Loan Options

 

New South Mortgage offers a wide selection of loan packages to meet the needs of each customer’s unique situation. Because we work with many lenders, we take the hassle out of shopping for a loan by doing the shopping for our clients. Our long time relationships with lenders also enable us to offer discounts and rates not available elsewhere. We assume the overhead costs of the lenders and as a result we can offer lower rates. Whether you are a first-time home buyer or purchasing a million dollar second home, New South Mortgage develops creative solutions for every customer. A few of our loan options include:

  • Conventional fixed and adjustable rates insured by Fannie Mae and Freddie Mac
  • FHA loans for borrowers with credit scores as low as 580
  • USDA and VA loans that provide 100% financing
  • Government HARP and HASP refinance loans that require no equity to refinance
  • Jumbo loans up to $2.5MM
  • The Zero Loan

 

WHAT IS THE LOAN PROCESS?

A mortgage pre-approval is typically accomplished with a telephone interview. A prospective borrower calls and the questions begin. There will be lots of questions as this critical phase of the process is akin to the discovery period in a trial – you’ll need to disclose everything. Expect to answer queries on what you do for a living, how long you’ve been employed in your current field, and what your salary is. If there is a co-borrower, they will have to answer the same questions.

Every dollar in checking, savings, investments and retirement accounts, also known as assets to close, as well as gifts from relatives and non-profit grants, has to be accounted for. Essentially everything appearing on a borrower’s asset-radar-screen has to be documented and explained.

If you were previously a homeowner and sold your home in a short sale, or if you own a home now and plan to keep it as an investment or rental property, there are new and specific underwriting guidelines created just for you. In these cases, full disclosure of your credit and homeownership past can potentially eliminate unforeseen mortgage approval woes.

For instance, FannieMae has a new underwriting guideline called “Buy-and-Bail,” for current homeowners’ planning on keeping their existing home as an investment/rental property. Properties not meeting the 30% equity test for “Buy-and-Bail” result in additional asset requirements to purchase a new home. Buyers with a short sale history may have to wait two to three years before they are eligible for mortgage financing again. Full vetting of your previous mortgage life will save you the dreaded we-have-a-problem call from your mortgage lender.

It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be. This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary.

If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this.

The reason the mortgage approval process is now so rigorous is simple. Avoiding defaults and loan buybacks has become the primary goal of mortgage lenders. Higher standards are reducing loan defaults, which should mean fewer foreclosures in the future. Government data shows that less than 2% of loans originated in 2009, that were resold to Freddie Mac and Fannie Mae went into default after 18 months, down from more than 22% default rates for 2007 loans.

So when your lender requests specific documents from you, give it to them just “because they said so.” Excepted from Forbes.com.

BAD CREDIT?

Many people don’t realize that certain loans can help people with bad credit. Need a home mortgage, but concerned about bad credit? You’ve come to the right place!

We can tell you about loan programs that can get you into a new home – even if you have less than perfect credit – because the loans are insured by the federal government. If you’ve had accounts forwarded to collections, have filed bankruptcy in the past, or have high debt, you still may qualify for an FHA or other portfolio mortgage options. These loans can work for you even if you don’t have much cash for a down payment or closing costs.

We’ve worked with many people who described themselves as having “bad credit” – but who are now homeowners! The truth is that many more people qualify for FHA mortgages than for traditional mortgages. We even have FHA lenders that will allow down to a 580 credit score in certain situations.

Our FHA specialists are ready to work with you to turn your dream of owning a home into reality. They’ll never judge you based on your credit history, and can tell you the specific steps you will need to take to own a home. Don’t hesitate to apply!”