No Shirt, No Shoes, No Mortgage
It’s getting more and more difficult for would-be borrowers in the New York region to get a mortgage, according to an article in yesterday’s Times. Mortgage brokers say many lenders are refusing loans to applicants with credit scores that are below the 680-700 range. Stated-income loans, meanwhile, are basically history, and people with lower credit…
It’s getting more and more difficult for would-be borrowers in the New York region to get a mortgage, according to an article in yesterday’s Times. Mortgage brokers say many lenders are refusing loans to applicants with credit scores that are below the 680-700 range. Stated-income loans, meanwhile, are basically history, and people with lower credit scores have to pay much bigger down payments. To add insult to injury, loans are coming with more fees nowadays, especially for those with less-than-pristine credit. One financial analyst says loan applicants with credit scores below 720 and down payments of less than 40 percent face fees between .5 and .75 percent of the loan amount. Is all this a necessary correction, or has the pendulum swung too far in the other direction, making home ownership unattainable for a huge segment of the population?
Lenders Raise the Bar [NY Times]
Chart from The New York Times.
1:32 here, I neglected to say that the 115K i have is from saving for only about a year.. now how about that 1:40. I also have grad school loans so you see 1:40 is a moronic fool who knows nothing about me and makes judgments. And 1:43 do you have a clue what the income tax bracket is for someone making 275K in NYC?
2:19 thanks for educating some of thees ignorant shpos……medical lingo 🙂
There is a lot of mis-information out there currently so I would like to clear some things up.
I am a banker/direct lender and we didn’t make any subprime loans so don’t start flipping out on me saying that I am the root of all evil and that I’m a predator. My background was in underwriting for the Bank of New York Mortgage Company based out of Brooklyn Heights on Montague St. The office is no longer there. I am currently a manager at a direct local lender that was started 20 years ago in Brooklyn.
Stated Income loans are out there but are very hard to qualify for as they have done away with the Agency SISA programs, which basically would give you a Stated Income, Stated Asset loan if your credit was over a 680 and LTV was below 90%. Those programs started out with 720 ficos and 80% LTVs but as demand increased the guidelines were reduced to 680 and 90%. Those programs are gone today but I can tell you for a fact Fannie Mae’s Automated Underwriting Engine or AUS system will spit out a verbal verification of employment condition to bascially anyone with a 700 fico and 80% LTV or less. That means that they do not need to verify you income via tax returns, paystubs, w-2s etc. Is is exactly like a Stated Income loan. Fannie Mae is bascially talking out of both sides of their mouth. The media is making a lot of hype about Stated Income loans so they pulled the product to appease the masses but left the backdoor open to do Verbal only loans. They don’t want to lose that business so they just called it somehting else. Verbal Only loans have the same rate and pricing as a Full Documentation loans. These are only happening on conforming loans not Jumbos.
Jumbos are also getting quite agressive again lately as long as you are in the top credit tiers. I don’t know where people are getting quoted 7% rates on Jumbos but they are much more competitve than that due to the Fed Stimulous program. They will allow you to go up to 90% on a purchase, 75% on a cash out refinance. They are Full Doc loan but will lend up to 45% of your gross monthly income.
30yr fixed JUMBO up to 729k 80% LTV with a 720 fico, purchase, FULL DOC
6.125% no points.
5yr ARM JUMBO up to 729k 80% LTV with a 720 fico purchase, FULL DOC
5.375% no points.
I’m not advertising rates, just showing you exactly what’s out there straight from the horse’s mouth.
In retrospect I have to say the What is partially right and if this trend continues he will be completely right sadly. I am looking to buy in FG and have 115K down payment on a 950K place with an income of 275K and above average credit but cannot find a decent mortgage. Things are tough folks..I may have to hold back for a while even though the wifey is 2 months pregnant.
considering that many people live on 40K a year, making 275K and only saving 115K of that in 2 years means you are living quite extravagantly. spending 3500 a month on rent is obscene to me.
Saving 115k when you are making 275k is not easy, that income range gets killed by AMT and if you are renting in NYC you will be lucky to take home much more than 55% of what you earn. That said, given the mortgage market right now you are going to be hard pressed to find someone to loan you 880k with only 115 down. Unless you put 20% down a loan of that size is going to be very hard to come by. With that downpayment and income you would be fine in the 600-700k range but getting close to a million is really pushing it. It’s this mentality that got the market in all this trouble to begin with, people buying what they couldn’t really afford
even when a source posts facts about how hard it is to get a morgage the people on this board are in denial. To me that says this is going to be a very bad downturn. I think many people here are overextended and about to have to make some tough choices. I think all the real estate gurus are about to learn that leverage goes both ways
1.45, its not so easy to save that in just two years. For a start, you are paying hi marginal tax rates, so say you are only taking home 66% of your income. Then say you are paying 3500 rent for 24 months, utilities and eating out a little, 2 vacations a year, running a car (none of these are unusual things in Brooklyn), buying work clothes etc. You’d probably not be near 115K in two years. You could live frugally for two years, but really, whats the point of not-living your life just so you can buy a brownstone?
I think your second point is right – don’t expect to buy a $1mil house, set your sights cheaper.
Okay, RICH and AFRAID. Fear protects their profits.
“Just read today, they are expecting the NYC price correction to top out at 15%.”
Exactly who is they? What’s their track record for predictions?