I have had the opportunity to speak with many buyers this year, and by far the first question is: Can I get a loan? The media has led people to believe that there are no mortgages available... YES YOU CAN STILL GET A LOAN!
As you are aware, the media has a tendency to twist the facts around and bring out the bad in order to sell papers. I don't know what it is about the American consumer that makes them dwell on the negative, but lets look at the facts.
Mortgage Guidelines have changed. The industry did a lot of dumb loans in the past few years. "0" down no-doc loans with low credit scores are at the top of my list of "dumb loans". This is one of the products that does not exist anymore. Surprisingly the low credit score and low down payment loans have not performed well, especially the ones where documentation was reduced (DUH! It doesn't take a rocket scientist to figure that out.) True No Doc loans are also gone, we can no longer get loans for people who do not have jobs. There are still stated income loans available, so please don't confuse the two!
What is left? A LOT! Way more than I can put in a short letter, but here are few examples:
- Reduced Doc (Stated income) loans still exist, you just need a down payment and good credit and a job. The lower the down payment the better the credit needs to be.
- No Ratio loans (where income is not stated on the application at all) are still available, You just need a down payment, A JOB, and a strong credit history
- "0" down payment and Low down payment loans still exist. You just need a Job, "OK" credit, and you need to qualify for the loan, but you will do much better with a small Down Payment.
- Piggy Back loans are quickly fading away, that means that the days of PMI are returning, but there are many ways do PMI which can be inexpensive and Tax Deductible!
- Do not be surprised to see FHA deals. The FHA is a great alternative to many of the loans that have gone away, it is also going to have much better rates than many of the low down payment options available, helping you to qualify more buyers and sell more homes. FHA loans also do not have a minimum credit score, or add ons for lower credit scores, all a BIG PLUS!
Over all we have seen significant changes in mortgage guidelines, but the reality is we still have MANY more options than we had in the late 90's into the early 2000's. The only loans that are gone are the "dumb loans" and the riskier loans that are still here will have higher rates. (That is called "risk based pricing").
Now more than ever you need to rely on a trusted partner in the business. I am talking about your Mortgage Partner and your Realtor. You need a Loan Officer/Mortgage guy or gal that knows how to qualify you for a loa It is not a market to be lazy and take the easy path. A loan officer needs to be able to know how to read a tax return and understand guidelines. You need to be sure that you will get to closing, happy, comfortable and with a mortgage you fully understand and can live with.
I hope that helps to answer some of the questions you may have. If not I am just a phone call or an E-mail away!
Robert Rauf
Countrywide Home Loans
Countrywide Bank, FSB
(732) 740-0175 Cell
http://www.robertraufhomeloans.com/
Building financial security, one home owner at a time
Comments(0)