Subprime Mortgage Lending ? What's happening? [mortgage-assumption.blogspot.com]
Over the past two years, it seems that every time a newspaper or turn on the television, confronting the issue of subprime loans. Everyone seems to have something negative to say. It seems that the root of all evil!
It 'true that the sub-prime loans, many things that is not particularly positive. For example, for loans, which has developed a high risk? For the sub-sub-prime mortgages, the borrower does not-very-very good, obviously. Often the person whoconsidered necessary in order to borrow at high risk, is the person whose credit rating is tarnished, and thus is considered as someone who is more likely to default on the loan. Subprime lenders typically specialize in this area. They tend to ask more, both in taxes and interest on the risk of default offset.
How can we tolerate? Has a lot to do with greed. Borrowers were greedy and wanted a way to homes that do not really afford to buy.
Subprime Bankers and mortgage brokers were greedy and offered to people who borrow money from everyone. Just add access to money and low interest rates in the mixture, and the risk of catastrophe.There was a time not long ago you could take against the equity in your home â€" an amount equal to 125% of its value. Although interest rates were low, many people have started their home or outside the lines of credit and refinance home loans > Equity. At the same time, the U.S. real estate markets have grown more quickly than ever before. These people thought it would be easier to sell your house or refinance again if she wanted. This growth leads to an extravagant event, but inevitably, the decline in the housing market.
At this point, these people are at an impasse.
You are not able to sell their homes, the value is far from being the amount of mortgages they hold. You are in a negative position> Equity: the mortgage is greater than the value of the house and their savings are not sufficient to fill this gap. They have an adjustable rate mortgage (ARM), which is steadily increasing. There's a lot of problems for many people! The inclusion of the houses are at record levels. These items make matters worse, when the houses are auctioned for a fraction of the total value of the contract.There are several other types of subprime loans exist, which canIf you want the temptation of a borrower who has no money for a down payment. An 80/20 mortgage is one of them. This is the epitome of greed, not possession of an ounce of responsibility for borrowers with loans. Eighty percent of the asking price includes a fixed rate or variable rate conventional mortgage. Then borrow the remaining 20% of the price of a credit against the equity in your home. The rate of mortgage would be higher. The creditor may decide toThe adaptation of some of these mortgage on a whim. Negative amortization mortgages and mortgage rates motivated only by greed. Both types of benefits that the lender not the borrower, as time passes, the loan will only increase. While the monthly payments are not too large, the last five or ten years of the loan, none of the principal has been paid, and there is a large "balloon payment" in the hope that the borrower, if the term expires.< /p>
These are just some things thatProblems with subprime loans. Keep an eye on the plans of guides that are actually cheaper for the lender!
http://www.americanequity.equitylinesite.com/2009/12/19/subprime-mortgage-lending-whats-happening/
Recommend Subprime Mortgage Lending ? What's happening? IssuesQuestion by drp2505: How hard is it to get a Mortgage because of Subprime Lending issues? I am looking to purchase my first home in the summer with my brother. We both make very good salaries, but we're trying to steer towards an 80/20 loan. I was figuring an interest rate somewehere in the 6.5%/8.25% area for the 80/20 respectively. Also, we will both be below the 28% PITI threshold, and 36% DTI threshold. We both have great credit (both over 700), and over 5 years credit history. However, we don't have enough for a 5% down payment in our market. Are these interest rates realistic? Is it even possible to get an 80/20 loan now due to tightenings in the mortgage industry? What would be the best way to obtain the loan, through an online site or through a mortgage consultant? Best answer for How hard is it to get a Mortgage because of Subprime Lending issues?:
Answer by Marty S
David, The subprime market is not affecting the prime (or A+) market. The 80/20 is still alive, and with your scores, I could get you a loan no problem. Just shoot me an email if I can help. msmith@premierloangroup.com I think a real person is better to deal with, simply because a website is not going to give you personal attention. Thanks again! Marty
Answer by mmuyiwa
I have been going through a broker. I'll admit that it is largly because of my timne constraints and the relationship I have built with him. He is in the business of shopping for loans. His contacts and daily use of market changes keeps him at a pc looking for the right deals for me. If you have the time to dedicate to this task, you can save the broker fees. It seems your numbers are on the mark, but loan approval is not the real hurdle. Underwiting holds the real power in this market. This is where the time and aggrivation may become an irritant. Truthfully, this is where the value comes for me to hire an underwriter. He is currently handling negotiations with three underwiting departments for three sli8ghtly different products. He knows my goals, strategy and thresholds and is held accountable (his fee) for getting me what I want/need. Best wishes!
