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"paranoid" <none@noneya.com> wrote in message
news:ZE4Ye.15866$fb6.9771@trnddc08...
>
> "Jeff Strickland" <crwlr@yahoo.com> wrote in message
> news:iJCdnS68XqO1xa3eRVn-rw@ez2.net...
>> You didn't say what you do for income. If you are the custodian at
>> WalMart, then you're going to have trouble stating enough income for two
>> mortgages, but if you are a Web designer then it is reasonable that you
>> can easily support two mortgages.
>
> <Owner/operator of home based pc repair business(plus a little pizza
> delivery for health insurance and stable cash)
>
> The trouble is, if you state enough income, then the
>> bank will want to verify asssets, and they will want to see something on
>> the order of 6 months of income in a saving/checking account. The actual
>> amount of money they want to see varies with each lender.
>
> <<This good be a bad thing......I've a fiancé, and she is paying half of
> the bills, but because her credit score is lower, the agent said the rate
> would be higher with her on the loan.....I do not want to have to show 6
> months of income at all!!!
>
>>
>> You current refi is an owner occupied, and you will be moving after you
>> close the loan. If you don't default on the new loan, they won't care
>> that your plans changed, but if you do default, then they might come
>> after you for fraud.
>
> << Hopefully, will never be a problem...I've a friend who has 4 houses,
> pretty much doing the same thing (even with stated income, and his
> computer job)....If I couldn't get it rented, I'd just work overtime
> if I had to, or rent it at a reduced rate.....I have worked hard to get this
> credit score up, and never want it to go low again!!
>
>
>>
>> I do not know why you cannot get a Pre-Approval Letter from your current
>> loan officer. He should be able to get you approved for the refi and the
>> purchase, but maybe he wants the refi to go through first, then start on
>> the purchase.
>
>
> <<A call from my fiancé this morning solved that. Amazes me sometimes, I
> talked to this guy twice, and he wouldn't do it.... I guess I left him
> enough room to "wiggle" out of it, whereas she did not...
>
>
>>
>> I would take the HELOC, or simply get a Cash Out loan on the existing house
>> for a short period of time, say 3 years. This will give you a low
>> fixed-rate loan, maybe even Interest Only. In 3 years you will be faced
>> with another refi, a sale, or the conversion of the loan to an
>> Adjustable. Most investors -- you will be an investor in the existing
>> residence when you move out and convert it to rental -- will take the 3/1
>> ARM and simply deduct the refi expenses against the income, and adjust
>> the rent every three years as the mortgage costs change. I think the 3/1
>> ARM makes more sense than the HELOC at this point.
>
> <<It probably does, but we are looking at keeping the house for a long
> time, and the rate we locked in is pretty low (5.625)....The plan is to
> just let it sit there and get paid off....or move back someday....although
> the interest rates on the Heloc may be higher, we can throw money at that
> pretty quickly hopefully....
>
>>
>> Then take the cash you pull out of the current home and use it to make
>> the Down on the next home.
>>
>
> That's the plan...
>
> Thanks Jeff, you've given me advice in the past, and always love hearing
> from you....
>
No matter what the loan is, you can throw extra money at Principle every
month. You probably have to do it with your Regular Payment, that is, you
have to make the regular payment and add money to the same check, not write
two checks, or send in supplemental checks between regular payments.
When you send in a check, they take the interest that is due, then they take
impounds (if any), then they apply the remaining amount to principle
reduction. If they want you to send in $1000, but you send in $1250 instead,
then you have just paid your principle an extra $250, without regard to how
much interest is due at that time, or what impounds there might be.
(Impounds are the monies that pay property taxes and home owner's insurance.
I do not know if the entire country has these costs, but I assume they do.)
So, on that $1000 payment, let's say that $700 is interest due, this leaves
$300 for principle reduction and impounds. For the sake of discussion, I will
say that taxes and insurance cost $100 per month, this leaves $200 to go
towards Principle Reduction. If you paid $1250 instead of $1000, then your
principle reduction would be $450, the $200 that is normal, plus the extra
$250 that you sent in.
You can throw extra money whether you have a fixed rate or a HELOC, so make
the decision on the loan program based on other factors, not on the
prepayment quality of the loan.
Let's talk about a PrePayment Penalty for a moment. All this is intended to
do is to prevent you from paying the loan off during the prepayment penalty
period, typically the first three years of the loan. If you simply throw
extra funds at your loan, you will not trigger the prepayment penalty. You
have to pay off more than 20% of the outstanding balance before the
prepayment penalty is triggered. Most of us will never do that from our
checkbooks, we have to do a refinance or sale to trigger the prepayment
penalty. Now that we are on the subject, there are two kinds of prepayment
penalty, Hard and Soft. A Hard Prepay is triggered on any repayment of the
loan within the prepayment period, a Soft Prepay is a prepay that is WAIVED
if the repayment of the loan results from a sale. If you refinance and have
a soft prepay, then you can be exposed to the penalty, but if you sell the
property then the prepay will be waived.
You want to specify with your loan officer that you want a Stated Income,
Stated Asset loan. If he screws up and gets you a Stated Income, Verified
Asset loan product, then the bank is going to want bank statements that have
some number of months of income as savings - or checking - balance. In
shorthand, you want a Stated/Stated, not Stated/Verified. You may even want
to see if there is a No Income, No Asset (NINA) product available. With a
NINA, the loan officer leaves your employment off the loan application.
Since this has a heightened risk to the lenders, it can carry a higher
interest rate, but it has very easy qualifying guidelines, and the added
cost might be a benefit to you in light of the easy qualifying.
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Re: preapproval problem
