Subprime melt down affects other prime borrowers
This entry was posted on 4/4/2007 9:22 PM and is filed under Products.
That was the headline I read today in one newspaper and on Yahoo Finance section. How scary for you the public to read something like that and not know how to interpret the information so you can act.
Well lets start by saying that yes the Subprime market will affect everyone else however those that have mortgage loans below 80% of their homes value will not be affected all that much. Also those borrowers that have FICO scores (credit scores) above 660 will not be affected.
If you are in the market for a mortgage you have probably heard a few phrases recently. You must take this loan otherwise the lender will no longer offer that program as of .... date or it might have went like this...
We had your loan in underwriting and because of the recent changes we can no longer offer product A but we have found a home with product b.
Things you should ask to determine if it is true that this has happened with your mortgage application.
1. What is my credit score - If below 600 FICO and you are going above 85% there is a good chance your loan officer is telling the truth.
2. What loan to value are we qualified for- see answer to question 1. Higher LTV loans are being eliminated from the market place. We just had 2 over equity (125%) lenders just say to us the other day that they no longer will guarantee a rate until you are approved...
3. Can I see a copy of my denial letter. By law Mortgage companies have to deny your mortgage loan and send you a copy as to why you are no longer qualified to receive the mortgage loan that you applied for. Ask them to fax you a copy as proof before you sign on the dotted line on a new deal. However if the company is eliminating your program and you must close by x period, see if they can forward you any information that would show you to act now.
Good luck in shopping for a mortgage and don't hesitate to ask some questions.. Remember it is your home.
