Good morning everyone,
I'm sure you have probably heard the news about the changes being made by FHA, but I thought I would give you a quick synopsis on the recent changes.
FHA has now approved our accepting and closing loans for borrowers with credit scores down to 500. Wells Fargo's minimum score up until this change has been 600. As you can imagine, with the additional risk involved with the lower scores, other changes have been put in place regarding down payment, source of funds, and possible required reserves. A quick review:
With credit score of less than 600, seller concession is limited to 3.00%
With credit score of less than 600, no gifts funds are allowed in order for the borrower to reach their minimum required investment
If I do not get an "approved" response when first decisioning the loan, the qualifying ratio is going to be limited to 31/36 (down from 31/43), and the borrower is required to have two months house payments in reserve after closing
If I do get an "approved" response when first decisioning the loan, the qualifying ratio is limited to 31/43 with NO exceptions
Credit score 500 - 579:
10% down payment required
Borrower must have two months house payments in reserve after closing
Borrowers down payment and cash reserves must be their own funds - they cannot be a gift
Credit score 580-599:
5.00% down payment required
Borrowers down payment must be from own funds - they cannot be a gift
If no "approved" initial decision, borrower will be required to have 2 months payments in reserve after closing
In my personal opinion only, these loan will still be a challenge. Lenders are taking on additional risk at a time when most are very much risk averse. I'm excited about the new opportunities for all of us, but I have no doubt there will be a learning process for a while on what will fly and what will not. I plan on sending out an another update next week on borrowers with no credit score and "non-traditional" credit
Showing posts with label Spring TX real Estate. Show all posts
Showing posts with label Spring TX real Estate. Show all posts
Wednesday, February 16, 2011
Friday, February 11, 2011
Lakewood Glen
Wednesday, February 2, 2011
Wedneday.. Whats UP in Real Estate
Yes.. home ownership is still POPULAR. It is what makes this business so AWESOME. I know you hear of the DOOM and Gloom... but life goes on, people get married, divorced, families blend... it is the circle of life in real estate. See a segment from Realtor.org
A substantial majority of both home owners and current renters agree that owning a home is a smart decision over the long term. That’s according to the results of a National Association of Realtors® survey of 3,793 adults conducted online by Harris Interactive.
The American Attitudes About Homeownership survey found that in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of home owners are happy with their decision to own a home – 93 percent of owners surveyed would buy again.
“Home owners and renters agree that home ownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The results of this survey illustrate just how important issues related to home ownership are to people in this country.”
The survey uncovered some differences between home owners and renters, as well. While more than half of owners are “very” or “extremely” satisfied with the overall quality of their family life, only one-third of renters report the same levels of satisfaction. Similarly, 43 percent of home owners are very/extremely satisfied with their community life, compared with 30 percent of renters.
A majority of renters – 63 percent – said that it was at least somewhat likely that they would purchase a home at some point in the future. Among this group, young adults (18-29 years old) have the strongest aspirations for home ownership; only 8 percent of young adults said that it was “not at all likely” that they would purchase a home at some point in the future.
A substantial majority of both home owners and current renters agree that owning a home is a smart decision over the long term. That’s according to the results of a National Association of Realtors® survey of 3,793 adults conducted online by Harris Interactive.
The American Attitudes About Homeownership survey found that in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of home owners are happy with their decision to own a home – 93 percent of owners surveyed would buy again.
“Home owners and renters agree that home ownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The results of this survey illustrate just how important issues related to home ownership are to people in this country.”
The survey uncovered some differences between home owners and renters, as well. While more than half of owners are “very” or “extremely” satisfied with the overall quality of their family life, only one-third of renters report the same levels of satisfaction. Similarly, 43 percent of home owners are very/extremely satisfied with their community life, compared with 30 percent of renters.
A majority of renters – 63 percent – said that it was at least somewhat likely that they would purchase a home at some point in the future. Among this group, young adults (18-29 years old) have the strongest aspirations for home ownership; only 8 percent of young adults said that it was “not at all likely” that they would purchase a home at some point in the future.
Subscribe to:
Posts (Atom)