We are obviously in a credit crunch right now. . . but, with that said, there is plenty of money available at fantastic rates. The old days of zero to 5 percent down are pretty much gone. Stated income loans (loans with no w-2’s or tax returns needed to qualify) are very hard to come by and no document loans (lenders that need to see very little financial income or account verification information) are a thing of the past.
If you have decent credit scores between 700 and 825, can document your income, and can put 10 percent down toward the sales price; then there is a great mortgage product for you. I am doing 30 year fixed mortgages now at 6.12 percent up to 729,750. That is a better rate than we have seen in years on jumbo 30 year products.
It is my feeling and my advice to my clients that we should start to move away from interest only products and switch to 30 year fixed loans. Interest only loans are still available to people who want them but lenders are now qualifying people on the basis of interest and principle payments. So even if you choose to purchase an interest only product, you will have to qualify based on interest and principle. If you think you might be receiving a large sum of money (such as from the sale of another home) that you want to use to pay your principle down and thereby lower your payments, an interest only product might be the right choice.
I am doing super Jumbo loans up to 5 million in the mid to high 6 percent range. There are certainly less lenders than there were 6 months ago but that is not necessarily a bad thing. Lenders are looking for good strong borrowers. For the best of the best they will reward you with an excellent rate.
Written by Mike Rutledge, Senior Loan Officer, First Security Loan / Edited by Dan Joy
1 response so far ↓
danjoy // May 13, 2008 at 9:49 pm
Mike Rutledge is a valuable asset to any home purchase team. I have been working with him for many years and my clients think highly of him. Although I’ve always found Mike’s rates to be very competitive, that is not the only concern when choosing a mortgage broker to work with. It is equally important that you can count on them performing as they tell us they can with respect to issues of timing. Their overall relationship with the lenders they work with is critical in this process. Mike always amazes me in this respect often having your documents at the title company ahead of schedule.