its one of the main drivers behind this looming recession. People overspent for a decade, then realized that teh credit tap was running dry & clammed up. Thishelped drive up the cost of funds, and that tightened the noose around those same consumers. There is a whole lot more to it then this, but in a nutshell.
But thats for another thread. Sorry for the OT
I dunno if you have good credit, they will give you surprisingly large amounts…
I think I was qualified for 275K on my income alone which is totally unrealistic, it would be like 75% of my net income lol.
You will get WAY overqualified even these days. Qualified /= afford.
we both have perfect credit… so im not worried about that
i have a little bit higher debt load then my gf, with some cc debt and higher student loans, but my credit score is still above 700 with no negative marks, hers was ~755 about 6 months ago before she got the lease on her fx35… so i imagine its around there still
just apply with whoever has the lower income to get the best state incentive program… being approved for enough dollars really wont be a problem, i’m tellin you they will give people WAY more than they can afford.
obviously just make sure you can afford it 
These loans are also good for a 2-3 family homes.
I’m going to buying a 2 unit home, living in half of it until I move away, and keep it for the income.
Viper: pay close attention to if paying the higher rate is worth taking $5000 towards closing costs or not.
also, I’m not sure how much house you’re looking to buy, but PMI’s not much on starter house… where you really want to make sure you have the 20% is when you’re spending 200K+ on your second house etc…
im looking ~150k… so avoiding PMI is what im gonna go for… im pretty sure im going to try out the BOA loan
so many various personal factors change how you should buy a house… but so many people get caught up in trying to avoid PMI and end up worse off for having avoided it.
based on an income range of 40-60K I would expect you to have $20k in cash to make buying a 150K house reasonable. If you can’t pull that off AND you want to play fancy games to avoid PMI then you’re asking for trouble. And no playing the + girlfriend’s income to make it appear safe.
I’ve been playing around with the idea of buying a house for the last 6 month and I’m working the numbers like crazy almost daily to find a good value that’s also not high risk.
my house was approx that price, and PMI was cheaper than any other alternative, FYI.
now, that is also because I could not qualify for sonyma, maybe if you do it is more cost effective…
You have to realize on these huge loans $40/mo for PMI is barely anything compared to the $800/mo in interest you are paying… tack that on a 20% variable rate loan you’re quite possibly better off paying PMI.
150k x 20% = 30k.
30k heloc @ prime (6.0%), int only = $147.94 /mo.
When prime makes it back up to:
7% = 172.60 / mo
8% = 197.26 / mo
Hell, I know that at least 3 major national lenders Cap their Helocs @ 16 - 19%. I won’t bother quote those though, since Prime hasn’t been that high since 1981.
Etc.
:fyi:
People haev forgotten that for many, MANY years prime was in the 8-10% range.
If this recession scare doesn’t pan out, and the economy picks up, prime will return to that range.
This chart only goes back to 1998, but you get the idea.
?
Couldn’t you get a fixed rate 80/20 without PMI?
That’s what I got, if you mean borrow 80% with 20% equity.
with 20% down yes, he is talking about 80/20 in terms of mortgage 80%, and essentially a personal loan for 20%. basically has no money to put down…
yes you can. sortof.
The point of 80/20 is to avoid PMI.
Generally you’re taking a conventional mtg (hopefully fixed) @ 80% LTV, while fenagling a 20% Home Equity (loan or line).
The mortgage would be fixed (unless you want vari)
The HeLoan would be fixed.
Or the HeLoc would be variable by default, though most have fixed rate options within the line. W/BOA for example, their 30k heloc is ~Prime - 0.26, with a fixed option in the 12’s% (:tdown:)
My point is that PMI will generally be cheaper then the interest paid on the 20% loan.
Also, the blended rate of the mortgage & the home equity will generally cost you more then a mortgage for the full balance + pmi.
Ok, so with an 80/20 you actually are borrowing 100%.(?)
I wasn’t sure what that meant.
Yeah, I would NEVER get a variable rate unless I had enough cash to pay-off the balance.
Umm, FYI, PMI is tax deductible 
Yes, you’re financing the whole thing. Paying closing & w/e fees for the loans.
It is a scam for banks to collect commision on insurance, tax deductable or not.
Why would they loan you money if they thought there was a big risk?
They wouldn’t.
the 20% isnt a personal loan its usually a 2nd mortgage and can easily be a fixed loan, but is typically 1-2 % higher then the first mortgage…
that being said, i just got prequal’d for a bank of america no fee loan at 5.625% so im ahead of SONYMA with the closing cost $$
looks like im actually gonna grow up and have a garage… :gasp:
PMI isnt tax deductable in NYS is it?