Pending Divorce & Buy-Down Question

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  • #63632
    hopesanddreams
    Participant

    I am NACA qualified and have found the perfect home. I received the contract to sign but have issues to work out.
    1. I have an uncontested divorce pending. How will this affect my closing?
    2. My MC indicated that I can buy down my interest rate to.125%. While reviewing the forum, it seems that non-priority members can only buy down their interest rate by 5 points. Is this correct?

    Terms of my purchase
    $324,900.00, 30 years, 46 a month HOA, Insurance $100 per month, & she has my taxes at $405 monthly (seems high) for a payment of $1,463 if I buy down to .125%. I don’t want to sign, pull out my money from my retirement, and she is wrong.

    Please help.

    #63634
    Nelsont
    Member

    Without getting into the intricacies of local regulations as long as you are not officially divorced before you close you will be required to have your spouse as a joint party on the deed. Depending upon your local regulations this may also legally entitle your spouse to half the house once the divorce is finalized.

    The buy down rules changed a couple months ago due to bank of America’s agreement with naca running out. They are in contract negotiations and the hope of new terms in 2020 is coming but unless that happens the new rule is 5 points maximum combined from all sources seller buyer and grants for all naca members regardless of status. That’s a 1.25% decrease from the current rate. If you are a priority member whose income is 80% or below that of your MSA you get an additional 0.5% decrease as a gift from the bank. This is for 30 year loans. The 15 year loan gives you double…5 points still but that equals 2.5% decrease.

    For the taxes check any local listing website. National average is close to 2% so for 300k house that’s 6000/year or 500/month. Your 405 sounds right. There also may be municipal services lumped in that the county will not allow you to forego. For instance my tax bill includes trash removal and sewer services which adds about 0.5% per month to the total tax bill.

    #63639
    Belle
    Member

    Hi. As non-priority members, we were able to buy our interest down to 0.5%. The seller contributed approximately 6 percent, and we contributed approximately 5 percent. You are capped around 5 percent buydown as a non-priority member, but you can get more if the remaining contributions (around 6 percent) come from the seller. We closed November 22, so this was recent.

    • This reply was modified 11 months, 1 week ago by Belle.
    #63641
    Nelsont
    Member

    @Belle

    This was a recent change. Check @@TTrumble posts from 2 weeks ago.

    #63642
    Nelsont
    Member

    December 9, 2019:

    “When the Bank of America Matching Grants program ran out of funds at the end of August, four months earlier than expected, it created quite a bit of confusion. At first, BOA replaced it with a 1% rate reduction for those with incomes below 80% of the median, then reduced that to 0.5%.

    So for now, the grand total of points you may buy down is five points, which equals 1.25% reduction on the 30-year and 2.5% on the 15-year. Plus you get the extra 0.5% reduction from BOA if your income level qualifies.

    Tim Trumble
    Online Operations, NACA

    @naca
    .com”>ttrumble@naca.com”

    #63668
    Belle
    Member

    @Nelsont Thank you for the update. I missed seeing this.

    • This reply was modified 11 months, 1 week ago by Belle.
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