Fallout From Tighter Guidelines

In the wake of news that a dozen or so subprime lenders have recently closed their doors or been purchased, and that a dozen more are in trouble, USA Today took a lot at what's happening in the mortgage industry


They found that, to stem their losses, lenders nationwide are notifying mortgage brokers to cut back on some subprime ARM loan programs. Many of them are:

• Reducing loans for 100% of the purchase price.

  
  
  

• Reducing the number of "piggyback" loans, whereby a lender makes one loan for 80% of the purchase price and a second loan for the remaining 20% of the price at a higher interest rate.

  
  
  

• Raising the required credit score.

  
  
  

• Requiring more documentation of a borrower's income and scrutinizing the appraisal and comparable-home sales data.
  

So how will this affect your ability to get a new loan, or refinance your existing one? It really shouldn't as long as you were't a marginal candidate to being with. At this point, most of the pain is being felt by lenders who made riskier loans... and hasn't spread to the broader financial markets.

But what if your ARM is climbing to an interest rate you're not comfortable with? Call us today at (603) 472-2272 and learn how we might help....