How To Get Financing In Today’s Tough Market

Yes Virginia, there IS a way.

Bailout is what everyone's been talking about lately, and I wanted to find out what lenders were thinking would be happening in the short term, particularly as it relates to Fannie Mae and Freddie Mac products.  According to Mark Weddle, and Dennis Duncan, both of Suntrust Bank, there are some positive sounds coming out of the purchase market. 

Mark Weddle

"Two main changes in the purchase market.  The first is that on cash-out refinances, Fannie and Freddie are both requiring  at least six one-time payments on their existing mortgage since the time of purchase.  The second is that if a purchaser has their current house under contract, but it doesn't close before the purchase of their new house, the current mortgage will not apply if two certifications are made (in writing)."

Dennis Duncan

"Not many significant changes in the investment arena.  Investment loans are still available, but there WILL be changes to the rates and points paid.  The easiest way to look at this is to consider a $100000 investment scenario:

  • a 75% loan to value would see a 30 year fixed rate at 7%, with no points
  • an 80% loan to value would see a 30 year fixed rate at 7%, with 2.6 points
  • a 90% loan to value would see a 30 year fixed rate at 7%, with 3.38 points

If you want to pay a better rate, then put more money down.  It's been that way for a long time, but will be even more important now."

No significant changes at this point, according to these guys.  Remember – put money down, and solidify your credit.  Those are the two best ways to buy a home in today's market. 

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