Applying for a mortgage

[taylor111947]

I recently signed an Agreement of Sale and applied for a mortgage. Although I’m still working, I plan to quit as soon as my house sells. I know I can live comfortably on my pension, SS, income from a business I own and my investments (although I haven’t made arrangements to start receiving benefits yet).

When the loan agent asked me if this was going to be my primary residence I answered ‘Yes’. I was shocked when he said I didn’t qualify for a loan because my expenses were greater than 50% of my income. It turns out that because I said my TV home would be my primary home, they immediately discounted my current income, but since my house hasn’t sold yet they added my current mortgage and taxes to the expense category. I had to agree to reduce my debt (pay off my car loan and home equity loan) in order to qualify.

That didn’t sit well with me so I went to another bank (with a better rate), explained my situation and it appears that I will qualify. However, I was surprised when they said they were only going to use one of my retirement accounts in their analysis. Apparently it doesn’t matter how much money you have in the bank – they only look at income. My sister had warned me that the new banking laws made it more difficult to get a mortgage, but I didn’t understand how that was going to affect me.

Just thought I’d pass that along. I know many people pay cash and that’s my back-up plan if my mortgage falls through, but I had a few scary moments.

[jackz]

Liz, if you don't mind sharing, which bank did you decide to go with? Thanks.

[swimdawg]

I recently signed an Agreement of Sale and applied for a mortgage. Although I’m still working, I plan to quit as soon as my house sells. I know I can live comfortably on my pension, SS, income from a business I own and my investments (although I haven’t made arrangements to start receiving benefits yet).

When the loan agent asked me if this was going to be my primary residence I answered ‘Yes’. I was shocked when he said I didn’t qualify for a loan because my expenses were greater than 50% of my income. It turns out that because I said my TV home would be my primary home, they immediately discounted my current income, but since my house hasn’t sold yet they added my current mortgage and taxes to the expense category. I had to agree to reduce my debt (pay off my car loan and home equity loan) in order to qualify.

That didn’t sit well with me so I went to another bank (with a better rate), explained my situation and it appears that I will qualify. However, I was surprised when they said they were only going to use one of my retirement accounts in their analysis. Apparently it doesn’t matter how much money you have in the bank – they only look at income. My sister had warned me that the new banking laws made it more difficult to get a mortgage, but I didn’t understand how that was going to affect me.

