Just like your new dream house has keys, mortgages have certain key rules. We recently interviewed the president and CEO of Palm State Mortgage, just to discover what unique mysteries she could unlock to help you better understand your status with the mortgage industry. In this week’s blog, you will find nine often misunderstood keys that might lock you out of, or into, a mortgage deal.
Key 1. Playing the Waiting Game:
Have you recently done a short sale or suffered a foreclosure? According to Pearl Lefkowitz, president and CEO of Palm State Mortgage since its origin in 1986, sometimes people do not realize that they are locked out of a new mortgage situation for a certain amount of time following short sales or foreclosures. “Some potential buyers are forced to wait until they are outside of the post-Short Sale or Foreclosure period to obtain financing for a new home. “
Key 2. Pause and Refresh: She added that, “If you have had a short sale or For Conventional financing, they must wait two years from the transfer of Deed on a Short Sale.” You will also need to wait two years if you signed a “Deed in Lieu of Foreclosure.
Key 3. Worst Case Scenario: If your situation went into foreclosure, the rules lock you out of new mortgages “for seven years,” for Conventional Financing.
Key 4. Being FHA Friendly: Ms. Lefkowitz also explained, “If you are For FHA financing, which requires only 3.5% down, they must wait 3 years.
Key 5. Recession Woes: She revealed another key for families who have recently endured hard times. “The Recession also caused many Bankruptcies. For Conventional financing, there is a 4 year waiting period from Discharge date on a Chapter 7 or 11.” Likewise a bankrupted individual must endure “a two year waiting period from Discharge date on a Chapter 13.”
Key 6. Light at the End of the Tunnel: In spite of the above restrictions, you should know that “Eases in underwriting, otherwise, have occurred.” So, do not be at all afraid to call for a mortgage consultation. You might be surprised at the deals Palm State can shop for you.
Key 7. Gift-Tags! Did you know, “gift money is allowed on Conventional financing with only a 5% down payment?
Key 8. Piggy-Bank! Another nice key to your financial life might be the “Cash-out refinance,” which currently allows up to 85% of one’s residence’s value.
Key 9. More Good News! “Minimum credit scores have been recently reduced on Conventional loans!”
In regards to this key, just last month, Dan Green of the Mortgage Reports, wrote, “As Mortgage Rates Drop, Mortgage Standards Expand to Include Lower Credit Scores.” He explained, “Effective immediately, home buyers and refinancing households can get approved for an FHA loan or a conventional loan with lower credit scores than during any time in the last five years.”
He added, optimistically, “Combined with mortgage rates today, which are at an 11-month low, it’s an excellent time to apply for mortgage. For today’s buyers of homes and households wanting to refinance, this is good news.”
He also stated, that for some mortgage deals, “You no longer need “perfect” credit to get access to Fannie Mae- and Freddie Mac-backed mortgages. A 620 FICO score now works just fine.”
If you are in the beginning stages of researching a loan, we recommend you also just click and read a previous articlefrom this website.
In closing, thank you for reading our blog this week. CEO Pearl Lefkowitz and the staff of Palm State Mortgage in beautiful Winter Park, Florida, wish you and your family a Happy Fourth of July week-end. Stay Safe. Drive Safe. Stay Healthy. Have fun! Happy Birthday, America!
By Charmaine Beleele
