And then the shock ........ All loans with borrowers whose credit scores are under 720
will be faced with an additional charge based on your credit score and loan to value. Those
with 719 credit scores and 60% loan to values must pay 1/2% in a fee for any type of loan, purchase, cash out or rate and term loans Those with 640 scores and 70% loan to values
will have to pay 1.75% in a new fee when getting their next mortgage loan. Two exemptions: Credit score over 720 or a loan with an amortization 15 years or shorter.
Old and new limits treated the same. This is and will become even more of a problem to those without stellar, A-1 credit who do not wish a shorter amortizing loan.
The FHA rules are much simpler. The new limits go as high as those of Fannie Mae and Freddie Mac and every loan over the old limits will have a 2 point cost associated with it.
Those loans under the new limit will remain the same. The highlights of the new FHA loans
and the old ones as well are:
1. Loans to 97% including purchases, which means 3% down.
2. Cash out to 95% for good files.
3. Qualifying with full documentation only but you can have as many cosigners
as you need.
4. Every loan has 1.5% (of the new loan) mortgage insurance premium added
to the balance. Every loan has a monthly mortgage insurance payment.
5. New limit loans will pay 2% in costs or a higher rate.
Realizing once again that these loans were adjusted to help those in need, do not try to figure out what they would look like if they weren't trying to help. Frightening! In my opinion only the high limit Fannie and Freddie loans that are looking for a 15 or 10 year amortization
are being helped and the FHA loans under the old limit, and purchases and cash out under the new limit. What ever happened to the help for those whose ARM' s were adjusting and they wouldn't be able to afford the new payment?
Maybe, just maybe we shouldn't allow the government to help! It seems strange, however,
it looks like it could be true. In their rush to help all conforming borrowers with loans up to
$417,000 who do not want or cannot make a 15 year loan work end up losing if they ever need a new mortgage and do not have stellar credit. It just doesn't seem a) right,b) fair, c)equitable, d) believable, e)logical - your choice.