Mortgage rates and advice

About a year and a half or two ago, most banks had pretty much pulled the plug on mortgage products—or just didn't offer them at all. I actually managed to snag one through JPMorgan Chase. The terms were decent enough, though the interest rate sat somewhere around 10-11%. Honestly, if you're planning to pay the whole thing off within two or three years, it’s actually a solid move since you dodge the brunt of those high rates.

About a year and a half or two ago, most banks had pretty much pulled the plug on mortgage products—or they just didn't offer them at all. I actually managed to snag one through JPMorgan Chase. The terms were decent enough, though the interest rate sat right around 10-11%. Honestly, if you’re planning to pay the whole thing off within two or three years, it’s a solid move to dodge those high interest costs.

Why don't banks offer mortgage loans without requiring guarantors? It’s clearly just a way to make collections easier and dodge legal headaches if someone defaults, since seizing property can be such a nightmare. But for decades, global banking standards have allowed you to secure a mortgage without needing any co-signers or guarantors, simply because the property itself serves as the collateral.

I'm trying to figure out which bank is actually offering the best mortgage deals right now for buying a house—you know, looking at everything from how they handle appraisals and their valuation limits to the actual repayment terms and how fast they can close the deal... Since the property is in a different city, I'm also wondering if I can just handle the whole application through a branch in Chicago or if I'm stuck dealing with local offices near the property itself. It would also be a huge plus if there was some extra cash left over for renovations.
What have you guys been seeing out there?

Look, friend, you aren't looking for a mortgage; you need a home loan.
Head over to the housing subforum if you want more details.
Here is the basic breakdown:
A mortgage—you put up property you already own as collateral to get cash in hand. It's basically just a general-purpose loan.
A home loan—it's specifically for buying, building, or renovating. Because it's purpose-driven, the interest rates are much lower.

Gerald Thomas11 said:Look, friend, you aren't looking for a mortgage; you need a home loan.
Head over to the housing subforum if you want more details.
Here is the basic breakdown:
A mortgage—you put up property you already own as collateral to get cash in hand. It's basically just a general-purpose loan.
A home loan—it's specifically for buying, building, or renovating. Because it's purpose-driven, the interest rates are much lower.

A person can absolutely use existing property as collateral for the purpose of purchasing a new one, can't they? Or even use someone else's property as security!
And even when you take out a standard home loan, the payment is secured by a mortgage on the property you are actually buying!

I have a few questions and could really use some help:
Which bank should I go to for a mortgage or a home construction loan? I'm looking to pull about $110,000.
The goal is to finish building my house by the end of the year. Right now, only the foundation and first floor are done. I’d also love to have some extra cash left over on the side without the bank breathing down my neck about where it went—maybe if I opt for a residential loan instead?
But here's the real catch: my credit score isn't where it needs to be. My dad offered to let me use his house as collateral, which is worth roughly $275,000.
Does anyone have advice or know a way to make a setup like that work?

Also, I remember someone mentioning a few months back that mortgage rates might drop this spring. Does anyone have any insight on that?

Brenda Gray5, take a chill pill, will you?

Seriously, turn off the Caps Lock before you type.

Alright, I'm not going to yell, I just want someone to post something if they actually know what's going on here.

At any bank, really—they absolutely love people like you, so they'll just take your house
and then flip it at least three more times after that
once you run out of cash to cover the monthly payments 🙂

I mean, don't ever go putting your property up as collateral 🙂 🧐 not even if you're dealing with a medical emergency

wanderingseal37 said:At any bank, really—they absolutely love people like you, so they'll just take your house
and then flip it at least three more times after that
once you run out of cash to cover the monthly payments 🙂

I mean, don't ever go putting your property up as collateral 🙂 🧐 not even if you're dealing with a medical emergency

What you're saying isn't really how things work in principle

Pure mortgage loans like that don't really exist here—at least from what I know, though feel free to set me straight if I'm off base

You've got loans where you provide a mortgage plus something else as collateral, but they still vet your creditworthiness; basically, they check if your minimum pay minus the annuity stays above a certain threshold.

Then there are Lombard loans where they don't bother checking your credit score, but you have to pledge something—like a CD, real estate, stocks, or fund holdings... but not actual property

And by the way, regarding banks reselling real estate—that is absolutely not true.

When a bank sells a property, it's strictly to recover what the client owes them; the bank isn't looking to turn a profit on the sale, their primary goal is just to recoup the principal debt, so you can actually pick up properties from a bank quite cheaply.

