FHA remains the hottest product in our market. With the high loan to values on purchases and refinances the mortgage insurance company's, commonly known as PMI are not approving many conventional loans with a 5% down-payment. That is when FHA comes in and is continuing to be the winner.
I have a portfolio FHA lender that is approving and closing loans. The big difference is the FICO score. On the portfolio product the acceptable FICO scores are: 560 minimum for a rate and term refinance, and 580 minimum for a purchase. Maximum debt to income ratios are: 40/45 with no reserves, 40/47 with 3 months reserves, 40/49 with 6 months reserves. They must have a perfect mortgage or rent history for the previous 12 months. We can use a verification of rent in lieu of canceled checks.
Downside is no gifts allowed for down-payment. Interest rates are a bit higher. Today's rate on this product is 5%, 30 year fixed.
Standard FHA Loans gives us the better rate if the FICO score is 620 or higher. Todays rates are 4.50% The portfolio loan is a half point higher.
I hope this will give you a better opportunity in selling homes. One more tool!!!!!!
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