Mortgage Update! Don't believe the hype!!

By
Mortgage and Lending with Guaranteed Rate, Inc.

Congratulations to Chuck & Robbin and Carolyn on their new home purchases and a very Happy 9th Birthday to Abbie!!

Well, it has been about a month since my last blog entry and the mortgage world continues to dominate the news!  The fact that it has been a month since I have blogged is a direct result to being busy thankfully!

For me, September showed an uptake in business with some people assessing their refinance options while many buying new homes.  I think the general public may be realizing that homes are priced very low and that financing has been getting more complicated and those that were on the fence as to when to buy, have jumped off the fence.

One significant change in mortgage underwriting guidelines affects those who wish to rent out their current home and purchase a new home.  In order to do this and to have the rental income offset the monthly mortgage payment you must have at least 25% equity in your current home.  If you do not have that much equity, then you must qualify for both mortgage payments included in your debt-to-income ratios.  For many, this will be important to know.

Overall, it is still business as usual and those loans that make sense are being improved.  I have not had any loans denied due to recent changes.  Interest rates are still at 40 year lows.  The inventory has never been better.

The most important piece of advice I have right now is don't believe the hype or assume anything either positive or negative.  Email or call and ask me what the real facts are and how they will apply to you, if I don't know the answers I will find out for you!  There are so many false assumptions and misconceptions out there.

Be well!  Be safe!  The days are long but the years go by quickly!

Gary Parkes

NorStar Mortgage Group

www.GeorgiaBankLoan.com

Gary@GergiaBankLoan or 404-936-5601

Comments (2)

Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Gary:  Great information!  You are correct that the 25% rule now applies to those who own rental property and want to purchase a primary residence and believe it or not, I totally agree with this concept!  I think that we should have been putting down at least 20% on our home purchases and this crisis that we're in wouldn't be happening. 

I have been told that an over 800 credit score is still being questioned and some even turned down this week; is that true?  (My gut says no but, my brain says I just have to ask!)

Debe in Charlotte

Oct 01, 2008 05:19 AM
Anonymous
Anonymous

Debe,

Thanks for your comments!  I, too, agree with a lot of the changes that have taken place although they have an adverse effect on me personally in the short term while I try and earn a living.

As to your question on the 800 credit score borrowers, they are still considered strong!  Anything above a 740 gets the best Fannie Mae rates available.  What I will say, is the regardless of credit score someone still needs to have a job, verifiable income, decent DTI ratios, etc.  In terms of FHA financing, an 800 score borrower has, and always has, had no difference in requirements than those borrowers with scores in the 600s.  For conventional financing with at least 10% down, the level of documentation will likely be reduced regarding assets and income verification.

Hope that gives some more insight!

Gary

Oct 01, 2008 05:33 AM
#2