I can’t blame you. This is another cause to the mortgage meltdown that we are experiencing. Realistically if you don’t have 5% to put down, it is going to be even harder to get financing for the home you want.
MGIC, the nation’s larges mortgage insurance lender has now tightened up their guidelines on down payment rules. What does this mean for borrowers? Well, if you have less than 5% to contribute to your down payment…you better have a 680 credit score. If you don’t have that, then sorry, you’re out of luck.
Just to give you a little educational moment…brought to you by Kenton Becker, What is Mortgage Insurance? Well, simply put it is the insurance that lenders take out to make sure that if you don’t make your payments they will still get paid. Easy enough, right?
What’s that you ask…How is mortgage insurance calculated, well thank you, I’m glad you asked. Mortgage insurance is calculated as a premium you pay monthly if your loan amount exceeds 80% of the value of the home. For example, if a home was worth $100,000 and you borrowed anything more than $80,000, you would be responsible to pay mortgage insurance every month.
SO essentially you are paying the insurance payment. Not all that bad if you don’t have to bring in the extra cash for a down payment. Consider it financing your down payment. Well, as of March 3rd, 2008 you will have to think twice about that as an option.
For more information about this new change in MGIC’s guidelines, go to http://seattletimes.nwsource.com/html/realestate/2004185092_harney17.html
What are my options?
You have 2 options if you don’t have the money or credit to put on the line.
1st Option: FHA / VA loan.
Now, not everyone can do these loans. They are government regulated loans and it takes a very very special person to do them…that’s me! I’m just kidding, well not about the fact that everyone can’t do them. These loans are very old school, make sense underwriting, fully document everything loans. SO be prepared to show it all…literally. But the benefit is that you can do a loan with as little as 3% down…and some of that can even be covered by the seller.
2nd Option: Lease Option (Rent to Own)
Why does this make sense? Well, have you not been paying attention to all of my previous emails…ok, ok…I will explain it again, but really brief this time, this email is getting long :).
Lease options are when you lease a property for a certain period of time, with the option to buy it at a future date. It also allows you to essentially borrow someone else’s perfect credit while you get yours in line. The benefits are:
MGIC, the nation’s larges mortgage insurance lender has now tightened up their guidelines on down payment rules. What does this mean for borrowers? Well, if you have less than 5% to contribute to your down payment…you better have a 680 credit score. If you don’t have that, then sorry, you’re out of luck.
Just to give you a little educational moment…brought to you by Kenton Becker, What is Mortgage Insurance? Well, simply put it is the insurance that lenders take out to make sure that if you don’t make your payments they will still get paid. Easy enough, right?
What’s that you ask…How is mortgage insurance calculated, well thank you, I’m glad you asked. Mortgage insurance is calculated as a premium you pay monthly if your loan amount exceeds 80% of the value of the home. For example, if a home was worth $100,000 and you borrowed anything more than $80,000, you would be responsible to pay mortgage insurance every month.
SO essentially you are paying the insurance payment. Not all that bad if you don’t have to bring in the extra cash for a down payment. Consider it financing your down payment. Well, as of March 3rd, 2008 you will have to think twice about that as an option.
For more information about this new change in MGIC’s guidelines, go to http://seattletimes.nwsource.com/html/realestate/2004185092_harney17.html
What are my options?
You have 2 options if you don’t have the money or credit to put on the line.
1st Option: FHA / VA loan.
Now, not everyone can do these loans. They are government regulated loans and it takes a very very special person to do them…that’s me! I’m just kidding, well not about the fact that everyone can’t do them. These loans are very old school, make sense underwriting, fully document everything loans. SO be prepared to show it all…literally. But the benefit is that you can do a loan with as little as 3% down…and some of that can even be covered by the seller.
2nd Option: Lease Option (Rent to Own)
Why does this make sense? Well, have you not been paying attention to all of my previous emails…ok, ok…I will explain it again, but really brief this time, this email is getting long :).
Lease options are when you lease a property for a certain period of time, with the option to buy it at a future date. It also allows you to essentially borrow someone else’s perfect credit while you get yours in line. The benefits are:
- That the down payment (the reason why I am writing this article) is very minimal, basically 1st and last months rent!
- You get the opportunity to buy the home in the future at a discounted price.
- Best of all you get into the home of your choice now, rather than waiting years to repair your situation and eventually get priced out of the market.
Well, I’m going to stop there. If you’re reading this then I congratulate you for making it through the email. Your prize is in the mail…just kidding. If you have any additional questions about your options, feel free to call me or email me and I would be more than happy to answer them.
Dedicated to Your Financial Success!
Kenton Becker
kentonb@empireoptions.com
Managing Partner / Lakemont Mortgage Specialist
License # 510-LO-36929
http://www.empireoptions.com/
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