Your Questions About Mortgage Loan Rates

Daniel asks…

How much would my mortgage payment be?

My husband and I are applying for a mortgage loan program that gives out loans for 38 year terms for first time home buyers to make the payments more manageable. We live in the state of Kentucky, we are looking at purchasing a $60,000.00 home. The interest rate would be at (I think ) 4% fixed for a 38 year term. Factoring in taxes and insurance can anyone tell me the estimated payment that we would be looking at monthly, so I can see if we are looking in the correct price range? Thanks so much and may God bless you!

John answers:

L did one for a lady at a 3% rate 38 years amount $100,000.00 and it was less the $250.00 per month. Now here is the kicker, and check this out for yourself before you comment to the deal, they add $100.00 per month for some stupid excuse, for the life time of the loan. Which means instead of 3% it is more like 41/2%. In your case it would be 51/2%. If l remember correctly they say it is for some king of insurance which l do not believe and their is no way around it either. If it were me l would want to read the whole contract before l do anything. Good luck.

David asks…

What did Barney Frank have to do with wrecking our economy?

I am reading The Big Short by Michael Lewis.

It’s about how the Wall Street geniuses were allowed by the GOP Congress under Clinton to wreck our economy thru the securitization of mortgage loans into AAA rated bonds.

The SEC under Bush was absent or was told to be absent by the Republicans (remember Bernie Madoff)

No where is Barney Frank mentioned. What role if any did he play?

John answers:

Http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/

Robert asks…

can I get a mortgage loan with less than 2 years or employment history?

I have been employed for 8 months, and a full time student for 14 months, unemployed before that…I wanna know if I could get a mortgage loan! will a down payment help?

John answers:

If you have been in school or trade training immediately prior to entering your employment, and get can verification of such, then it is a possibility. The lender will probably require a written verification of employment from your current employer, to verify hours you work and rate of pay. Below are the employment requirements for Freddie Mac loans:

Newly employed
borrowers /
borrowers re-
entering the
workforce
(Guide Section 37.13)
• If newly employed borrower with less than a 2-year employment history, obtain
documentation showing that the borrower was in school or in a training program immediately
prior to their current employment
• If borrower is re-entering the workforce, obtain documentation to support the borrower has
been at the current employment for a minimum of 6 months and documentation to show a
previous work history

Sorry, I’m not familiar with Fannie Mae rules, as we only sell our loans to Freddie. But I imagine they should be somewhat similar.

James asks…

What exactly is Ameridream, and what are the rates?

I heard from someone that they provide you with a down payment for a home. But what about the intrest rate, and all that good stuff? Is it just a beefed up mortgage loan?

John answers:

Ameridream provides the money for down payment at closing. The seller pays Ameridream the money for the down payment plus a donation, and you payback the seller once the loan closes because the down payment is rolled into the mortgage.

It’s not a loan, and you do not borrow from them. It just an exchange of money so that buyers can get into the house without coming out of pocket. It’s a love triangle but with money.

Ideally the seller is paying the down payment, but since that is illegal, they give it to Ameridream, who then pays the title company or mortgage company, and when the loan is funded, the seller is re-reimbursed.

You must find a seller willing to participate in order to qualify for Ameridreams.

Sandra asks…

Who is providing construction loans to build first home?

I’ve been approved for a mortgage loan but need a construction loan to build a home.
In Texas. Great fica score 840 or higher. Have enough money in the bank. Have tried builder contact, waiting since month ago. A big lending company on-line bluntly told me that he didn’t know of any bank that was offering construction loans because of the way things are with the economy right now?

John answers:

What Col Kurtz didn’t mention is that when you pay retail to a direct lender you end up with a higher rate and the lender gets more on the back end then a broker would, it’s called SRP or service release premium.

Here’s another little fact/difference.

The brokers yield spread premium has to be disclosed on the HUD1 settlement statement but the bank does not have to disclose their premium.

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