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Question About US Mortgage...

Question About US Mortgage...

Old Nov 23rd 2010, 9:33 pm
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Default Question About US Mortgage...

I am wondering if it is possible to get a mortgage in the US secured on 50% of the property value?

So say a house is for sale for $120,000 and I have $60,000 as a down payment, can the mortgage for the remaining $60,000 be secured on the $60,000 I put down on the house.

Not sure if that makes sense but I'm new to morgages and buying houses.

Thanks
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Old Nov 23rd 2010, 10:18 pm
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Default Re: Question About US Mortgage...

depends on the bank, your credit history, how many places have foreclosed, how much business is going etc...
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Old Nov 23rd 2010, 10:24 pm
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Default Re: Question About US Mortgage...

I'm pretty sure the property would have to be valued at $120,000, if that's what you're asking.
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Old Nov 23rd 2010, 10:33 pm
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Default Re: Question About US Mortgage...

Originally Posted by goldenlobster View Post
I am wondering if it is possible to get a mortgage in the US secured on 50% of the property value?

So say a house is for sale for $120,000 and I have $60,000 as a down payment, can the mortgage for the remaining $60,000 be secured on the $60,000 I put down on the house.

Not sure if that makes sense but I'm new to morgages and buying houses.

Thanks
You'll really have to check with the lender. These days it's all whacky. Some places won't do a mortgage for as low as $60,000. Also, the lower the amount of the loan, the higher the interest rate.

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Old Nov 24th 2010, 12:12 am
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Default Re: Question About US Mortgage...

Originally Posted by goldenlobster View Post
So say a house is for sale for $120,000 and I have $60,000 as a down payment, can the mortgage for the remaining $60,000 be secured on the $60,000 I put down on the house.

Not sure if that makes sense but I'm new to mortgages and buying houses.
As you have worded it - no - it doesn't make sense to me.

The mortgage will be secured against the property that you buy - not against the money that you put into the purchase because, after the purchase goes through, that money won't exist - you will have the property not the money, so it is the property that would normally be used to secure the loan.

As others have said, it all depends on the lender but, all other things being equal (which they may not be if, for example, you don't have a US credit history) getting a mortgage on a property for which you are making a 50% downpayment shouldn't be too hard.
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Old Nov 24th 2010, 1:02 am
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Default Re: Question About US Mortgage...

Okay.... I think i'm a bit clearer now. What I was thinking doesn't actually make any sense since securing a mortgage on 1/2 a property is pretty useless.

I would like to buy a house around $120,000-$130,000 but only really have 1/2 of that money. I'm not sure how easy it would be for me to get a mortgage since I am self-employed and although I earn a fair amount, I don't have business records going back very far.
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Old Nov 24th 2010, 12:10 pm
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Default Re: Question About US Mortgage...

It's actually fairly easy, at that LTV.

If you're already a resident of the us and have financial records to prove your income, any big bank will be able to give you a mortgage..... Do you have records of your income from the uk? Or any other source of wealth such as a whole life insurance policy or retirement accounts.

In your situation I'd be stunned if you weren't able to get a mortgage
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Old Nov 24th 2010, 1:54 pm
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Default Re: Question About US Mortgage...

I've been a US resident for about 4 years. I have financial records going back that far but i've only really started earning significant amounts in the past 6-12 months. Before that things were a bit of a struggle to say the least.

It sounds like I am in a good position to get a mortgage but I think I may continue to rent for a little longer and build up my reserves a little more. It's great to go from a position of not knowing how to pay the bills to thinking about buying a house. I guess with hard work and determination anything is possible!
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Old Nov 24th 2010, 2:24 pm
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Default Re: Question About US Mortgage...

Originally Posted by goldenlobster View Post
I've been a US resident for about 4 years. I have financial records going back that far but i've only really started earning significant amounts in the past 6-12 months. Before that things were a bit of a struggle to say the least.

It sounds like I am in a good position to get a mortgage but I think I may continue to rent for a little longer and build up my reserves a little more. It's great to go from a position of not knowing how to pay the bills to thinking about buying a house. I guess with hard work and determination anything is possible!
It's worth a shot, I think.

Was your current self-employment based on your previous job? For example, you worked for a company writing java apps for 10 years, then went self employed writing java apps. If so, document this.

Pay greatest attention to where you're going to submit your application. I'd put multiple ones in within the span of a single week in order to minimise hit to credit score and maximize chance of success. I'd throw in a couple with banking institutions and one in with a broker.
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Old Nov 24th 2010, 3:12 pm
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Default Re: Question About US Mortgage...

I would say at 50% LTV there shouldn't be too much of a problem.