Just thought I’d pass that along. I know many people pay cash and that’s my back-up plan if my mortgage falls through, but I had a few scary moments.

~~~~~~~~~~~~~~~~~~`
You're right. The way that bank explained things to me was because of our economy, politcal situation, banking crisis, etc., things have gone from one extreme to the other. Even Donald Trump would have a hard time getting a mortgage if he couldn't prove he had a set amount coming in every month. He would have to get a statement from his financial planner proving he takes so much out each month for living expenses. Ridiculous! But.....they're protecting themselves.............I guess!:confused:

[LEWIS]

Would you please let us know what bank that was because I will be looking for one soon I hope .
Thank you

[taylor111947]

Liz, if you don't mind sharing, which bank did you decide to go with? Thanks.

If you don't mind waiting - I'd like to make sure everything works out as planned before I say anything more - closing is in three weeks.

I can understand the bank's position, but it seems to me that retirees are the ones that will really suffer with these restrictions. It was brought to my attention when my sister applied for a mortgage - they have a small income, but make up for it in returns on their investments. They found the big banks had to abide by 'the rules'. A local bank was more understanding.

[swimdawg]

Would you please let us know what bank that was because I will be looking for one soon I hope .
Thank you

The BBD (Big Bad Developer - who I am gaining more respect for with each passing day) referred me to Citizen's First Wholesale Mortgage Company in LSL.

[jackz]

[QUOTE=taylor111947;344927]If you don't mind waiting - I'd like to make sure everything works out as planned before I say anything more - closing is in three weeks.

No problem, understood. Good luck with closing.

[taylor111947]

Well, the mortgage company came through on time and it appears I will settle on time. :MOJE_whot:

I used Wachovia/Wells Fargo. John Sherer was the individual I worked with - PM me if you want his number.

However, I can now see the advantage of working with Citizens First Mortgage Company. They guarantee you will close on time - I spent more than a few anxious moments as questions were still coming in right up until the last day. Was this stress worth the difference in the mortgage rates? Now I can say yes - yesterday I may have had a different answer!

One thing I did that I think helped speed the process - I converted all the documents I needed into PDF Files and emailed them - including Tax returns, W2s, Bank statements. I also converted any other documents - Agreement of Sale, etc and stored them all in Google Docs. That way I could get to them from any computer and refer to them quickly if needed.

One problem I encountered - I have income from several pensions. I was able to verify the amount, but they wanted documentation as to the term of the pension. This was one of those last minute questions and I had trouble getting the information quickly.

So, my blood pressure is back to normal - at least for the moment. The next challenge is moving. But I know it will all be worth it when I'm sitting on my lanai with a frozen drink in my hand and watching the sunset.:a040:

[Jhooman]

Thank you for your posts and getting the loan, I'm a bit jealous, not really.

We are waiting for our home to sell too and then apply for the loan process with CB.

Your info will help us get our docs in order, we too have pensions and various sources of income. It's a quality problem I know, but having the docs ready will keep my blood pressure down.

Enjoy your journey to the TV, they are waiting for you to play.:MOJE_whot:

God Bless yea

[teachnmo]

You could have had the same last minute problems with Citizens. We had problems up to the week before. Glad that part is behind you!

[momesu]

Any idea if the amount of down payment one is willing to put down makes a difference on ones ability to get a mortgage. I am hoping to buy in TV sometime late summer. My complication is I will be a divorcee with alimony and a monthly pension amount. Too young for SSI yet but though I can afford to pay cash I was thinking of putting about 25-50% down and having a smallish mortgage. I do plan to try and fiind a PT job just for fun money and to keep my mind occupied, but nothing big.
Should I just give up the thoughts of a mortgage and pay cash? OH decisions decisions............
S.

[Snowbirdtobe]

When we were looking for a mortgage in August 2010 for a resale we first tried First Citizens and I felt that I needed an appointment to speak with a mortgage person. They seemed to work bankers hours and never nights or weekends.
I contacted an independent mortgage broker. She was eager to take calls nights, weekends, anytime on my schedule. She didn’t get paid unless the deal went through.
We did the closing remotely from Massachusetts on our schedule.
The developer may sell 10 or more homes in a day where a broker would be thrilled with 2 a week.
An ethical broker can guide you into giving the correct answers to questions with responses like “How can it be your primary home since you are still working in Massachusetts? Don’t you mean it’s a vacation home?”

[ladydoc]

We used Citizen's and they could not have been better. We were referred by some villagers to Anthony, who was WONDERFUL. He was patient, answered all our questions and made the process as simple as a mortgage process could be. ASK for Anthony if you go through CFM. It is nice to have your mortgage there in TV..it stays there and they are never sold off. If there is a problem you can go the source in a matter of minutes. We really did not have any problems other then the stress I imposed on myself about it.

What we really liked about the loan, although we did not know about it at the time, was that if you are ever in the position of being able to put $10,000 or more towards the loan, for a $175 fee, they will apply the sum to the balance of the loan with the same terms and same interest rate. NO refinancing fee. When our house sells we will be putting a chunk into the loan. There is something nice about a low mortgage payment, or no payment. We will see what the future brings. If the house does not sell, we will rent it and the rent will pay the mortgage. So, its all good.

