How hard is it to get a Mortgage because of Subprime Lending issues?
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I am looking to purchase my first home in the summer with my brother. We both make very good salaries, but we're trying to steer towards an 80/20 loan. I was figuring an interest rate somewehere in the 6.5%/8.25% area for the 80/20 respectively. Also, we will both be below the 28% PITI threshold, and 36% DTI threshold. We both have great credit (both over 700), and over 5 years credit history. However, we don't have enough for a 5% down payment in our market. Are these interest rates realistic? Is it even possible to get an 80/20 loan now due to tightenings in the mortgage industry? What would be the best way to obtain the loan, through an online site or through a mortgage consultant?
How hard is it to get a Mortgage because of Subprime Lending issues?Since your DTI is rather low, or falls below the requirements, I'd skip going through a broker to save lots of $$$ on high fees. You should be able to get a loan through a regular lender, a well known one. If your fico is over 700, the minimum required to go A paper, (better than subprime, alt A) since it's conventional, if both incomes are strong you should be able to obtain a 80/20 without any concerns because of the compensating factor you have in terms of the DTI being lower, good ficos, good salaries, & if you've been at the job for quite some time that will also help, keep in mind that the main concern now for the lender will be issue with reserves, they will be asking for proof of 3 months reserves of your mortgage payment (PITI) the interest rates you placed here are within range, they may be a bit higher by a 1/4 difference due to add ons or if they aren't charging you enough points, you can always negotiate this, (The subprime market has fallen & it's best to get a conventional loan.) Again, my recommendation is for you to skip the brokers, dealing directly with a large reputable lender will save you all of the junk/unnecessary fees. You may try Wells Fargo, Bank of America, or any other, if you have a Credit union, it's your best bet. Best wishes.
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