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Subject Author Date
Alt-A category? none 04-21-2005
Posted by Jeff Strickland on April 24, 2005, 2:04 pm
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> Jeff Strickland wrote:
>> Alt-A is the category that takes Investors, Stated Income, No Income
>> Verification, etc.
>>
>> Alt A is available to a wide range of borrowers, the minimum FICO score
>> will
>> be around 660. There are a wide range of Adjustments for all sorts of
>> things. If the FICO is high and the L:TV is low, then there can be
>> substantial rebates on the loan, conversely if the FICO is low and the
>> LTV
>> is high, the same loan can have substatnial costs.
>>
>> Can you give a more specific question?
>>
>> Do you think you can use an Alt A loan?
>>
>> Call me,
>> Jeff Strickland
>> City Mortgage Service
>> 858 217 2449
>>
>
> I had never heard that term before, and I wondered what it covered. I am
> mortgage/home shopping right now, and have some concerns with my
> situation. I had a Ch. 7 BK discharged in October 2003, however, I have
> established a number of positive accounts since then, and my FICO socres
> are - as of last the last broker's pull - 686, 698, & 702.

Your BK shouldn't be a huge problem.



I know that
> my scores are good, but the CH. 7 being less than 2 years old hurts me. I
> am in Florida, and it seems as though prices just keep going up. One
> broker has me approved for a 2/28 first & second mortgage(zero down for
> me) up to $170K. He claims my payments would be in the $1200-1300 range.
> I earn roughly $40k/year and my monthly debt(auto loan and CC) is $275.
>

The 2/28 is the program that I would look for for you as well, AFTER I
confirmed that the A-paper lenders wouldn't want you. Assuming your loan
officer didn't simply throw you into a 2/28, then he is doing you right.

He is giving you a Blended Rate of about 7.750. You should be getting an
80/20 loan, 80% is a 1st, and 20% is a 2nd. You could be getting a 100% loan
that includes the PMI, in which case you are getting a 7.75% loan. A Blended
Rate is the total payment on the 1st + 2nd calculated into the total loan
amount. Since you didn't give me the value of the 1st & 2nd, but you gave me
the payment and the total loan amount, then 7.750 will make all of these
numbers come together. Given your past BK, this sounds about right, my gut
instinct is that I could do beter but I can't write loans in FL, so this is
a moot point.


> Do those numbers sound right to you? Can you find me a better deal? How
> does one in my position qualify to purchase a home that hasn't been built
> yet.


Go into the Sales Office and give them a check for $3000 for your earnest
money. They can give you a loan if anybody can.


For example, there is a condo project going up that won't
> start construction until June 2005, and completion is expected in June
> 2006. Talking to the sales center, they are taking 7% down and going
> "straight to contract." I know what 7% down means, but does the second
> part mean that you are closing immediately? How would/could I qualify for
> a new construction loan in my situation. With 7% down, I'd try to finance
> roughly $165K to $170K.
>
> I know this turned out to be long. Thanks for any input.


No, you do not go straight to closing. This would mean that you begine
making payments on a house that you are not allowed to live in.

YOU do not need to concern yourself with New Construction because youare not
pulling permits to construct a residence on property you already own. All
you are doing is buyint a house that somebody else has taken out the New
Construction loan against. Your transaction is a simple Purchase, not a New
Construction.

I hate to tell you this, but you should give serious consideration to using
the builder's lender. When I financed a purchase for my brother in law, it
was a pain in the ass because the builder was completely unable to stick to
the construction schedule. Even when they told us that the house would be
done in 30 days, and it was at least 30 days late at that time, it still
took them 60 days, and I locked for 45 days and had to pay a fee to extend
my lock. When yo purchase through the builder and the lender that is doing
thier financing, then the lock isn't really your trouble, and you can
reasonably argue that the builder should soak the costs you incur as a
result of them dragging their feet. If the builder can give you a rate of
n.nnn% today, and lock (guarantee) that rate when you move in, then take it.
If you are sure to get a No Prepayment Penalty, then you can simply
refinance after you move in. If the rates improve alot, then you can get
your own loan when the time gets nearer to Closing.





Posted by Jeff Strickland on April 24, 2005, 2:10 pm
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I forgot ...


To qualify for the $170,000 loan at 7.750%, you will have the following
expenses, mortgage, property taxes, home owner's insurance, HOA Dues, and
ongoing debt service. The total of all of this is about $1618, and you need
to make about $4000 per month to support this kind of debt load. This debt
load will take about 45% of your income on a monthly basis. This is rather
tight, but lots of lenders will do it, especially the lenders that do 2/28s.




> Jeff Strickland wrote:
>> Alt-A is the category that takes Investors, Stated Income, No Income
>> Verification, etc.
>>
>> Alt A is available to a wide range of borrowers, the minimum FICO score
>> will
>> be around 660. There are a wide range of Adjustments for all sorts of
>> things. If the FICO is high and the L:TV is low, then there can be
>> substantial rebates on the loan, conversely if the FICO is low and the
>> LTV
>> is high, the same loan can have substatnial costs.
>>
>> Can you give a more specific question?
>>
>> Do you think you can use an Alt A loan?
>>
>> Call me,
>> Jeff Strickland
>> City Mortgage Service
>> 858 217 2449
>>
>
> I had never heard that term before, and I wondered what it covered. I am
> mortgage/home shopping right now, and have some concerns with my
> situation. I had a Ch. 7 BK discharged in October 2003, however, I have
> established a number of positive accounts since then, and my FICO socres
> are - as of last the last broker's pull - 686, 698, & 702. I know that my
> scores are good, but the CH. 7 being less than 2 years old hurts me. I am
> in Florida, and it seems as though prices just keep going up. One broker
> has me approved for a 2/28 first & second mortgage(zero down for me) up to
> $170K. He claims my payments would be in the $1200-1300 range. I earn
> roughly $40k/year and my monthly debt(auto loan and CC) is $275.
>
> Do those numbers sound right to you? Can you find me a better deal? How
> does one in my position qualify to purchase a home that hasn't been built
> yet. For example, there is a condo project going up that won't start
> construction until June 2005, and completion is expected in June 2006.
> Talking to the sales center, they are taking 7% down and going "straight
> to contract." I know what 7% down means, but does the second part mean
> that you are closing immediately? How would/could I qualify for a new
> construction loan in my situation. With 7% down, I'd try to finance
> roughly $165K to $170K.
>
> I know this turned out to be long. Thanks for any input.




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