My most popular article by far was dealing with a loan product that, surprise, is no longer available. February 1st of this year, the investor which at one time offered an unbelievable alternative to the FHA loan is no longer taking loan applications nor servicing loans. The biggest benefit to what they once offered was a 97% loan with no mortgage insurance. If you are a follower of mine and my articles, you know that ultimately that would have been covered in the rate, but I digress. The part that has gone away is basically the mortgage insurance being rolled into the rate or the ability to market the loan with no MI.
There are still high loan to value (97% and 100%), conventional loan programs available that are less expensive and better options when compared to an FHA loan. They have mortgage insurance and you will see an expense for that both on the settlement statement in the form of an upfront expense and then also in your monthly payment. Basically the same set up as the FHA loan, but the amounts are lower than the FHA loan.
Recent news stories will have you believe that the current administration is pushing lenders to make loans to lesser qualified candidates and to some extent that pressure has always been there, but what you wont find is a lender who will discuss this or approve loans that don't fit into the traditional FNMA box. We are in no way heading back to if you have a pulse, you can get a mortgage. What you will find are loan programs available that can achieve lesser down payment, no down payments, and more tolerance toward certain credit challenges than other types. Bottom line is it behooves you to find a loan officer who is very knowledgeable about all programs available today, not just your generic fixed rate or FHA/VA loans. One more way to empower you to manage your mortgage.
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