Mortgage Advice.

[BETO74 0]

Mortgage Advice.

This is the situation: I bought a second property pre-construction a year and a half a go, I’ll be closing in September and decided to go and look for a financial institution to well…. finance the property, I gave 20% down a year ago to close the deal. I been told by the Bank that my income-debt ratio was too high, yes I do have credit cards 5 total I don’t think that’s more than any other person out there but as a side note the C.C’s are all pay off with zero to almost zero balance, I have a loan for ten grand when I bought my travel trailer, I had 2 previous properties all sold and pay for, I’m planning to keep my property now and rented when I close in the new one. ( I have done that before no problems)

The bank is asking me to close the C.C accounts regardless that they are in zero balance, (I was told that closing accounts can be seen as a negative in your credit score). They also ask to either sell the trailer and pay it off, or just pay it off.

I would like to hear from those of you working for loan approval or similar…is any of this sounds crazy or is it just me??

Thanks

Carlos

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html

[tigra 0]

I think the issue is that you'll be responsible for two mortgage payments, plus taxes and insurance on two homes. Your intent is to rent out the property you currently live in and move into the new home, but it sounds like the lender isn't giving you credit for the potential rental income to offset the mortgage payment, and that's throwing your debt load off.

[BETO74 0]

That's what I think, now... If this was the first time I done this It will make sense to believe I'm a risk for them but there is a 20% down already on the property the mortgage amount is only 80% of the property value, what I'm I missing???

Is it right for them to ask me to close evry C.C I have??? That's a little bit of an inconvenience regardless of they are already paid off.

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html

[JENNR8R 0]

It sounds reasonable to me. Think of it from the lenders point of view. With very little effort you could max out all of your credit cards. The mortages, trailer loan and credit card debt would be too much for you to handle and they may have to foreclose, which is costly to them.

There are things you simply cannot control. You may have trouble renting the other house or your renters could do damage that you’d have to pay for and repair before it could be rented again. Or there could be medical bills that need to be paid. There is too much risk for them now. Have you tried other lenders?

What do you call a beautiful, sunny day that comes after two cloudy, rainy
ones? -- Monday.

[simplyputsi 0]

Quote

It sounds reasonable to me. Think of it from the lenders point of view. With very little effort you could max out all of your credit cards. The mortages, trailer loan and credit card debt would be too much for you to handle and they may have to foreclose, which is costly to them.

There are things you simply cannot control. You may have trouble renting the other house or your renters could do damage that you’d have to pay for and repair before it could be rented again. Or there could be medical bills that need to be paid. There is too much risk for them now. Have you tried other lenders?

yup, this is what i was told. See having credit cards with high maximums is considered debt even though you paid them off. They have the potential to be used.
Instead of closing them, just call the companies and ask them to lower your credit limit. If you have 5 cards you shouldn't really need more than a 10 grand limit on any of them.
But I really don't know your lifestyle so I could be wrong.

Skymama's #2 stalker -

[BETO74 0]

I played this game before, and I’m looking at it from the lenders perspective with 20% down I’m not much of a risk compare to those giving 5% down or zero. In the what “if” world anything goes. Yes I could max out C.C’s and I have not done it. I have C.C with a limit of 15,000 and zero balance in all of them I paid them off every month. Technically I could close every account and sign for the property and get them back a day later???

Why not other lenders? Simple…. Bank of America has no closing fees that alone saves me ten grand…Yes I could go with other lenders but I have not found a better deal. I’m willing to do what ever they ask me to…..anyway. Just does not seemed logical to me.

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html

[simplyputsi 0]

whoa, b of a has no closing fees?????

where and how did you get that deal??

Skymama's #2 stalker -

[BETO74 0]

That was my response, anywhere everyone is able to get this deal the way it was explained to me is that they have their own legal/title etc department that takes care of everything you pay some tax fees and miscellaneous check it out is very good, a little anal about things that I just explained.

Other lenders have to subcontract these services that's why they get expensive.

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html

[wildfan75 1]

What's your debt to income ration including the mortgage on your other home?

If I were a banker I'd rather a client that only puts 5% down whose debt to income ration is low, vs. someone who can put 20% down but their debt to income ration is high, and the mortgage on the first place is debt.

Go talk to another lender, even if you have no intention of using their services. I was super happy with my lender from the first home I bought so I went back for the second home. Got his figures but I also checked around at a few different places. Another lender quoted me a lower interest rate and lower closing costs. I went back to my guy and said, "The other deal will save me thousands of dollars over the years. I'd love to give you my business so if you can match it, it's yours." And he gladly matched. I would suggest that you do that, and compare the big picture. If Bank of America is waiving closing costs but their interest rate is high, then it's not such a good deal.

Just my $0.02.

[BETO74 0]

I agree..... the thing is I have credit cards but they are paid off, the account is open and the credit is available thats her problem with my debt-income score. I don't even have a car payment.

I could take care of that no problems close all the accounts and have no C.C's but is it realistic???

Guess what I be doing the day after I close???

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html

[tigra 0]

I'm not an underwriter. I disagree with closing the credit cards because the lender should not hit you with potential debt, just actual debt. I thought lenders stopped requiring revolving accounts to be closed a long time ago. (Paid, yes, closed, no.) Paying off the note on the trailer does sound reasonable.

Are they processing this new mortgage as owner occupied? If they are considering it a 2nd home or an investment, the underwriting criteria is different. 80% LTV is great for owner occupied properties, but lenders want to see 70% to 75% for 2nd homes and investments.

Truthfully, you can shop around and find a lender with fewer conditions, but you'll most likely pay for it in the rate and closing costs.

[Channman 2]

> If Bank of America is waiving closing costs but their interest rate is high, then it's not such a good deal.

Best get your Truth in Lending Documents in front of you to determine if in fact the Closing Cost have been waived when and if you enter into a contractual relationship with Bank of America.

The Bank controls 3 things when it comes to mortgages, and the only one we seem to be concerned about is the Rate.

Your goal when buying a hove hopefully is to have it become an asset, not remain a liability.

[BETO74 0]

Thank you for throwing some light on this.. Is processed as main residence where I'll be living at. they will have a renters contract for my actual property, the one I live in now.

That's was my thinking??? maybe she is new at this job....uh!

Can't beat the no closing I'm willing to go with it just to save ten grand...

http://web.mac.com/ac057a/iWeb/AC057A/H0M3.html