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Closed on 2 Mortgages this Week!

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Valued Member

Closed on 2 Mortgages this Week!

Thanks to all of the helpful advice on this forum, I was able to close on 2 loans this week!

 

5/6 -  I remotely closed on a conventional refinance for a house in GA. I did a cash-out refi on my investment property for a cheaper rate, lower monthly payment and to pay off my car note and 2nd mortgage. Since it was both cash-out and investment property, the 5.1% interest rate is a bit higher than if it were a primary home with no cash out. But the previous mortgage was 6.2% and the home equity loan was 8.35%. I bought the house in 2006 when interest rates were much higher and it took forever to recover from the housing crash. Luckily someone else has been paying (most) of the mortgage. The current PITI for this mortgage is more than fully covered by the tenant's rent and I'm saving almost $1000 in monthly expenses that I would be paying out of pocket. 

 

On the refi, I ended up using the same mortgage company as the old mortgage (PHH). I was originally using Chase but they eventually denied me (after I paid for the appraisal) due to DTI issues because of the way they calculate student loans on a conventional mortgage (lender overlay). My original DTI was 40% with both mortgages + car note + home equity loan. With the refinance, the DTI for both mortgages went down to 31.2%. But according to Chase it was over 56% because instead of using whatever student loan amount is listed on the credit report, Chase calculates the payment amount at .5% of the balance. I went to a private law school, so that balance is super high. Also, once Chase found out that I was under contract for a new house, the underwriter started asking for all of the info pertaining to that loan as if he was underwriting that one too. He wanted cancelled deposit and earnest money checks, copies of the sales contract, sourcing for the funds used for those payments, etc.  I found it quite ridiculous, as all they should've been concerned with was how much my expenses would be when considering the new mortgage and how that impacted my DTI. The funds used for that mortgage had nothing to do with Chase. I wasn't putting money down since I had plenty of equity in the house and I wasn't paying any money out of pocket. The money in my bank account was already seasoned but they wanted to see bank statements from 4 to 5 months ago to verify the deposit money for a mortgage that had nothing to do with them. PHH was a smooth process and I probably could've closed in 2 weeks had I not wasted so much time dealing with Chase in the first place.

 

5/11 - I closed on a VA loan for my primary residence after waiting almost 9 months for the new construction to be completed. 3.875% interest rate. I found a great mortgage broker that was able to beat the builder's lender's rate and match the 6k closing cost incentive. After allowing the builder's lender and broker to compete with each other, I went with the broker because I could use her for future mortgages. The builder's lender only did loans for the builder. NFCU was willing to match the rate (after initially quoting me a much higher rate) but could not match the closing cost incentive so I didn't use them. I found working with a broker much less stressful than working directly with the bank because she was completely on top of things and handled all of the hurdles and LOAs, only involving me when absolutely necessary. She also covered the costs to extend my rate lock for 10 days after a delay by the builder. Overall, I had a very positive experience with this loan and closing and I know it's because I had an experienced broker and a very involved real estate agent to handle all the builder issues. 

 

I learned so much from this site that directly benefitted me throughout this process. My real estate agent and lender were amazed at how much I knew. I had a spreadsheet tracking my scores over time and automatically calculating my DTI based on my expenses and income. I started off with a middle score of 702 when I signed the new build contract last August. I used the AZEO method to get my score up to 764 when I was ready to lock in Mar.  I also shopped around with different types of lenders-- builder's lender, a credit union (NFCU), and a broker. This put me in a great negotiating position and I was able to get my rates down even lower + other concessions (e.g., broker paying for 2-week rate extension, matching 6k closing costs). After I was approved for the mortgage, I decided to shop for the refi within the same 21 day period to minimize inquiry impact since my credit score qualified me for the best rate. I figured since this would only improve my current position, I should just go for it and get it out of the way. I'm so happy that I did and that both mortgages are done!

 

If anyone is in a similar position or has any questions, I'm more than willing to answer them. It's my way of paying it fwd for all of the help that I've received from (mostly) stalking this site for the past 9 or 10 months.

Message 1 of 22
21 REPLIES 21
Valued Contributor

Re: Closed on 2 Mortgages this Week!

Curious on your spreadsheet!  I'd like to set up something exactly like this!  I've been tracking scores and our budget but what you have/had in place is exactly what I need and I didn't realize it till you shared what you did and how you did it.  Would you be willing to share? 

Thank you for sharing your experience.  I really appreciate when someone can share what they have done or didn't do. 