Answer by katie s
we have moderate credit, a 20% down payment, and low diebt and we got our mortgage at a 6.125% rate in less than a week from our bank. you should have little problem with your situation and good credit and income
Answer by †♥♥FLORECITA DIVINA
Since your DTI is rather low, or falls below the requirements, I'd skip going through a broker to save lots of $ $ $ on high fees. You should be able to get a loan through a regular lender, a well known one. If your fico is over 700, the minimum required to go A paper, (better than subprime, alt A) since it's conventional, if both incomes are strong you should be able to obtain a 80/20 without any concerns because of the compensating factor you have in terms of the DTI being lower, good ficos, good salaries, & if you've been at the job for quite some time that will also help, keep in mind that the main concern now for the lender will be issue with reserves, they will be asking for proof of 3 months reserves of your mortgage payment (PITI) the interest rates you placed here are within range, they may be a bit higher by a 1/4 difference due to add ons or if they aren't charging you enough points, you can always negotiate this, (The subprime market has fallen & it's best to get a conventional loan.) Again, my recommendation is for you to skip the brokers, dealing directly with a large reputable lender will save you all of the junk/unnecessary fees. You may try Wells Fargo, Bank of America, or any other, if you have a Credit union, it's your best bet. Best wishes.
Answer by Yanswersmonitorsarenazis
I would never recommend using an online lender for your first purchase transaction. You will be dealing with someone with marginal experience at best. Some of those companies actually process their loans in India. I don't know about you, but I'd rather be able to sit down face to face with someone the first time I borrow a couple hundred grand. Plus, almost all loan officers/mortgage brokers work on commission. This means you have someone working for you that will not receive a penny unless they close your loan. Which should mean they work extra hard to make it happen, compared to some salaried processor at a call center for some random online lender, where they get paid regardless of whether your specific loan actually closes. The rates you mention are definitely in range, in fact the first mortgage could easily be .25% lower. I'm closing someone next week 6.125%/7.375% 80/20. Similar profile to yours. I'd recommend getting a couple referrals to loan officers from friends, family, coworkers, etc... Talk to at least a couple different brokers or bankers. Everyone does things a bit differently, and some have investors and products that others won't, so the offers could vary quite a bit. But with the profile you state that you have, you should very easily qualify for 100% financing. Ask if a 75/25 would save money over an 80/20 (it should). It's getting more difficult to get 100% financing with scores under 620. That's where the tightening is taking place, along with the reduced documentation (no income verification/stated income loans). You need neither. Anyone pitching you a short-term ARM, you should probably avoid. Fixed rates are right about equal with a 5 year fixed ARM right now, so why bother? Need anymore info, you can feel free to email me through here.
Answer by Jackson
It is going to get harder for a lot of folks to get a mortgage for their house but I don't think you are in that group. Sub primes are difficult to finance folks-you are not. Do your shopping until you are convinced it is the best deal for you. If you are in the market for a mortgage, home equity loan, or refinance get up to 4 FREE No Obligation Mortgage Rate Quotes at http://www.m-o-r-t-g-a-g-e-r-a-t-e.com LEARN HOW you can save some serious money with http://www.h-o-m-e-e-q-u-i-t-y-l-o-a-n.com and FREE Home Equity Loan Information Get details on a FREE HOME SECURITY SYSTEM http://www.h-o-m-e-s-e-c-u-r-i-t-y.com
Answer by ron d
Don't good sub prime........If someone try to take you sub prime.....try another broker......................