However, be prepared to document where that deposit has come from. Banks have become very wary of people secretly trying to take out a second loan or advance on a credit card to magic up a larger deposit.

This happened to me and my wife recently, we had the cash for the deposit but she is self employed and they wanted months worth of bank statements and then started asking questions "where did this big deposit come from?" our answer "here is the invoice". Very annoying at 10pm the night before closing.
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Old Nov 25th 2010, 1:31 pm
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Default Re: Question About US Mortgage...

Originally Posted by fatbrit View Post
It's worth a shot, I think.

Was your current self-employment based on your previous job? For example, you worked for a company writing java apps for 10 years, then went self employed writing java apps. If so, document this.

Pay greatest attention to where you're going to submit your application. I'd put multiple ones in within the span of a single week in order to minimise hit to credit score and maximize chance of success. I'd throw in a couple with banking institutions and one in with a broker.
I am not sure how different our situation is but we have been shopping for a mortgage for a few months now and were doing it before finding a house (since, as soon as we found one we liked, we wanted to be ready to pounce). What we I did was check my own credit score since apparently you don't get dinged for that, and I screen shot my results. I then sent this to the broker who was getting quotes for me. along with all the other details he needed such as old tax returns.
He prepared all the paperwork and told me which mortgage I'd be able to get, what the fees were, and how much the interest rate would be.

As soon as we have an offer accepted and actually need a loan from him, he will officially check our credit score which then counts as one ding. Doing it this way meant we didn't get loads of checks on our credit score which brings the score down.
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Old Nov 25th 2010, 2:37 pm
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Default Re: Question About US Mortgage...

Originally Posted by jackattack View Post
I am not sure how different our situation is but we have been shopping for a mortgage for a few months now and were doing it before finding a house (since, as soon as we found one we liked, we wanted to be ready to pounce). What we I did was check my own credit score since apparently you don't get dinged for that, and I screen shot my results. I then sent this to the broker who was getting quotes for me. along with all the other details he needed such as old tax returns.
He prepared all the paperwork and told me which mortgage I'd be able to get, what the fees were, and how much the interest rate would be.

As soon as we have an offer accepted and actually need a loan from him, he will officially check our credit score which then counts as one ding. Doing it this way meant we didn't get loads of checks on our credit score which brings the score down.
Yep. However, if you get the hard pulls all within a narrow time frame for the same sort of loan (i.e. a mortgage), then it only counts as one ding on your credit score despite the fact there were multiple pulls. Hence my advice to make multiple applications at the same time.

The big mistake is to apply for a mortgage every 3 months because you keep getting turned down. That will badly ding your score.
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Old Nov 25th 2010, 2:43 pm
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Default Re: Question About US Mortgage...

Originally Posted by jackattack View Post
I am not sure how different our situation is but we have been shopping for a mortgage for a few months now and were doing it before finding a house (since, as soon as we found one we liked, we wanted to be ready to pounce). What we I did was check my own credit score since apparently you don't get dinged for that, and I screen shot my results. I then sent this to the broker who was getting quotes for me. along with all the other details he needed such as old tax returns.
He prepared all the paperwork and told me which mortgage I'd be able to get, what the fees were, and how much the interest rate would be.

As soon as we have an offer accepted and actually need a loan from him, he will officially check our credit score which then counts as one ding. Doing it this way meant we didn't get loads of checks on our credit score which brings the score down.
... basically you have a prequal.
At somepoint you may want to go ahead and get a preapproval... among other things, the lender will have to run your credit to verify and review your credit report (you producing a score etc means jack to them as they won't accept it because they want to pull it for themselves to ensure its correct etc). Your credit score is different from your credit report.

Obtaining a preapproval is handy because when they pull your credit, you'll find out if there are any 'issues' which may have to be addressed and removed inorder to satisfy the underwriter's requirements - ie loan conditions. Underwriters are notorious to come back time and time again with more of their wants and needs!

With your LTV etc, it should be slam dunk... but you never know! Shop it and compare the GFE's and see what you can haggle with the garbage fees. Rule of thumb 2-3% of the loan size is typical for closing costs. You may want to check a credit union or two for comparison; they don't adhere to the same requirements and regulations as banks do.
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Old Nov 30th 2010, 4:11 pm
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Default Re: Question About US Mortgage...

Definitely shop around a bit, talk to them, find out rates, get the one or ones you like, and apply for a pre-approval. Having a letter of pre-approval, among other things, helps with making offers onto a house; I've seen home-owners who accepted a $5,000 lower offer over a higher one because the lower offer had a pre-approval and could guarantee smooth sailing on the mortgage side; while the higher offer hadn't started the process and the seller just didn't want to deal with the application time-frame.
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