MLS updates on a third party sight like Redfin? Would what you suggest may be happening would the listing show up under "backup offers accepted" or similar, or would it wind up being available for call it a week, when it was really under contract before the status changed?

I had never thought of that, I'm going to drift through one open house today and actually meet the Redfin realtor at the second (which is a place I actually might be interested in) and see if that process actually works or if I do need one of the more locally connected realtors as sort of can be inferred from your post. Hmm, there's got to be a place with MLS listings that I can quickly get at the realtors over time though do realtors typically do full service or do they focus on either the buying or selling side of the transaction, "specialized" if you will?

I'm in LA, if the Redfin experiment doesn't work, guess I can ask one of the LO's as I'm sure they're not above kicking service to someone they like working with... which in their line of work, usually means they get deals done for the LO presumably which isn't a bad symbiotic arrangement to take advantage of in some respects if you're happy with the rate from said LO/lender I guess.

Now that I'm looking more closely you're right, a bunch of places on the market don't have open houses, actually I should track that too on any property that comes up that I might even possibly be interested in. Didn't think of the "riff-raff" gawking, not in my personality, if I don't have a prayer of being able to afford it seems like not only a waste of time but something that would set me up for failure in this process (wanting too much than I reasonably could get access to).

Online "so this is what 2M+ (insert number here for the ocean front places) gets you" from pictures on listing is good enough for me.

Actually probably would be helpful to pay attention to who's coming into the open houses too as you suggest. Oi vey competitive real estate can be complex, would never want to be a realtor I think.

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 18:52:34 GMT

Turn around time varies greatly, the best site for me was coldwell banker, it rips the listings off MLS way faster than anybody else does. Redfin here was updating my searches with houses 2 days behind CB. Century 21 was 1-2 days late, same for remax, realtor.com. Zillow/Trulia could be a week late. There were times I would get confused because Ihad already seen the same house pop up 3 different times. Hell zillow would show a new listing when coldwell banker was on a price change.

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 18:54:09 GMT

@Anonymous wrote:
Turn around time varies greatly, the best site for me was coldwell banker, it rips the listings off MLS way faster than anybody else does. Redfin here was updating my searches with houses 2 days behind CB. Century 21 was 1-2 days late, same for remax, realtor.com. Zillow/Trulia could be a week late. There were times I would get confused because Ihad already seen the same house pop up 3 different times. Hell zillow would show a new listing when coldwell banker was on a price change.

Thank you for that insight!

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 19:03:34 GMT

@Revelate wrote:
Thank you for sharing Marlena!

Rather puts things in perspective for me; I never did watch any of those home buying shows (or much of any TV in my adult life heh). Not certain the market here is that competitive right now, wonder if there's a disconnect (sellers too high, buyers too low) or something as looking at some history some places are moving lickety split (listing date vs. sold date) and the prices are across the board more reasonable for similar places.

Guess that is the market comparison right there now that I think about it.

How common is for sale by owner? I've looked at Redfin off and on for the past couple of years and only saw the pink house listing once. I'd think it'd be more frequent in some respect.

It wasn't a traditional "for sale by owner" situation. In our area anyone can pay the fee and list their property right on the MLS. It's issued an MLS number and given a listing just like any other property listed by a real estate agency. Turns out the seller was a Realtor herself in a previous life so she just cut the selling agent right out of the deal and took care of it herself.

The market here in Charleston, SC is very, very active at the moment. Houses that are move-in ready and priced appropriately are gone in days, so nothing worth buying is around for more than a blink of an eye. I was very surprised at how many times houses were snatched from under me by someone quicker to the draw. My own house is a perfect example - I saw the listing the day it hit the MLS and by 5 p.m. that afternoon it was under contract - by ME!!!

Re: Revelate's home buying - here we go!

Anonymous — Sun, 31 May 2015 19:05:36 GMT

Also, just google searching gave me a site called LApocketlistings.com looks like they may have some stuff in your price range, that almost certainly is NOT anywhere on MLS. I just called Susan (roommates sis in law) she says its very very common in LA for brokers to hold listings if they are established RE Brokers. It ensures they get actually qualified buyers and offers them possible dual agency. I'm way out of my depth in that price range, but I would make sure your agent either has significant experience or/and good connections. I guess the same thing is happening in London, NYC, SD, SF and a few other places with hot markets.

Re: Revelate's home buying - here we go!

Its_Me — Sun, 31 May 2015 19:49:08 GMT

@Anonymous wrote:
Turn around time varies greatly, the best site for me was coldwell banker, it rips the listings off MLS way faster than anybody else does. Redfin here was updating my searches with houses 2 days behind CB. Century 21 was 1-2 days late, same for remax, realtor.com. Zillow/Trulia could be a week late. There were times I would get confused because Ihad already seen the same house pop up 3 different times. Hell zillow would show a new listing when coldwell banker was on a price change.

