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Mortgage guidelines for Tampa, FICO scores

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Mortgage and Lending with Bay to Bay Lending

Understanding Lending Guidelines In Today’s Market

With today’s tightened lending guidelines, it is critical for buyers and agents to understand what is needed to successfully obtain mortgage financing today.  Many buyers as well as agents get very frustrated over the whole procedure.  Below are some of the issues that become frustrating given the current state of the market.

l.  Bad Credit scores are now between 640 and 660.  The bank usually says no to these buyers automatically.  This is really not a true statement.  Most FHA/VA loans require at least a 640 FICO.  Here at Bay to Bay Lending, LLC, we offer a program for FHA with FICO’s as low as 530 with 10% down.  100% VA Mortgages with FICO’s as low as 530.  We also have programs for Conventional Mortgages, for a primary residence, with 5% down and FICO scores of 620.

2.  Not enough income.  That is 100% correct.  If sufficient income to support the mortgage payment cannot be documented, then the mortgage cannot be approved.  That is why it is very important that all income documentation (pay stubs, W-2’s and Tax Returns) be received by the lender.

3.  Paperwork glitches.  Incomplete information, missing forms, etc., can slow down or stop the lending process altogether.  Incomplete applications become a big challenge for all involved.  When buyers only supply a few pages of a document, that will not be acceptable.  Some also do not understand the importance of getting everything in ASAP. Time is of the essence with any request of documentation when the buyer in under contract.  I often see contact information for the closing attorney/title company and HOA information missing from the sales contracts.

4.  Homeowner Associations issues.  HOA issues really pose a problem with the mortgage approval especially on Condos.   Condos go through a more stringent approval to better examine their overall stability since it impacts every owner in the project.  Things such as owner occupancy, pending litigations and delinquency of HOA dues are evaluated. 

5.  Appraisals:  If the home doesn’t appraise, the banks won’t lend.  Simple as that.  The LTV (loan to value) is based on the lesser of the sales price or the appraised value.  The seller and buyer can always renegotiate the transactions based on the new value.

6.  Gaps in employment history can certainly be a problem for buyers trying to obtain a mortgage.  If the buyer has a 6 month gap in employment, then they must currently be employed for at least 6 months before the income can be used to qualify.  Bonus/overtime/commission income, must be received at least 12-24 months before it can be used.  Then it is averaged out.  Unreimbursed Business Expenses claimed on tax returns are also deducted from the buyer’s qualifying income.

7.  Name inconsistencies, Contracts, and Discrepancies in title Work.  This is where agents need to be very careful when writing a sales contract.  If they pull the USPS for the address, it will be 100% accurate.  They need to use the buyer’s LEGAL NAME.  (Robert, not Bobby, John, not Jonathan).  I see addendums all the time that need to be changed because the legal names were not used and then the title company has to change their documents because they used the buyer’s names as they appeared on the sales contract.

Having agents set proper expectations upfront will go a long way in making mortgage closings much easier.  Everyone working together will result in quicker and much smoother closings.

It is always advisable to consult with a knowledgeable lending professional when navigating today’s turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options.

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