Conventional guidelines keep tightening.


Recent Conventional Loan Changes

1) Ocean and Monmouth County has been designated a Declining Market Areas for Conventional loans.

What it means: For example, if your buyer is putting 10% down they are now considered a 5% down loan. This will cost your buyer an additional $65 a month in PMI costs on a $300,000 mortgage. In addition, this also eliminates no money down loans.

2) Conventional buyers now have to pay increased fees if they are putting less than 30% down and have credit scores below 680.

What it means: For example, if a client applying for a $300,000 has a score less than 620 it will cost him around $123 more a month!

Credit Scores less than 620
Additional 2 points or approximately 5/8% to the interest rate.

Credit Scores between 620-639
1.75 points or approximately 1/2% to the rate

Credit Scores between 640-659
1 1/4 to the points or approximately 3/8% to the rate

Credit Scores Between 660-679
.75 to the points or approximately 1/4% to the rate

3) Conventional loans now require a minimum 10% down on all condominiums.

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Avoid these Restrictions : Think FHA

FHA still allows as little 2.25% down.

There are no rate increases on FHA loans until credit the score is below 585

Select Mortgage is a direct endoresement FHA underwriter draft

FHA also allows non-occupant cosigners

	STRETCH YOUR CLIENT'S BUYING POWER
SELECT will pay up to $3,600 of closing costs (or 1% of the total loan amount)
...and still offer great rates Today's Rate: 6.000% + 0 Points 6.198% APR 30 Year Fixed Rate Only 2 1/4 % down Credit scores as low as 600 Loans also available with scores as low as 540 with 2 1/4 % down, slightly higher rates apply.

FHA , DEAL OR NO DEAL

REASONS FHA WILL BE HUGE IN 2008

Reason #4 Flexible Underwriting

Subprime is dead. Clients with lower scores are either getting rejected for Conventional loans or being charged astronomical rates.

FHA does not have a minimum credit score requirement.

Select underwrites their own FHA loans. All FHA loans are initially put through a computerized underwriting system. Select, as a direct endorsement underwriter, can overturn any computerized decline if we can document compensating factors. This gives Select the flexibility to approve many more borrowers.

REASONS FHA WILL BE HUGE IN 2008

2008 THE YEAR OF FHA

Reason #3 FHA ALLOWS NON-OCCUPANT CO-SIGNERS.

Your buyer can use a relatives income in conjunction with their own income in order to qualify.

The co-applicant does not have to occupy the property.

This becomes especially important as the availability of no income verification loans have been greatly reduced. In fact, Fed Chairmen Ben Bernanke has put forth a proposal to eliminate all no income verification loans. (This proposal is still in the discussion phase and has not yet been approved.)

You may be turning away potential clients if you refer them to mortgage companies that do not offer FHA or are not experts in it. Put my 22 years of FHA expertise to work for you.

FHA, BACK TO THE FUTURE

REASONS FHA WILL BE HUGE IN 2008

Reason #2 FHA LOAN LIMITS ARE EXPECTED TO INCREASE TO $417,000.

This increase has already passed the Senate 93 to 1. The Senate is also asking for the minimum down payment requirement to be reduced to 1.5%.

These changes will allow for more FHA financing in our area. Nationally, it is estimated that FHA mortgages make up just 4% of the financing for single family homes. However, just 10 years ago FHA made up over 19% of single family financing.

FHA's higher loan limits combined with lower down payments and flexible underwriting will enable more of your clients to purchase the home they desire.

I have been closing FHA Mortgages in New Jersey for over 22 years. Please call me so I can highlight some of the ways FHA can help your clients.

RING IN THE NEW YEAR WITH FHA

REASONS FHA WILL BE HUGE IN 2008

REASON #1 : T0 AVOID HIGHER RATES

Your clients can avoid the new Risk Based Pricing* now being charged for Conventional Loans .

* The following Risk Based Pricing is now being charged on Conventional loan with less than 30% down:

1. Credit Score below 620 add 2 points or about 7/8% higher to the rate

2. Credit Score 620-639 add 1.75 points or about 3/4% to the rate

3. Credit Score of 640-659 add 1.25 points or about 1/2 % to the rate

4. Credit Score of 660-670 add .75 to points or about 1/4% to the rate

FHA still does not increase interest rates for clients with lower credit scores.

Select Mortgage Corporation is a direct underwriter for FHA. Call me with your scenarios. I can pre-flight them before you take your clients out to see homes.