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Can somebody here explain this to me and tell me this is normal? I was overlooking my good faith estimate and in line 1001 (under box labeled reserves deposited with lender) there is a charge for 3 months of hazard insurance. Also, in line 903 (under box labeled items required by lender to be paid in advance) there is a charge for hazard insurance premium that's around 1000 bucks. If my lender requires this, doesn't this mean I do not have to play hazard insurance for 15 months? Since I'm already paying a full 15 months worth right at closing?
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Jun 23, 2009 19:59
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Does the Making Home Affordable Refinance option require an escrow account? I know the modification one does, but there is nothing that says on the website that the Refinance does.
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Jun 24, 2009 02:28
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MrMidnight posted:Can somebody here explain this to me and tell me this is normal? It's normal assuming you're setting up a loan with escrow (impounds) for insurance. Basically, they will pay for your insurance up front and a year's worth at a time, so you have to pay for a year's worth at closing (line 903). In addition, they will set up your escrow account with a cash cushion, and require you to fund that at close as well. 2 or 3 months' worth is common and that's line 1001. You will still pay a monthly charge for insurance from payment #1. This way, one year from closing, you will have a year's worth of insurance premium in the escrow account (plus a cushion) that they will use to buy your next year's worth of insurance. P.S. gently caress escrow. I would recommend avoiding it if you can. SlapActionJackson fucked around with this message at 14:04 on Jun 24, 2009 |
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Jun 24, 2009 13:56
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SlapActionJackson posted:It's normal assuming you're setting up a loan with escrow (impounds) for insurance. Thanks for the info man. After some research I figured that's what it was. Other than higher monthly payments, why do you recommend avoiding escrow? Is it because you don't trust the lender to pay insurance and taxes when the time comes?
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Jun 24, 2009 15:53
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MrMidnight posted:Thanks for the info man. After some research I figured that's what it was. You lose the short term use of your money. They need to build up a buffer, as well as pay everything in advance. Because of this, you put a lot of money down in front. ..and they can still gently caress up your taxes and insurance.
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Jun 24, 2009 16:06
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Cheesemaster200 posted:You lose the short term use of your money. They need to build up a buffer, as well as pay everything in advance. Because of this, you put a lot of money down in front. I close on the 29th of this month. Is it too late to tell my lender to not set up an escrow account?
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Jun 24, 2009 16:14
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MrMidnight posted:I close on the 29th of this month. Is it too late to tell my lender to not set up an escrow account?
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Jun 24, 2009 17:23
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MrMidnight posted:I close on the 29th of this month. Is it too late to tell my lender to not set up an escrow account? Absolutely not, you even have three days to tell them to go gently caress themselves after you sign the papers.
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Jun 24, 2009 18:23
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It turns out the mortgage company that is handling my loan sells it to either Chase, Wells Fargo or Bank of America. If I choose to cancel, I would have to ask either of them. I won't have 20% equity, so I should probably ask now if I want to avoid escrow. I've been reading up on this whole thing, and I've read some good things about it. The general consensus here seems to be that escrow sucks. I'm still undecided. Cheesemaster200 posted:Absolutely not, you even have three days to tell them to go gently caress themselves after you sign the papers.  What do you mean by that?
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Jun 24, 2009 18:55
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We closed our house this past Friday. Holy poo poo, what an adventure that was. It was a short sale, and when we got to closing we found out that the seller was going to need to push back a week. Then, when we went back, we found out that they had to push it back again. Finally, we got it all sorted out -- the HOA had decided to try and extort $10,000 in fees from the bank, and had gotten a lien. After that, the escrow agent realized the seller had gotten married and his wife hadn't signed, which is important since we're in a community interest state. Now that we have the place, we've been doing some minor renovations. We got some awesome closeout deals on materials and, in some cases, labor from contractors that are stuck with tons of inventory they can't move, so we're putting replacing the vinyl bathroom and kitchen floors with tile, redoing a bunch of the trashed carpet with laminate, and making some improvements to the kitchen. Before agreeing to do a short sale, the guy had ripped out all the light and plumbing fixtures, so we got to replace all those with poo poo we like. But, for all the work we have to put into the place, we got an awesome deal: 4.78% fixed, and we paid I'd guess somewhere around a third of what the original owner paid a few years ago for the house plus some extensions he put in, and about 3/4 of what some of our new neighbors with the same floorplan and comparable improvements paid over the past couple months. Our monthly mortgage payment is comparable to what we paid for housing in college. Our total costs, including insurance, taxes and estimated maintenance, but not accounting for tax deductions, is less than our monthly rent at our last place.
