Weekly Mortgage Update From Tom Balk: Changes in Acceptable Debt Ratios

Weekly Mortgage Update From Tom Balk

In December, the Agencies (FNMA and FHLMC) are going to be revising their underwriting software. This version (I have been told) will only accept debt ratios to 45% of income (down from as high as 64.9%.

Currently I can do ratios to 64.9% (see success story below). So this may have a dramatic impact on how much of a house buyers can qualify for. We need to convince borrowers NOW is the time at ACT.

3.875% at No points, 5 year Fixed to $417K

I have been asked ‘Who/What is Mortgage California?’. We are a subsidiary of PHH Corporation; the 8th largest mortgage originator in the US. We are originating $2.5 BILLION in mortgage loans every month, so we are big, stable and we are good at what we do. Unlike some other lenders, we have never run out of funds to close loans.

These quoted rates are for Full Doc Purchase transactions with either no prepay penalties or a 1 year penalty and good credit. Rate ranges are shown when LTV and/or credit scores and/or loan size affects the rates offered; I hope this makes sense because rates at 900K are different form 700K and also from1.1M:

• 4.375% at No points, 5 year Interest Only to $417K
• 80% to $1.1M – 5.875% at no points 10/1 IO
• 10 year (then ARM) Jumbo- 5.375% at 1.0 Point, 75% to $2M
• 5 year (then ARM) Interest Only Jumbo-5.25 % at no points
• 30 year Conforming-Jumbo fixed 5.25% at no points (Up to $729,750)
• 30 year Conforming fixed 4.875% at 1 point (Up to $417,000)
• 30 year Conforming fixed 5.25% at No points (Up to $417,000)

As always, email tom@afirealestate.com to continue the discussion. We look forward to hearing from you.