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How to get a mortgage in Charleston

... despite rumors that banks won't lend you money.

My mortgage is with Countrywide and I'm considering refinancing because current mortgage rates are low and I believe they'll even go a little lower. I've always been happy with Countrywide despite the negative publicity they got in the subprime meltdown and their eventual takeover by Bank of America. Other than not offering the kinds of loans that caused the financial system to get in all sorts of problems, BofA has continued to run Countrywide as before.

I pay my mortgage online and decline paper statements, after all, you can save a tree and postage. But Countrywide continues to send junk mail to solicit my business. I guess there isn't much you can do about that. But I got a refi offer the other day and it was just about the worst offer considering today's excellent mortgage rates. They were offering a 15 year, 5.5% loan with a whopping 2 points and emphasized how I would save money compared to my current mortgage because of the shorter loan term supposedly distracting me from the unusually high rate offer.

As you can imagine, I stay on top of current mortgage rates and a 15 year loan should be approximately 4.5% to 4.75% with 1 point max so Countrywide would need to improve their offer if they wanted me to seriously consider it. And by the way, a 30 year loan is currently around 5%.

So my first bit of advice is to work with a reliable local lender and not deal with junk mail, the telemarketing department or an online loan broker.

Now, you have to understand that no doc loans are a thing of the past. Say goodbye to the NINJA loan (no income, no job, no assets). Here is what you will need to get a mortgage loan in Charleston today.

Proof of Income:

  • a pay stub showing ytd pay
  • w-2's for the past 2 years
  • tax returns for the past 2 years

Documentation of Assets:

  • checking, savings, investment and retirement statements for the past 2 months
  • the value of any other real estate you may own including investment property
  • estimated value of any vehicles and other personal property you may own

Information about Debt:

  • details about your current mortgage(s) or your current rental arrangement
  • most recent credit card statements and any other loans you may have including lender name, account number, balance and monthly payment

It's not that difficult (although you probably will have to dig around in storage and / or your files for a little while so be prepared). And please do yourself a favor and deal with a reliable lender. If you don't know one, I'd be happy to recommend several.

Published Saturday, January 10, 2009 6:28 AM by Howard Arnoff

Comments

# re: How to get a mortgage in Charleston

Countrywide bought 2 of my existing seconds and I have had nothing but problems with them trying to initiate monthly fees which were not in the original loan documents I signed on to.

They are one of the worst in the business if you ask me.

And that refi offer you received was nothing short of a joke. I would have found it difficult to resist calling & toying with some poor LO in regards to it.

Saturday, January 10, 2009 3:11 PM by Mike G

# re: How to get a mortgage in Charleston

Mike, I can see how it would be difficult to get them (or anyone) to do something that wasn't in the original loan.

But I liked the old Countrywide and the people locally in Charleston were great, most have moved to several other banks and they are top flight lenders.

And I love their monthly payment website, it is so easy to navigate, add extra principal each month, schedule the date, etc.

And now to the offer. You are right, an absolute joke and I did toy with the idea of harrassing some jokester in telemarketing but I figured I'll probably need them and didn't want to be marked down as a problem client.

Saturday, January 10, 2009 4:07 PM by Howard Arnoff

# re: How to get a mortgage in Charleston

I just locked in the following refi with Countrywide...

Loan Request

Product Conf ARM LIBOR 5/1  5-2-5  

Loan Type Conv Uninsured

Payment Type ARM

Document Type Fast Track

Prepayment Option 0-NPP

Current CLUES / Decision Prelim / ACCEPT

Loan Amount $

Base Loan Amount $

Calculated Loan Amount $

Commitment Summary

Rate 4.625%

Points 0.000

Margin 2.250%

Float / Lock Locked

Monday, January 12, 2009 2:27 PM by js

# re: How to get a mortgage in Charleston

JS, that's an excellent rate but an ARM for 5 years when 30 year fixed rates are just about as low must mean you aren't staying put for more than 5 years and *you'll want my help to buy and sell in a few years*

You know where to find me ;)

Monday, January 12, 2009 2:43 PM by Howard Arnoff

# re: How to get a mortgage in Charleston

yes, i will come knocking in 2-3 years...:-)

Monday, January 12, 2009 3:26 PM by js

# re: How to get a mortgage in Charleston

Howard is right...30 year fixed at Par is in the high fours right now. I looked at Chase rates today...& Chase has Higher rates than most but then again...most is just a few these days :(

Avoid adjustables no matter what your intentions. If the past year has taught us anything its that things can change in a blink & your best intentions may be turned upside down in a hurry...Stay with a fixed rate.

