Government Loan Update to Guidelines

And in the blink of an eye – while I was checking my Blackberry – there it was. More guideline changes! Holy Cow Batman!

Many of that Nation’s Banks changed guidelines to show that FHA, VA and USDA minimum credit scores (some people call them FICO scores) are going to 620. What does this mean – since FHA has an underwriting “guideline” that allows for scores even below the traditional 580, and VA doesn’t have a minimum credit score? Well, just because FHA and VA might accept and insure borrowers with lower scores – Wells Fargo, Suntrust, Countrywide, Security National Mortgage Corporation and OTHERS are not.

We do have companies that we work with that will make Government Loans to folks with scores under 620… that’s the good news. Here’s the BAD news. The rates are higher – and because we have a rate spread LAW in North Carolina – not all of those loans will be available!

Additionally – the PMI companies listed Wake County as a “Distressed” area effective February 2, 2009. This means that the minimum credit score needed for a loan that requires PMI here is now 700. That’s STIFF!

If you are considering a purchase later this year – go ahead and talk to your lender. Let us begin the work of getting your scores “tight…” especially if you think you have a low credit score! We need to start this process EARLY! Especially in view of the fact that Government Underwriting Guidelines are changing so quickly! Call Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058.