Underwriting rules are being modified just as quickly as mid-day rate prices. Compensating factors and exceptions for income, debt ratio, credit or down-payment that used to be the "norm" may still be listed in investor's guidelines, but are unlikely to pass underwriting. Automated underwriting is only the first step for approval. After automated underwriting the file goes to a live underwriter, which is where new rules that haven't even been entered in the automated machines yet are being enforced.
Prepare your clients in 3 ways by suggesting for them to:
•1) check their credit at http://www.annualcreditreport.com/ or http://www.myfico.com/ and gather payoff letters to prove any inaccurate credit reporting
•2) gather the most recent 30 days' paystubs, 2 yrs W2s and tax returns, and 2 months bank/brokerage statements because full documentation is the standard now
•3) talk to a reliable mortgage consultant who is quick to communicate any issues BEFORE you write an offer
Here's a sample of Purchase money rates today, 0+1, with escrows for credit 700. These are subject to vary based on loan amount, occupancy, credit quality and other factors.
Conforming (using 250K as amt) 30 yr fixed 5.625%
15 yr fixed 5.125%
5/1 ARM, 30 yr am 4.875%
Jumbo (using 650K as amt) 30 yr fixed 6.625%
15 yr fixed 6.25%
5/1 ARM, 30yr am 5.25%
Super Jumbo (using 1M amt) 5/1 ARM, 4.875%
(30 or 40 yr am)
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