95% Conventional Financing Available for Sonoma County Home Loans
5% down payment - Conventional Financing - What does it mean to me, the buyer?
The news of conventional financing allowing 5% down payments has significance in the fact that it sends a strong signal of stability. The conservative insurance industry is stepping forward and saying "We see recovery, we feel confident that it is a good risk to back these loans."
When things were at their worst getting this PMI coverage was the deal breaker, it couldn't be done.
Should I go FHA (3.5%) or Conventional (5%)?
The ultimate answer will rest with your loan officer and your particular circumstances but consider this. The conventional loan will allow you to remove the PMI much quicker. Once you have 20% equity you have the ability to lower your monthly payment by DROPPING THE PMI PAYMENT. With the FHA loan you were required to pay down the original loan balance 20% before it was an option. That would take 9,10,11 years even if prices were appreciating rapidly. With people providing information like Kathy Hoare did in her blog post below 95% LTV Available Again for Sonoma County Home Loans the answers are out there.
Is there a stigma associated with FHA loans? Real or perceived I have run into the stigma when representing buyers with FHA loans. The conventional option may serve to lessen this issue. But more importantly, it opens up your options because some properties were not "FHA APPROVED" meaning you couldn't even write an offer on it even if you liked it. Now, those homes are available to you.
More Inventory to choose from
Lower up front cost
Talk with your lender to get facts specific to your case but I sure enjoy having options!
This is really the FIRST STEP for every buyer. Giving trusted referrals to buyers at our first meeting has proven to be most helpful. These are the buyers that enter the market with full knowledge and ability to get the property they desire.
For up-to-the-minute-rates www.SonomaCountyHomeLoans.com
95% LTV Available Again for Sonoma County Home Loans
Genworth mortgage insurance company is now insuring and has made available financing up to 95% LTV home purchase loans in California and Sonoma County for specific conventional loan programs including Fannie Mae's My Community Mortgage and Freddie Mac's Home Possible financing. This is an improvement over the previous 10% down requirement for all conventional lending in any declining market. And all of California and Sonoma County had been deemed a declining market. There are some restrictions but the pricing is good (5.125% - 5.25%). An advantage of the My Community Mortgage program is the mortgage insurance to 95% LTV comes at a lower MI rate than standard for conventional. Here are some highlights.
- Up to 95% LTV Purchase Transaction only
- 680 Minimum Score Requirement
- 1 unit property only (SFR and PUDs. Condos maxed at 90% LTV)
- 2 mos. reserves required regardless of AUS findings
- Full appraisal required regardless of AUS findings
- 3% Seller Concessions maximum allowed
- available in CA, FL, NV, and AZ
- Freddie's Home Possible Doc #5335 (Fixed Rate only)
- FNMA MyCommunity Doc #5325 (Fixed Rate, 5 yr ARM and 7 yr ARM)
Fannie Mae's Deed for Lease (D4L) Program
For loans owned by Fannie Mae (http://loanlookup.fanniemae.com/loanlookup/), the program Deed for Lease is meant to allow some homeowners facing foreclosure to hand the deed back to their lender but remain in the home as a renter. The servicer has to decide that the borrower qualifies for a "deed in lieu of foreclosure." The rent can't exceed 31% of their monthly gross income, the borrower cannot have 12 or more past-due payments on their mortgage and they must have made at least three payments since the loan was first taken out. Primary residence only - and no non-Fannie loans please! The borrower's credit score is indeed impacted, but not as badly as a foreclosure.
Tax Credit Extension
Just a reminder that for the new tax credit, it needs to be paid back if the buyer sells the home within 3 years after purchase.
Rates
Rates remain excellent as the stock market retains strength in spite of unemployment numbers. The 7/1 ARM is an excellent product to consider as rates are down to about 4.125%. Especially good for first time homebuyers or investors getting into the market who know they will be out of that property within 7 years.
Today's Rates http://www.sonomacountyhomeloans.com/
Comments(0)