If banks were making bank by flipping mortgaged properties, the newspapers would be plastered with ads from big banks offering "super deals" on mortgages, but you see they don't actually exist.

Real estate is illiquid stuff, and banks in America don't particularly enjoy holding onto it. Think about how much time it takes to sell a house, handle all the paperwork, etc... it's all just a massive expense for the bank; nobody is earning interest on that money while they're stuck dealing with the headache of reselling property... they simply don't have the resources for that.

wanderingseal37 said:At any bank, really—they absolutely love people like you, so they'll just take your house
and then flip it at least three more times after that
once you run out of cash to cover the monthly payments 🙂

I mean, don't ever go putting your property up as collateral 🙂 🧐 not even if you're dealing with a medical emergency

Oh, really? Why don't you go ask the crew who took out home loans for a few hundred thousand dollars over thirty years what they gave the bank as security?

So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

Look, you hear fine, but your reading comprehension is lacking.

Of course banks take a mortgage on property, but that’s hardly the only collateral they grab; they also have... (I'm not going to go copy-pasting terms from some JPMorgan Chase website) ...plus, most importantly, they run a full credit check first.

But what you're talking about isn't a pure mortgage loan. A true mortgage loan is one granted solely based on the property itself as security. What you're describing are residential loans where a mortgage is just one part of the package used as collateral. And yeah, the bank will eventually come for the house, but before they do that, they'll try to drain every other liquid asset you've pledged—you know, the stuff that's easier to grab—and if they still can't get their money, then the house goes on the auction block.

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

And who said you can just pay whenever you feel like it? If you miss three payments in a row, they send a warning, then they try to negotiate a payment plan, then they exhaust all those more liquid assets I mentioned, and only *after* all that does the mortgage kick in... and by then, you are truly screwed.

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

So, did she actually think you were being smart? You're taking something you already own and putting it at risk just to end up out on the street.

The people taking out residential loans today are usually mortgaging the exact same apartment they are buying, and most of them were renters right before this. So, for them, it's kind of a "nothing to lose" situation; they didn't have anything before the loan, and they might not have anything after (if they don't stay current on payments)... but if they manage to grind through the loan until the end, they actually walk away with an apartment.

So I apparently misheard about five or six people saying the bank was going to seize everything!🙂 👋

But hold on, it’s not like I can just stop making my payments. They usually tell you that you'll pay when you actually have the money.
I guess that's why they bother with insurance in the first place.🤔

Back when a woman was helping me run the numbers for an attic renovation,
she asked where I was getting the cash. I told her straight up I was going to put the house up for mortgage,
and she just looked at me and said, "Oh, very smart," as if she's some kind of expert in the field! I wasn't being smart.

At any bank out there, they absolutely love people like you, which means the bank will just take your house
after they end up flipping it at least three times over
once you run out of cash to cover the monthly payments🙂

I'm telling you, don't ever put your property up as collateral 🙂 🧐 not even if you're facing a medical emergency

wanderingseal37 said:At any bank, really—they absolutely love people like you, so they'll just take your house
and then flip it at least three more times after that
once you run out of cash to cover the monthly payments 🙂

I mean, don't ever go putting your property up as collateral 🙂 🧐 not even if you're dealing with a medical emergency

What you’re saying isn't really how things work in reality, if we're being honest.

Pure mortgage loans like the ones you're describing don't really exist here—at least not from what I know, so please correct me if I'm totally off base.

What does exist are loans where you provide a mortgage plus some other collateral, but they still run a full credit check; basically, they look at your minimum pay versus the annuity to make sure the math works.

Then there are Lombard loans where they don't bother checking your credit score because you're pledging something else—like a CD, a house, stocks, or fund holdings... but definitely not real estate.

And by the way, regarding this idea about banks flipping properties—that is absolutely not true.

When a bank sells a property, it's strictly to recover what the client owes them; the bank isn't trying to turn a profit on the sale, their main goal is just to get their principal back, which means you can actually pick up a property from a bank quite cheaply.

If banks were actually making money by reselling foreclosed properties, the newspapers would be flooded with bank ads promoting "super deals" on mortgages, but you see for yourself that those aren't happening.

