You hear it every day: “There are just no loans out there. No one is lending.” Well, I’m here to tell you that this is just not true. While it is true that all lenders have become more restrictive, and the news media asks “Where did all that money go?”, there are still indeed lenders staying focused on moving forward through the morass, and doing good business with qualified home buyers.
I think we all agree that the changes in qualifying standards are good for the community at large, and good for individual buyers. Sometimes it is also helpful to have a program that takes a holistic approach to the individual applicant. There has been a lot of light shed on the downsides of 100% financing, but a buyer in good credit standing with a qualifying debt to income ratio along with other complying factors, first-timer or not, can really benefit from a good 100% program.
I work with a variety of lenders I trust in order to be able to recommend good lending sources to my clients. I say this to make sure you understand I am not recommending any one lender, and encourage any buyer to check out all their options (there are more than you think!). That said, I was struck by the program at KeyBank, as were my cohorts, and thought it worthy of some blog space. I am particularly encouraged when a lender in today’s economic climate makes a point of supporting the local community, and that is what we appear to have here. I’ll give you some details below, and would be happy to point you to a contact person at KeyBank if you’d like more info. As always, if you are working with a Realtor, please do consult them for advice and recommendations on lenders they trust.
OK, here are the main points pertaining to the KeyBank 100% program:
- Financing is 100% w/no mortgage insurance
- 30-year fixed w/no prepayment penalty
- 620+ credit score
- On the job for 2+ years
- Primary residence only
- Seller contribution allowed to a maximum of 3%
- Must have at least $500. in the bank
- Must also have one month’s PITI available (this, however, can come as a gift)
- Fees are: $395./appraisal, $300./processing, $300./underwriting
- Max 42% debt-to-income ratio
- If self-employed, must give 2 years’ tax returns
- Must have 2 years’ satisfactory rent or mortgage payment history
- Rates vary all the time, but today I’m told you’re looking at approx 5.5%
- (for more info, email me and I’ll put you in touch w/a rep for KeyBank)
Now, there is another component, and that is geographical area. There are certain areas that have been identified as fitting into the program’s guidelines. To find out if a property you are interested in fits the guidelines, enter an address here: http://www.ffiec.gov/Geocode/default.aspx
Granted, in order to meet the guidelines in Lake Oswego, you are probably looking at homes in lower price ranges and/or condos in order to qualify. If a property of interest does not fit into the geographic guidelines, you can still take advantage of this program, but would most likely need to have an income of less than $52,000. according to the KeyBank rep. with whom I spoke. This is a great program for first time buyers or those wishing to purchase a condo or starter home in Lake Oswego!
I hope this info was helpful. Please do feel free to contact me with any questions. There are still lots of programs out there with several lenders suited to those who meet credit and debt to income standards that vary with each institution.