Our Real Estate Blog

The New World of Lending

March 11th, 2009 5:17 PM by Lehel Szucs

The New World of Lending
 
For the Buyer:
 
1.  There are 71% fewer mortgages available than a year ago.
2.  Tightening credit standards are now in place at 85% of our banks
3.  Buyers putting down less than 20% must have a FICO score of at least 720 with the exception of FHA
4.  All assets and income must be verified and could be re-verified at closing.
5.  Fixed rate mortgages account for 69% of funded loans.
6.  New conforming residential loan amount for LA County is $625,500 (there is still a difference in overall pricing once your loan amount goes above $417K)
7.  Only 2.9% of buyers are taking adjustable rate mortgage vs. 85% in 2005
8.  Short-sales are selling for 97% of list price, while foreclosures sell for 101% of list price.
 
FHA is the New Big Player.
 
1.  Up-front insurance premium (MIP) is now 1.75%
2.  Over 95% financing, .55% monthly and .50% for less than 95%.
3.  Down payment is 3.5% and the fico score must be at least 580.
4.  Down payment assistance programs have been abolished.
5.  Debt-to-income ratios typically cannot exceed a 45% back end, unless lender receives an automated approval
6.  Must be greater disclosure to buyer on monthly payment changes.
7.  Borrower must have a valid social security number and be a legal resident of US.
8.  Owner-occupied properties only, but “gift” is still available for down payment.
a.  For example “ Kiddy Condos” for kids in college.
9.  Chapter 7 BK – discharged 2 yrs. / 1 yr. chapter 13 and foreclosure / short sale is 3 years.
10. FHA appraisers must be certified, which will cause a decrease in the number of appraisers.
11. New FHA loan limits for single family homes:
 
Los Angeles County                    $625,500

San Bernardino County                $ 355,000

Posted in:General
Posted by Lehel Szucs on March 11th, 2009 5:17 PM

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