Lender Side of Things!

April 19, 2016

I hope you had an entertaining weekend and I hope this week is going well. I had a busy weekend here at the office and it seemed like every time I left the office the phone would ring and I wished I was back at the office so I could handle what was needed fast. 

 FHA will be looking at Student loans differently in June, but I made an error on what I wrote. FHA currently will hit a borrower with 2% of the balance on deferred Student Loans, and they will be lowering that amount to 1% starting with case numbers pulled on 6/30/2016. Yep, read something and I misinterpreted it and I screwed up! Sorry! I hope I haven't lost your trust and respect and for those of you who pay to read my words of wisdom, the check is in the mail. 

Now, on to today's topic which is always fun. I hear from clients or potential clients that they don't want me to run their credit because it can affect their credit score. Credit scores are a funny thing and they can vary from day to day depending on what was paid off or charged in the past 24 hours. Inquiries are not the devil if they are all done over a short time frame. Lenders look at the past 6 months of inquiries when they look at a credit report, and if there are 3 or 4 inquiries from mortgage lenders then that is usually OK. If they see a credit card application, or a car dealer in the past 30 days then they start to ask questions. An automobile inquiry could mean that someone is buying a car and if that is the case, it could affect the debt-to-income ratio. A credit card is not usually a big deal, but if it is to an appliance or furniture store then it will definitely be asked about. 

The biggest thing we look for on a credit report is how we can improve a score for a borrower especially on a conventional loan. Improving a credit score over a short period of time usually consists of paying down some credit cards or getting a collection deleted off of the credit report. When a client looks a house on a Saturday and applies for a loan on a Monday and is in Escrow by Wednesday that is closing in 5 weeks, then there is not a lot of time to improve the credit score! If they are getting pre-approved now and they want to start looking in the summer then we have some time! Moral to the story... Get your buyers in as soon as they show interest for their own benefit! 

Interest rates are holding steady at very low levels. Below are some rates that you may find helpful as your clients search for a property: 

  • 30 year fixed conventional loan 20% down - 3.625% (3.696 APR). You can get a 30 year conventional loan with as little as 3% down up to $417,000.00!
  • 15 year fixed conventional loan 20% down - 3.000% (3.118 APR) - You can get a 15 year conventional loan with as little as 3% down up to $417,000.00!
  • 30 Year fixed FHA loan 3.5% down - 3.250% (4.671 APR) - You can get an FHA loan with 3.5% down up to $625,500.00. 
  • 30 year fixed VA loan 0 down - 3.250% (3.482 APR) - VA Loans are 0 down up to $625,500 in LA County and a Veteran can get a VA loan up to $1,000,000.00 with about 9% down. 

All of the above are based on a $400,000.00 loan amount and a 740 credit score. Loan rates are 0 point loans! Rates are subject to change without notice. More money down could reduce interest rates and lower scores will likely increase interest rates. 

  • 30 year Jumbo over $625,501.00 - $3,000,000.00 - 25% down - 3.625% (3.709 APR) - We can do Jumbo loans with as little as 15% down up to $3,000,000.00. Interest rates are subject to change without notice.