All Forum Posts by: Tim Crosby

Okay, another update! I've now gotten my original lender to look this over, she says the loan looks good but the problem is with my original loan. This is only an estimate and doesn't take into account the fact that I got Down Payment assistance to get the house. She tells me that in order to refinance, I would first have to repay that assistance. That adds to the closing costs!

Also, she believes this particular lender is reading the current FHA guidelines wrong. She says that my loan is asking for $145,882 but current guidelines say the limit for me is $143,382. That difference of $2,500 would also need to be paid at closing.

So, assuming all that's right, and I don't have any reason to believe it isn't, there are a lot of hidden fees here, not necessarily applied by the lender, but by the FHA guidelines themselves.

Of course, everyone has an opinion, she knows my particular situation better than most, so I tend to think she's correct. Let me know if this makes sense to you guys as well. Considering all this, having to pay that original down payment (about $5,000) and the difference in the allowable loan amount ($2,500) PLUS the first payment of about $1,040... all turns this into a $8,540 investment to save $80 per month.. it would take over 106 months, or just over 9 years to recoup those costs.. doesn't sound like such a good deal any more lol

@Andrew Postell I'd be happy to forward you this estimate, just not here. I'd prefer not to make my address public information. Lol. Message me your email address and I'll send you a copy.

@Andrew Postell, I did ask them send me an estimate, which they just did today. As far as I'm aware, the only fee is the first payment being due at closing. Great advice though, definitely something to consider!!

Also, as an update, thanks to everyone for reaching out and answering these questions. I've gone from skeptical of this whole thing to focused on getting the most out of it. Which brings me to this - I asked for a rare under 4% and they've offered me 3.99% with my first payment due at closing. If anyone thinks they can do better, or better can be done by someone else, I'd love to talk to you! Also, what is the standard? What should I be asking for? Obviously, I'd love to get as low as possible, but I don't know where that bar is.

@Andrew Postell, I'm hoping to get that estimate to help shop around. My original lender is scheduled to call me later this week and I'll definitely be asking them about this!

@Zack Karp, yes I plan to keep everyone in the loop. The second lender was Village Capital. I was already in the process of applying for a second mortgage when they called me about the FHA Streamline. I didn't even know this was an option until the second lender called.

Well it's good to know that it isn't a scam. That was my major concern! Now about this interest rate... they pulled my credit and said the low end was about 739. I think that's pretty good! I've already asked him to try and get that under 4%, which he claims to be doing, but he's also asking me to set a date for the closing. I'm holding out on that until I know exactly how low they're willing to go. Here's something else to consider... I am currently talking to another lender about being approved for a conventional mortgage for another property. How does that potential loan effect this streamline opportunity? I don't think it'd be a problem if it were a 20% down investment loan, but that's not what we're looking at right now. I'm currently in the process to be approved for a 5% down conventional loan which I believe has the same requirements as FHA - that I live in the home for a certain period of time. I wasn't planning on restructuring my current loan if we bought another house, so does it matter that I re-streamline current the loan? Does that reset the 1-year clock on my current FHA loan?

Hey, so about 2 weeks ago I was contacted by a company, Village Capital, who said they wanted to help me by refinancing my current FHA mortgage down to a lower interest rate. They said they could offer me this because it was coming up on a year for my current loan through US Bank and because I hadn't missed any payments, they might be able to help lower my payment. After more discussions with this representative, they told me they could get my rate down from 5.5% to 4.25% and their estimates are that this would save me close to $100 a month on the mortgage. This particular property is an FHA loan and I am currently living there, but it's a duplex and I'm looking to leave for a more permanent residence soon, making it a total investment property. Because of all this, that extra $100 just adds to the monthly cashflow and looks like a great deal, but that's what worries me! As they say, "if it sounds to good to be true, ask the people on BP!" Let me know what you guys think about all this. Is this common? Does it sound like a scam?? I looked them up on BBB, they have a B rating, but the complaints are all about how slow they are, not that it's a scam or anything like that. Again, just let me know what you guys think. Thanks!

I avoid everything with an HOA. I don't like the idea that there is some outside group who has that much power over me and my investment. You've already got to deal with government regulation, why would you want to add to that mess? If you only have a budget of $110k, I think you'll still be able to find other properties to suit your needs. When it comes to the down payment stuff, I'm no expert, but I've been told that most banks will require 20% for an investment property if you're looking at conventional financing. That's why my wife and I decided to get a duplex. That way, we could use FHA and only be required to put down 3.5%. On top of that, being that this was our first home, we were also able to take advantage of the First Time Home Buyer's Down Payment Assistance program - meaning the only costs to us out of pocket were the inspection, the survey and the appraisal. Something to consider..

Always negotiate whatever you can. When it comes to banks, they've already got a number in mind as to what they need before they can sell a property. They're main goal is to cover or mitigate the losses from the foreclosure, but of course, they're never going to tell you what that minimum offer number is, you just have to get that through trail and error. That said, if there are other people bidding on that same property, you know they're going to want more. Also, I'm not sure exactly how true this is, but I've been told that most banks refuse to pay commissions or closing costs like other sellers would. They want the buyer to cover any extra expenses. Just something to think about.