my co-worker wants a home and a loan to go with it-but he wants to do a debt consolidation in conjunction with his first home loan- I told him I thought I had heard of this but not sure where,we googled lots of stuff but to no avail- So my question is ,where can you get a 120% first mortgage?
2006-11-25 16:36:51 · 3 answers · asked by badmts 4 in Business & Finance ➔ Renting & Real Estate
you make many good points but your last comment is wrong as this is for my co-worker NOT me ,I can't afford a home loan at this time-and BTW its the SEATTLE market
2006-11-26 10:19:24 · update #1
My apologies for assuming who this was about.... there's a bankruptcy in your friend's future. I'm in the Portland, OR market and it's soft now, so I stick by my advice: spending 20% more than the market value in a time of market flux is a highly risky venture.
Friend, that type of thinking is the sure path to financial self-destruction.
In the first place, your friend should only buy a home he can afford, which is usually said to represent no more that 25-28% of one's gross pay in terms of mortgage payments. Second, depending on where your friend lives, most housing markets are in a slump and prices are continuing to slide, albeit modestly. So why hang yourself out for 120% of something that may be declining in value for the foreseeable future? (Sure, housing prices will once again pick up, but why buy in at the top?--buy low, sell high!) Finally, being in debt for 1/5 or 20% more than the going market price for anything is ridiculous. Better to rent and pay off those credit card loans with their high interest rates rather than go further into debt, especially when that debt exceeds the market value of the asset!
I see a bankruptcy and ruined credit in your future...
2006-11-26 06:00:11 · answer #1 · answered by airpocket2002 2 · 0⤊ 0⤋
I don't recommend borrowing more on property than it is worth. But, there are lenders who will make loans over the appraised value but will probably require an above average credit score and demand a higher interest rate. Keep in mind that if he wants to consolidate his credit card bills into his mortgage, he will likely pay much more in interest than if he just paid off the credit cards on his own. Remember a mortgage is usually 20-30 years. That is a lot of interest. If you want to find this type of loan, you may want to check with some mortgage brokers in your area. You can probably find some on the Internet. You can also check locally with lenders in your area. Your local bank is a good place to start. If they cannot help you they can probably direct you to someone who can.
2006-11-25 16:47:29 · answer #2 · answered by Flyby 6 · 1⤊ 0⤋
Have a look at the articles on debt consolidation and debt relief at http://www.hammocksurvivalguide.com/
There might be several other categories you might be interested in too.
That might be the sort of advice you are looking for. It helps to know what you are doing before you do it, and you can learn a lot from these articles.
2006-11-27 09:30:29 · answer #3 · answered by Anonymous · 0⤊ 0⤋