Is this a good deal? - Posted by IB (NJ)

Posted by will on December 03, 2000 at 08:02:06:

i was in the same situation a year ago and i quit claimed the house from my company to my wife and then refinanced .i got good rate but today i realize that i could have saved the mtg. broker comission if i would have gone straight to the lender .seasoning was never an issue .

Is this a good deal? - Posted by IB (NJ)

Posted by IB (NJ) on December 02, 2000 at 18:55:02:

Okay here’s my currect situation:

I purchased a 2fam REO for $47k back in August and rehabbed for about $15k. For the last 6 weeks, we had a buyer under contract for it for $95k.

Well he fell through so I’ve decided to purchase it myself from my LLC for the retail price, thus allowing my partners and I to cash out and move on to other deals. I’m then going to rent it out which should bring in at least $400 Pos. cash flow.

A fellow investor referred me to a mortgage banker that deals with companies that don’t have seasoning requirements. The only thing is these guys charge a higher interest rate than the “typical” mortgage companies. On this one for a 95%LTV, they’re charging me 9.75% plus two points on a 30 year fixed. He also said I would have to pay maybe 1/2% to avoid a prepayment penalty. My plan was to season the mortgage for about a year and then refinance for a much better deal. My credit score came in at an average (between the 3 cerdit bureaus) of 634.

My question is (1) does this seem like a good deal? (2)since these guys are mortgage bankers, would I get a better deal if I went straight to a mortgage company that didn’t have a seasoning requirement? (he says that there are only 2-3 companies out there that don’t). (3) Would you guys take another route in solving the problem that was created when my buyer backed out? and (4) is there normally a prepayment penalty to pay when refinancing a seasoned mortgage?

Thanks once again for your ears and input.