After an eventful couple of weeks for the mortgage industry, you are wondering what it all means to you as you consider your real estate plans. Here are some answers:
Q Will I still be able to get a mortgage?
A One of the widest-held misconceptions that the current problems will have a negative impact across the entire mortgage spectrum. So far, borrowers with decent credit histories who can document their income aren't being shut out from getting a loan.
What is getting harder to come by are Alt-A mortgages, which often don't require income documentation. And jumbo loans -- those that exceed the $417,000 conforming limit and thus can't be purchased by Freddie Mac and Fannie Mae -- are getting more expensive.
Q Can I still get a no-down-payment loan?
A People tend to incorrectly group no-down-payment mortgages together with subprime. There are still programs that can get prime borrowers into mortgages with little or no money down.
However, these loans now require strong credit, verifiable W-2 income and healthy assets in reserve. Homeowners whose tax returns include large write-offs, such as small-business owners, will have a much harder time qualifying.
Q Should I be concerned if I currently have a subprime mortgage?
Subprime loans are not the end of the world ... unless you are at the end of the term and your payment is set to adjust sharply upward, said David Podgursky, a Florida-based mortgage broker. By looking ahead -- preferably a year before the reset date -- borrowers can improve their credit and consider their options so they aren't saddled with monthly payments they can't afford.
Please give me a call or simply respond to this email with any questions you might have and/or feel free to contact me with recommendations for lenders to assist you with your real estate plans.
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