And congratulations on your accomplisments!  I am sure I will be asking more questions as we approach our purchasing journey. 

Message 2 of 22
Frequent Contributor

Re: Closed on 2 Mortgages this Week!

I hear you on the private law school! Student loan debt is killing my DTI... but thankfully I’m able to go up to 56.9%. Still, it’s a bit crazy that I pay nothing (3L), my IBR is $450/mo once my in-school deferral ends, and the Mortgage UW uses $2150/mo. Dude.
FICO8: Low 700s. FICO9: Mid 700s. Goal: 800 club
Message 3 of 22
Valued Member

Re: Closed on 2 Mortgages this Week!


@Hasselfree wrote:

Curious on your spreadsheet!  I'd like to set up something exactly like this!  I've been tracking scores and our budget but what you have/had in place is exactly what I need and I didn't realize it till you shared what you did and how you did it.  Would you be willing to share? 

Thank you for sharing your experience.  I really appreciate when someone can share what they have done or didn't do. 

And congratulations on your accomplisments!  I am sure I will be asking more questions as we approach our purchasing journey. 


Sure. If you PM me your email address I will send you what I have!

Message 4 of 22
Valued Member

Re: Closed on 2 Mortgages this Week!


@Readyformyhome wrote:
I hear you on the private law school! Student loan debt is killing my DTI... but thankfully I’m able to go up to 56.9%. Still, it’s a bit crazy that I pay nothing (3L), my IBR is $450/mo once my in-school deferral ends, and the Mortgage UW uses $2150/mo. Dude.

@Readyformyhome I plan to be on IBR FOREVER lol. Even with a high income, REPAYE only requires you to pay 10% of your discretionary income (AGI) and takes into account household size. I told the loan officer that I will never pay anywhere near the amount they calculated for me. I already have 2 years of public service loan forgiveness that has been certified. I left public service for more money but I will go back for another 8 years and (hopefully) get loan forgiveness before I pay such an outrageous monthly payment. Interest capitalization is crazy and is one of the things I wish I knew more about before going to law school. The laws changed during my 1L year and the govt stopped giving subsidized loans to grad students. Now I owe WAY more than I actually borrowed.

Message 5 of 22
Valued Member

Re: Closed on 2 Mortgages this Week!

Same! 6 years post law school and my loans are double what I borrowed. I've accepted that I will never pay them off and shifted my focus to figuring out how to pay the IRS bill that's going to come with the write-off of my student loans after 20 or 25 years. Also wish I would have known more about this before going to a private law school. 

I'm looking to get a contruction loan/mortgage in 12-18 months after I pay off the lot. It is my understanding that if I keep my scores above 720 and qualify for conventional loan, my "actual" student loan payments will be used to determine my DTI rather than a percentage of my loan balance used when applying for insured loans. My info is from a few years ago when I first looked into buying a house. I'm hoping any recent changes won't negatively impact me. (crossing fingers)

Message 6 of 22
New Contributor

Re: Closed on 2 Mortgages this Week!


@orion1017 wrote:

@Hasselfree wrote:

Curious on your spreadsheet!  I'd like to set up something exactly like this!  I've been tracking scores and our budget but what you have/had in place is exactly what I need and I didn't realize it till you shared what you did and how you did it.  Would you be willing to share? 

Thank you for sharing your experience.  I really appreciate when someone can share what they have done or didn't do. 

And congratulations on your accomplisments!  I am sure I will be asking more questions as we approach our purchasing journey. 


Sure. If you PM me your email address I will send you what I have!


Can you also send me the spreadsheet? I am looking for something just like this!

Message 7 of 22
Valued Member

Re: Closed on 2 Mortgages this Week!

Sorry for the late reply MikeMike18. Please check your PM for the google drive link to the excel file. I figured it would be easier to share that way. You will have to save or download to make edits. 

 

If anyone else wants it I'm more than happy to share the link. Just know that although I'm pretty good with excel, I am by no means an expert and this was for my own personal use (but it worked out really well and I had no surprises during my mortgage process). If u see anything wrong let me know. I certainly don't want to mislead anyone.

Message 8 of 22
Established Member

Re: Closed on 2 Mortgages this Week!

@orion1017 which lender did you use for you invest property Cash out refi ? 


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Message 9 of 22
Valued Member

Re: Closed on 2 Mortgages this Week!

I used the lender that I already had a mortgage with -- PHH Mortgage. I was going to use Chase but they had student loan overlays that disqualified me once they factored in the new mortgage.

Message 10 of 22
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