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Mortgage approval; what to expect?

Mortgage approval; what to expect?

Old Sep 10th 2014, 10:47 am
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Default Mortgage approval; what to expect?

I've had a look at wikis and searched the forum some, but didn't see info about this specific issue...

I'm a USC who has maintained a couple of credit cards in the US over the past few years. My husband is green card holder and he's the one with a job lined up for the moment; I probably won't be working for another year since my job is in the public schools. He of course has no US credit history.

We'll be renting for the first few months but would like to buy a house not long after. However I've seen on other forums that even people with our profile (ie one spouse who's a USC, has good credit, and there's a solid down payment to be made) have found it nearly impossible to get approved for a mortgage with a competitive rate (between 3.5 and 4%). Have others here also found this to be the case? If so, are there any pointers (for ex, banks that are more open to buyers in our situation)?

I do still have accounts with the teacher's credit union. Also here in the UK when we bought our house we had a mortgage advisor who shopped around different rates from many different banks...is there any equivalent to that in the US or do you do your research yourself?
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Old Sep 10th 2014, 1:24 pm
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Default Re: Mortgage approval; what to expect?

Originally Posted by vtcarter6 View Post
I do still have accounts with the teacher's credit union. Also here in the UK when we bought our house we had a mortgage advisor who shopped around different rates from many different banks...is there any equivalent to that in the US or do you do your research yourself?
We bought a house after two years of renting. OH had maintained some US credit history through student loan payments from the UK, I started from scratch but have a good salary so was able to get a decent credit score. Our realtor recommended a mortgage broker who had experience with dealing with ex-pats and whilst the paperwork was onerous and took forever, we did get approval in the end. Our rate is not especially good, but that is as much to do with not being able to put down a large down-payment as anything else. We're planning to refinance soon as we got the house at quite a steal and property values have risen enough in our area that we can probably get a better rate, eliminate the need for PMI and take a bit of equity out for more improvements.

ETA, our broker mentioned that he'd recently closed a mortgage for another Brit ex-pat who was pretty much fresh off the boat and had no US credit history at all. This person was working for the Mountain View Chocolate Factory[1] in NYC so was probably making $$$. It is doable though.

[1] Google

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Old Sep 11th 2014, 12:12 am
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Default Re: Mortgage approval; what to expect?

What's your rate out of interest? We have been offered:

30 yr fixed
4.25% no points

10 /1 arm
3.875% no points
Rates stays fixed for 10 yrs at start rate. It can adjust yearly thereafter. There are caps to prevent the rate from going too high or low
The future rate adjustments are tied to a 1 yr libor plus a margin of 2.25%

7/1 arm
3.5% no points
Rate stays fixed for 7 years at start rate. I can adjust yearly thereafter. There are caps to prevent the rate from going too high or low.
The future rate adjustments are tied to a 1 yr libor plus a margin of 2.25%

Thoughts?
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Old Sep 11th 2014, 12:19 am
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Default Re: Mortgage approval; what to expect?

What are the relative closing costs, how long do you expect to stay in the house, and do you plan on paying anything off early?
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Old Sep 11th 2014, 12:48 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by Yorkieabroad View Post
What are the relative closing costs, how long do you expect to stay in the house, and do you plan on paying anything off early?
Hi -

We're putting down $99k, the 'cash to close' required is $108.5k across all three (few hundred diff between them). The closing cash includes property taxes as well i believe.

We'd expect to stay in the home around 10 years. Unsure whether we would be in a financial position to pay it off early, but I would like to overpay on bonus months.

Thanks!
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Old Sep 11th 2014, 12:49 am
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Default Re: Mortgage approval; what to expect?

I am not a mortgage expert, but I work with lots of mortgages after the fact, and I would say that right now almost nobody (USC, expat, hybrid) will get less than 4% on a 30 year fixed.

The figures Hungry Horace mentioned look realistic, based on what I see closing on a daily basis.
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Old Sep 11th 2014, 1:00 am
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Default Re: Mortgage approval; what to expect?

We refinanced two years after buying our house, and got a much lower rate at that point. Worth considering?
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Old Sep 11th 2014, 1:03 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by kins View Post
We refinanced two years after buying our house, and got a much lower rate at that point. Worth considering?
I'm not very up on it, but how would that be possible if interest rates had risen (even by 0.25%)? I'm not questioning I stress, just genuinely interested.
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Old Sep 11th 2014, 1:10 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by RICH View Post
I am not a mortgage expert, but I work with lots of mortgages after the fact, and I would say that right now almost nobody (USC, expat, hybrid) will get less than 4% on a 30 year fixed.

