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Unread 01-13-2011, 05:42 PM
 
66 posts, read 89,374 times
Reputation: 25
Default How will the 25% downpay requirement affect the market?

It seems home loan is getting tough all around now.
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Unread 01-13-2011, 06:31 PM
 
Location: Laguna Niguel, CA
768 posts, read 2,430,816 times
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What 25% down payment requirement are you referring to? FHA just requires 3.5% down, and hasn't indicated that will change in the foreseeable future.
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Unread 01-13-2011, 06:41 PM
 
Location: Union County
4,915 posts, read 4,181,462 times
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Jumbos? Vacation homes? Investment properties? Are you talking residential first mortgages? Because I couldn't even imagine the crushing blow that would be to the market. lol
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Unread 01-13-2011, 09:03 PM
 
66 posts, read 89,374 times
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Fannie Mae requires: for down payment between 20% and 24.99%, there is a processing fee of 0.25 Point (your mortgage broker may charge you another 1%, which is called origination fee), which can be avoided if and only if you make 25% and above down payment. You can also choose to turn the 0.25 Point Charge into extra rate on the top of your interest rate, which is about 0.125%. Basically Fannie Mae increased the loan interest rate by 0.125%.

Generally, most people who use conventional loan may not be eligible for FHA.
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Unread 01-13-2011, 09:59 PM
 
Location: Laguna Niguel, CA
768 posts, read 2,430,816 times
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Fannie Mae just requires 5% down, but you are right, there are differences in rate between a 5% down payment and a 25% down payment. .25% of the loan amount in fee, or .125% higher in rate, won't deter many from entering into the market. Put it this way, if it wasn't announced, no one would even know about it... it'd be seen as a market fluctuation in interest rates.

That is an incorrect generality to make, in most ways FHA is easier to qualify for than conventional financing.
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Unread 01-14-2011, 05:57 AM
 
Location: Plano, Texas
1,667 posts, read 3,881,090 times
Reputation: 629
you can still get 100% financing with VA and USDA loans.
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Unread 01-14-2011, 08:23 AM
 
3,213 posts, read 6,496,919 times
Reputation: 1256
Quote:
Originally Posted by graygray View Post
Fannie Mae requires: for down payment between 20% and 24.99%, there is a processing fee of 0.25 Point (your mortgage broker may charge you another 1%, which is called origination fee), which can be avoided if and only if you make 25% and above down payment. You can also choose to turn the 0.25 Point Charge into extra rate on the top of your interest rate, which is about 0.125%. Basically Fannie Mae increased the loan interest rate by 0.125%.

Generally, most people who use conventional loan may not be eligible for FHA.
Your "facts" are completely off base. Fannie Mae requires a down payment of 5%. You don't have to pay an origination fee with 5% down if you don't want to. Your rate will be .25% higher. This holds true for any amount of down payment, 20% 30% 50%...whatever.

Processing fee .25 point??? Never heard of it.
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Unread 01-14-2011, 08:45 AM
 
4,087 posts, read 4,792,790 times
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If they required 25% then most people wouldn't be upside down or just "walk away". Sounds like a winner to me.
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Unread 01-14-2011, 08:50 AM
 
Location: Boca Raton, FL
3,891 posts, read 4,381,447 times
Reputation: 3350
Smile Really?

Quote:
Originally Posted by graygray View Post
Fannie Mae requires: for down payment between 20% and 24.99%, there is a processing fee of 0.25 Point (your mortgage broker may charge you another 1%, which is called origination fee), which can be avoided if and only if you make 25% and above down payment. You can also choose to turn the 0.25 Point Charge into extra rate on the top of your interest rate, which is about 0.125%. Basically Fannie Mae increased the loan interest rate by 0.125%.

Generally, most people who use conventional loan may not be eligible for FHA.
I'm a broker and just did a 10% down conventional loan for a buyer, score 790- no hits to the rate - boy, was her timing right but anyway - you can get a loan without points.

Don't believe everything you read and call a mortgage broker!!
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Unread 01-14-2011, 09:04 AM
 
Location: Wake Forest, NC
832 posts, read 2,036,006 times
Reputation: 604
Processing fee .25 point??? Never heard of it.[/quote]


I've heard of LO's quoting par rate regardless of credit/LTV adjustments and charging the adjusters as discount. It's the set up for the bait and switch---- I could get you that low rate, but you don't want to pay discount so now I have to raise rate.
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