My last house in Houston sat for 1 year because the kitchen had vinyl flooring that needed to be replaced. No one wanted it even though I offered a $5000 allowance at closing. I had the floor tiled for $2500 and sold the house to the very first looker. Lesson learned. OS- I'm not there and if you feel that's a good offer on the house, enjoy it! I just meant that is a good offer. ps. I'm a big cheapskate...just ask my wife.
We did an 80-15-5 and refinanced into a conventional 30-year 15 months later at 6.85 with no point/orig fees. I like the 80-15-5 option, but an 80-10-10 may be better (I could get a .5 lower on the first mortgage with the 80-10-10). You will want to check to see if there is a ballon (lump sum payment) if you only pay back at the rate they suggest on the 2nd. Of course it didn't matter for us because we were paying more than scheduled and then refinanced with the extra money paid plus appreciation, but you want to be aware of it. Given interest rates are still very good historically, I would make sure you get locked as soon as possible at around 7.00 for the first (with 0 points), even if you have to put 10% down do that (if you have it). Then over the next few years you can put any extra payments towards paying of the 2nd. If you get lucky--the house appreciates well and rates get lower then they are today, you can refinance the whole thing into a 30-year conventional. However, even if 1 or both of those things don't happen, you are still in good shape and have the bulk of your loan at a very good rate for a very long time.
My agent called me today...I was outbid and the buyers were going to put 25% down...much more than me. I was beginning to have second thoughts anyway. I know of two people that told me there were foundation problems in the neighborhood so I was probably better off in the long run. The search continues. os
My wife and I currently have our townhome on the market, but are looking high and low for a new (or slightly used) house. That's the fun part! The un-fun part is looking for a mortgage and I'm sick of looking at Good Faith estimates and seeing all of the Coffee Break fees and Paper Clip fees that come along with the process. Question: Can some of these fees be bargained out of (or lessened) the dealings (like origination fees)? We currently use Countrywide, which has been a fair mortgage company, but we are shopping around for the best deal. We are aiming for an 80-10-10 or 80-15-5 deal so that we can avoid paying PMI. My wife called Conseco today to see how their rates compared and the guy she spoke with said that we could do a conventional 30 year mortgage with only 5% down with no PMI. We haven't received the estimate from Conseco or inquired any further about their fees, but is this a rarity? I always heard that a 95-5 loan always required purchasing PMI. I'd appreciate if any of you expert home buyers could help shed a bit of light on this. Thanks!!!
If this is legit my guess is the interest rate of the whole loan would 1%-1.5% higher, negating any advantage over the other options we discussed. It is worth checking out and seeing what the monthly payment is. If they are comparable I would go with the 80-10-10 because you are securing the 80 part at a lower rate once you get rid of the 2nd. You do want to make sure there aren't baloon payments with any of these so-called new loans, or atleast be aware of them so you can pay extra so it wouldn't sneak up on you. One other bit of advice is getting the 2nd (10% or 15%) with a credit union and the 1st with a mortgage lender--that this can be the way to get the best rates on each part of the loan (apparently it is legal in Arizona). To me getting a good loan deal is much less difficult than finding a good house and figuring out what to offer.
