stated income loans
- HOME EQUITY LOANS
- CONSTRUCTION LOANS
- INVESTOR LOANS
- FHA MORTGAGES
- 3 – 2 -1 BUY DOWNS
- VA MORTGAGES
- AND MANY MORE
CONVENTIONAL – Conventional loans are viewed as the most secure loans because their loan-to value ratios are often lowest. Traditionally the ratio is 80 percent of the value of the property or less because the borrower makes a down payment of at least 20 percent
Conforming loan limits for first mortgages are the following:
One-family loans: $729,750
Two-family loans: $934,200
Three-family loans: $1,129,250
Four-family loans: $1,403,400
Note: Maximum original loan amounts are 50 percent higher for first mortgages on properties in Alaska, Hawaii, Guam and the U.S. Virgin Islands.
Many people are under the false assumption that it takes perfect credit to get a home loan. It would be great to have perfect credit but people are human and so many life circumstances can affect your credit score.
95% PURCHASE On conventional loans, 5% Down payment is required and closing costs can be financed up to 3% of the purchase price. First time homebuyer status not required. This program is available only if the borrower can provide to the lender income and assets documentation. If you would like to buy a condominium, Great Northern Mortgage will help you to get a loan with as little as 5% down (usually 10% down payment is required to purchase a condo).
Cash out and No cash out refinance are allowable. Single family detached, Condo’s, PUD’s and single-family second homes can be financed with no prepayment penalty.
3 – 2 – 1 BUYDOWNS -As we all know, the mortgage industry is in the middle of a major shift where high fico’s and full doc rule the day. A temporary buydown allows you to reduce the initial rate (or start rate) of a loan and, over time, the rate will increase to the normal note rate. How does it work? Depending on the specific buydown (the typical buydowns are 2-1 or 3-2-1 buydowns), your start rate will be 2 or 3 percent lower than your note rate. Every year, the rate increases by 1% until you’ve reached the note rate. The payment difference between the fully amortized payment on the note rate and current buydown rate is calculated up front and is placed in an escrow account at closing. That escrow account is accessed with every monthly payment and the difference between the payments is taken from the account. Benefits: A borrower is qualified at a lower percentage rate and therefore needs less income to qualify for the loan. In addition, the money to be put in the escrow account can come from any source other than the lender. It can come from the borrower themselves, from the seller (if it’s a purchase), from the mortgage broker or from an interested third party (like your real estate agent who wants to close the deal). It is not required to be sourced or seasoned.
Here’s an example: Suppose a loan amount of $350,000 with a rate of 6.5% and $400 a month in taxes and insurance. At 6.5% (note rate), the borrower would need to make $5000 a month ($60k a year) to qualify. But with a 2-1 buydown, the borrower would qualify at 4.5% and would only need to make $4000 a month ($48,000). During the first year, the difference in payment between a fully amortized payment at 6.5% and a fully amortized payment at 4.5% is about $435 a month ($5226 a year). During the second year, the difference in payment between a a fully amortized payment at 6.5% and a fully amortized payment at 5.5% is about $225 a month ($2700 a year). The escrow account would need to have $7926 in order to cover the difference. So for approximately $8k, a borrower is qualified at a lower percentage rate and therefore needs less income to qualify for the loan.