Well, the “New World” of Mortgage Lending is upon all of us and finding the correct loan is still not as easy. This section of mortgagesutff.com is to help prospective borrowers think about the loans that they might qualify for a home loan. In the following sections, I take a role as your “Trusted Advisor” to seek what is really best for most of my clients today.
One of the big obstacles today, as a result of the Sub Prime debacle and high rate of foreclosures we are seeing in today’s market, is Fannie Mae and Freddie Mac’s desire to credit base interest rates. This means that as of March of 2008, all Conventional loans are being evaluated on FICO scores.
Conventional vs. FHA
The object, while simple, is not an exact science to find out weather a Conventional loan or an FHA loan would give better terms to the borrower. For example, for Conventional loans, the higher the FICO or credit score, the better the interest rate for the Borrower. Other things to consider are:
- If the loan type is for a purchase one set of pricing guidelines take place.
- If the loan is a refinance, there is another set of guidelines
- If the loan is a cash out loan, which is consider a more ‘risky’ loan, another set of guidelines for setting loan interest rates is in affect.
- If FICO scores are too low, a borrower may not be able to get Private Mortgage Insurance, and
- In some cases, the better loan option may be a Government backed loan instead of a Conventional loan.
If you don’t know these differences, it can cost you money!
While this may be overwhelming, my Home Loan Finder service, along with my 22 years of experience in the Real Estate and Mortgage Industry will help me find how to best fit you to a loan or several loan options, if available.
Need some very specific information, please contact me by email at jyarrington@pulasibankkc.com |
