Doc type - Full doc is always the best way to get a lower rate. Any time risk is involved the rate will go up. See examples below.
Reduced - Stated income, Employment and Assets verified (prime)
No Ratio - Employment and Assets verified, Income NOT stated or verified (prime)
SISA - Stated income, Stated assets but Employment verified (prime)
NINA - No Income, No Assets, Employment NOT verified( prime)
Stated - Income Stated, No assets needed, CPA letter or W2 stated or below 65 LTV. (subprime)
Assets - 3 to 6 months in the min... If you have a lot of assets you can get a prime loan at 52% DR and I say 52% because that is the highest I have ever done. For subprime you do not need assets for a refi or purchase below 90 percent.
DR (debt to income) - To be prime you need to be at 38% or less but you can get away with 45% and I have even seen one at 52 percent but they had low LTV with 500K in the bank. For subprime you need to be below 50 to 55 percent. The crazy thing is Alt-A you can be at 65 percent.
NDI (Net Disposable Income) Well this is the cash you have after you pay all your bills. For family of 1 you need 700 and 100 per family member. ALT-A it does not matter.
Mortgage and Rental Histroy... Again we need two years or a letter from a family member (rent free letter) Going Conforming you can have 1 late and Non maybe a rolling. Rolling is when you are 30 days late more than 1 month in a row and up to 6 is counted as 1.
Loan To Value... Depending on your score! For subprime full doc you can go up to 100 percent and stated 90 percent. As for prime you can go up to 100 percent on a conforming program but full doc. All other doc types depend on your credit score. Keep in mind that no all bank can go 100 percent on subprime and
So is prime better or subprime? Every person is different and sometimes it is better to go subprime but very rare.
PMI and TAMI... Private Mortgage Insurance and Tax advantage mortgage Insurance is only for Prime loan. PMI is a separate payment and TAMI is added into the rate. What is better? Thats up to you!
Keep in mind that all this could change tomorrow and that other companys may do it other ways. I hope this helps you. Like Dionlawoffice said... Do what is best for you. A good loan officer will give you options and work have to take you prime or get you an uplift. Always ask for a Good faith est and get the ASK for the HUD before you go to the closing table. After reviewing the HUD take it with you to the closing table and if it is off just don't sign and walk away. The loan will still be there. Check the NOTE for the rate and prepay at the closing. REMEMBER you have 3 day to cancel the loan on a refi. Make sure you ask for the fax number to the title company and for the loan officer. As for a purchase... When you sign you're done.
What if I listed my home on MLS and now I want to refi? You must remove the sale sign and remove the listing from MLS. On Conforming you can not refi till after six months and Nonconforming you can lock in your rate right after.
As I think of thing I will add to this. To be continued.
Check Out Tuscani's Credit 101 at http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654
fused111 wrote:Nice thread! How knowledgeable are you with prime jumbo loans and land loans (raw land)?
OneMortgageGuy wrote:I really don't know too much about land loans but I do know if you buy the land a build you can do a "refi" after the home is complete on a prime loan.As for prime jumbo loan... What would you like to know?I live in Hawaii and the average price of a home is 650K and climbing. I qualify for
fused111 wrote:Nice thread! How knowledgeable are you with prime jumbo loans and land loans (raw land)?an A Paper Loan, problem is they requiring 20% down on a 750K house I want for the best rate. Too much, I am concerned my wife and I will not have any reserves available in the event one us becomes sick or disabled. I had a rate locked in at 6.2 about six weeks ago not sure if they have changed since. My question is will a mortgage broker have loans available to us where we put down 10% and pay a slightly higher interest rate. My wife works in escrow, and I would think she would know moreabout this but she doesn't.
fused111 wrote:OneMortgageGuy I just PMed you, check your messages at the top of the screen.
Message Edited by fused111 on 06-27-2007 07:22 PM