We all know there is alot of tough news out there right now. I just need to dispell the myth that you can’t get a loan. You CAN get a loan and interest rates remain very attractive. I asked my friend and motgage broker James Adair www.pdxhomeloan.com to share what kind of programs are available and what changes have been made.
Here is James’ recap of all the recent changes:
“Believe it or not, the only loans that are no longer around are the subprime variety. (no more bank statement loans, or 100% stated income) Also, the OPTION Pay ARM’s have been removed from the marketplace with the rollup of Wachovia (who was the last remaining player in that area).
99% of All Loan programs are still available.
The Biggest changes this year are as follows:
1. Credit score based pricing on interest Rates: Anything below a 720 credit score is subject to potential higher pricing
2. Credit score based pricing on Mortgage Insurance
*(this credit based pricing is what is driving the huge increase in FHA mortgages- they remain mostly unaffected by borrower credit scores)
3. More documentation and Reserve requirements on buying a new house and turning your old house into a rental. (monthly payments for both properties times 6 in reserve after close)
4. LTV restrictions on SECOND mortgages: Most second mortgages will require a minimum of 10% equity
I do still have the 100% purchase loan: the “Access” mortgage
30 year fixed, 40 year fixed, Fixed with Interest Only, Adjustable rate mortgages are all still available.
The Premium paid for Interest only has increased slightly, as has the premium paid for Investment/Non Owner Occupied financing.
FHA has moved to the forefront as one of the best available mortgage loans. Still, relaxed credit requirements, and excellent pricing and Low Down payment requirements.”