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Jun 24, 2009 18:59
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MrMidnight posted:The general consensus here seems to be that escrow sucks. I'm still undecided. I decided to go with the escrow just because it makes things a bit easier on you.. Insurance and mortgage both pulling from the account rather then being paid separately. Plus gives me the option of throwing a bit more in every month to act as a buffer for when taxes or insurance rates change as they usually do every year.
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Jun 24, 2009 19:32
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MrMidnight posted:
By law, you can opt out of the loan contract within three business days. More of an issue if you are refinancing (as I am currently doing), but still might be a factor if you are buying as well.
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Jun 24, 2009 21:11
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MrMidnight posted:Other than higher monthly payments, why do you recommend avoiding escrow? You will receive little to no interest on a substantial chunk of money that is just sitting around. You lose flexibility to do things like paying two years of property tax every other year for the tax benefits. You will have to do extra accounting work to make sure your taxes and insurance are getting paid properly and that nothing else is screwed up with the escrow account. Your escrow payments will adjust based on the lender's formula which is probably not as accurate as what you could estimate on your own. This can lead to nasty whip-sawing of payments in certain situations. It's just cheaper, easier, and less risk of something getting screwed up if you pay the tax and insurance yourself. MrMidnight posted:I won't have 20% equity, so I should probably ask now if I want to avoid escrow. Then escrow will likely be mandatory for your loan. You can ask anyway. Cheesemaster200 posted:By law, you can opt out of the loan contract within three business days. Depends on the state, and rescinding is usually an all-or-nothing deal. I.e. you can't keep the refinance and drop the escrow account.
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Jun 25, 2009 00:51
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moana posted:If it's like ours, you can choose anytime to stop the escrow account and just start paying it yourself. But ask anyway as soon as possible. I had to refinance to get rid of mine. Check with the lender.
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Jun 25, 2009 00:54
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SlapActionJackson posted:Depends on the state, and rescinding is usually an all-or-nothing deal. I.e. you can't keep the refinance and drop the escrow account. That depends on your loan and how much the bank wants it.
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Jun 25, 2009 03:03
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What are the best places online to look for home loans? I went through my bank (etrade) but they suck and their website is broken. I went to http://www.creditkarma.com/ and they said my credit was 729, anyone know how accurate they may be? Im hoping to be pre-approved soon and also working with a mortgage broker but she is kind of slow so I want to see whats out there.
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Jun 25, 2009 19:41
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libberlibber posted:What are the best places online to look for home loans? I went through my bank (etrade) but they suck and their website is broken. I went to http://www.creditkarma.com/ and they said my credit was 729, anyone know how accurate they may be? I got in touch with my mortgage guy through my realtor (who is also a family friend) and she directed me to this guy she liked working with a lot. My advise would be to find somewhere where you can directly interact with the mortgage broker. Avoid online or phone dealings with things as technical and confusing as mortgages can be. I like knowing that at any point I can drive over and deal with my mortgage guy in person.
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Jun 25, 2009 20:05
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QUESTION ABOUT REAL ESTATE AGENTS: can you have multiple agents at the same time like porn stars, or are they like sports agents where you're only supposed to have one at a time?
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Jun 25, 2009 21:54
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Steve Yun posted:QUESTION ABOUT REAL ESTATE AGENTS: can you have multiple agents at the same time like porn stars, or are they like sports agents where you're only supposed to have one at a time? That depends if you are selling or buying. If you are selling, yes. If you are buying, depends on the broker. Remember, real estate agents make their money off the seller.
