Financing in 19125>Question Details

Andrea, Home Buyer in Philadelphia, PA

How do i find a good mortgage?

Asked by Andrea, Philadelphia, PA Fri Jul 11, 2008

We're looking to buy a 2nd small property for rental. We have enough for a 5% down payment and great credit. My current mortgage is with a state bond mortgage. So should I start with my current boker or pick one close to me or try lending tree?

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Andrea,

If you are purchasing an investment property you will need more than 5% down. Most banks or lender will require at least 10% and some even between 20-30%. When you are shopping for a mortgage it is good to compare apples to apples. You can compare a good faith estimate but the most important thing to compare is your truth in lending. This tells you which bank or lender is giving you the best deal.

I totally disagree with Luke and not just because I work for a broker but I just had a client that the bank wanted to give them 6.75 and I gave them 6.25. Banks have tight guidleines just like us, they have certain requirements just like us, and they have gotten rid of programs just as we have. Should you need any further assistance please feel free to contact me. Thank you and good luck

Andres Munar
mortgage specialist
814-308-3276 Cell
800-839-6186x334 Office
HABLO ESPANOL
1 vote Thank Flag Link Fri Jul 11, 2008
Lending answer:

FannieMae and FreddieMac both limit the LTV of a purchase money loan on an investment property at 90% Loan-to-Value (LTV). Every bank and lender will confrom to this guideline if they wish to offer rates backed by Fannie or Freddie.

Chris's answer below has some good insight on comparing loans.
0 votes Thank Flag Link Fri Jul 11, 2008
Hi Andrea, lots of good ideas below-most likely you will definitely have to put down more than 5%-most likely 10%. One other quick note-Andres has some good points below but I would definitely not use the truth in lending as the most important comparison tool. Depening on what products you are reviewing and comparing (ARMS, Fixed) this document can be manipulated to represent any number of possible interest rate events down the road. I would focus on section 800 of the GFE and also make sure the products are being compared on an apples to apples basis.
0 votes Thank Flag Link Fri Jul 11, 2008
Andrea,

You can call me and I can discuss all your options with you. I'm emplyed by a direct lender. Standards has changed my mitigating factors like credit, assests and property use will all play a role in the type of program you will qualify for. You can call me on my cell 609-876-5817

Best Regards,

Jeremy S. Hill, Mortgage Consultant
Aurora Financial Group Inc.
0 votes Thank Flag Link Fri Jul 11, 2008
Andrea-
I know this may sound harsh but I would avoid a mortgage broker right now at all costs. You have to understand that brokers are only able to offer you products that are given to them by lenders. Over the past year, they have lost 90% of those products. Even now, retail divisions of banks such as Flagstar, Wells Fargo, Bank of America can offer much better pricing, rates and products then any broker can. If you have a good relationship with your local bank or credit union, you probably will find your best product there. With 5% down, it may be very hard to find a lender to even offer you an investment loan right now because of the mortgage insurance. More likely you will need 10% down. If you are offered a loan with 5% down, consider it rare and I would take it and run with it.

Luke Allison
Flagstar Bank
0 votes Thank Flag Link Fri Jul 11, 2008
I would suggest to get a good referral or two with your buyers agent. Typically the minimum down payment for an investment property is 10 percent down. We can give you a good referral or two in Philadelphia. If interested, shoot us an email. Our contact info is on our website below.
0 votes Thank Flag Link Fri Jul 11, 2008
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