What to do when you're caught in the middle of a mortage mess.Today's mortgage market has certainly gone though many sweeping changes over the past months--with over 120 lenders having shuttered shut·ter n. 1. One that shuts, as: a. A hinged cover or screen for a window, usually fitted with louvers. b. their doors this year alone--the biggest question that a borrower has is, 'What happens to me if my lender goes under before I close my loan?' The answer is simple--make sure that you have applied to a lender that is on solid footing and, if you aren't sure, consider making and application to more than one lender. A mortgage broker can often facilitate this and help provide you with approvals from more than one lender at no additional cost. If you are one of the unlucky borrowers who have been left in the lurch lurch 1 intr.v. lurched, lurch·ing, lurch·es 1. To stagger. See Synonyms at blunder. 2. To roll or pitch suddenly or erratically: The ship lurched in the storm. , the best thing you can do is to get a copy of your loan package and get yourself to a new lender as soon as possible. If a bank is not going to fund, there is nothing to do but reapply Re`ap`ply´ v. t. & i. 1. To apply again. reapply vi → volver a presentarse, hacer or presentar una nueva solicitud and do it quickly. Banks have made sweeping changes with their guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and the most important piece of advice in this market is to LOCK in your rates as soon as you can. We have found that even lenders that have gone out of business are honoring and closing their locked loans. By locking in you also ensure that you will be protected from any guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. change a bank may make mid-application. Once you are locked you are protected as best you can be. What are some of the biggest changes that we have seen these days? Lower loan to values. It's harder today to find 100% financing and the larger the loan the bigger the down payment your lender will look for. Better credit scores to get the best rate. While there are still a few banks that are not credit history driven, most banks want to see credit scores of at least 700. If you are unsure of your credit score, run it and there are ways to improve your credit if the score is low More liquidity. Banks today are asking for larger reserves from borrowers. They want to know that you have a cushion post closing, just in case that rainy rain·y adj. rain·i·er, rain·i·est Characterized by, full of, or bringing rain. rain  i·ness n.Adj. day happens Qualifying for the interest only loan. Interest only loans are still very popular, but today banks are demanding that you qualify at the fully indexed amortizing payment, making it harder to get the interest only loan No Income verification loans. They are now getting harder to find. They are being offered to those who are truly self employed and are harder to get for the salaried borrower While we have seen many changes, there is still good news in the mortgage market. There are a large number of portfolio lenders in our area that are still making mortgages at very competitive rates--you can still get a Jumbo jum·bo n. pl. jum·bos An unusually large person, animal, or thing. adj. Unusually large: jumbo shrimp; a jumbo jet. 30 year fixed at 6.75% with no points. These portfolio lenders did not get involved in the sub prime lending mess and are financially healthy and ready to lend--it's the banks that got caught up in the sub-prime mess that have made the most changes and raised their rates significantly. So, while the guidelines have changed, mortgages are still being made and will continue to be made. The storm will calm down and the correction that we are experiencing will stabilize and normalize normalize to convert a set of data by, for example, converting them to logarithms or reciprocals so that their previous non-normal distribution is converted to a normal one. and rates will settle down. BY MELISSA COHN Cohn , Ferdinand Julius 1828-1898. German botanist considered the founder of bacteriology. The first to recognize bacteria as plants, he proposed a classification system for bacteria based on genus and species. , PRESIDENT, MANHATTAN MORTGAGE |
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