My Realtor has an app they (or somebody) created that updates as soon as they hit the MLS. It also updates pending and contingent listings pretty frequently. It's been quite helpful. I also receive an email based on a custom search each time a new home hits the MLS. I'm in Ohio so homes aren't selling like hotcakes but I do notice that many of them aren't listed long. As soon as I get preapproval and see something I like, I will need to act on it.

Re: Revelate's home buying - here we go!

Revelate — Sun, 31 May 2015 23:21:07 GMT

@Anonymous wrote:
Also, just google searching gave me a site called LApocketlistings.com looks like they may have some stuff in your price range, that almost certainly is NOT anywhere on MLS. I just called Susan (roommates sis in law) she says its very very common in LA for brokers to hold listings if they are established RE Brokers. It ensures they get actually qualified buyers and offers them possible dual agency. I'm way out of my depth in that price range, but I would make sure your agent either has significant experience or/and good connections. I guess the same thing is happening in London, NYC, SD, SF and a few other places with hot markets.

Yeah, I got that impression when I was wandering around today that there may be a secondary market... was a few obviously for sale places in driving around that I didn't see, not that I even bothered: if you have to ask the price, you can't afford it anyway. I can see the advantages for pulling off a dual agency win to be sure, especially with the pricing around here... and yeah, the local connections bit is going to be key I think, though strangely the best friend of the listing realtor, is now working in the same office as my realtor: real estate is apparently very small world. Guess that could be either good or bad.

I don't honestly know if it would make a difference right now, when it's game time for the long-term house on the assumption I have kids in the future, that one absolutely the local connections would be key, without a doubt, but right now those houses are around 1.2M which I can't afford currently.

Walked through 2 open houses sans realtor, not sure whether it's because I clean up OK or it's just any client with a pulse will do, but they threw business cards at me without my even soliciting for them. Neither were appropriate for me but I digress.

Did go through the one listing I was actually interested in, and I can see the value in an experienced realtor... asked some questions I would've never thought to ask on my own (seller's requirements, title issues since it was investment trust, and what does the seller want to see in a strong offer) some of which had obvious answers (duh, price) but it was interesting to see the two professionals in the room exchanging information. Learned some things just listening to the conversation which definitely makes me a more educated buyer.

Was a little surprised that neither of them had good comps, didn't seem like it was that hard to make a swag based on prior sales in this complex but it's more likely I don't know what makes a good comparison when you get something off a one-off location / complex. It's just over on the right side of the school district line, that and the view (which absolutely did not suck, like seriously if I get "stuck" waking up to that for the next 30 years, I assure you, I'll be OK!) tack on like 200K apparently. So Cal pricing, though cost of sticking the theoretical kids through private school is a lot more than that over time I suspect so I understand the price difference. There was one couple with what looked like an 8-10 year old there, I'm just guessing that people aren't quite certain what they're out for as based on what I know of the area, they really need to suck up the crappier commute whereas I don't want that currently sans kids... that'd be the jump I make in 5-7 years if everything goes swimmingly well in my life though it was clear those houses based on similar financing would need some work whereas this was pretty much move-in ready.

I liked the place a lot though, some of it was a little dated which may get replaced later and I simply cannot get a better location for myself where I live between commute, right school district, and easy access to my hobbies (soccer refereeing and running, I used to drive 30 minutes to get here to run, rolling out of bed, stumbling down the stairs, a little uphill and then running right along the drive overlooking the ocean... um, yes please!). Whether I find a chica and raise a few kids or I don't, this works for at least the next decade or so in either event.

Something I wasn't sure on but I guess this is where you have to trust the realtor: he made a comment about putting your offer in 5% lower than you are targetting... which here is like 40K from their asking price, and from where I sort of thought it should be priced at (which I checked Zillow estimate afterwards and difference was 2K, even I thought that was strange) is closer to 60K off their asking price. I think based on financing availability in the market I need to set a floor on the offer based on the stretch that other offers would be made based off what could be reached with conventional and FHA mortgages... and nobody that I saw there today at any rate would be giving an all cash offer. If someone bets the farm on one of those newer 10% down jumbos, well fine they can have it.

Asked the realtor for a good market analysis, hope to make at least a competitive offer: if they take it I win, if they don't, my lenders at least will have done the pre-work needed for next time, so I win there too. There was something I thought odd where the realtor suggested that for a strong offer I include not only the pre-approval letter, but also proof of funds, and optionally my credit report. I don't have any issue with this (after blacking out the relevant account numbers and most of the SSN) but I thought that's what the listing agent's phone call to the loan officer listed on the pre-approval letter, but I guess a first-hand look at the documents is important with the various fly-by-night mortgage mills around?

Is this a common step for offers in a competitive market in that I know a bunch of deals historically around here have fallen apart on financing?

Anyway thank you everyone for the discussion on this, been very educational for me as I attempt to navigate this process!