Comments by Mortgage Professor

Loan Programs

Priced On-Line by LENDER X

Fixed-rate programs are usually identified by their term.

Fixed-Rate Programs

     40-years

     30-years

X

     25-years

     20-years

     15-years

X

     10-years

Balloon-loan programs are identified by the period for which the quoted rate holds.  The balance is due at the end of that period.

Balloon-Loan Programs

     5-year

     7-year

Adjustable-Rate Programs

The first figure is the initial rate period, the second figure is the rate adjustment period after the initial rate period ends.  ARM programs are also identified by the interest rate index that they use, and other features.  See Requirement 4.    

     1 month/1 month

     3 months/3 months

     6 months/6 months

X

     1 year/1 year

X

     3 years/1 year

X

     5 year/1 year

X

     7 years/1 year

X

     10 years/1 year

X

     3 years/3 years

     5 years/5 years

     FHA Programs

     VA Programs

     Second Mortgage Fixed-Rate Programs

X

     Second Mortgage Adjustable-Rate Programs

State Coverage

Property Types

Few lenders make loans on all types of properties

Single-family

X

2-4 family homes    

X

Condo, less than 5 stories

X

Condo, more than 5 stories

X

Co-ops

Manufactured homes 

Land

In a planned unit development (PUD)

Farms

Commercial

Alternative Documentation

The precise details of alternative documentation requirements may differ a little from one lender to another.

“ Stated income”, “stated assets”, or both:  income and/or assets are disclosed but not verified by lender.   

X

“No ratio”: maximum ratios of housing expense and total expense to income are ignored by lender.

X

“No income”, “no assets”, or both:  income and/or assets are not disclosed.

 Shoppers should expect to pay more for a waiver of escrows or a float-down, less for accepting a prepayment penalty.  A float-down is a lock plus the right to a lower rate if market rates decline.  

Options

Waive escrow of taxes and insurance

X

Prepayment penalty

X

Float-down

Interest-only

X

Temporary buydown

Special Loan Purposes

All of these cost more than loans taken out to purchase a home for permanent occupancy, or to refinance with no cash out.

Cash-out refinance

X

Use house as vacation or second home

X

Rent out house

X

Borrower a non-resident alien

Construction loan

Bridge loan

Maximums and Minimums Across All Programs

 Max & Min of Lender X

Warning!  The maximums and minimums vary for different programs.  For example, the longest lock might be available for ARMs but not FRMs.  Further, the stated maximums and minimums are not likely to be available on the same loan. Don’t expect to get a 107% loan, for example, if you have a 540 credit score.  (Note: you can get your credit score on www.myfico.com.)  Housing expense is the sum of the mortgage payment, property taxes and homeowners insurance. 

Maximum ratio of loan to value

107%

Minimum credit score

540

Maximum loan size

$4 million

Minimum loan size

$10,000

Maximum ratio of housing expense to income before taxes

65%

Maximum ratio of housing expense plus other debt payments to income before taxes

65%

Longest lock period available

60 days