Real estate is illiquid stuff, and banks over here don't actually like holding onto it. Think about how much time it takes to sell a house, deal with all the paperwork, etc... it's all just a massive expense for the bank. They aren't making money while their capital is tied up, and they have to deal with the headache of the sale... they just don't have the resources to play real estate mogul.

wanderingseal37 said:At any bank, really—they absolutely love people like you, so they'll just take your house
and then flip it at least three more times after that
once you run out of cash to cover the monthly payments 🙂

I mean, don't ever go putting your property up as collateral 🙂 🧐 not even if you're dealing with a medical emergency

Oh, really? Why don't you go ask the people who took out home loans for a few hundred thousand dollars over thirty years what they used as collateral for the bank?

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

Look, you might be hearing them, but you clearly aren't listening properly.

Of course banks take a mortgage on a property, but that isn't the only security they hold; you also have... (I'm not going to sit here and transcribe the fine print from some JPMorgan Chase website) ...plus, most importantly, they run a full credit check on you first.

But that’s not what a mortgage-only loan is. A true mortgage loan is one granted based exclusively on the property as collateral. What you're talking about are residential loans where a mortgage is used as security alongside other things. And yeah, sure, the bank will eventually seize the house, but before they get to that, they’ll try to exhaust every other liquid asset you've pledged. If they still can't make up the difference after hitting those, then—and only then—does the house go up for auction.

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

And who exactly told you that you can just pay whenever you feel like it? If you miss three payments in a row, they send a warning, move to collection negotiations, drain every single one of those easier-to-grab assets first, and only then do they come for the mortgage... and by then, you are truly, deeply screwed.

wanderingseal37 said:So, I must have misheard at least five or six people saying the bank is going to seize everything!🙂 👋

But hold on, it's not like I can just choose not to pay my installments. They usually tell you that whenever you actually have the cash, you can hand it over.
I guess that's exactly why they bother with insurance in the first place.🤔

Back when a woman was helping me run some numbers for an attic renovation—it was quite a large space
she asked where I was getting the funds from. I told her straight up that I was putting the house up as collateral,
and she just goes, "Oh, very smart," as if she's some kind of financial expert! And honestly, I wasn't being smart at all.

So, did she actually think you were being smart? You're taking something you already own and putting it at risk just to end up on the street.

The people taking out home loans today are usually doing it for the very apartment they are buying; most of them were renters before this. So, in a way, they don't care—they didn't have anything before the loan, and if they fail to pay, they probably won't have anything afterward either... but if they manage to grind through the mortgage until the end, they actually walk away with a home.

A mortgage is strictly for real estate. As a concept, you don't "mortgage" anything else.

Lending policies vary from bank to bank—it all comes down to their own internal business decisions.

Generally speaking, banks make sure they aren't just relying on collateral (like the house tied to the mortgage), but also on promissory notes and their own accepted notes.

The promissory note is what you actually need to fear. If it’s issued with a note of protest, it can be drawn against your entire net worth.

Basically, if you fall short on payments to those wonderful, lovely Europeans, and you have property in Matthews while dealing with Citibank, the bank decides whether to seize your Ford via that note or simply call the debt due and put everything you own in Matthews up for auction.

A note isn't inherently bad—that's actually its positive side—but our mentality is such that the average insolvent American would rather put a summer vacation or a ski trip on six installments at Diners Club than actually pay off a debt... and that's why everyone hates banks.!!!!

That's exactly why people in this country live beyond their means.

James Cox6 said:A mortgage is strictly for real estate. As a concept, you don't "mortgage" anything else.

Lending policies vary from bank to bank—it all comes down to their own internal business decisions.

Generally speaking, banks make sure they aren't just relying on collateral (like the house tied to the mortgage), but also on promissory notes and their own accepted notes.

The promissory note is what you actually need to fear. If it’s issued with a note of protest, it can be drawn against your entire net worth.

Basically, if you fall short on payments to those wonderful, lovely Europeans, and you have property in Matthews while dealing with Citibank, the bank decides whether to seize your Ford via that note or simply call the debt due and put everything you own in Matthews up for auction.

A note isn't inherently bad—that's actually its positive side—but our mentality is such that the average insolvent American would rather put a summer vacation or a ski trip on six installments at Diners Club than actually pay off a debt... and that's why everyone hates banks.!!!!

That's exactly why people in this country live beyond their means.

Look, you're spot on with all five points, but let's be real here: nobody in this country is going to cut you a loan based solely on the collateral without demanding extra guarantees (just like you pointed out yourself) and running a full-blown credit check first.

But honestly, if you’re looking at a $100,000 loan, you’d need to be pulling in maybe $70,000 or $80,000 a year. If you actually had that kind of income, you wouldn't even need to worry about a mortgage