Monday, January 12, 2009 10:29 PM by Mike G

# re: How to get a mortgage in Charleston

really I checked chase today and they didn't have the rate 4.625 unless i wanted to pay 1.5-2 points and take on 11 grand in closing costs...

I am a big boy and can handle the 5/1! thanks for worrying though!

Tuesday, January 13, 2009 2:14 AM by js

# re: How to get a mortgage in Charleston

An ARM is a terribly misunderstood product and it currently gets a bad rap and much of the blame for the financial mess.

When understood and used properly, there is nothing wrong with an ARM. As an example, if you are planning on staying in your home for only the next 3,4 years and the rate is significantly lower than the security of a 30 yr fixed rate.

But that advantageous rate is no longer available, the spread between a 5 yr ARM and a 30 yr fixed is minimal. So there hasn't been much reason to take the *risk*

The resets may not be pretty if predictions of higher inflation come true in the years ahead.

But JS, I know you know what you're doing and you did get an excellent rate with *no* points.

Right now I'm waiting for the introductory government promotion of a 3.99 30 yr fixed to be offered ;)

Tuesday, January 13, 2009 6:38 AM by Howard Arnoff

# re: How to get a mortgage in Charleston

If the gov does that all bets are off...

If past perfomance is an indication of future results, I wouldn't expect the feds to assist responsible mortgagees with this kind of program.

A socialist program like that will most likely go out only to  the people who irresponsibly reached too far. Indirectly, i feel this just will elongate the crisis.

If it would be available to all, I would benefit enormously from such a program.

Although I am totally against it.

Wednesday, January 14, 2009 12:57 PM by js

# re: How to get a mortgage in Charleston

JS, actually I said that a little "tongue in cheek" but it could happen. I'm actually watching and waiting for fixed rates to drop into the 4.5 range though I may try to get greedy. And I most likely will not stay in my current home for the next 5 years.

I totally agree with you, the govt has assisted the irresponsible at the expense of the responsible.

But don't be surprised at anything the govt will do.

I like the line I heard about Bush, he entered office a social conservative and is leaving office a conservative socialist.

Obama is not conservative so who knows.

Wednesday, January 14, 2009 1:07 PM by Howard Arnoff

# re: How to get a mortgage in Charleston

In deciding on an ARM one needs to know exactly what Financial Index the ARM is tied to and the corresponding Margin.

The Issue with Subprime ARMs was that most carried usurious margins and were Indexed to LIBOR...which is considered one of the more volatile indexes. Know the product and its parameters before signing on the line which is dotted. That is the best advice I have to offer.

And BTW...I was quoting PAR rates. The problem is right now is the banks are not making any money on this paper so spreads are nowhere near where they would normally be. They are keeping as much yield Spread premium as they can.

Wednesday, January 14, 2009 10:45 PM by Mike G

# re: How to get a mortgage in Charleston

Thanks Mike. btw, when I had a 4% 5/1 ARM, it was tied to Libor but it didn't matter to me because I had no plans to stay for more than 2 - 3 years. I took an ARM because the rate was 2% better than a 30 year fixed at the time. That isn't necessarily the case today and that's why I would rather have the security of a 30 yr fixed rate.

As to usurious subprime rates, well, the fatal flaw made by banks was when you lend money at a high rate, the high rate is only good if it gets paid back. Obviously, we've seen that the subprime borrower was an unwise credit risk.

Thursday, January 15, 2009 5:07 AM by Howard Arnoff
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