The program is open to those with FICO scores down to 601 (for FHA fallout). The loan is a 5/1 ARM in the 6% range, with a loan-to-value maximum of 60%. But if you have a client for it, then we can definitely do it.

A stated self-employed program is available in the all 5 boroughs, Long Island, Westchester, Connecticut and New Jersey at very aggressive rates. The LTV maximum for this program is 70%. (For full-doc, we can go to 80% LTV with no mortgage insurance.) Rates are in the 4% range. Loan limit is $7 million.

Need A Jumbo Loan?
We have a jumbo full-doc program that has rates in the 4% range, up to $10 million for co-ops and condos in Manhattan. That market has been seeing an uptick recently.

We have FHA and conventional financing. REMEMBER: For FHA financing, the down payment and closing costs can be 100% gifted.

We can go down to 580 FICO, but the file must have compensating factors. There should be no late payments on mortgage refinancing in the last 12 months. For first-time homebuyers, there should be no late credit card payments in the last six months. (Rent checks will be needed for the last 12 months.)

Other Available Loan Programs:
● No-doc loans available on second homes and investment properties (no limit on cash-out).
● Jumbo loan financing up to $10 million (full-doc and no-doc).
● Foreign national lending, up to $2 million (with no traditional credit).
● Commercial loan programs that allow us to go to $50 million (must debt service).
● “Lite” documentation commercial funding to $3 million.

 We have private money programs as well as for quick closings.

In a December 23, 2010 memo sent to lenders in its network, Fannie Mae announced that it has decided to impose a new schedule of higher add-on fees, similar to what Freddie Mac did just before Thanksgiving. The fee hikes are slated to go into effect this spring. Some potential buyers who have high credit scores and large down payments may be surprised to learn that they are also being targeted for higher “risk-based” fees, according to the Post article.

Let’s say someone wants to buy a house with a $300,000 first mortgage has a FICO score above 800 and just less than 25% cash for a down payment. In 2010, that person would not have to pay a loan fee because their down payment and credit score signified no risk of default. This year, Fannie Mae will tack on an extra quarter of a percentage point of the loan amount (in this case, $750).

If someone has a FICO score of 679 and can put down less than 20% for a down payment, that person would be assessed an add-on fee of 2.75%, or $8,250. Last year, that fee would have been $1,500 less.

In addition, Fannie and Freddie tack on what they call “adverse-market fees” of 0.75% of the loan, just for the privilege of sitting down with the lender. Using the $300,000 example, the cost would be $750. All the fees can be paid up front as part of the transaction costs or financed with a higher interest rate on the mortgage itself.

These fees are part of a multi-layered cumulative risk-based pricing system employed by Freddie and Fannie. Every perceived risk factor in a loan transaction receives its own separate add-on fee, and some fees are based on which type of real estate that is being financed. Condominiums are assessed higher fees than standalone houses (at 0.75% when the down payment is less than 25%). Rental investment properties, manufactured homes and loans with interest-only payment features all get separate fees, all of which mean significantly higher costs.

While Fannie Mae officials declined to comment on the reason for the fee hikes, Edward J. DeMarco, acting director of the agency overseeing Fannie and Freddie, said the add-ons were “necessary” to protect both lenders from “the costs and risks” inherent in the mortgages they buy or guarantee. The Post also reported that DeMarco said Fannie and Freddie “underpriced mortgage risks” during the housing market’s boom years.

MarketWatch reported today that “cash-in refinancing” is the new trend in which borrowers tap their home equity and, instead of putting it into their pockets, are putting that money into their mortgages, especially when they want to refinance. And with mortgage rates at record lows — 4.56% for 30-year fixed-rate mortgages and 4.03% for 15-year fixed-rate mortgages for the week ending July 22, according to Freddie Mac — people will reduce their debt significantly.

Many homeowners are resorting to paying down the mortgage instead of investing in CDs or stocks. CDs don’t have the same high yields as in years past and the stock market’s volatility have made many people bearish.

Some of the advantages of a cash-in refinance include:

● By using the extra cash, borrowers would no longer have to pay private-mortgage insurance (PMI), which is required when the mortgage is more than 80% of the home’s value. The extra money would allow borrowers to eliminate PMI, thereby saving monthly premium costs.

● Borrowers can use the extra money to help them get the lowest rates possible, provided the loan-to-value ratio is less than 60% and the borrower has a FICO score above 740.

● The extra money brings the homeowner’s mortgage under the conforming loan limit so they do not have to pay higher jumbo rates. The money can also help homeowners reduce their mortgage term from 30 to 15 years to make their monthly payments more bearable.

According to Freddie Mac, 18% of all refinanced mortgages in the first quarter of 2010 were cash-in refinances — less than half of what it was in the previous quarter. However, many underwater homeowners may consider a cash-in refinance if they can find no-cost refinancing or get help from the government’s Home Affordable Refinance Program (HARP), despite being short on home equity.

In the 1960s, Fair Isaac and Company started working on a system that lenders could use to evaluate the likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual to be a man of his word. Fair Isaac sought to take human error out of the equation with a reliable system that could determine whether or not consumers were truly worthy of credit, and thus FICO was born.

Credit scoring has an enormous impact on a borrower’s ability to purchase a home. It can mean the difference between getting a good interest rate and the home of their dreams, and whether they will even be able to apply. For this reason, it is important for borrowers to understand the credit scoring process, and to know what their credit score is when they look to obtain mortgage financing.

According to the myFICO Web site (www.myfico.com), 90% of the largest banks use FICO scores for credit decisions. A 100-point difference in your FICO score can mean paying an additional $40,000 in interest payments on a 30-year loan of $300,000.

What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt without being more than 90 days late on a payment at any time in the future. Credit scores can range between a low score of 350 and a high of 850. (Anything 700 or above is considered “good credit.”) The higher the client’s score is, the less likely they are to default on their loan.

Credit score minimums have risen for mortgage applicants, even for those seeking FHA loans. It is imperative that applicants get their financial affairs in order and make sure they pay their bills on time. Improving your credit score will not only get you your house, but will also save you thousands of dollars over the life of the loan.