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Need help choosing the best mortgage product

The last post in this topic was posted 5224 days ago. 

 

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We will close next July 27th and we have three choices thanks to Credit boards. Here they are:

 

All three mortgages are 30 year fixed.

 

Loan amount $395,600.00 down payment $100,000.00

 

We will not sell the house we are currently living in. We will rent it. No tenant yet.

 

Choice number one

 

Builders loan company. If we use then they extend the house warranty to two years and they pay $4000.00 towards closing costs.

 

Full doc loan. Rate is 6.37. No points. Closing cost are $4,500.00 taking into account the $4000.00 the builder pays. There is a possibility of including a HELOC as well for 50% of the down payment account.

 

Contingent upon providing a rental agreement, copy of 1st month's rent and appraisal to make sure we are renting for the appropiate amount of money. I think we will have a renter by closing.

 

Choice two

 

Stated income loan due to no renter yet. Rate 6.7. No points. Closing cost are $7,200.00.

 

No contingencies.

 

Choice three

 

Stated income loan due to no renter yet. Rate 6.25 buying 1&1/2 discount points. Closing costs are $14,051.00

 

No contingencies.

 

Is it worth it to pay the $14,000.00 in closing cost to get the lowest rate? It is $10, 000.00 over the builder's loan.

 

I think we pretty much discarded choice two, but I am not sure between choice one and choice three.

 

Any help and opinions from the experts will be appreciated.

 

Nikki

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We will close next July 27th and we have three choices thanks to Credit boards. Here they are:

 

All three mortgages are 30 year fixed.

 

Loan amount $395,600.00 down payment $100,000.00

 

We will not sell the house we are currently living in. We will rent it. No tenant yet.

 

Choice number one

 

Builders loan company. If we use then they extend the house warranty to two years and they pay $4000.00 towards closing costs.

 

Full doc loan. Rate is 6.37. No points. Closing cost are $4,500.00 taking into account the $4000.00 the builder pays. There is a possibility of including a HELOC as well for 50% of the down payment account.

 

Contingent upon providing a rental agreement, copy of 1st month's rent and appraisal to make sure we are renting for the appropiate amount of money. I think we will have a renter by closing.

 

Choice two

 

Stated income loan due to no renter yet. Rate 6.7. No points. Closing cost are $7,200.00.

 

No contingencies.

 

Choice three

 

Stated income loan due to no renter yet. Rate 6.25 buying 1&1/2 discount points. Closing costs are $14,051.00

 

No contingencies.

 

Is it worth it to pay the $14,000.00 in closing cost to get the lowest rate? It is $10, 000.00 over the builder's loan.

 

I think we pretty much discarded choice two, but I am not sure between choice one and choice three.

 

Any help and opinions from the experts will be appreciated.

 

Nikki

 

?

Did they tell you what your ratios are? Are you sure you do not qualify with both homes? What are your scores? You may qualify for a conforming loan with both homes even without a renter because of the down payment. What state are you in? the closing costs seem high unless you are in a high cost state, like FL.

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I'm wondering if the lender from choice #3 can offer you a full doc loan if you have the rental agreement, or the stated income rate from builder's lender.

 

The difference between option #1 & #3 is if you can get the rental agreement or not, therefore you qualify for better terms. It's tough to compare which one would be better because it's not exactly apples to apples, but based on if you can provide a rental agreement or not. If you can't provide the rental agreement then, between the two options, #1 would be the better choice without a doubt. If you can't provide it then #1 isn't an option. That's why I'd like to see if #1 has a stated income option & #3 has a full doc option.

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Our ratio must be low as we have no other debts. The only debt we have is the mortgage on our present home. If we rent this place our ratio will be even lower. I will ask them anyway, just to verify the information. Our middle scores are : Husband (primary income) 678, 674, 712. Mine 686, 658, 678 We are in NC.

 

The guy from the builder's lender indicated if I don't get a tenant we have to then go stated and he said the rate will be slightly higher.

 

I left a message for the lender of the other two choices to see the rate would be less if we do a full doc loan. SHe has all the information anyway but if we get the tenant I figure they should be able to do something .

 

Thanks for your responses. I am leaning towards choice 1 just because I am thinking if we don't have a tenant it will have OK rates and the closing costs are less.

 

 

Nikki

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I am leaning towards choice 1 just because I am thinking if we don't have a tenant it will have OK rates and the closing costs are less.

 

It would appear that way, but I'd make them give you a good faith estimate if you did have to do the stated income route, just want to make sure what your exact backup plan & the terms are.

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