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Jun 25, 2009 23:34
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Even buyer's agents will want you to sign an exclusive agency agreement. Read what you agree to.
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Jun 26, 2009 00:48
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I closed today with 20% down and decided to escrow. Main reason being that Wells gave me 5.25% instead of the 5.375% I would have got if I decided against escrowing. Everything went smooth at closing though, the check from Wells was ready and waiting 
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Jun 26, 2009 00:52
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Numbnuts posted:I closed today with 20% down and decided to escrow. Main reason being that Wells gave me 5.25% instead of the 5.375% I would have got if I decided against escrowing. Everything went smooth at closing though, the check from Wells was ready and waiting Good deal. I'm kinda kicking myself for locking at 5.5% when I probably could have gotten closer to your rate if I had waited. Oh well, that's the name of the game. I close this upcoming Monday and I can't wait to be handed the keys. I'm so ready to move in to my first house!
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Jun 26, 2009 01:09
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In the grand scheme of life, 25 basis points is nothing. Don't worry about it.
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Jun 26, 2009 02:05
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SlapActionJackson posted:Even buyer's agents will want you to sign an exclusive agency agreement. Read what you agree to.
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Jun 26, 2009 04:35
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MrMidnight posted:Good deal. I'm kinda kicking myself for locking at 5.5% when I probably could have gotten closer to your rate if I had waited. Oh well, that's the name of the game. I close this upcoming Monday and I can't wait to be handed the keys. I'm so ready to move in to my first house! Things may have fallen, but the bond market is is complete chaos at the moment. One day it could raise .1 and another fall .1. It just so happens that this week was a falling week, but it could have very well raised just as much and we could be at 6% right now. Your lock at 5.5 was wise so don't feel bad about it.
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Jun 26, 2009 12:34
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Yea woo our appraisal came back today right on the money so when it's signed off by the underwriters we're good to go on that end. 3 more weeks, a bunch of packing and a mountain of paperwork/money and we'll have a house! Too excited
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Jun 26, 2009 14:24
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FidgetyRat posted:Things may have fallen, but the bond market is is complete chaos at the moment. One day it could raise .1 and another fall .1. It just so happens that this week was a falling week, but it could have very well raised just as much and we could be at 6% right now. Your lock at 5.5 was wise so don't feel bad about it. That and lending is extremely cheap for the banks right now. Once things start picking up and the fed starts to increase rates, mortgages are going to get a lot more expensive.
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Jun 26, 2009 14:58
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So my parents went to florida today (cape coral) to buy a house for rental purposes... they're looking at ultra cheap houses (we're talking 60k and lower) to rent out. Is this a bad idea?
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Jun 26, 2009 15:06
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Mister Fister posted:Is this a bad idea? Can they afford it even if it sits vacant? How many houses are sitting vacant or for rent in that area? Its probably not a terrible idea, but if houses are THAT cheap, they probably aren't the only people with that idea, so it may just be a supply vs demand issue. I think if they can afford it, and they want to, it's a fine idea. If they can't afford it, or they're just doing it because they think "it's the right thing," it's probably a bad idea.
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Jun 26, 2009 15:33
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Grumpwagon posted:Can they afford it even if it sits vacant? How many houses are sitting vacant or for rent in that area? Yeah, they're going to pay with cash (i mean 60k, sheesh). The housing bubble pop in FL was particularly nasty... i just want to know if long term prospects are good there.
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Jun 26, 2009 15:42
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Mister Fister posted:Yeah, they're going to pay with cash (i mean 60k, sheesh). The housing bubble pop in FL was particularly nasty... i just want to know if long term prospects are good there. Man I was expecting to see a shack or trailer for $60k in florida, but that will buy you a nice looking house down there. That said, holy poo poo what a suburban nightmare and market saturation. Zillow shows a HUUUUGE number of homes everywhere you scroll. Unbelievable. Since they're paying cash, assuming they can afford the property taxes it seems like it would be nice to have. They might not get many renters (because holy poo poo look at all the places for sale down there), but it's still a freaking HOUSE for $60k.
