Five Financing Questions with a Charlotte Mortgage Expert
Answers from Alma Jacobs, SunTrust Mortgage Manager
Answers from Alma Jacobs, SunTrust Mortgage Manager
A veteran of the mortgage and housing industry, Alma Jacobs is a mortgage manager for one of the nation’s largest and strongest financial holding companies
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Story Highlights
• Various 100% loan programs are available
• FHA and VA loans do not have credit scores requirements
• Within Charlotte, certain areas outperform others.
1. Are 100% loans still available?• Various 100% loan programs are available
• FHA and VA loans do not have credit scores requirements
• Within Charlotte, certain areas outperform others.
Yes – There are various programs available. VA is 100%. FHA accepts gifts from family members and individuals with a significant relationship as the source of the down payment. FHA also works with various non-profit agencies which offer down payment assistance such as Nehemiah and AmeriDream. These programs do not require the buyer to have any of their own funds in the transactions at the current time. Fannie Mae has eliminated their 100% programs. Some lenders, such as banks, will have what is know as portfolio loans wherein you can obtain 100% financing with a combination first and second mortgage. These loans have special guidelines and will vary from bank to bank.
2. What is an acceptable credit score?
FHA announced effective July 14, 2008, they will implement their Risk Based Mortgage Insurance Premiums. Their new guidelines will have a slight increase in a borrower’s up front and monthly premium if the borrower is looking for maximum financing (97%) and their credit scores are below 640. VA loans do not have credit scores requirements. Fannie Mae (conventional loans) guidelines use the borrowers middle credit score to determine pricing as well as the maximum amount of money they will lend a particular individual. Fannie Mae typically requires a minimum credit score of 620 with a 5% down payment coming from the borrowers own verified bank accounts.
3. Interest rates seem to be coming down, should I wait to buy a new home?
No. Every home is different, every subdivision is different, and every lot is different. You want to be able to purchase your “dream home” and waiting for the “perfect” interest rate may not be the best for you. There is no guarantee interest rates will go lower. Interest Rates are great today and if you find your dream home, you should not hesitate taking the next step in purchasing the home. As an example, if the interest rate goes up or down .125% on the rate the payment will only change by $8.00 on a $100,000 loan amount. This is not much if you consider losing the home.
4. How can I purchase a home when I have not sold my current home?
Many individuals have been in the same situation. If a person’s credit scores are over 700, there are great options available. These options can eliminate the need to sell your current home at a “fire sale price” and also give you the opportunity to prepare your home for sale. Don’t hesitate to discuss options with a mortgage professional.
5. I have heard money to buy a home is limited or not available according to the media, is this true?
No, there is plenty of money to lend for home ownership and interest rates are great. However, the biggest changes come from the following:
• The tightening of credit score requirements
• Elimination of 100% financing for investors
• Reduction/elimination of no income loans
• Elimination of the 80/20 combo loans.
This being said, there are so many options available. Call a lender today to determine the best program for you.
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