Tag Archives: mortgage

Home loan limits lifted for first time since 2006

Federal borrowing limits were increased for the first time in more than a decade last week because of rising home prices across the nation. The Federal Housing Financing Agency had capped the baseline loan limit since 2006 as home prices dropped during the recession.

The new rates, used for conforming loans acquired by Fannie Mae or Freddie Mac, will take effect Jan. 1. In general, federally backed loans allow for smaller down payments and, theoretically, help more people enter the home market.

In San Diego County, loan limits for a typical single-family home will be $612,950, up 6 percent from where they are now. Those limits are higher than the national baseline of $424,100.

read more at: http://www.sandiegouniontribune.com/business/real-estate/sd-fi-mortgage-borrowing-20161130-story.html

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Don’t be frozen out of the mortgage market: New programs can help

Are you or someone you know needlessly missing in action this summer, leaving near-historically-low mortgage money at 3 1/2 percent to 3 3/4 percent on the table? You might be if you fit this profile:

•You’re renting, though your goal is to buy a home. But you assume you can’t qualify for a mortgage because today’s underwriting rules are so strict and inflexible.

•You don’t have a lot of extra cash in the bank and you seriously doubt that you could scrape enough money together to afford a down payment.

•Your credit scores aren’t great — just under 700 FICO — but that’s mainly because you’re young and don’t have a deep credit history.

Sound just a little familiar? Well, here’s some good news. Giant mortgage investor Fannie Mae last week revised and improved its low down payment mortgage plan known as HomeReady. Fannie’s competitor, Freddie Mac, has a similar program known as Home Possible Advantage. Either one could be key to your getting out of your rental apartment and buying a house or condo by early fall.

Check out the basics of Fannie’s program. Start with the 3 percent down payment. There’s no minimum cash contribution requirement out of your wallet as long as you’re buying a single family house to live in. You can supplement your cash on hand with gifts from relatives or other sources. You can also increase your effective income for mortgage qualification purposes by including so-called “boarder” or in-house rental payments. Say the rowhouse you want to buy downtown has a long-term tenant in a basement unit who would like to remain in the house. That rent could count toward your income.

Another flexibility: Say you’re part of an extended family and you expect to have other household members living in the house with you who earn incomes but don’t want to be on the mortgage note as a co-borrower. You can use their documented earnings to increase the maximum debt-to-income ratio (DTI) you’re allowed on your mortgage.

read more at: http://www.chicagotribune.com/classified/realestate/ct-re-0807-kenneth-harney-column-20160803-story.html

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Consumer-friendly options open doors for homebuyers

So you say you want to buy a home but you’re locked out of the market because you don’t have enough money for a down payment. Or you don’t have adequate savings to meet lenders’ requirements on financial reserves. Or you have a “thin” credit file that lenders find tough to score and accept.

Pushed by regulators and consumer groups to expand home loan opportunities for first-time and moderate-income buyers, major mortgage players have come out with nationwide programs designed to turn renters who are creditworthy – but don’t have big down payments or closing-cost cash – into home owners.

The newest option, known as the Affordable Loan Solution plan, launched Feb. 22. It allows for down payments as low as 3 percent, no minimum cash reserves, loan amounts as high as $417,000 and, unlike other low-down-payment mortgages, there are no charges for traditional private mortgage insurance. The latter alone can sometimes add hundreds of dollars a month onto buyers’ costs and make ownership difficult to afford, so this is a big deal. For applicants with thin or no credit bureau files, the program allows for consideration of non-traditional forms of credit, such as monthly rent payments, utility bills and the like. There is no minimum required contribution toward the down payment and closing costs, so applicants can supplement their own cash with gifts, such as from parents, or even use grants or secondary financing that is available through some local government agencies. Significantly, applications won’t go through the usual automated underwriting systems that generate instantaneous approval-disapproval decisions. Instead, they’ll be handled the old-fashioned “manual” way, allowing for more individualized evaluation – and verification – of applicants’ situations.

The program is a joint effort of Bank of America, giant mortgage investor Freddie Mac and the Self-Help Ventures Fund, an affiliate of Self-Help Credit Union, a community development lender. Starting Feb. 22, Bank of America began offering these mortgages through its network of 4,800 local financial centers around the country, as well as through its online and call center channels. The bank plans to sell the mortgages to Self-Help, which will provide early-intervention servicing to borrowers who experience payment difficulties. Freddie Mac will ultimately purchase the loans. Self-Help will provide a financial backstop to cover default losses in lieu of traditional private mortgage insurance coverage.

Disclaimer: for information and entertainment purposes only