Better Loan Options as Lenders Expand Offerings

The recent influx of improved financing options for those with limited down payment funds suggests an increasing investor consensus that the housing market continues to stabilize. As an added -and necessary -vote of confidence, private mortgage insurance providers have also relaxed their requirements over the past few weeks. Although getting a loan is still challenging and income requirements remain stringent, the growing pool of lenders competing over expanded offerings will improve financing options for millions of borrowers.

Here are some loan products that were tough to secure just a few weeks ago and are now more solidly supported:

95% Purchase Money for Loans to $417,000 that Compete with FHA.
Although this product has been around for a while now, the terms are now far more attractive. Rates for 30-year fixed loans are extremely competitive and some lenders are now more lenient with debt-to-income ratios, which were previously limited to 41% and can now go as high as 45%. Even better, some lenders are now offering mortgage insurance at significantly reduced rates, lowering monthly payments. Mortgage insurance rates can be as low as those charged on FHA loans, without having to pay the FHA’s added insurance premium of 2.25% -saving you thousands of dollars. Of the 5% down payment, 2% can be gift funds, so borrowers now need just 3%, plus closing costs and two months’ reserves.

90% Purchase Money to $729,750 for Single Family Homes & Condos!
Over the past two years, investors have been extremely reluctant to extend credit secured by condominiums, and have held to the true conforming $417,000 limit. Some lenders will now underwrite 90% loans to $729,750, however eligible projects must be in excellent standing with owner occupancy of 70% and no litigation.

Purchases to $1,225,000 with Just 20% Down Payment.
More lenders are now offering excellent equity lines of credit to “piggyback” behind super conforming loans to $729,750. This allows you to secure the bulk of your financing on a 30-year fixed mortgage at historically low rates.

30-Year Fixed Jumbo Loans to $1,500,000 with Just 20% Down Payment.

Although the rates on this product are approximately 1/2 percent higher than the super conforming first mortgage and equity line combo listed above, securing 30-year money to $1.5 million at rates well below 6% is extremely attractive for many borrowers. Rates were significantly higher a month back for jumbo loans of this size and investors were requiring 30% down. The ability to buy up to $1,875,000 with just 20% down and secure great 30-year money is a huge improvement over past offerings.

Nicholas Ballard is both a mortgage broker and banker specialized in the residential Marin market.  For assistance, please call or e-mail:

Nicholas Ballard: 415-526-1941;
Real Estate Financing
CA Dept. of Real Estate #01356374
California Mortgage Advisors, Inc.
CA Dept. of Real Estate #01170868
Redwood Highway, San Rafael 94903

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