A true grant of $1,500 to help buyers with their closing costs is now available from the State of Maryland. This grant adds a little more sizzle to your loan options and purchasing power. The grant assistance runs from June 28th to September 30th 2017 in EVERY county throughout the State of Maryland. A buyer wishing to use the grant must have their loan registered during this time period. The grant funds can only be used for closing costs and cannot be used for the down payment. It can be combined with the other State of Maryland down payment programs. It also must be used in conjunction with conventional loans only which require a minimum 640 credit score. Scenario #1: A buyer wants to purchase a home for $200,000. The minimum the buyer has to contribute is 3% for the down payment. The Grant Assist program will cover the BALANCE of down payment. Let's say the closing costs is approximately $9,000 and the seller has agreed to give 2.5% or … [Read more...]
The State of Maryland Supersized their Grant Assist Program
The State of Maryland supersized their Grant Assist Program - This new program will help many buyers throughout the State of Maryland. Initially the program was rolled out to help with ONLY the closing costs. But, they have just changed it so that the 4% can be used towards down payment and/or closing costs. This is HUGE news - if you are a buyer with a minimum 640 credit score. You could have your entire down payment covered by using this program, instead of the flat $5,000 the State offers through the CDA program. Example: If you are a buyer who wants to purchase a home for $300,000. The minimum you as a buyer have to contribute is 3% for the down payment. The Grant Assist program will cover that ENTIRE down payment. The seller agrees to give 3% for closing costs. The program will also cover another 1% towards closing costs for a total contribution of $12,000. And viola, you are in with no money out of your pocket! Grant Assist Funds - The Grant … [Read more...]
The Basics of Mortgage Financing
The basics of mortgage financing for each type of mortgage financing as it relates to credit, income and assets follows. We have included helpful tips that will help home buyers in situations that are unique and do not follow cookie cutter conventional financing. Credit score: Currently, the lowest credit score is 620 if no mortgage insurance is needed. And, 640 if mortgage insurance is required. Loan officers cannot manually underwrite conventional loans. They must have an Approve/Eligible in the automated underwriting system. Unlike Federal Housing Authority (FHA) loan - Conventional loans carry risk based pricing adjustments so the lower the credit score the higher the rate and mortgage insurance rate. Typically, a buyer with low credit scores will be much better served using FHA financing because the rate and Mortgage Insurance (MI) will cost less for them. Income: The maximum debt to income ratio is typically 45%. However, a Loan Prospector with good … [Read more...]