Well, all is not well in the lending industry. But we all knew that. I just thought I was immune to the banking problems. hahaha...guess not. Heres an inside look at what I learned today-
Bank #1 called me back wanting to know why I was bothering them when I clearly don't qualify for a mortgage.
Empowered by yesterdays lending tree approval, I stated my case. Banker at bank #1 hands me off to her boss.
Boss says I cannot even touch a "normal" mortgage based on our measly income...but let her see what she could do.
Calls me back with these lending parameters:
If I put 25% down (50k)...they will loan me 150k. Interest rate is 7% for 5 years- after that it balloons to whatever the current mortgage rates are...and it must be a 15 yr mortgage...and I must liquify at least $80,000 and transfer it into their bank into CD's or something so that- they get the business? or they can seize it if I don't pay?...they kind of lost me there because I had loud ringing bells going off in my head and a smart librarian girl was screaming "DONT DO IT!!"- they kept stressing this was an in house loan and they were trying to work with me and around my situation. When asking why I cant get a 30 yr fixed- they said they NO LONGER OFFER THEM??? I don't know. Whatever. It's not going to work so I just said that I would think about it. I think they were qualifying me for a commercial loan because they were actually counting the duplex rental income on this loan...
Bank #2 (Broker guy from lending tree)...all is not well there either. I thought yesterdays 16 pg document was an approval, but he called me back today saying he was meeting with his boss to discuss my case. I guess he compiled all my info into a mortgage and sent it to me to verify that the info was correct- and perhaps added in the 6.653% interest rate to scare me away. It didn't work and so now he's stuck in a meeting to "discuss my case" with his boss.
Bank #3 is "still in underwriting" (where it has been for well over 2 weeks). No decision there.
BB is telling me he does not want to lose the house because of 1/2% interest point. I have my pride. I refuse to pay as if I have a bankruptcy or foreclosure in my background. I'm not going to agree to over pay for something everyone else is getting cheaper. I'll wait if I have too.
BB says we can always refinance later. That's what all the people now losing their homes thought too.
So we have compromised. I want an $850 a month mortgage. If we must go with a 6.5% interest rate (or higher) then we will have to negotiate harder and knock ANOTHER $20,000 off the cost of the house. Then my payment is at $850 plus all the other crap like I was planning all along when I assumed I would be able to lock in a decent interest rate.
BB accepts this plan. Poor BB. There's no way the seller will go that low on the house. But I will let him try...
PS. Congrats Monkey Mama on your awesome refi today!! Instead of discouraging me- your post made me dig in my heels and stick to my pride harder.
adventures in mortgage- land
December 11th, 2008 at 04:08 am
December 11th, 2008 at 08:17 am 1228983450
hope it all goes well in the end.
I absolutely HATE IT when everything has a time limit and it all needs to fall in sync otherwise the plan will fall apart. just makes me so STRESSED! i can't even imagine how you guys must be feeling right now!
December 11th, 2008 at 03:45 pm 1229010351
Right! Calculate what would happen under the worst case scenario (the highest rate you could possibly end up with) and if you think you could make that work, then go ahead. Hopefully you can refinance down the road, but don't assume you can.
Good luck!
I know you really really want this house, but just remember that if you don't get this one some day another will come along that you like just as much if not more.
December 11th, 2008 at 09:10 pm 1229029849
" like I was planning all along when I assumed I would be able to lock in a decent interest rate. "
Decent interest rates are for those with good/great credit and good/great income. NOT just one of those factors. You yourself have admitted, more than once, that you have a measly income. You're lucky you're being offered something less than double digits IMSNHO.
December 12th, 2008 at 12:44 am 1229042683