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The Bad Guy
07-27-2009, 08:35 AM
I know there are some really knowledgable mortgage guys on the Planet (calling Bill Lundberg) and I wanted to solicit some advice.

In my hometown, all the houses under 200k are flying off the market. The housing recession is only hitting houses in the 350-600k range, which is way, way out of my league.

Because of this, my wife and I are looking at land to build. Because my father in-law has built 3 houses in the last 2 years, we feel we should use his resources. There are a few lots that have been sitting for a while I'm planning to pursue in the next few weeks. We can build a really nice house for around 150k with his help and that is more around our range. Instead of grabbing someone's junk and turning into our own, this is a better route to take.

My question is as a first time homeowner, what programs can I look into and how can I shop around to get the absolute best mortgage rate. We can live with family until the house is built, which is a huge plus with a newborn on the way, but I wanted to get this ball rolling immediately.

Thanks in advance for any help.

KC native
07-27-2009, 08:40 AM
A FICO score north of 700 and a 20% down payment will get you the best rates.

Hog's Gone Fishin
07-27-2009, 08:41 AM
You're just gonna have to get on the phone and start calling banks to see what they are offering. And also the mortgage companies like ditech that you see on TV. Also Quicken loans. Use google.

sd4chiefs
07-27-2009, 09:21 AM
This may help.

http://articles.moneycentral.msn.com/Banking/Loan/Mortgage.aspx

hawkchief
07-27-2009, 09:26 AM
Find a handful of mortgage brokers and have them call you daily with their rates (make sure to compare apples to apples, i.e. closing costs, points etc) for as long as you want to. Over time, you'll find out which one is more hungry for your business and they will price their rate accordingly.

The Bad Guy
07-27-2009, 03:45 PM
Thanks for the help guys.

Would the 8k tax break be able to be applied to a construction loan?

What are some good first-time homebuyer programs? I'm also a teacher so I don't know if they offer any extra assistance for them.

Fat Elvis
07-27-2009, 10:05 PM
Thanks for the help guys.

Would the 8k tax break be able to be applied to a construction loan?

What are some good first-time homebuyer programs? I'm also a teacher so I don't know if they offer any extra assistance for them.


No. The tax credit only applies to first time homebuyers who purchase thier homes between Jan1, 09 and Nov30, 09. For new construction, the date you actually occupy the residence will be considered the purchase date.

If your FIL can build a house by Nov30, then you are in luck otherwise, you are SOL.

KcKing
07-27-2009, 10:47 PM
I'm no mortgage expert by any means, but I'm currently going through the NACA program... 4.875% rates and 100% financing through Bank of America for anyone that goes through it. From what I could find, the only way to get a better rate is to be a Vet.
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doomy3
07-27-2009, 10:50 PM
I'm no mortgage expert by any means, but I'm currently going through the NACA program... 4.875% rates and 100% financing through Bank of America for anyone that goes through it. From what I could find, the only way to get a better rate is to be a Vet.
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What is the NACA program?

DaneMcCloud
07-28-2009, 12:40 AM
Find a handful of mortgage brokers and have them call you daily with their rates (make sure to compare apples to apples, i.e. closing costs, points etc) for as long as you want to. Over time, you'll find out which one is more hungry for your business and they will price their rate accordingly.

Unless you know a VP of a bank, this is the best tactic.

Good luck!

KcKing
07-28-2009, 06:23 AM
What is the NACA program?

It's a thing my realtor/friend told me about... He's said he's put 10 or so people through the program with success. The website is cheesy, but from what I can tell, it's worth it. naca.com

SenselessChiefsFan
07-28-2009, 07:58 AM
What is the NACA program?

NACA.

Well, if you want to be obligated to pay fees just to become a member in order to qualify, this is for you.

Oh, and you have to participate in FIVE organization which can be:

Participate in at least five actions and activities a year in support of NACA’s mission
Every Member is encouraged to contribute their unique skills to NACA and its mission. Many people say the NACA program sounds too good to be true. It is real because of the active participation of NACA’s huge Membership. Participation and direct action have made NACA successful and will continue to strengthen our neighborhoods and organization. There are numerous ways for you to participate:
Join advocacy campaigns that may include protests, demonstrations, actions and/or engaging in litigation against persons or companies that discriminate against or victimize others;
volunteer in the NACA office;
participate on the peer lending committee; and
assist other Members with the home buying process.

Once you buy a home, you will have a $50.00 a month membership fee.

There are other limitations as well. You can never use the home as a rental. As it is, you can buy a home as a primary residence, but after six months, if you choose to move, then that is fine.

No one in the house can own any interest in any other property. (No rental homes, no commercial property, no second home)

Basically, NACA bullies big banks and uses extortion and blackmail to get the banks to do these deals. They are the Jesse Jackson of the mortgage business.

Just to give you an idea of how this works.... Bank of America and NACA are partners, so NACA turns a blind eye as BOA is one of the worst about doing mortgage restructuring and negotiating short sales. One of the other companies that is horrible is CitiMortgage. Oh, guess what? Also a partner of NACA.

I think there are some great things about NACA. Honestly, the process they put new homeowners through is very thorough and diligent, according to what I have heard.

