I had a productive meeting with my mortgage person last night. I did not get home until 8:30 PM, and I met with him just after 5:30 PM! Wow, has the mortgage market gone crazy. If you imagine the mortgage, chances are you can actually get it. If you can think of a mortgage, it can be made to happen. As my mortgage guy reminded me, though, with any of these mortgages, there is one hard and fast rule: “Pay now, or pay later.” As my friend said who recommended him, I can see why he likes him.
My credit score is not exactly where we would like it to be, although it is not as bad as I thought it would be. It could stand to be higher, though, given that I am probably going to not have a terribly large amount of money to put down. I think I will talk to my grandfather and uncle on that, and maybe I raid my retirement again expressly for this purpose. In some sense, I am robbing my future to pay for the present. Admittedly, though, doing this is going to be beneficial in the long run. The tax benefit alone will certainly help me in the long run, as will the equity in getting rid of some of my other debts. Initially, I can see some of this being a bit tough in the early going, but with some discipline this is doable. Of course, this is presuming I go all out.
In any event, I have an idea of what I can afford. Now, the fun part begins. I can begin looking around at homes.
{ 8 } Comments
Ha, just based on the times you met him and the quote, I know you went to the same fella I met with (I also have an inkling as to who recommended him to you ;)), the single best lender in the Baltimore region.
Ha, just based on the times you met him and the quote, I know you went to the same fella I met with (I also have an inkling as to who recommended him to you ;)), the single best lender in the Baltimore region.
I’m sure you’re better versed on this than I am considering you talked about it for 3 hours last night, but my #1 suggestion is that you don’t buy more house than you can afford with an ARM or some other “low interest now, who knows later” mortgage. While you may be able to refinance in 3 or 5 years or whatever when your interest becomes whatever the prevailing rate is at the end of the initial period, you’re also taking a chance that even with a refi to a fixed rate your APR may be as high or higher than under the terms of your ARM. You just can’t predict the future.
I’m a 30-year fixed rate guy myself because I like boring predictability in my finances, and my first mortgage was an 85/15 so I didn’t have to pay PMI and got even greater tax benefits from homeownership (I had to put 5% down, but you can get 80/20 loans that do the same thing and require less out of pocket). You’ll always know what you have to pay and won’t be in for any surprises (aside from when they do those escrow audit deals and adjust that accordingly).
Good luck, and when you find your place and you need a deck or a fence I know a guy.
I'm sure you're better versed on this than I am considering you talked about it for 3 hours last night, but my #1 suggestion is that you don't buy more house than you can afford with an ARM or some other “low interest now, who knows later” mortgage. While you may be able to refinance in 3 or 5 years or whatever when your interest becomes whatever the prevailing rate is at the end of the initial period, you're also taking a chance that even with a refi to a fixed rate your APR may be as high or higher than under the terms of your ARM. You just can't predict the future.
I'm a 30-year fixed rate guy myself because I like boring predictability in my finances, and my first mortgage was an 85/15 so I didn't have to pay PMI and got even greater tax benefits from homeownership (I had to put 5% down, but you can get 80/20 loans that do the same thing and require less out of pocket). You'll always know what you have to pay and won't be in for any surprises (aside from when they do those escrow audit deals and adjust that accordingly).
Good luck, and when you find your place and you need a deck or a fence I know a guy.
mokie: My guy is in Columbia. I am curious if who you think recommended him to me knows who might have recommended him to him.
How’s that for confusion? My recommendation came from a coworker of your bro’s (who happens to be a good friend of mine).
SC: Those ARM loans are downright frightening, and the scary part is that people are just looking at their money down and their monthly payment. They are not even looking at what comes down the road, presuming they are only going to be in a house for 3-5 years. Honestly, I see myself in a place for at least 5 years, maybe more depending on what may come.
I completely agree on the more house than I can afford part. That part definitely was a large part of the discussion. I think the first year will be somewhat tight, but manageable.
As for the 30-yr-fixed stuff, that is exactly what kind of guy this fella is. The best thing about that is no fees/no points, and we were looking at 80/20 as well. And, in looking at some numbers that were run, it looks like the savings (at least in my case) of going with some of the interesting ARM deals is marginal at best. My point is why add risk where I don’t need it.
We also had an interesting discussion on FHA loans. Those are interesting since the rules for them are a bit more flexible, however there seems to be reticence on the side of either agents or homeowners to deal with them. They are better than what they used to be given some of the rule changes, and I think as the market cools off agents and homeowners won’t look any gift horse in the mouth.
mokie: My guy is in Columbia. I am curious if who you think recommended him to me knows who might have recommended him to him.
How's that for confusion? My recommendation came from a coworker of your bro's (who happens to be a good friend of mine).
SC: Those ARM loans are downright frightening, and the scary part is that people are just looking at their money down and their monthly payment. They are not even looking at what comes down the road, presuming they are only going to be in a house for 3-5 years. Honestly, I see myself in a place for at least 5 years, maybe more depending on what may come.
I completely agree on the more house than I can afford part. That part definitely was a large part of the discussion. I think the first year will be somewhat tight, but manageable.
As for the 30-yr-fixed stuff, that is exactly what kind of guy this fella is. The best thing about that is no fees/no points, and we were looking at 80/20 as well. And, in looking at some numbers that were run, it looks like the savings (at least in my case) of going with some of the interesting ARM deals is marginal at best. My point is why add risk where I don't need it.
We also had an interesting discussion on FHA loans. Those are interesting since the rules for them are a bit more flexible, however there seems to be reticence on the side of either agents or homeowners to deal with them. They are better than what they used to be given some of the rule changes, and I think as the market cools off agents and homeowners won't look any gift horse in the mouth.
Could you handle having a roommate for the first year to help with cash flow? I lived with my sister and her husband when they first got married and I know they liked having the extra cash.
Could you handle having a roommate for the first year to help with cash flow? I lived with my sister and her husband when they first got married and I know they liked having the extra cash.
Post a Comment