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Jun 26, 2009 16:07
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The housing situation in Arizona right now sucks. We have a ton of pre-foreclosure/short sales and bank owned properties on the market. However, almost all of the bank owned ones are getting 5-10 bids on them from investors, mostly with cash. This is because these homes back in 2006 or so were sold for $180k-$280k and are now hovering around $100k-$130k. I can't blame the investors for jumping back in but it's not fun trying to beat cash offers. I'm just afraid of the homes getting inflated again. We were smart a few years ago when we knew it was ridiculous to see prices rise so fast. Short sales are a pain in the rear end I've come to learn. We put in a bid last weekend and went back and forth this week with counter offers until we got what we wanted. Even though we have a signed offer sheet with the seller (which is the homeowners still), it pretty much means nothing until the bank says it's OK to sell it short. This bank takes up to 45-60 days for this happen we are told. But of course during this 2 months, they can accept other offers or change our terms at their liking. If someone else bid better, they get it. If no one bids and they like our terms, then we finally get to do our closing, 30 days later. So basically, this will be our backup plan if we can't find a non short sale home. It's costing us nothing to keep our bid on it and we aren't obligated to the home even if we are accepted by the bank. I'm hating short sales now. Oh, this is our first home buying experience. It's quite overwhelming at first, but we are starting to understand things a lot more.
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Jun 26, 2009 20:58
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SlapActionJackson posted:You lose flexibility to do things like paying two years of property tax every other year for the tax benefits. For my own curiosity: how does this benefit you?
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Jun 27, 2009 08:29
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Ambihelical Hexnut posted:For my own curiosity: how does this benefit you? It's only helpful in a certain situation: Your itemized deductions would be more than the standard deduction if you counted two years of property taxes, but less than the standard deduction if you only count one. Since you get to deduct property taxes in the year you actually pay them, you can pay two years worth of property tax in one year (e.g. Jan 1 and Dec 31) to take a larger itemized deduction every other year, and the standard deduction in the in-between years. This saves you a bit of income tax compared to just taking the standard deduction every year.
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Jun 27, 2009 08:58
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SlapActionJackson posted:yase I figured it would have to be something like that, but I'd never heard of the technique before. Thanks.
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Jun 27, 2009 13:36
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Hi everyone, thanks for the great thread with some great information. I've been reading through it the best I can and I am really jealous of everyone who is making more than me in an area with affordable housing. I just got pre-approved for a $135k FHA at 5.5% interest over 30 years. I live in the suburban Chicago area where housing prices and property taxes are through the roof. I've been looking in about 12 different cities and towns around me, and just getting into a place that isn't in "tear down" condition will start listing around $125,000 with an average property tax rate of $4,100. I gross about $42,000 a year and have $12,000 in savings - I'm looking at putting the minimum 3.5% down. This thread really has me in a bad mood because I've been so gung-ho about buying a house for the past few months, and even people who are in considerably better financial shape than I am AND in markets where housing is affordable are still worried, that leaves me pretty upset / jealous / what have you. My question is, I guess for anyone in areas where property taxes are high, why haven't property taxes gone down in conjunction with dropping home values? After looking at what people around the country are paying for property taxes, the $4,100 I'm looking at on a $126,000 house seems outrageous. Assuming home values decline, should I expect property tax rates to drop as well? I guess I could see the value in waiting it out while home prices drop some more, but I'd really like to take advantage of the $8,000 credit for my down payment. The Shep fucked around with this message at 22:56 on Jun 30, 2009 |
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Jun 30, 2009 22:53
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Has anyone used TurboTax to file their form 5405 for the tax credit? When I did my taxes earlier in the year I got about $2500 back, now after going over my 2008 return again and adding in the first time homebuyer credit my federal refund is at $10,600. If I submit this will I only get the 8k back or will I get that full $10,600. I feel like I might be loving something up with this... sorry if this was already answered but I didn't see anything.
