I was able to find mortgage insurance rate cards online a while back. There’s a base rate for a credit score and LTV that’s adjusted for factors like an increase for high DTI or a decrease for more than one borrower. Might not be exact, but I’ve been able to calculate pretty close.
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I’d guess that it is also a source of commission for some lenders. PMI in my primaries have always been ~0.25% to 0.3% of the loan annually. One lender I used had me around 0.6% of the loan annually, and when I mentioned in previous loans, it was a lot lower, they magically “found a better PMI provider” and reduced to ~0.27% of the loan.
This.
Bought a 3/3 condo in the $350’s that sat in the market long enough that I was able to negotiate closing costs in full, and my closing consisted of just bringing in 5% down payment on a conventional loan. My PMI is $100 a month, absolutely zero regrets. Locked in at 3.25 rate.
At the bare minimum, I can walk out of this condo with $100k equity a year and a half in to it.
Second property I’ve closed on with 5% down conventional. The equity realized from each property has been life changing, to say the least.
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Is the second property in today’s market? Asking as I am looking into purchasing some turnkey properties but everywhere is 20-25% down (currently have a mortgage-obtained in march 2022).
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Investment properties are 20% down, and the rates will be considerably better at 25% Down.
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For those that currently own investment real estate–did you buy turnkey to not deal with the hassle of the BRRR or BRRRR is your go to regardless? anyone used renttoretirement?
Any tips or advice for a first time home buyer looking to get pre-approved soon. I plan on going with my credit union. Our Honda lease is due back in June. Should I get its replacement now, take the credit hit, and wait to apply or take the hit after applying. Id guess I should look at my DTI first.
Yes check dti first before deciding on lease.
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Whats the preferred/acceptable DTI
For conventional, assume up to 50% dti (of your gross)
Also, unless you need a non-conforming loan, your CU likely won’t have the best pricing.
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It’s always weird they use gross income instead of net.
But in theory, a gross HHI of $240k/yr would be qualified up to $10,000/mo in debt. That’s insane, but my guess is that debt amount also factors into how much house they’ll qualify you for.
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First property was 2017, second property (condo) was August 2021. Home prices were skyrocketing (South Florida), just about hitting peak market going into 2022. 3/2, 4/3 homes were the most sought out properties. Condo’s were seemingly overlooked, so I jumped on it.
There is a lot of sitting inventory even in hot markets like South and Central Florida. I would look into what is sitting in the market longest and seeing where you can compromise.
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It would be nearly impossible to create a baseline for calculating ‘net income’ hence the industry uses gross income calculation. To your point, with people with very little other debt, they will qualify for a much higher mortgage loan than they would ever conceive.
Is it really not advisable to get a car loan if I am planning for mortgage soon? My score is around 800 and I was looking forward to get a car loan at 3.75%, even though I can probably pay in cash.
Its fine as long as is doesn’t blow your DTI out of the water or drop your score from opening a new line of credit/inquiry. The latter being more unpredictable.
Generally anything 760-780 qualifies you for the best rate regardless.
However, if you can wait, do that. It just makes the process smoother.
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I would stay put. I remember when I was buying a house several years ago my credit score was above 800 but maybe one bureau was slightly below 800 and I almost got hit with a higher mortgage rate because of that. Don’t remember all the details but remember having that discussion with my mortgage consultant (Wells Fargo)
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Unfortunately there is no blanket answer.
It depends how close your middle mortgage FICO score is to the minimum required to get the best mortgage pricing on your target program.
(You cannot reliably estimate your mortgage scores from a score that was generated with a different model.)
And of course there are DTI considerations as already mentioned.
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Interested to hear your thoughts on my situation. Looking to purchase a home soon and my wife and I have gone through a few leases each over the past year. Strong income, low DTI, great credit. Do you think all the open/closed autos will negatively impact the process? Will the underwriters ask why we’ve had so many leases and pry anymore if we just said something like we’re indecisive on cars?