financing programs

As I write this, I am thinking about all of the mortgage programs that we used to have. Just a year ago there used to be all sorts of stated income programs, 40 and 50 year term programs, buydown programs, adjustable rate mortgages, no PMI programs, you name it, it could be found! Just a couple of months ago, the real estate mortgage industry has tightened up to the point of conservatism! They were only looking for "vanilla" loans. Do you know what a "vanilla" loan is? An almost perfect loan...wonderful credit, high credit scores, plenty of down payment, plenty of income, many years of job history in the same industry, no credit glitches, not much debt, and the DTI ratio of less than 40%. Sound too good to be true? Yep! That is what the mortgage industry has found out as well. Now, they are relaxing their guidelines to accommodate people with less than perfect credit, not too much money, and especially in the refinance realm; not enough equity. Now, you are starting to see the lines of credit apps in the mail, the TV commercials touting debt consolidation by major lending institutions, and even advertising campaigns by the large lending institutions promoting "new" programs. It still isn't where it was last year at this time, but do we really want it to be? A good many of those programs were promoted to the wrong consumers by well-meaning mortgage originators. Some of these programs were negative amortization loans, which in the wrong hands could be detrimental to consumers. There were some very good negative amortization programs last year, but they were structured for a very specific, knowledgeable buyer/consumer. Are you looking to refinance now, out of a detrimental mortgage for your finances? I would strongly suggest shopping around. Do not give your credit information to the lenders, as every pull of credit ( unless in a 2 week time period for mortgages only) will drop your credit score. I would suggest pulling your own credit, making certain that you receive credit scores with your credit report. Take that into the different lenders and find out what sort of mortgage program they would suggest for your specific situation and needs. If that particular lender does not have the right program, then go to the next one until you find the right program for your needs. During this process, you will become more and more knowledgeable, ensuring a success for your project.
Before you go into the lenders, be sure that you look at your original mortgage documents to ensure that you do not have a pre-payment penalty on your loan. In many of the programs that the lending institutions have dissolved, there was a pre-payment penalty. In many of these pre-pays, you would not be able to even sell your property before you would owe up to 6 months of payments to your lender. If you do not feel comfortable interpreting your mortgage documents, take it either to your bank's loan officer, the title company or attorney that settled your property, a lender, or a realtor. Talk to you soon.