Is 100% financing Dead?
Short answer yes. Long Answer No.
Recently, the Mortgage Insurance companies indicated that they will no longer insure the Fannie Mae and Freddie Mac 100% loans. This applies in cases of BPMI (Borrower paid MI) and LPMI (Lender Paid MI). The important note to take away from that is even loans that have “no MI” really just have no borrower paid MI, ...
they have MI that is paid by the lender, and that too is now no longer available. So we are now seeing the 100% loans that have “no MI” with slightly higher interest rates disappearing as well as the more obvious cases of Borrower Paid MI. The official ruling and cut off was effective Monday March 31st, 2008. If the insurance certificate was not issued by then, the loan CAN NOT be done.
Not so short for a short answer, I know…now onto the long answer.
While the 100% financing programs are effectively dead, what your buyers care about is not 100% financing, but Zero Down financing…which IS STILL AVAILABLE.
I know… confusing. Let’s try to explain a little; Down payment assistance programs are available for your buyers and are very easy to qualify for. The process is easy, the approval is easy, your borrower must contribute $500 towards closing costs and that can be their first years Homeowners Insurance. The program also allows for a 3% seller concession towards closing costs! The important part of qualifying for this program is that the bid has to be structured carefully and it can not be amended after it’s been accepted. There are some novel ways to correct a transaction after the offer has been accepted, but it is much easier on you to set it up correctly the first time.
If you need help setting up a Zero Down transaction, please feel free to call me or my staff. As a quick reminder, we are a Federally Chartered Bank and lend in all 50 states. We specialize in all aspects of FHA and Fannie Mae lending and have an experienced staff that can get your tricky loans to close, and offer your easy loans a cost effective and no hassle closing.
--Keith
**If you know someone else who would benefit from these updates, please pass this link on to them http://www.realestatemortgagenews.com
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