Expert: Jim Root - 7/29/2009

Question
SECOND ATTEMPT TO ASK QUESTION!!!
I currently own a house in which I live and a condo which provides minimal rental income.  Both are owned free and clear;  both have been appraised within the last four months.  I am looking to borrow approximately 60% of the Mid-March appraised value of the home.  I owe NO OTHER money, have a credit score above 800 and liquid assets of approximately $200,000, IRA and Pension providing another (future) asset in excess of $200,000.  
I am self-employed with both W2 and shareholder K1 income which is minimal.  


I have the following questions:  
1. I have been told that I do not qualify for a mortgage (of approximately $150,000 because combination of mortgage payment, taxes, insurance  cannot exceed 60% of income based on new guidelines.  Is this valid?  
2. I have been told that appraisal done in mid March CANNOT be used because of volatility of market.  While I appreciate that market have reduced the value of my home (or increased it for that matter) I do not understand why the basic appraisal which includes photos, area measurements etc. cannot be used along with current market data.  Of course if this is done the appraiser cannot charge me another $400 so perhaps that answers my question...
3. In researching loans I was told that if I do not escrow homeowners insurance and taxes that I would have to pay an additional percentage of loan as a penalty.  I was also provided closing costs which included tax service fee which I believed was payment for escrow setup which shouldn't apply.  Am I correct?
4.  Other charges included in BANK (smaller regional bank which has a good reputation and had good rates# loan closing estimate were underwriting, processing, document,settlement fees #as well as $400 Appraisal fee# which seem redundant to me. Are these all legitimate fees?  
5.  If someone with my qualifications cannot borrow what I consider a minimal amount based upon my net worth WHO CAN????  
I truly wanted to borrow money because I thought this would be a good time to do work since there is a glut of qualified talent around and because I think everyone can contribute a little to helping the economy recover. I'm fortunate enough to not need the money...but i would think that I am the guy the bank WANTS to lend to.    

Sorry for the length  of this post but I'm rather outraged about all I have learned.  I have talked to #and began loan application procedures first with a broker then with a bank.  I felt as if I were dealing with the caricature of a used care salesman with BOTH.  I've decided to not borrow from any bank but to simply bypass the upgrades/new decor in my home.  I lose a little because it would have been nice;  the economy loses a lot.   
Thank you for your answers and your time.  My apologies for the venting included in the post.  

Answer
I answered tbhis question the FIRST time you sent it--but I wrote the answer three times and our newly revised AllExperts "system" kept deleting my replies whenever I "spell checked" them. After several HOURS of writing, rewriting and frustration, I sent you a reply (witout "spoell checking")that said to by-pass AllExperts and send your question to me at:

                        real-t-pro@comcast.net

or to call me at 1-509-220-6886 and I'd help you! The AllExperts "system" tells me that that message was sent to you! I hope this one gets through to you!--JIM