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Mortgage help please

Mortgage help please

Old Mar 12th 2014, 5:29 pm
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Default Mortgage help please

Search is currently down and Googling "site:britishexpats.com mortgage" yields results for other parts of the world (not sure if/how I can narrow down a Google search to a particular subforum...?). So I apologise in advance for asking questions which no doubt have been asked before. I can only find a brief paragraph in the credit section of the Wiki for mortgages.

We're going for our first mortgage appointment next week. I thought I read somewhere that first time buyers, or maybe those without much credit history, should head to their bank first, which is what we're doing (Wells Fargo). Did I recall that correctly?

Should we shop around as well? Or would WF be able to sell products from any supplier, not just their own?

I've got two tax returns (signed by accountant), last two payslips for the wife (electronic; printouts), last two bank statements (electronic; printouts), and last year's W-2 for the wife (electronic; printout). This is all the advisor has asked for but he didn't answer questions about the electronic versions. Are they generally ok, including the W-2? I'm sure the wife ought to have a proper W-2 but not entirely sure... I'm self employed. Anything else we ought to take that he hasn't asked for?

Using the affordability calculators and comparing to the price of houses in the area, the former is roughly double the latter. Do we specify how much we want to borrow - in which case we go for a very conservative figure that is much lower than the theoretical maximum - or do they just give you a figure?

Is deposit much of an issue at the pre-approval stage? Put another way, do we have to show the appropriate funds while getting pre-approved? We're nearly there, just slightly short for a couple of weeks.

Any idea how long we should expect to wait for something we can wave in realtors' faces to show we're serious about buying houses?

Obviously the advisor is going to answer these but it helps to have an idea before we walk in the building. Thanks.
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Old Mar 12th 2014, 5:51 pm
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Default Re: Mortgage help please

Originally Posted by GeoffM View Post
Is deposit much of an issue at the pre-approval stage? Put another way, do we have to show the appropriate funds while getting pre-approved? We're nearly there, just slightly short for a couple of weeks.

Any idea how long we should expect to wait for something we can wave in realtors' faces to show we're serious about buying houses?

Obviously the advisor is going to answer these but it helps to have an idea before we walk in the building. Thanks.
Going in person is a good idea.

Regarding deposits, banks are much more wary about checking where the cash has come from. They do not like to see it coming from a second loan or cash advance. They do like to see a paper trail of where it has come from.

You'll probably get a response right there and he'll hopefully say you can borrow a ridiculous sum at which point you giggle and say yeah well we probably only need X.
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Old Mar 12th 2014, 6:14 pm
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Default Re: Mortgage help please

Originally Posted by sir_eccles View Post
Going in person is a good idea.

Regarding deposits, banks are much more wary about checking where the cash has come from. They do not like to see it coming from a second loan or cash advance. They do like to see a paper trail of where it has come from. ....
Under current (new/recent) regulations the deposit CANNOT come from a loan unless it is a loan secured on real estate. In other words you can't either borrow the money on your credit card, against your car, or an unsecured personal loan, it is not permitted.

"Where the cash came from" is a slightly different issue, and may cause you some headaches if it is wired from overseas, or has some other murky appearance e.g. a sack of mixed used small value banknotes.

Other points: Wells Fargo is a bank, not a broker, so you will only get a Wells Fargo mortgage from them. Wells Fargo is currently responsible for almost 30% of mortgages written in the US, and offer very competitive rates. I have a Wells Fargo mortgage myself and found the process of getting the mortgage to be very smooth, and everything has gone flawlessly since, so I definitely recommend them!

Last edited by Pulaski; Mar 12th 2014 at 6:19 pm.
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Old Mar 12th 2014, 6:20 pm
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Default Re: Mortgage help please

Originally Posted by Pulaski View Post
Under current (new/recent) regulations the deposit CANNOT come from a loan unless it is a loan secured on real estate. In other words you can't either borrow the money on your credit card, against your car, or an unsecured personal loan, it is not permitted.

"Where the cash came from" is a slightly different issue, and may cause you some headaches if it is wired from overseas, or has some other murky appearance e.g. a sack of mixed used small value banknotes.
I knew they had tightened up the rules, didn't know they had made it specifically illegal.

When we bought our house (2010) they basically wanted to know the origins of almost every deposit into our account. When your wife is a freelance consultant for some big firms this can get tricky.
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Old Mar 12th 2014, 6:23 pm
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Default Re: Mortgage help please

I would definitely shop around. Credit unions and regional banks will often have more discretion than somewhere like Wells Fargo.
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Old Mar 12th 2014, 6:30 pm
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Default Re: Mortgage help please

Originally Posted by sir_eccles View Post
I knew they had tightened up the rules, didn't know they had made it specifically illegal.

When we bought our house (2010) they basically wanted to know the origins of almost every deposit into our account. When your wife is a freelance consultant for some big firms this can get tricky.
Yeah, that issue nearly bit me on the ärse, when we got our mortgage. Having obtained the deposit ahead of closing, from a specifically permitted source, I parked the money in a revolving credit account, to earn (save) some interest for a few days until closing, and the underwriter phoned me in quite a tizzy as she insisted that although there was a trail back to the source of the money, placing it in the revolving credit account "tainted" the money.

