Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

attention mortgage brokers or those who know about loans?

Hi. I'm really asking a question that's not exactly about me. I have a friend buying a house. Here are the facts:

-The house cost $400,00 (it will appraise for about $450,000)

-She makes $60,00 a year

-She is putting down 5%

-She is taking $20,000 from her 401k for down payment

-She is doing 6% seller's concession

-It is a legal 2 family, tenants pay $1,300 monthly

-She has less than $20,000 in the bank

-She has a credit score of 695

-This is in NYS

-Her broker told her he is going stated (remember,95%financing!) and mentioned nothing to her about reserves.He told her he can get her 6.5% and didn't mention PMI

Here are my two questions:

1) Is there any way this loan is going to happen?

2) Will she be able to afford this in the long run?

I'm not totally nosey, just clearly worried. Let me know what you think. Thanks

2 Answers

Relevance
  • Anonymous
    1 decade ago
    Favorite Answer

    1) Yes there is a way the loan will happen because there are DOZENS of programs out there to get applicants qualified for home loans, whether it's practical or not.

    2) It depends on what your friends debt situation is like and how well she budgets her money.

    Advice: 1) I'd save the 5% and not take it out of the 401k. She will have PMI whether the loan is at 95% LTV or 100%. 2) Brokers imperticular don't disclose a lot of things, and make a lot of false promises up front (not all, but a lot). Advice your friend to shop around, and check with local credit unions (typically lower fees, lower rates). She can compare apples to apples by comparing Good Faith Estimates from different lenders 3) In the end it's your friends decision whether she can truly afford the home or not, so although your being a good friend by looking out for her best interest, try not to rain on her parade -buying a home is a big event for most first-time homeowners.

    Source(s): I do home loans for a living
Still have questions? Get your answers by asking now.