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Jun 30, 2009 22:54
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Cmdr. Shepard posted:Assuming home values decline, should I expect property tax rates to drop as well? I guess I could see the value in waiting it out while home prices drop some more, but I'd really like to take advantage of the $8,000 credit for my down payment. Taxes have dropped in alot of areas.. My house is being built in the second section of a neighborhood.. My tax rate will be 2.55% wheras all of theirs are still where they were when they built, somewhere over 5%. I guess it all depends on when their next tax assessment takes place for them to get a drop. Not entirely sure, but they have dropped. Keep in mind, not only are people struggling, but governments as well. California was near filing bankruptcy.. They won't be dropping taxes much in a time when they need money the most. Also keep 2 things in mind.. Your pre-approval is not a guarantee on mortgage rate.. If you close in 60 days and rates skyrocket, you get the rate at the day you lock. Second, don't buy a house just because of the 8000.. Sure it is nice, but make drat sure you are stable enough to make that commitment. FidgetyRat fucked around with this message at 04:03 on Jul 1, 2009 |
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Jul 1, 2009 03:59
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Numbnuts posted:Has anyone used TurboTax to file their form 5405 for the tax credit? When I did my taxes earlier in the year I got about $2500 back, now after going over my 2008 return again and adding in the first time homebuyer credit my federal refund is at $10,600. If I submit this will I only get the 8k back or will I get that full $10,600. I feel like I might be loving something up with this... sorry if this was already answered but I didn't see anything. You overpaid them by $2,600 so they owed you that money anyways. You will get your return + $8,000. If you already received your $2,600 amend your return and they will send you the other $8,000. Cmdr. Shepard posted:My question is, I guess for anyone in areas where property taxes are high, why haven't property taxes gone down in conjunction with dropping home values? After looking at what people around the country are paying for property taxes, the $4,100 I'm looking at on a $126,000 house seems outrageous. Yes that is an extra $400/mo on what should be a $700/mo loan. Either Chicago has retarded property tax, your house was last assessed during the boom, or a combination of both. So you are paying $1100/mo + another $100-200/mo in insurance to own a $126K home. Your first payment of $1300 will result in you paying down ~$140 on your principal. $1160 just went down the drain. It doesn't get much better down the road, 10 years into the loan your monthly principal payment has grown to a whopping... $240. By then you have paid $156,000 in payments ($41K in interest) and you still owe $104K on the $126K house. I bet a $125K house anywhere near Chicago would immediately destroy your $12K savings with repairs along with everything else you need to buy for your first home. Other Options: Investigate whether you can get a much lower tax rate by avoiding certain city limits or counties. That home inside city limits in Atlanta would be a very similar rate, outside the city limits it would be $1200-1300. Look up tax records on the county's website and see how it is broken down. You can also see what the house was assessed at and call the county/city and see when it will be assessed again to possibly go down. Get a loan with a better interest rate. I've pimped this non-profit organization I used a few times here and they are really good at helping you find out what you can really afford if you get a good counselor. [img]www.naca.com[/img] They also have no closing costs so anything the seller gives as a concession can be used to pay down your interest rate, 1% up front for .25% permanent reduction. I purchased at $125K and the seller was offering $6K in closing costs. After my lock at 4.25% it paid down with the $6K to 3.0%, fixed, for 30 years, on a 100% loan. I was $1200 out of pocket on the entire ordeal, to fill up escrow accounts and pay title insurance with another $200 for a home/termite inspection. Oh yeah I forgot to account for PMI in your payment earlier, there isn't any on NACA loans. There are downsides for sure, you are supposed to volunteer 5 times a year for them (But everyone I know of has never volunteered at all and they dont keep track), and you have to be a member of their club for $50/mo after you close for the first 5-10 years (Cheaper than PMI), and the process is a pain in the rear end. If you are interested at all shoot me an e-mail at my username @ gmail. I don't get anything for it but I'll be happy to answer any questions you have it you are interested.
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Jul 1, 2009 15:57
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ManDingo posted:I ran accross this article today and thought it might be worth posting. I just closed yesterday and $8000 is better than nothing, but $15k would be jaw-droppingly awesome. Hopefully this will apply to anything bought after 12/31/08.
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Jul 1, 2009 16:35
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