Hi
I wanted to know what ppl think about 0 down mortgages. Im able to get that with no PMI (lender pays it) and a slight increase in rate (4.3% APR). What are the disadvantages of that? Thanks.
“slight” increase is a bit of an understatement… given that todays rates on conforming (that means 20% down) 30yr FRM are around ~3.75%, over the life of the mortgage the one at 4.3% will cost you over 35K more (on a 300K original balance, a number i simply picked as an example).
Are you SURE you are being quoted a fixed 30 year mortgage with NO points?
I almost bet that quote includes additional costs (application fee, points upfront, etc)
I’ve worked in banking all my professional life, lenders will never give you anything for free, there is always another way/area of the transaction were they can make up for and then some… nothing wrong with that, its a capitalist business in existence to provide a good/service in exchange for PROFIT.
I just closed last Friday on a house
30 year fixed
3.625%
5% down
No PMI
Not a Physician loan
2 Likes
I get it that they’ll make their money. They’ll get it from the increase in APR for sure. There are no added fees or points. I’m just wondering if there’s a downside of paying less than 20% or no down payment other than the obvious things (higher APR, higher monthly payment…).
That’s about what I’m getting. The increase is about 0.5. Im just wondering if it’s better to just put the down payment money into retirement, stock market…
I just made a six-figure principal payment on our mortgage.
Most of the money was from the sale of underperforming securities, which over 2-3 years had gained a grand total of $40.70 in value.
And that’s before capital gains tax. 
The fees are also baked into your rate. No free lunch here.
Depending on your loan amount and the intended duration for keeping the mortgage, you could very well pay the fees several times over.
I have never taken a “no fee” option, because for our circumstances it’s always been the most expensive choice.
Depends on the likelihood that you would pay off/down the mortgage earlier or refinance. In which case you may be better off taking the higher rate over paying upfront fees/points.
2 Likes
Please register as a broker if you plan to tout your business on this site.
I agree about Zillow mortgage. I used them previously and found them to be very good.
1 Like
I only have had one mortgage, but as far as I know, the lendee has to pay for the pmi, whenever down payment is under 20%.
1 Like
Amazon is getting into mortgage game.
Amazon is getting into the lead generation game. Doesn’t really involve mortgages at all. Just sending prospective buyers information to large real estate corporations (realogy).
An interesting model would be banks providing real estate agents fee free if you take a loan out with them for the home (maybe with a refi penalty). Especially in high priced cities, real estate agents do a job that a corporation, with efficient control of resources, could have salaried employees do for way less.
Slightly off topic, but interested to hear what others have to say about rolling student loan debt into mortgage. I have researched this to death and consensus is great idea for those struggling to make payments, terrible idea for most as hidden fees, costs associated with refinancing. To lay out an ideal scenario for discussion 60k equity in current home, 40k in student loan debt. This is not me as I researched and just making double strident loan payments, a friend said he was going to attempt this I am trying to talk him out of it, want to hear what others have done.
It probably heavily depends on the interest rate on the student loan and the interest rate on the new mortgage.
3 Likes
The risk of missing a series of student loan payments is bad credit.
The risk of missing a series of mortgage payments is bad credit and foreclosure.
Generally, the interest rate on a mortgage is lower than student loans and the amortization schedule on the mortgage is 30yrs vs 10yrs for student loans.
To use your numbers 40K student loans at 6% for 10yrs amounts to about $445 per month, while 40K at 4% for 30yrs is only $190, needless to say the monthly payment is more manageable but keep in mind in the LONG run you will pay more total interest given the longer amortization schedule. You can offset this by sending the same $400+ payment now as part of your mortgage, even if you mortgage only when up by $200 bc of the additional 40K you rolled in.
Note that cash out refi for debt OTHER than home improvements have tax implications. If you have positive equity in your home, refi to pay off student loans could work in your favor from monthly payment perspective but keep in mind the long run cost and potential tax implications.
As a small business owner, do any members have any recommendations of where to go to see what I might qualify for as well as what changes I need to make to my 2019 tax return for a mortgage? I ask because local brokers (I am in Connecticut) want 2 years of tax returns, which I am fine with, but also want to do a hard credit pull, which I am not.
I plan on applying for a mortgage sometime between April 2020 & September 2020. My fiance is a W2 employee so she is simple.
1 Like
As a business owner most mortgage companies will need your company’s 2 year taxes as well as yours. If you are pulling any money from business for down payment they might ask for a letter from your CPA stating that there is no restriction to withdraw funds from business account.
1 Like
PM me I have a couple of suggestions.