Should I go ahead and close escrow on a 550k house now or back off and wait a few months for lower prices?

Question

Is this is an opportunity or not? The facts are these:

My avg. FICA is 715, make about 85K p/year, have @ same job for 12 years (teaching) and have about 30K in investments ready to put as down payment and about 20K in cash.

The property is a Duplex in L.A. area (South Bay), I already put $3,000 as guarantee, The terms are to put 5% down; The loan is option is a 85/15. Tthe interest on the loan is 7% fixed on the big loan (85% Interest only for first 5 years), and 10.75% on the small loan (15% jumbo loan).

I just heard today more statistics on what has been suspected: more people defaulting on mortgage payments and a worldwide stock maket scare due to this. Countrywide. WaMu, and other lending institutions are in trouble. I know it'll be hard to get better loan terms right now but I don't want to let the opportunity go.

Is it better to wait few mos. untiI the storm's gone or do I gamble with what I have on hand? (1st time home buyer)

Thanks for your advice. =0)

Answer 1

Well if you really want this house then you had better move on it cause it will not stay on the market long if it is a good price and a good house . I think you have a good deal here . good luck .

Answer 2

First of all, your loan officer sucks. Find a new one.

The jumbo loan market right now is getting killed, right along with the Alt-A stuff.

However, Fannie Mae/Freddie Mac loans are going down in rate.

You should be able to do a $417,000 conforming first mortgage at about 6.375%-6.5% today, even interest-only (I/O for 10 years instead of 5 as well).

And to pay 2.5% over Prime for your second is too high as well. With your credit, you should be able to get a 2nd under 9% (fixed rates are lower than HELOC's right now).

But seriously. You're working with someone who was too dumb to figure out that by dropping your first mortgage by $23K, he could save you over $2K/year in interest. What else has he missed?

Answer 3

First congratulations on your purchase.

if you back off just because you changed your mind you will lose your 3k, and honestly 550k for a duplex is excellent, if you wait any longer there is no guaranty you will get anything better, and the loan I hope is already lock because as of today there is no way you will get a 7% fixed, unless you pay points to buy-down the rate.
Also the sellers have a right to take to court for specific performance, for breach of contract.
I'm sure your realtor will give you all the details.

Answer 4

My husband and that i are first time residing house shoppers. we've discovered the residing house we'd like, yet we don't desire to close till might or June. Any help could be liked. What are necessary maintenance for as quickly as I Escrow funds would not carry the residing house, a stable-faith deposit with the vendors does. With eager to hold approximately 5 to 6 months to close, it may must be a substantial deposit if the vendors are keen to dally. a common stable expectation deposit (sometimes refered to as Earnest funds) is $1000 +. It shows extreme reason to purchase. With the dimensions of time you will loaf, they might desire extra. only ask. This funds would be utilized to the acquisition value of thehome. and determine you compromise on a maximum cutting-edge remaining date. in case you do no longer close, they are able to maintain your funds!!

Answer 5

Your income and credit score are WAY too good to be paying over 10% interest on a piggy back loan.

Check around some more - you should be looking at no more than 6.5% on the first and 8.5% on the second.

Good luck.

Answer 6

those are not very good rates for someone with your credit and loan info. I would start shopping. Use the Good faith your company gave you as leverage with other mortgage companies. They WILL beat that rate.I am in the mortgage business and I know I can beat it. contact me if you want and I will show you.

Answer 7

I am with everyone else, your rates are too high. You should be getting a better deal on this loan, unless you are doing some stated program.