[jackz]

Well, the mortgage company came through on time and it appears I will settle on time. :MOJE_whot:

I used Wachovia/Wells Fargo. John Sherer was the individual I worked with - PM me if you want his number.

However, I can now see the advantage of working with Citizens First Mortgage Company. They guarantee you will close on time - I spent more than a few anxious moments as questions were still coming in right up until the last day. Was this stress worth the difference in the mortgage rates? Now I can say yes - yesterday I may have had a different answer!

One thing I did that I think helped speed the process - I converted all the documents I needed into PDF Files and emailed them - including Tax returns, W2s, Bank statements. I also converted any other documents - Agreement of Sale, etc and stored them all in Google Docs. That way I could get to them from any computer and refer to them quickly if needed.

One problem I encountered - I have income from several pensions. I was able to verify the amount, but they wanted documentation as to the term of the pension. This was one of those last minute questions and I had trouble getting the information quickly.

So, my blood pressure is back to normal - at least for the moment. The next challenge is moving. But I know it will all be worth it when I'm sitting on my lanai with a frozen drink in my hand and watching the sunset.:a040:

Thanks for sharing your experiences with the mortgage process, I am sure it will be helpful for many of us.

Good luck with the move and enjoying that first frozen drink on your lanai.

[getdul981]

We used Citizen's and they could not have been better. We were referred by some villagers to Anthony, who was WONDERFUL. He was patient, answered all our questions and made the process as simple as a mortgage process could be. ASK for Anthony if you go through CFM. It is nice to have your mortgage there in TV..it stays there and they are never sold off. If there is a problem you can go the source in a matter of minutes. We really did not have any problems other then the stress I imposed on myself about it.

What we really liked about the loan, although we did not know about it at the time, was that if you are ever in the position of being able to put $10,000 or more towards the loan, for a $175 fee, they will apply the sum to the balance of the loan with the same terms and same interest rate. NO refinancing fee. When our house sells we will be putting a chunk into the loan. There is something nice about a low mortgage payment, or no payment. We will see what the future brings. If the house does not sell, we will rent it and the rent will pay the mortgage. So, its all good.

I'm not sure what you mean about charging you a $175 fee. It was my impression that you could pay any amount over the monthly payment and it would automatically be applied to the principal. Were you referring to the bond payment instead? You have once a year to pay the entire bond payment, but you can pay the entire loan off at any time.

[rpicker04]

I'm not sure what you mean about charging you a $175 fee. It was my impression that you could pay any amount over the monthly payment and it would automatically be applied to the principal. Were you referring to the bond payment instead? You have once a year to pay the entire bond payment, but you can pay the entire loan off at any time.

The $175 fee also includes a re-amortization of the loan which results in a lower P&I payment over the remaining life of the loan. This allows you to basically refinance the loan at same interest rate resulting in lower P&I payment without closing costs. That is what is good about it.

[Russ_Boston]

I'm not sure what you mean about charging you a $175 fee. It was my impression that you could pay any amount over the monthly payment and it would automatically be applied to the principal. Were you referring to the bond payment instead? You have once a year to pay the entire bond payment, but you can pay the entire loan off at any time.

I have the same deal with Citizens and this is different than just applying principal to the loan. Yes, you could do that any month you wish and in any amount that you wish. And yes it will reduce the principal so you'll pay it off sooner.

But the deal mentioned here allows the monthly payment to be reduced. For example if you had a 200K loan and the payment was $1000 per month you could put down another 100K and they reduce the monthly payment to $500 (same length of time). They do this since many people take the mortgage for the TV house and still have a house to sell up north. When the house sells you can reduce your monthly nut down here. (added note: you obviously would owe 100K less on principal balance as well)

[katezbox]

The BBD (Big Bad Developer - who I am gaining more respect for with each passing day) referred me to Citizen's First Wholesale Mortgage Company in LSL.

Just to be sure you know this...but CFWM is a company owned by that BBD (who I also greatly respect). I am not passing judgment on them, just stating a fact that may not be known...

We were biting our nails with them until the last minute as well...and they also made a couple of huge goofs. But they set everything right and the closing was glitch free!

[KatzPajamas]

We are so anxious to get there, but cant come for couple of years. That being said-we have thought of buying a home and getting a management company to rent it out for us until we can live there. Anyone have experience with this? :undecided:

[Russ_Boston]

We are so anxious to get there, but cant come for couple of years. That being said-we have thought of buying a home and getting a management company to rent it out for us until we can live there. Anyone have experience with this? :undecided:

If you need a mortgage to buy the TV house you will have to tell the mortgage company (and insurance co) that you plan to rent out. Slightly higher loan rate and insurance premium to do so.