Bye bye 100% financing

Announced today, fannie mae and freddie mac, the largest buyer/servicer of mortgage loans announced the discontinuation of 100% financing options through conforming products. This move will require home buyers to put a minimum of 3% down payment into a new home purchase. From my last post, you must have a 680 fico to be able to get into the 97% conventional loan.

100% fianancing is still available for all credit scores using one of the government insured program - VA, USDA Rural Development and FHA with use of a non profit gift. Need more info on these great programs, contact me for free information and reports.

In today's mortgage world you must speak with a lender that offers all of the programs available to the market.

I was told twice just this week from potential clients that going for an FHA loan had too many property restrictions. When asked where they heard that from the answer was other brokers. Turns out these brokers do not offer FHA financing and instead of being upfront, they made up rules that are just not accurate. FHA uses the same exact appraisal as conventional financing these days. When you hear a negative about FHA, VA, state bond programs or Rural Development loans, ask them if they offer them. If they say no, talk to another professional. If you are from out of state and would like some guidance, call me. I would rather help someone analyze their options then see them put into the wrong product even if there is no compensation to me. I am trying to do my part to clean up our industry. Happy Easter!

Mortgage Insurance companies make it harder to finance with less than 5% down

Starting in the next couple of weeks the private mortgage insurance companies will be rolling out new guidelines for the mortgage industry to follow. Those being effected will be borrowers looking to put less than 5% down with lower than 680 credit scores, stated income with less than 10% down and I would imagine there will be PMI rate adjustments to follow as well.

What can you do if you are looking to buy a home and have less than 5% down and credit scores below the 680?

Two things - 1 -Make sure you do talk with a lender that can originate not only conventional loans, but FHA/VA or USDA Rural Development packages. These all require less than 5% down payment and currently have no price hits for credit score unless the lender themselves have imposed a price hit. 2 - Speak with a lender today and figure out where your credit score is. If it below 680 request a detailed plan of action to help increase your credit score. This should be done for anyone with less than 30% down payment because the credit score adjustments as of June 1, 2008 are going to be excessive and cost borrowers thousands of extra dollars PER YEAR!!!

I have been in the mortgage industry for the past 15 years. We distribute the products mentioned in this blog. If you would like some free information, please email requests to vin@alliedhomenet.com. We are licensed in all 50 states aa a lender and broker.

What ever info I can help you with please ask. I like helping people save money and buy homes.