Posted 08 June 2003 - 05:13 PM
1) Abilty to get into a home with no down payment
2) You do not have to pay for private mortgage insurance, as the second loan gives you the required 20% equity (of sorts) in your home
My question is this...
I understand that many times these second loans (the 20%) are done as home equity lines of credit. If this is the case, would this 20% loan show up on the CRs as a "revolving line of credit"? If so, my concern is that my credit utilization would go from around 30-40% to well over 90%. This would most likely tank my FICO scores.
Does anyone have more infomation on these 80/20 programs? Can the 20% loan be written as an installment loan, rather than revolving? If not, are there other programs available for 0 down financing? Any info is welcome - thank you!
Posted 08 June 2003 - 05:33 PM
As far as how the HELOC is reported I am not exactly sure how it is viewed but I would imagine it would be revolving. The line of credit could be 50k yet the usage 25k.........so the 25k is what would affect your score IN MY OPINION. I am sure some credit goo roo's will see this pist and set me straight.
Posted 08 June 2003 - 05:56 PM
Thank you for addressing my question. I don't have any real desire for a a HELOC, I had just been told that this was how they did the 20 portion of an 80/20 loan. All I'm interested in is a no down payment loan, so from what you are saying, I need to be inquiring about a second mortgage (installment based) for the 20 portion? Do you know if any lenders offer conforming (I think that's the correct term anyway) single loans for 100% of the value of the home?
In my case, if I went HELOC for the 20, it would be around 40-50K and so if they only approved me for the 40-50 (as opposed to say 80-100), then I'd be 100% utilized on that loan. I'm thinking that would be a bad thing .
Posted 08 June 2003 - 06:02 PM
Posted 08 June 2003 - 06:36 PM
Ah yes, the credit score....
I've been working on cleaning things up for the past 3-4 months. I was in the 570-580 range. My last equifax FICO came in at 648. I've only spoken with one mortgage broker so far, and here is what they quoted me based on a mid score of 633 (quote was about two weeks ago)
80 - 30 year fixed no points = 6.125%
20 - 30 year amortized (due in 10 ...I think?) = 12.99%
It wasn't clear whether the second was fixed or ARM. (I forgot to ask)
Now, with my credit scores, I know I'm definetely not going to get the best rates the market is offering. However, the quote, especially on the 20, did seem a bit high. I'm obviously going to shop, shop, shop....but does anyone (willtygart) have any idea if this is in the ballpark of where lenders are at for 80/20 with the above listed mid score? Thanks again for all of the information, I really appreciate it.
Posted 08 June 2003 - 06:48 PM
Posted 09 June 2003 - 01:41 AM
Posted 09 June 2003 - 09:54 AM
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