Risk Based Lending
April 24, 2008
This morning we had a meeting with our agents and our in-house mortgage specialist, Peter Mastrangelo. CTMove Mortgage
Though the mortgage market is changing daily, Peter focused today on two aspects of the residential mortgage market, Risk Based Lending & Declining Market.
Both Fannie Mae and Freddie Mac, the two largest buyers of residential mortgages, have instituted “risk based” lending. According to Peter home buyers with less than 30% down (that is most of our buyers) and who have a credit score of under 720 will end up paying more for their loan in the form of additional points (each point being equivalent to 1% of the mortgage amount) OR a higher interest rate or some combination.
The good news is that with increased FHA mortgage limits, now $440,000 in our area, the risk based lending premium can be minimized as FHA doesn’t add on until a FICO score reaches below 620. Everyone agreed that we love Government loans (FHA/VA) and that for 1st time buyers, CHFA will generally beat everything else on the street.
Entry Filed under: Mortgages. .
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1.
Katie Keough | April 24, 2008 at 6:36 pm
We definitely appreciate the CHFA because without them we would not have been able to buy into our first home with saving for multiple years first!
2.
Debbie Bonanno | April 30, 2008 at 1:15 pm
It’s a great market for the first time home buyers as now there are more affordably priced homes to choose from.