Recently, Non-Prime or Sub-prime mortgages have started to make their way back into the wholesale mortgage market through the Mortgage Broker community, enabling previously unqualified buyers to obtain financing on a home. Several of the available programs that have caused the largest impact are the self-employed bank statement program on credit sores above 600 as well as the buyers being able to obtain financing immediately after a short sale with a credit score above 500. Of course, the restrictions and guidelines are considerably tighter than during the “Sub-Prime” hay day, but, these programs can certainly benefit buyers who genuinely experienced hardships during the down turn and were forced to short sale or worse, have their property foreclosed upon. Completed Bankruptcy’s also are acceptable in many “Non-Prime” products as well. Interest rates are also reflective of the risk involved in these loans, as well as Loan-to-value(LTV), but several doors have opened in the last 6 months that were only a pipe dream in recent years. Other programs that have benefited the South Florida housing market, include a Condo-tel as a acceptable property type for financing as well as Foreign Nationals being able to obtain financing. More than likely, the greatest resemblance to previous mortgage options, is the Stated Income/Verified Assets program, this program allows self-employed borrowers to “State” their income amount that they earn on a Yearly basis. This “no income verification” loan resembles many previous mortgage loan programs of yester-year. While these loans are similar in description to previous “Sub-Prime” loans, guideline restrictions are considerably stricter and must pass the proverbial “smell” test with the wholesale lender to make sure borrowers are in fact qualified and have the ability for repayment. Eligible property types include Single Family Residences(SFR), Condos, Townhouses, 2-4 Units and Condo-tels as previously discussed. Occupancy types include Owner occupied, Non-Owner occupied and Second homes. Loan amounts up to $1 million are available and 2nd mortgages are also available. As always, speaking to a mortgage professional is highly recommended, as a knowledgeable, experienced and licensed professional can make navigating your way through the sea of products a much easier process. Mortgage Brokers possessing the full array of products available to buyers in the Non-Prime market will increase the financing opportunities and closed sales in the South Florida real estate market. Knowing your options is a consumers best friend, and knowledge is power!!!
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