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Don Maher

Need To Know Loan Programs For 2011

Monday, February 28, 2011 - Article by: Don Maher - Universal Capital Mortgage Corp - Message

With the current lending markets changing weekly, Real Estate Professionals as well as Home Owners/Buyers need to keep up on guidelines. As the markets open up, certain investors are looking to capture markets by offering programs that were suspended after the mortgage crisis. The programs below, both purchase and refinance ones, will give you more options, and a better chance of completing your transaction.

"Stated Income" Loans

Yes, they still exist, but in the fashion that they were originally intended for - basically self employed borrowers with great credit and 40% equity. The following guidelines are required:

* Loans up to $1,000,000
* 720 credit score required
* 60% maximum loan to value
* 12 months of reserves required
* Occupied, 2nd home, or investor available

Borrowers with mortgage lates in last 12 months

Even if a home buyer has rolling mortgage lates within the last 12 months, they can still qualify for a new loan. The following requirements must be met:

* Minimum credit score of 620
* Maximum LTV of 75%
* 500k max loan
* 45% maximum debt to income ratio

Non Warrantable Condo Loans

Savvy buyers and investors are taking advantage of under-valued condominiums that are not Fannie/Freddie/FHA approved, and thus are not eligible for agency loans. There are great loan programs available for condos in projects with the following issues:

* Mixed use projects with commercial in excess of 50%
* Projects where one entity owns more than 10% of the units
* High rise projects in excess of 8 stories
* Projects where majority of units are rentals
* Condotels
* HOA Litigation on a case by case scenario

Jumbo Loans

Loans in excess of $729,750 are considered Jumbo, or Non Conforming. The majority of lenders offering these loans a few years ago have exited the market, although there are still some great programs:

* 80% LTV loans to $900,00, 75% to $1,500,000 and 65% LTV loans to $3,000,000
* Purchase, Refinance, Cash out, 2nd home, Investor, all considered

Qualify With Primary Wage Earners Credit Score

Sometimes a husband and wife may possess vastly different credit scores. Conventional financing requires that you use the lower of the two credit scores for a husband and wife. So a couple where the husband, who is the primary wage earner and has the better credit score, has a wife who also works, but has a 550 credit score, will not qualify. That is not longer the case now.

Paying off 2nd Mortgage/Credit Cards No Longer Considered Cash Out

With certain portfolio lenders, unless you are getting more than $2000 in your "pocket", your loan will not be considered cash out. So you can pay off the following items, and your loan will still be considered "no cash out":

* 2nd mortgages or lines of credit
* Credit card debt
* Student loans
* Construction Loans

Lines of Credit and 2nd Mortgage Loans Making A Comeback

Last year, there were literally no lenders offering 2nd to 80% LTV. But as the market opens up, we are starting to see 2nd mortgages make a comeback. The following are currently available:

* 1st position HELOCS to $350,000 (great for free and clear properties)
* Stand Alone 2nds - HELOCS and Fixed rate loans to $350,000
* Credit scores as low as 650
* Loan to Values up to 80%

Short Payoff Refinances

You may have heard about them, but they are few and far between, as most lenders will not entertain refinancing a loan where the current lender is discounting the principal balance. Borrowers must have the following qualifications:

* Minimum credit score of 620 to $500,000
* Max loan amount of $900,000 with 750 credit score
* Condos, manufactured home, SFR's and 3-4 unit properties eligible

It is imperative for your success that you are aligned with a seasoned, experienced mortgage professional with many, many years of experience. There is no such thing as an easy loan these days, so make sure you refer your clients to an expert mortgage planner who has a vast knowledge of all current lenders and programs.

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