How To Gain Access To Available Loan Programs
By Paul Esajian on October 11, 2013
The mortgage industry has gone through some fairly dramatic changes over the past five years. Countless mortgage companies, brokers and lenders have gone by the wayside as a result. We are left with a core of approximately six main lenders and a handful of others trying to carve out a niche. While there have not been many changes in programs or guidelines over that time, it is still important to know what is going on. Niche programs come out every now and then, many of which may be a perfect fit for you. It is important to familiarize yourself with all of the loan programs available, as there may be one suited to your needs.
Programs, interest rates and new guidelines can change at any time. What you may have thought would work last month, may not be available today. On the flip-side, what you may have thought was impossible, may not be anymore. Large lenders are very good at conventional purchases and programs, but they most likely do not have access to many investment programs. There are a few lenders that have started to dip their big toe back into the stated income pool. These loans are largely for investment deals, but they are out there.
To gain access to the newest programs, reach out to mortgage brokers and lenders. Explain to them exactly what it is you do and what kinds of programs you are looking for. You may get laughed at when you tell them your intentions, but the better mortgage brokers will keep your name and number on file. They will then call you every time there is a change in a program or something new hits their desk. For every ten calls you get, there may be only one program that is useful to you, but that program could give you access to a deal that you would have had a tough time getting otherwise.
Just recently, there was a change in the way FHA loans are underwritten and approved. The credit score requirement increased along with the amount of monthly private mortgage insurance (PMI). If you are looking to sell, and your target market was FHA buyers, you may need to change you plan of attack. The same could be said regarding interest rates. These have the potential to change every day. If you were calculating a purchase on rates that were a half point higher, it may change the way your numbers come out and make the deal less attractive.
Many outsiders assumed that it was short term loans, like the two and three year adjustable rate mortgage (ARM) products, that got buyers in trouble in the mortgage crisis. If used correctly and in the right situation, these loans could be a perfect fit. Find out the guidelines and parameters with your mortgage broker or bank and see how much lower the payments would be. If you are looking to hold a property for a max of one year, this could be a far better option than the standard 30 year fixed rate mortgage.
Mortgage programs are constantly being updated and changed. It is important to your business to know what is going on and if there are any new programs that would benefit you.