Stated Income Mortgage

Kathy at A&K Tile in Park Slope is very knowledgeable and I'm sure she can point you in the right direction. I've never used A&K but got this information from neighbors who have. Good luck!

Posted by: prop351 at September 27, 2008 8:17 PM in response to Need a mantle restorer

mshook- thanks for the suggestion.

vanburenproud - from what you wrote, sounds like our situations are pretty similar. As for what the brokers have told me, the banks are looking for at least 30% down. We can afford that but we're interested in a place that needs serious renovations and that wouldn't leave us with the money needed for renovations. Another broker suggested a 40 year mortgage, with ARM for first 10 years at the prevailing rate, and cap of 5% above the initial rate over the life of the loan for the remaining 30 years. He says I can prepay the principle without penalty. The ideal situation would be to refinance before the 10 years is up at a good rate, but who knows, right? So what do folks think of this financing option?

Posted by: prop351 at August 25, 2008 10:33 AM in response to Stated Income Mortgage

I know Astoria has an Alt-A portfolio, but not sure if they are offering this product much anymore. Management has taken some serious flack for this book and they are unlikely to underwrite loans to anyone without ~50% down and a business or jumbo deposit relationship. But it wouldn't hurt to check. Anything that happened in stated income 2 years ago will definitely not happen today. I tend to agree with other posters here. If this is your only option, you may want to work on being able to document and try later. If you can even get a stated income, you will get gouged on the rate.

Posted by: jingle mail at August 25, 2008 10:41 AM in response to Stated Income Mortgage

With a 40-year loan, you are basically a renter who takes real estate market risk. That is probably the worst of both worlds right now. If there are any issues with getting a mortgage, why not just rent?

Posted by: lechacal at August 25, 2008 11:26 AM in response to Stated Income Mortgage

Nothing wrong with a 40 year mortgage. 30 years is just convention. You probably pay a slightly higher rate, and a little less principle in a slightly lower monthly payment. It's more conservative than an interest only loan. If lenders offer it and the numbers work then keep the option on the table.

Many years ago when I was self employed, I went with a no income check 7/1 ARM. Had a good experience then with Norman Calvo from universal mortgage.

Posted by: Bklnite at August 25, 2008 4:59 PM in response to Stated Income Mortgage

With a 40-year mortgage, you have paid off very little principal by year 10. If you are like most people, you will sell before then. The forced "savings" of actually making meaningful principal payments means that it is easier for someone to get out from under a property in a down market (which I think most people think the next 5 years will be). If you are on a 40-year mortgage and prices have gone down, you are underwater very quickly if things go south.

These are things that people should think about when they buy, but after a long run-up in prices everyone thinks they don't really matter.

Ask the Californians who got 40-year mortgages in 2005 whether they are happy they used a new mortgage product to "stretch" for a price they really shouldn't have been able to afford.

My advice - if you are asking these questions, rent. Don't buy into the myth that everyone needs to be a homeowner. You could lose all of your equity in a heartbeat if you engage in stretch financing in this market.

Just my $0.02.

Posted by: lechacal at August 25, 2008 5:36 PM in response to Stated Income Mortgage

highly unlikely that you will be able to get a stated income loan in this climate. Talk to a reputable mortgage broker (NOT "deariemortgage.com") but Manhattan, Universal, Apple or Trachtman. But I don't think you can get them anymore. Too bad, 'cause some of us who did lie about our income but know what we could afford were able to get mortgages and buy homes that we have no problem making payments on. (It helps to not spend your money buying crap).

Posted by: Ppark at August 25, 2008 8:53 PM in response to Stated Income Mortgage

I merely gave the OP my reputable mortgage broker's web site, since I am too forgetful and lazy to look up her phone number, and the web site address sticks in my mind. I am not the only one I know who has used this broker, and we all had great experiences with her. Cheesy company name, perhaps; helpful and professional woman, definitely.

Posted by: mshook at August 25, 2008 10:13 PM in response to Stated Income Mortgage

To clarify--my stated income loan has a fixed, low interest rate over 30 years. I would NOT NOT NOT take out an ARM or any other exotic product in this climate... even though you have found someone still stupid enough to offer one.

If you are looking at places that need serious renovations, in this climate I would suggest:

1. Make sure you can afford payments on the best fixed-rate 30-year mortgage you can get, and don't get a house that is one penny more expensive than what you think you can easily afford.

2. Once you've closed and moved in, don't do anything for six months except save like the dickens and plan. Get a strong emergency fund. Poke around.

3. After six months of planning and saving, do renovations slowly as you accrue cash *over* a six-month emergency reserve fund (three months if you like risk).

The act of buying a house is so disorienting and exciting that it can make you deliriously wasteful. I strongly suggest avoiding this period--it's really bad for your bottom line, and your decisions are bad anyway.

If you can't afford to rent an apartment and keep a mortgage (as I could not), living in an unrenovated house for six months or even a year is not the end of the world. You will need the time to stop buggin', get to know what you actually bought, address actual emergencies like flooding basements or serious leaks, and get a very clear sense of how much the house actually costs you.

The bottom line is that we are in a credit crisis. In this climate, I would not go into debt over renovating a house under any circumstances, and that includes indulging in an exotic mortgage in order to keep a cash reserve for renovations.

For that matter, I would not take any mortgage in this climate that depends upon refinancing to make it look sane. I would not take a mortgage that I would kick myself for in twenty years if I could not refinance. I would not put myself in any position where I had to trust banks right now.

Posted by: vanburenproud at August 25, 2008 11:46 PM in response to Stated Income Mortgage

I'd be very surprised if you can get a stated income mortgage through Apple Mortgage.

My wife has just taken out a mortgage through them with Citi.

I've refrained from posting my negative comments about them so far because at the end of the day we did get it.....

But seriously what was promised and what was delivered were two very very different things.

Apart from shopping us around I fail to understand exactly what Apple did on our behalf apart for their $26.850 commision except lose documentation and just generally cause us issues.

I'm sure I'll blog about it sooner rather than later but lets just say the USA has a lot to learn about "frictionless transactions".

Cheers,
Dean

Posted by: deanc at August 25, 2008 11:48 PM in response to Stated Income Mortgage

To go stated income you must be looking to put don at least 20%. You must also be able to show reserves in your bank account after you down payment and closing costs. We still have "stated" loan programs availabe. Of course your credit must be excellent as well. There are no promises with stated income loans. The reasonability factor has to be there. sunny_hong@coutrywide.com

Posted by: shong1 at August 26, 2008 12:00 AM in response to Stated Income Mortgage

Hi Sunny,

good to know they still exist. we had banks pull all kinds of crazy stunts to say no.

Chase said they wouldn't provide us a mortgage when they realised we owned 25% of the apartments in the building eg. we were buying 2 of the 8 apartments in the building.

They said their limit was under 10% but when we pointed out that with only 8 units everyone owned at least 12.5% ..... they kind of went away quietly never to be heard of again.

Cheers,
Dean

Posted by: deanc at August 26, 2008 12:06 AM in response to Stated Income Mortgage