This Tuesday February 26th I received an e-mail with information regarding program changes concerning 100% financing. It seems the MI (Mortgage Insurance) Companies will know longer ensure borrowers below 680 needing 100% financing. In fact in order to get financing above 80% anymore you need a minimum of a 620 and that will take you to 97%. Why are these changes happening? The lenders are not the culprits in this, the MI companies such as, AIG, MGIC, and United Guaranty are not willing to ensure borrowers anymore over 80% unless they have a 680; therefore the banks/lenders cannot lend the money to the borrowers above and beyond that amount.
I do think as the "credit crunch" and "mortgage meltdown" become more isolated and "seasoned" the standards will relax again, however only time will tell when and for how long. Most of what we are seeing in today's market is overreaction to underlying problems. But just like any other dilemma just give it time and we will see things get back to normal. With all of this being said there are still a lot of programs out there specifically designed for "first time home buyers" that will allow for 100% financing below this guideline. For instance, MHDC (Missouri Housing Development Corp.), USDA financing or "rural development" financing and FHA (Federal Housing Administration) financing just to name a few.
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Thursday, February 28, 2008
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