The highest house prices are approaching. As with the 17th century tulip mania, everyone must take the path of home ownership.
Now even the first buyers without a down payment can take part in the promotion. This means there will be no skin in the game – like in the good old days of Great Mortgage Meltdown.
Upfront loans of up to $ 1.25 million are not available if the main employee has at least an average FICO credit rating of 700.
If you do not show sufficient income from your main job or income from self-employment to qualify, you can document your income using bank statements averaged over deposits on your personal bank statements over the past 24 months.
Unpleasant prices for this so-called combined 80/20 mortgage. But beggars do not have to choose.
The minimum “minimum rate” on a 30-year mortgage is 4.5%. After the first 5 years, it is subject to an initial adjustment. The second mortgage has a minimum rate of 9.99% per annum with full amortization over 15 years.
Here’s an example. Let’s say you buy a home for $ 1.25 million. The first mortgage rate of $ 1 million is 4.5% with an original principal and interest payment of $ 5,067.
You then take out a 15 year fixed rate loan for the remaining $ 250,000 at 9.99% with a repayment of $ 2,685.
Let’s say the monthly property tax is $ 1,302 and the monthly payment on fire insurance is $ 200 per month. Then your total payment for the house will be $ 7,952 excluding possible HOA fees.
The only significant differences between this current crop of exotic zero rate mortgages from last year’s so-called non-downgrade subprime category are today’s mortgages, which prohibit air payments and prepayment penalties thanks to the 2010 Dodd-Frank Act.
And the current minimum average FICO score of 700 points is higher than last year.
But remember, race to the bottom until the Great Recession. This has always been due to competing mortgage lenders undermining other guys ‘or girls’ underwriting standards. Take this to foreclosure prevention.
How about another memory craze?
Can you fog up the mirror? Of course you can. Invisible mortgages are now available with a discount of just 20% on purchase and 25% on home equity when refinancing a $ 3 million loan.
No income or job listed? No tax returns? No roots? Not averaging bank deposits over 12 or 24 months to calculate income? You only need a page of one of your bank statements to receive an advance payment, provided that you are not receiving 100% gift funds.
Don’t worry about the lender seeing these bounced checks or other financial hardships on the second page of your bank statement. Rates start at 4%.
How about investor tools? Believe it or not, investment property mortgages start out even cheaper than primary home mortgages. How about 3.75% on a 30-year mortgage, adjusted after the first five years?
You need a minimum of 15% down. The loan amount is $ 1.5 million. You will be charged a three-year early repayment penalty (the early repayment penalty is 80% percent for six months).
If you are considering one of these mortgages because you cannot qualify for the traditionally cheaper Fannie or Freddie mortgage, let’s get down to business first.
Think about it. Housing prices are peaking. If you’re not three times confident that you can handle higher home payments, have a family lifebuoy to rely on, have many, many cash reserves, and don’t have the courage to weather a potential downturn in property values, then don’t do it. Do not overdo it.
Freddie Mac appreciated the news: IN 30-year flat rate on average 2.9%, 8 basis points lower than last week. The 15-year fixed rate averaged 2.2%, down 6 basis points from last week.
The Mortgage Bankers Association reported a 1.8% decline in mortgage applications last week.
Bottom line: Assuming that the borrower receives an average 30-year fixed rate on the corresponding loan of $ 548,250, the payment last year was $ 38 more than this week’s $ 2306.
What I see: Locally, highly qualified borrowers can obtain the following fixed rate mortgages for 1 point: 30-year FHA at 2.25%, 15-year standard at 1.875%, 30-year standard at 2.5%, 15-year regular a high balance ($ 548,251 to $ 822,375) at 1.99%, a 30-year regular high balance at 2.625%, and a 30-year fixed large balance at 2.75%.
Eye-catching Credit of the Week: Giant 30-year mortgage with adjustment after 10 years starting at 2.25% with 2 points.
Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or firstname.lastname@example.org. His site www.mortgagegrader.com…