All Forum Posts by: Jeff Dulla

@Benjamin Dutil From my experience, even if you were putting down 70%, there would still be a 60 day bank statement requirement. 

@Benjamin Dutil Most conforming loans and portfolio loans are going to require 60 days of statements (so you need 60 days of seasoning in the account to get past this). Be aware, you have to source deposits and transfers as well. Another thing that bites people in the rear end with a situation like this is that transfers/deposits do not time up properly. Then when the underwriter asks to source something from one account, it forces you to supply a statement that may be older than 60 days. Obviously if that happens, they may see the large deposit.

Hopefully this makes sense but let me know if you have more questions on it. 

@Dwayne Moore The main question is whether or not it cash flows with a new mortgage on it. If it does, and you would like to keep it, then the question is cash out or equity line?

If you are indeed weighing the two, I know people on here love equity lines like they love private money, hard money, and all these apparently easy/fail-safe options. However if you want my two cents you need to cash out and fix the interest rate.

An equity line is similar to a credit card in that the rate is traditionally not fixed, tied to Prime rate, and not capped. Not sure if you have seen any of the news coming out about the Fed but they intend to increase Prime three more times this year and up to four more times next year. That could spell some serious trouble for your equity line interest rate. 

Especially if you have had issues with over extended credit, I think the equity line would be a horrible idea. Again, just my opinion. 

@Blaze Crook I’ve yet to hear of a lender that would let you order your own. The lender would order it and most appraisals will run through a management company so the lender doesn’t have any direct influence.

@Justin C Huggins I guess I am speaking on two different points. If you went through a broker or mortgage banker, they typically do not service the loan and will not make interest. They get paid when they sell the loan to servicing bank. If you pay off within first six months after the last loan closed, this person forfeits all commissions and cost that were covered.

As it pertains to a retail bank and servicer, there is probably overhead and costs that go into honoring a loan at a certain percent over time when borrowing costs change for them and also personnel costs. I have been told by a few banks that really if the loan doesn’t stick on the books for 18 months, the bank didn’t really break even. Not sure what the figures are behind that but just what I have been told.

@Tiffany Bishop Echoing @Chris Mason sentiments. That doesn't sound like a bad rate. I also want to add that referring to costs in terms of a percentage often doesn't work. Many costs are fairly fixed and therefore do not fluctuate too much with purchase price - therefore the higher price, the lower your costs are as a percentage. Also many are state/location specific. Just a heads up. 

Here is the inverse of Chris' chart. This maps out the 30 Year mortgage backed security bond market. We are matching the worst point in four years. Meaning worst rates we have seen in four years.

@Hector Gonzales Do you mean that you fear your debt to income ratio will be too high or that in actuality, you will not be able to afford and pay your portion of the monthly payments?

@Justin C Huggins There typically aren’t prepayment penalties or anything like that with conforming loans. I don’t know the legality of whether or not you actually sign something in the note or mortgage that says you won’t sell for 60 days.

What I can tell you is that mortgage bankers and brokers have something called an EPO. Basically if you sell within, generally speaking, six months, that company loses all revenue and closing costs that they covered on your loan. It’s a huge loss. 

It stems from the end bank needing to service your loan for a certain period of time in order to breakeven on it. You may not feel bad for the big banks but when they lose, it’s the little people underneath them that really lose. The big bank will come after the broker/mortgage banker for those losses. Hopefully this all makes sense.

@Chanise P. Good question. I think ultimately you need to talk to a few people. I think you can get to a point where you are nickle and diming, over analyzing some of this to your detriment but on the other hand, there are a lot of terrible lenders and realtors out there. 

From a cost perspective, traditionally speaking you would want to do what you were doing - go through a mortgage banker or broker. But to paint with that wide of a brush would just be an ignorant thing for me to say. I would typically start with someone, anyone, that you trust and has some real estate experience. Get a referral from them. Talk to that person and talk to the person you are already talking to. Ask for a full cash to close estimate or fee sheet. Compare the two. 

You are on the right track and do not panic. Just find another reliable source or two and ask the right questions. Hopefully this is helpful. 

@Chanise P. I may be biased but I agree with the realtor/lender. I also am not 100% sure that it is legal, whatsoever, for them to give you the contact information of their closed clients. That is private information. 

I would say the reviews on Zillow, Yelp, Google are hopefully a fairly solid indication of their legitimacy. You also have a whole forum at your fingertips that you found the professionals through and you could ask if anyone on here has an experience with them.