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We've been working with a lender for our pending relocation. From a logistical/cash flow standpoint we were looking to secure a loan for about 1/3 of the purchase and only need it for about 6 months maximum. Now we were expecting some origination costs but the estimate I just got is a LOT higher than I expecting. Like 4-5 times higher. So, those in the industry or who have just been through the process what is "reasonable and customary"? Google foo tells me .5%-1%. Fortunately I can pivot and avoid taking the loan. It just wasn't my preferred way of doing it. | ||
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| Just because you can, doesn't mean you should |
A home equity loan maybe? Many years ago when I was in a similar situation and juggling the sale my old home and the purchase of another, they offered those (HELOC) with little to no closing costs. ___________________________ Avoid buying ChiCom/CCP products whenever possible. | |||
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| Member |
No, straight up loan for 1/3 of the house cost. Excellent credit. In my mind I should be getting the best rate/total cost. But I forget, lenders don't really want to lend to those who don't really need it. But I don't currently own another home that would get me the short term cash I need for this deal. | |||
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| Needs a check up from the neck up  |
Is the property here in Florida? If so reach out to me I am Florida attorney and may have some options. __________________________ The entire reason for the Second Amendment is not for hunting, it’s not for target shooting … it’s there so that you and I can protect our homes and our children and and our families and our lives. And it’s also there as fundamental check on government tyranny. Sen Ted Cruz | |||
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| Member |
No, property is in Utah. Fortunately I have a backup plan so we're not in a bind. Just a bit annoyed as I really think the lender is trying to take advantage of what he perceives to be my situation. | |||
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Fighting the good fight |
Sounds like they may be trying to make extra money at origination, since they know going into it that they're only looking at ~6 months of interest before payoff. | |||
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| Member |
My last employer bank did bridge loans and we were happy to do it at 30% LTV. We would do Prime +1% and 1 point. If you were a big client maybe you got Prime +0. No prepay charge. Terms up to 1 year but typically 6 months to make borrower feel some pressure to sell the departure home. Short term loans don’t make much profit when they pay off in 30-90 days after you pay all the salaries so they will want something up front. If it was me I’d get the lowest cost HELOC you can obtain in 1st lien position. Minimal interest only payments then pay it to $0 as soon as you sell and keep it open and available for future emergency use. | |||
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| Needs a check up from the neck up |
Merrill Lynch also has portfolio loans that loan against your investments. I understand the fees associated are less than a regular mortgage, but I don't have much experience with them. Also might be a situation to borrow from your 401k if you can get the money back in on time. __________________________ The entire reason for the Second Amendment is not for hunting, it’s not for target shooting … it’s there so that you and I can protect our homes and our children and and our families and our lives. And it’s also there as fundamental check on government tyranny. Sen Ted Cruz | |||
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thin skin can't win |
For your situation this may be a great idea. You are basically paying yourself interest, with them taking a 1% cut off the top of amount loaned or so. You only have integrity once. - imprezaguy02 | |||
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| No, not like Bill Clinton  |
I wouldn't tell the lender about the 6 month plan, keep that to yourself | |||
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| Member |
I’ve had clients pull that and it leaves a sour taste for next time around. Depends on your relationship with your bank/banker. If you have the brokerage assets and don’t want to sell for tax reasons a margin/asset loan would be a reasonable alternative. No bank fees at all. Any short term loan will be prime based. Consult your tax advisor, margin interest can be tax deductible in some situations. If you do decide to self finance, get the owners title insurance at the closing. It’s cheap and you only buy it once for as long as you own the property. Protects against a lot of weird occurrences that are never low cost to resolve. Our resident title attorney in this thread could probably relate some real horror stories of non insured real estate transactions that went sideways. When folks try to get smart and record certain deeds without the help of an attorney and title company is when things break bad. | |||
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| Needs a check up from the neck up |
I could make you barf in 90 seconds with the shit that has crossed my desk. Yes buy the owner's title policy. Also be careful on quitclaiming property, which voids the policy. Care to look at the property I'm trying to get closed with $475,000 in mortgagees on it when it's supposed to be $65,000. Yeah, it's a thing. __________________________ The entire reason for the Second Amendment is not for hunting, it’s not for target shooting … it’s there so that you and I can protect our homes and our children and and our families and our lives. And it’s also there as fundamental check on government tyranny. Sen Ted Cruz | |||
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| Left-Handed, NOT Left-Winged! |
The mortgage bank I use is very low frills but loans are only $300 application fee and they pay all closing costs. You have to have very good credit and a fully conforming loan with 20% down. Union Savings Bank - Ohio, Indiana, Kentucky, Pennsylvania. | |||
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| Member |
Yeah I have some good friends in the eacrow biz and they have some doozies. un-reconveyed old liens are my favorite. Especially when it’s my bank and we have done the last 3 refi’s and have proof they all paid off the previous lien. Favorite was a nice old couple comes in to do a loan and we get the title report and a lien from 1980 is on title and they say oh we paid that off 40 years ago and the lender is a failed S&L and they have nothing to document the payoff. Took weeks of research and phone calls just to find out what current bank took that S&L over. | |||
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His Royal Hiney |
Mortgage loans are just a transactional deal. It's like going through a fast food window. You have to figure out what the going APR is for your terms. 1/3 down, good credit should be a slam dunk for the lowest rates. I don't think you need to disclose you'll pay off in 6 months. Nobody cares. It's all about the time value of the transaction right now. When money was cheap, mortgages were offered with no cost, no origination fees, no points. When you look at mortgage terms, everything can be boiled down to an APR figure, that's including loan fees, origination fees, etc. An origination fee effectively increases your APR because even though the note rate is based on what you're supposedly borrowing, the actual amount you are borrowing is less because part of loan amount is mathematically financed by your origination fees. One way is to figure out the origination fee as a percentage of the loan amount. You can consider that as the money the mortgage lender is making on your loan. Is it reasonable for you? It's mostly paperwork labor for them so it shouldn't cost that much. "It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946. | |||
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