Under the underwriter's advice I had to moved the money through another account, which was a "permitted source", before moving into my checking account and buying an official check to take to closing. I still don't see how what they told me to do made a scrap of difference, but it made them happy, so who am I to argue?

Originally Posted by MidAtlantic View Post
I would definitely shop around. Credit unions and regional banks will often have more discretion than somewhere like Wells Fargo.
It will always be easier dealing with a bank that already knows you. A lot of the f***ed-up mortgages prior to 2008 were sourced from brokers even if they were eventually sold on to a bank for servicing. "Discretion" is not necessarily a desirable thing when you're making the most expensive purchase of your life.

Last edited by Pulaski; Mar 12th 2014 at 6:38 pm.
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Old Mar 12th 2014, 6:42 pm
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Default Re: Mortgage help please

Originally Posted by Pulaski View Post
Under the underwriter's advice I had to moved the money through another account, which was a "permitted source", before moving into my checking account and buying an official check to take to closing. I still don't see how what they told me to do made a scrap of difference, but it made them happy, so who am I to argue?
It's a case of you say jump I'll say how high. You want to buy the house or not (very similar to a lot of immigration situations, you want the visa or not, then reply to the RFE with what they want). At which point there are a flurry of faxes as midnight.

It will always be easier dealing with a bank that already knows you. A lot of the f***ed-up mortgages prior to 2008 were sourced from brokers even if they were eventually sold on to a bank for servicing. "Discretion" is not necessarily a desirable thing when you're making the most expensive purchase of your life.
Ding, exactly. Nothing beats being able to call up someone who you know personally having met them face to face and being able to say "Bob, what's this all about..."
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Old Mar 12th 2014, 7:34 pm
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Default Re: Mortgage help please

Thanks for the replies. It most definitely is a face-to-face meeting at a WF mortgage office.

I heard about the paper trail for the deposit. Being self employed with (still) most of my work coming from the UK and being XE-ed across, and with the remainder coming from PayPal (software I sell to the general public), this could prove quite... interesting. I could do PayPal reports though, which would be a good few thousand transactions so a fair bit of paper. And the other work is invoiced electronically.

No loans though, nor credit card cash advances or anything silly like that.
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Old Mar 12th 2014, 7:38 pm
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Default Re: Mortgage help please

Originally Posted by GeoffM View Post

Using the affordability calculators and comparing to the price of houses in the area, the former is roughly double the latter. Do we specify how much we want to borrow - in which case we go for a very conservative figure that is much lower than the theoretical maximum - or do they just give you a figure?

Is deposit much of an issue at the pre-approval stage? Put another way, do we have to show the appropriate funds while getting pre-approved? We're nearly there, just slightly short for a couple of weeks.

Any idea how long we should expect to wait for something we can wave in realtors' faces to show we're serious about buying houses?
First two depend on the institution...the third too, but realistically plan for 30-90 days, but you should get a rough yes or no on the spot for a pre-approval.

Anyway, if you want a laugh, I heard from someone hoping to get $400K to get this place and they were offered $65K which they weren't to pleased with
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Old Mar 12th 2014, 7:41 pm
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Default Re: Mortgage help please

Definitely shop around. You might find this useful:

http://www.forbes.com/sites/learnves...hese-pitfalls/

http://www.learnvest.com/knowledge-c...et-a-mortgage/
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Old Mar 12th 2014, 7:46 pm
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Default Re: Mortgage help please

Originally Posted by MarylandNed View Post
What I did was look for the lowest rates available for anyone, anywhere. Then I went to my bank, and they offered me a loan at about ⅛% over the best reported current rate anywhere. There was no point in me wasting my time shopping around.
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Old Mar 12th 2014, 8:22 pm
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Default Re: Mortgage help please

Make sure you get pre-approved and not pre-qualified. There is a major difference when you make an offer.
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Old Mar 12th 2014, 9:56 pm
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Default Re: Mortgage help please

Originally Posted by Pulaski View Post
What I did was look for the lowest rates available for anyone, anywhere. Then I went to my bank, and they offered me a loan at about ⅛% over the best reported current rate anywhere. There was no point in me wasting my time shopping around.
I've refinanced my mortgage twice and I've never had the best rate from my bank so I never used them.
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Old Mar 12th 2014, 10:04 pm
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Default Re: Mortgage help please

Originally Posted by MarylandNed View Post
I've refinanced my mortgage twice and I've never had the best rate from my bank so I never used them.
My ex g/f refinanced her house 5 times between 1992-2012 with no point/no fee mortgages and always used the same mortgage broker. The last rate was a little less than 4% which is about as low as someone could get when rates hit bottom with a no point/no fee 30 year refinance (she just refinanced the old mortgage and didn't pull out any equity).

GeoffM: For an initial mortgage, you can easily get a no point mortgage but more difficult to get a no fee mortgage since there is title insurance, title transfer fee, city tax, and other fees that don't apply to a refinance.

Last edited by Michael; Mar 12th 2014 at 10:11 pm.
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Old Mar 12th 2014, 10:20 pm
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Default Re: Mortgage help please

Originally Posted by MarylandNed View Post
I've refinanced my mortgage twice and I've never had the best rate from my bank so I never used them.
That would be why your bank doesn't have 30% of the mortgage market.
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