The following are several questions I have been asked over the past few days:
Are there still 100% loans?
Are there still 100% loans?
Yes, for fully documented incomes and decent credit under $417,000 loan amounts. Ratio's (income vs.. debt with new house payment) have gotten stricter. (no more 68% ratios!) And interest only loans are difficult to get approved. Is it harder to qualify for a "vanilla loan" if you have good credit, income, some savings and putting at least 5% down on a loan amount under $417,000? No, the guidelines have not changed.
Can you do 100% FHA loans?
Can you do 100% FHA loans?
Yes, with Ameridream or Grant America
Have the loan guidelines changed on FHA/VA?
Have the loan guidelines changed on FHA/VA?
No, they have stayed the same.
What are "agency" loans?
What are "agency" loans?
Loans that follow Fannie Mae or Freddie Mac guidelines. Loan amounts under $417,000 (conforming) And FHA, loan amount of $263,150 or VA $417,000. (government)
Which loans have been affected by the changes?
Which loans have been affected by the changes?
Any loan amounts over $417,000 will now have a higher interest rate since they are not insured by "agencies". Adjustable rate mortgages have changed to require borrowers to qualify at the fully amortized rate rather than the start rate with a much stricter qualifying process. Any loan with less than 20% down may require mortgage insurance instead of the purchase money seconds. Interest only loans, 40 year loans are available but at higher rates.
What is mortgage insurance?
What is mortgage insurance?
It's back..........Mortgage Insurance could be added to all conventional loans with less than a 20% down payment. Mortgage Insurance companies take part of the "hit" if a loan goes bad. Mortgage insurance is now tax deductible with combined family incomes under $100,000. And M. I. amounts are determined by credit score. The lower the score the higher the mortgage insurance.
Are subprime loans gone?
Are subprime loans gone?
100% are no longer available. And the companies that do subprime may not be around in the next 5 minutes. Keep in mind FHA and VA are great alternatives and even some Fannie Mae and Freddie Mac programs are designed for lower credit scores. But the rates will be higher and there is mortgage insurance if the client is putting less that 20% down.
What about an 80/20, 80/15/5's,80/10/10's or any purchase money second?
What about an 80/20, 80/15/5's,80/10/10's or any purchase money second?
Still available, sort of. But the rates are high and they are much harder to qualify for. And doing a loan with "mortgage insurance" actually may bring the payment lower.
Home Equity Lines of credit or second mortgages are they available?
Home Equity Lines of credit or second mortgages are they available?
Yes, but the criteria has changed and "loan to values" or appraised value vs. loan amounts are much less than they were a few months ago. Higher credit scores may be required.
Can Investors still finance homes?
Can Investors still finance homes?
You bet! Underwriting is a little stricter and your investor will need 10% down. They may not have the option of an adjustable rate loan, just 30 year fixed. Oh, yeah, good credit and reserves. Lower credit scores and recent late payments could kick them out of getting a loan.
I need a "stated income" loan. What are the guidelines?
I need a "stated income" loan. What are the guidelines?
10% down, good credit score, and money left over (reserves) after the loan closes. Lenders may need as much as 6 months worth of payments or three months of the "stated" income. The income will have to make sense for the type of employment. By the way, there is a web site underwriters now use to determine pay for every type of employment.
Keep in mind, there are a lot of great loan programs available.
Got questions? Give me a call!
Keep in mind, there are a lot of great loan programs available.
Got questions? Give me a call!
MaryEllen Kohut
1720 East Warner Road Suite 1
Tempe, AZ 85284
Phone: 602-329-3437 ~ Fax: 480-831-5223
