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Q: Buying a Home - Mortgage (GO or NO-GO, good deal or not) ( No Answer,   3 Comments )
Subject: Buying a Home - Mortgage (GO or NO-GO, good deal or not)
Category: Family and Home > Home
Asked by: vinceman-ga
List Price: $5.00
Posted: 06 Aug 2006 16:08 PDT
Expires: 05 Sep 2006 16:08 PDT
Question ID: 753214
1) Offered on a condo worth 360K 
2) Escrow is closing Aug 16 ($5K deposit)
4) Our real estate agent's lender pulled our credit report Jul 18 and
was around 570
6) We are getting a loan for both downpayment (20%) and mortgage (80%)
- Could not afford downpayment for now.
7) Was told that we're not qualified for interest only
8) They offered us 40yrs - 2yrs fixed/38ARM  for the 80%; and 15yrs
fixed/15yrs ARM for the downpayment.
9) I don't have the specific amounts but overall total is $2900/mo
10) Aug 1- I pulled my credit report online ang got 652
11) Asked another lender and they pulled 570 credit score (Aug2)
12) I'm still shopping around.
13) Checking our budget. We can only afford 3K/month and will have
additional income of $3K/mo two years from now.

I know we are not in the best of credit score but we really wanted a
home and we are working on to improve it, knowing now  how important
it is. I'm very much biased in getting a home now especially that
we've given it some emotional investment.

1) Did I get a good deal on ITEM #8?
2) Is it advisable to buy now or wait till we improve our credit score?
3) In connection with question #2. Is it smart to buy now then
refinance once we get our additional income and improved our scores?
4) Why is there a disparity between the mortgage lenders and the
online credit scores. I did a bit of research on this but I'm not sure
if its the answer.
There is no answer at this time.

Subject: Re: Buying a Home - Mortgage (GO or NO-GO, good deal or not)
From: bcattwood-ga on 07 Aug 2006 05:24 PDT
Seeing as you are already under contract it is a little late to be
asking these questions, but:

1) They certainly seem to be bending over backwards to accommodate
you, which makes me think you are stretching yourself too thin. 
Without knowing the interest rates you'll be paying it is hard to say
if it is a good deal.

2) Do you have ANY savings beyond the $5K deposit?  Could you afford
to pay the realtor's $21K commission out of pocket if you had to sell
a year from now and prices remained flat?

3) Hard to say.  If the market remained hot in your area in two years
you could qualify for a traditional 80% LTV loan based on your equity.
 On the other hand, the condo could lose value.

4) There is no simple mathematical formula for generating a credit
score.  Each provider has their own proprietary method for calculating
it, so it's not surprising that you would get a different score from
your online source.
Subject: Re: Buying a Home - Mortgage (GO or NO-GO, good deal or not)
From: vinceman-ga on 07 Aug 2006 10:38 PDT
Thanks so much bcattwood.

1) the first loan (80%) is around 7.325% the second one is 13.25%

2) No I dont have the 21K for next year. Would this mean I might be
sticking with this loan as long as the market value is not hot enough
to cover for the realtor's commission? (I don't think I have the
knowhow to sell on my own)

3) I see. Is there a refinancing scheme qualifying you solely on
credit score improvement? Or again, I may have to stick out with the
loan if the LTV ratio is not 80%? or better.

4) Thanks. It is just disheartening that disparity on my score is around 90pts.

As for my location in California, basing on the historical price of
the home we are interested with (which is rising modestly). I am
conservatively assuming it might be cooling down flat in the coming
months/years.   In summary, I'm willing to lose the 5K deposit, if all
this is bad idea,
Subject: Re: Buying a Home - Mortgage (GO or NO-GO, good deal or not)
From: neilzero-ga on 18 Aug 2006 04:21 PDT
The number of forclosures is increasing in some locations especially
amoung people with ARM = adjustable rate mortgage.
Not very luxurious condos and houses are available for half that much
money in most locations and there are more sellers than buyers. It is
unlikely that the recent prosparity will continue for 40 years.
Furnishing a less costly house can be done from yard sales, but my
guess is you plan to buy new for your delux condo, which may mean it
will take years for you to get back to the present $5k in savings,
which likely is offset by $50,000 in credit card and vehicle debt.
Generally it is not wise to put all your savings into any kind of
investment. A few weeks of sickness could put you close to
bankruptsey, without a few thousand dollars in liquid assets.  Neil

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