Debt-to-Income Ratio . . . Is that a bad word?

The lending world used to consist of strict guidelines.  It was all black and white, no gray area on qualifying.  The past few years lenders have lived in the gray area and we’ve all been spoiled to the “new way” of qualifying.  You don’t have a job, don’t worry about it . . . you didn’t pay your last mortgage, ah, that’s ok . . . you don’t have any money now while paying only $500 rent and you would like to buy a $300,000 house, sure, we can make that happen. 

Those were the days, right?!!!  In the past 12 months EVERYTHING has changed and it continues to change on a daily basis.  Our beloved, lenient “all qualifying” FHA loans are now undergoing major changes as well.  Effective tomorrow (3/9/10), the maximum debt to income ratios for FHA financing through Premier Lending is 50%.  There are no exceptions or compensating factors taken into consideration.  In the past it was not uncommon for a buyer to be approved for FHA financing with debt to income ratios as high at 62%.

So, what is a debt-to-income ratio?  Well, if you’re in the market to buy a house anytime soon, you need to know!

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FHA Changes . . . AGAIN!

FHA loans are the most popular financing option for homebuyers for many reasons.  The low down payment of 3.5%, minimum credit score of 620, and flexible debt-to-income ratios makes FHA the financing of choice for over 70% of my clients. 

There are many proposed changes for FHA and while they haven’t all been set into motion yet, we have certainty of one change which will negatively affect potential home buyers.   As of April 5, 2010, FHA increased their funding fee from 1.75% to 2.25%

Further changes are in the works, so if you have found the home of your dreams, move quickly before FHA mortgages are further restricted and become more costly.

As always, I’m here to care for your family and save you some CA$H . . . it’s a pleasure serving you!



Upcoming FHA Changes - Is Now the Right Time to Buy?

The FHA’s mortgage insurance reserves fell to the lowest level in history last fiscal year and the government said more steps are needed to shore up the agency that guarantees one of every five single-family loans.   In El Paso it is the most commonly used loan program for home buyers.  The benefits include

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FHA Bailout next...?

There is a good article posted today on the Fox Business site that takes an in-depth look at this question and its ramifications.  Keep in mind that virtually all new mortgages are now

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