But, as I said above, they are extortionists in the spirit of Jesse Jackson and Al Sharpton. Not who I would do business with regardless of the rates.

SenselessChiefsFan
07-28-2009, 08:19 AM
I know there are some really knowledgable mortgage guys on the Planet (calling Bill Lundberg) and I wanted to solicit some advice.

In my hometown, all the houses under 200k are flying off the market. The housing recession is only hitting houses in the 350-600k range, which is way, way out of my league.

Because of this, my wife and I are looking at land to build. Because my father in-law has built 3 houses in the last 2 years, we feel we should use his resources. There are a few lots that have been sitting for a while I'm planning to pursue in the next few weeks. We can build a really nice house for around 150k with his help and that is more around our range. Instead of grabbing someone's junk and turning into our own, this is a better route to take.

My question is as a first time homeowner, what programs can I look into and how can I shop around to get the absolute best mortgage rate. We can live with family until the house is built, which is a huge plus with a newborn on the way, but I wanted to get this ball rolling immediately.

Thanks in advance for any help.

Honestly, most mortgage guys are scum. I am an appraiser and I do mortgages on occaision and I have been in the industry for 12 years. I know of what I speak.

If someone refers you to a guy, always shop his price. The reality is that most people make as much money as they can. Sorry to say, but there aren't a lot of 'ethical' people in the business.

They will make money commensurate on your willingness to shop around.

Up until the day you lock, you should be shopping.

Many guys will quote lower than you can get because they know you won't lock that day.

Don't EVER call about rates late in the afternoon. Mortgage brokers will quote a low rate knowing that if you are calling around, by the time you call back, they can say the lock desk is closed and they can't lock your loan. (Even though many lenders actually use an online automated locking system that is open till early evening)

Oh, and when you lock your loan, have your mortgage guy fax you a copy of the lock committment. They may lie and say they have you locked at a rate they can't do and hope that the rates fall before your loan closes to give you that rate. Otherwise, they will come up with some excuse and hope you buy it.

Loan officers don't know if the rates are going up or down. Some will advocate floating (not locking) because they think the rates will go down. Many times, this is so they can make more money. If the rates do go down, they can pocket the difference. If the rates go up, they don't eat the difference. They just explain that's the way it goes sometimes.

Now, in recent years, due to the volatility in the market, some lenders allow float downs. Meaning, that if the rate drops before your loan closes, you can get a better rate.

Three things on this. #1) Typically, the lenders with the best rates don't offer float downs, and unless something drastic happens, you will be better off with the lender that offers the best rate at the beginning.

#2) If something drastic does happen, you can walk away from the deal (or threaten to) unless they lower the rate. Now, you may have to walk and give up your application and appraisal fee, BUT, if there is that much of a drop in rates, then it is worth it. The lender knows this, and many times they will relock at a lower rate rather than lose the business.

#3) Mortgage brokers work with many lenders. Some of the lenders may have float downs, others won't. Just because a broker mentions that they have the program, doesn't mean he is locking you with a lender that does that. If that is something you care about, ask him/her directly about whether this company provides that. In fact, knowing mortgage guys the way I do, I would have them cut and paste the specific lender guidelines that pertain to that and have them email it to you. I know several loan officers who tell clients they offer a float down and then when the clients call back, they say that the rates haven't dropped enough yet, or this excuse or that excuse. When, in reality, they don't even have the loan locked with a mortgage company that offers a float down.

Just some thoughts.

SenselessChiefsFan
07-28-2009, 08:28 AM
Find a handful of mortgage brokers and have them call you daily with their rates (make sure to compare apples to apples, i.e. closing costs, points etc) for as long as you want to. Over time, you'll find out which one is more hungry for your business and they will price their rate accordingly.

I am not sure you want a mortgage transaction, especially a construction loan, riding on someone who can't get business and who is desperate.

Additionally, the guy who is desperate may need a larger payday than the guy who is busy just to pay the mortgage.

I agree with shopping around, but I would do it heavy in the beginning, call at least 10 different places. Then, I would narrow it down to the top five, and on the day I was going to lock, I would call then at Noon and ask for updated good faith estimates. At that time, I would make my decision and lock.

Realbaddog
07-28-2009, 11:03 AM
I'm wanting to re-fi my house, (Olathe) what would be your advice? Would you use online brokers, recommend anyone, etc. Any advice would be welcomed............ Thanks in advance for your help.

Realbaddog
(lifetime lurker, rare poster)

KcKing
07-28-2009, 12:35 PM
Well, if you want to be obligated to pay fees just to become a member in order to qualify, this is for you.

The 50 dollar a month fee is instead of paying PMI (which is about the same if not more). It goes into a fund which is present for if you have an emergency, you can use said fund to pay your mortgage.


Oh, and you have to participate in FIVE organization which can be...

Actually, that's as simple as referring 5 people to the program... (Which is NOT what I'm doing here, I doubt i'd get referral credits if people say they heard about it from me on chiefsplanet...)

Then again, maybe I'm just drinking the mortgage kool-aid and have my eyes half shut hoping to get a good place to move my family in... I dunno.
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