What Happened to 100% Financing?! April 9, 2008
Posted by GregChaffin in : Financing, Market Reports, Real Estate , trackback
The days of 100% financing are over for the time being. The exception is VA loans for our veterans. FHA is fast becoming the financing of choice for numerous borrowers for various reasons. FHA loans offer a low down payment and provide the security of a fixed payment. FHA is used when borrowers have limited funds to close requiring a minimum investment of only 3%.
There is a saying in the mortgage industry “No credit is good credit”. FHA is not a credit score driven program. Borrowers who are faced with credit limitations on conventional financing may find a solid alternative through FHA. Borrowers who have no credit established are able to obtain alternative credit sources for creditors who don’t report to the 3 major credit bureaus. This method makes it possible to “build” a credit file for potential borrowers.
Major benefits for borrowers seeking FHA financing are; New debt-to-income ratios of 31/43%. No reserves are required, Sellers in the transaction can contribute 6% towards the buyers closing cost, Borrowers down payment can be in the form of a gift letter from another person, or a gift swap program. What makes a gift swap program different, the seller contributes the down payment funds to a non profit organization that in turn make the funds available to the buyer for their down payment.
Ameridream, Nehemiah and Genisis are the organizations who make this possible for buyers.
The new loan limits for the West Texas area are $271,050.00. This means single family homes with a sales price of $279,181.00 will qualify for FHA financing. Singlewide and Doublewide manufactured homes are acceptable for FHA financing. Some restrictions apply see your lender for details.
Grag Chaffin, Coldwell Banker Mortgage Specialist
(432) 528-3192
http://gregchaffin.coldwellbankermortgage.com
Greg.Chaffin@mortgagefamily.com
Financing, Market Reports, Real Estate
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