The figures Hungry Horace mentioned look realistic, based on what I see closing on a daily basis.
Yeah, it's pretty much the rate we've received across the various brokers we spoke to. I still don't know whether to go for the 30 year fixed (something that doesn't exist in England anymore I believe?) or 10 year.
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Old Sep 11th 2014, 1:48 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by kins View Post
We refinanced two years after buying our house, and got a much lower rate at that point. Worth considering?
Much lower than what?
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Old Sep 11th 2014, 2:47 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by hungryhorace View Post
Hi -

We're putting down $99k, the 'cash to close' required is $108.5k across all three (few hundred diff between them). The closing cash includes property taxes as well i believe.

We'd expect to stay in the home around 10 years. Unsure whether we would be in a financial position to pay it off early, but I would like to overpay on bonus months.

Thanks!
I guess it depends if you feel lucky.....nobody can predict the interest rates 10 years out, so what value do you put on sleeping easy? 3/8%? 3/4? ARMs aren't flavor of the month round here, because so many got stuck with massive balloons, but let's face it, any of those options are probably giving you a longer fix than you could get in the UK ( may be talking out of my arris there.....not looked at UK mortgages since the late 80s)

We're lucky...we came to a cheap state at a cheap time, and don't have mortgages, but if I did, I think I would be taking the cheapest rate on the 7 year arm and setting the autopay to pay it as if I'd taken the 30 year fixed. Then keep an eye on rates with a view to refinancing halfway through it with a better/longer credit history, higher salary and hopefully a better loan to value ratio.
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Old Sep 11th 2014, 5:55 am
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Default Re: Mortgage approval; what to expect?

Originally Posted by Yorkieabroad View Post
I guess it depends if you feel lucky.....nobody can predict the interest rates 10 years out, so what value do you put on sleeping easy? 3/8%? 3/4? ARMs aren't flavor of the month round here, because so many got stuck with massive balloons, but let's face it, any of those options are probably giving you a longer fix than you could get in the UK ( may be talking out of my arris there.....not looked at UK mortgages since the late 80s)

We're lucky...we came to a cheap state at a cheap time, and don't have mortgages, but if I did, I think I would be taking the cheapest rate on the 7 year arm and setting the autopay to pay it as if I'd taken the 30 year fixed. Then keep an eye on rates with a view to refinancing halfway through it with a better/longer credit history, higher salary and hopefully a better loan to value ratio.
ARMs have never been popular in the US with at best 10% share of the market. Although it may be a while for the world economy to recover but when it does, 30 years fixed mortgage interest rates typically have been in the 6%-8% range.

Primary Mortgage Market Survey Archives - 30 Year Fixed Rate Mortgages - Freddie Mac
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Old Sep 11th 2014, 11:06 am
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Default Re: Mortgage approval; what to expect?

I'm "straight off the boat" and just closed on 30 year fixed for 10 years at 3.5% with 20% down.
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Old Sep 11th 2014, 12:41 pm
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Default Re: Mortgage approval; what to expect?

Originally Posted by Michael View Post
ARMs have never been popular in the US with at best 10% share of the market. Although it may be a while for the world economy to recover but when it does, 30 years fixed mortgage interest rates typically have been in the 6%-8% range.

Primary Mortgage Market Survey Archives - 30 Year Fixed Rate Mortgages - Freddie Mac
I couldn't believe when we got here (2001) that it was possible to fix mortgage rates for such long periods. It was unheard of at that time in the UK. My first mortgage, in the early/mid 80's was around 14%() and I went with the provider that gave me the longest term fix - 12 months!! At those rates, the stress of the impending adjustment was pretty intense, particularly as that was the first step on the ladder, with loan to income at full stretch.

Kids today eh, don't know they're born
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Old Sep 11th 2014, 12:43 pm
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Default Re: Mortgage approval; what to expect?

Originally Posted by Relobotomy View Post
I'm "straight off the boat" and just closed on 30 year fixed for 10 years at 3.5% with 20% down.
That's gotta feel nice!!

(See my last comment above)
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