And, no, 80-20% combinations are not coming back, and no there will not be a 100% one loan on a 600 score 1 day out of bankruptcy, as one lender offered back in 2005.
However, there is 100% financing one loan out there for one who can go full doc, most likely looking at a score above 600(this one is not minimum-score driven), and 2 years out of a bankruptcy, 4 years out of a foreclosure, and that is a VA loan.
Of course, one has to be eligible for VA financing, which includes, but is not limited to:
One who served in the military and received an honorable discharge as long as he or she served for 90 continuous days during wartime or 181 days during peacetime A spouse of a deceased veteran who died while in military service.
Why VA financing? Here are some reasons:
100% financing for a purchase(one loan) Maximum origination fee of 1%(just like FHA) No minimum reserves(savings and othe liquid assets) required Flexible credit guidelines(similar guidelines to FHA) Interest rates similar to conforming interest rates And the Best Part: NO MONTHLY MORTGAGE INSURANCE ON VA LOANS!!
Yes, there is an upfront funding fee of 2.15% for first-time users(similar to the 1.5% mortgage insurance premium on FHA loans), but it, just like the FHA mortgage insurance, can be financed into the loan.
However, there is a possibility of exemption for the funding fee under certain circumstances, which again, could include, but not be limited to:
Veterans receiving VA compensation for service-connected disabilities Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.
VA loans are great loans, and are for those well-deserving folks who have honorably risked their lives over the years to defend our country's freedom.
As conventional lending continues to tighten and guidelines continue to change every day, the guidelines for government-backed loans such as FHA loans and VA loans have stayed pretty much the same.
The demand for these type of loans will continue to increase into this year and next year as these programs have the flexibility that your conventional conforming and non-conforming loans no longer have. And, in many cases, the interest rates are more favorable for these type of loans.
You can also see this information on my blog on the website www.activerain.com. It is a website that consists of profiles and blogs from realtors, loan officers, consumers, and many other professions related to real estate. It is free to join and has some very good information in there.
Thank you again for your business.
Paul W. Thompson
Loan Consultant
Wells Fargo Home Mortgage
MAC P6730-011
14201 NE 20th Avenue, Suite 2101paul.w.thompson@wellsfargo.com
Vancouver, WA 98686
360 574 0753 Tel
866 667 3038 x1753 Toll-free
503 810 1119 Cell
866-494-4806 Fax
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