The following chart shows estimates of insurance premiums per month.
Value Monthly Premium
50,000 33
70,000 42
90,000 46
110,000 50
130,000 55
150,000 60
170,000 65
190,000 70
210,000 75
230,000 80
250,000 85
270,000 90
290,000 95
310,000 110
330,000 120
350,000 130
400,000 150
450,000 175
500,000 200
600,000 250
Monthly Mortgage Insurance Guidelines
Mortgage insurance is required if LTV is greater than 80%.
We do not charge up front mortgage insurance (except for FHA loans), only a monthly insurance.
Mortgage insurance rates depend on percent of coverage, type of loan, and loan to value.
The following rates are for a 30 yr The following rates are for a 15 yr
fixed mortgage for standard coverage*: fixed mortgage for standard coverage*:
100% LTV Rate = 0.97 90.01-95% LTV Rate = 0.56
95.01-97% LTV Rate = 0.91 85.01-90% LTV Rate = 0.23
90.01-95% LTV Rate = 0.78 80.01-85% LTV Rate = 0.19
85.01-90% LTV Rate = 0.52
80.01-85-% LTV Rate = 0.32
*Some programs may require different coverage. Mortgage rates will be much higher for applicants with low credit scores.
Rates for other terms of fixed & arms may differ.
Monthly mortgage insurance is calculated as follows:
MI = Rate multiplied by loan amt divided by 100 divided by 12
Also for some locations there is a tax on mortgage insurance. The tax is approximately 5%. So multiply the MI by 1.05 to get the mortgage insurance with tax included.
GENERAL INFORMATION
Child support & alimony payments should be received for 1 full year to count as income. Canceled checks or other verification of receipt of payments is usually required.
Gift Letters
Gifts may be from a relative, church, municipality, or non-profit organization.
A relative (parent, grandparent, sister, brother, even a fiancé) can pay closing costs, points, and escrows, if a gift letter is used. Gift restrictions for downpayments vary for different programs. See restrictions under each program.
If appraisal is less than 120 days old, it can be used.
If appraisal is greater than 120 days but less than 1 year, it must be re-certified (normally $50-$75).
Credit report is normally good for 90 days.
Student Loans - Student loan payments will normally count against the borrower even if they are deferred. If payments are not showing on the credit report, then underwriters usually count a payment of 2% of the balance owed against the borrower.
Decorating Allowance - It is not advised to have a decorating allowance in sales contracts. Generally we will have to deduct the allowance from the sales price when determining the LTV. Instead suggest that the seller pay closing costs and/or points.
Purchasing Non House Items – If a buyer wants to purchase a lawn tractor or other miscellaneous personal items from the seller, it is best that they are not included in the purchase contract. Lenders do not want to include personal items on a mortgage. We suggest a separate contract for the purchase of any personal items. If they are included in the contract, make sure to write “these items are of no value”.
Interest Rate Trend Indicator
Generally, if the 30 yr treasury yield goes up, then rates will go up.
Generally, if the 30 yr treasury yield goes down, then rates will go down.
PROGRAMS:
- 103% financing conventional
- 100% financing conventional & seller can pay 3% towards closing &
prepaids
- Special Teacher Loan
- 97% financing conventional
- 30 yr, 20 yr, 15 yr fixed conventional - Qualifying ratios up to 50-60%
- Jumbo fixed & adjustable loans (loans >$359,650)
- Interest only loans
- 1, 3, 5, 7, & 10 yr amortized arms
- Balloons
- Investment Property purchases with as low as 10% down
- Cash out investment property refinancing up to 85% LTV
- No Ratio
- Buydowns
- We can finance most condos
PROGRAM HIGHLIGHTS
103% Financing 1 unit owner occupied
This is a zero down payment program. The closing costs, escrows, & prepaids up to 3% can be financed in the loan. This allows the purchaser to buy the home without any money towards the transaction. Two months of reserves of payments are required to qualify. No income limitations.
0% DOWN-30 YR FIXED CONVENTIONAL 1 UNIT OWNER OCCUPIED
We have several 100% financing programs. The following has the best rate.
Seller can pay closing costs, escrows, & prepaids up to 3% of the lesser of the sales price or appraised value.
Debt to income ratios 33/41.
No upfront MI (only monthly MI).
Rate only slightly higher than 5% down conventional rate.
Two months PITI reserves required
Homebuyer education not required.
Borrower can not own other real estate at time of closing.
Current maximum borrower income is $44,960 per person for Jefferson, Oldham, & Bullitt Counties - if married you may use only one income so limit is not exceeded.
Based on qualifying ratios and income limitations, max sales price is in $116,000 to $125,000 range.
Gifts: Closing costs, escrows, & prepaids can be gifted.
We have other 100% financing options with no income limitations.
SPECIAL TEACHER PROGRAM
The teacher program is the same as the above 100% financing program except that there is no income limitation.
3% DOWN-30 YR FIXED CONVENTIONAL I UNIT OWNER OCCUPIED
We offer several 3% down conventional loan programs.
The sellers can contribute up to 3% of the sale price towards closing, points, & prepaids.
Qualifying ratios vary for each program but we can approve borrowers with excellent credit in the 40-50% range.
Some programs have income limitations, but others have no limitation.
Required reserves range from none to 2 months PITI.
Gifts: Borrower must use 1% of own funds for down payment. The remaining down payment, closing costs, escrows and prepaids may be gifted. Other program allows everything to be gifted.
5% OR GREATER DOWN - 30 YR, 20 YR, 15 YR FIXED CONVENTIONAL 1 UNIT OWNER OCCUPIED
For a 90.01-95.00% LTV, sellers can contribute up to 3% of the sales price for closing costs, points, and prepaids except prepaid interest.
For a 0.01-90% LTV, sellers can contribute up to 6% of the sales price for closing costs or points, and prepaids except prepaid interest.
A loan secured by an asset can be used for closing costs, escrows, & down payment.
Reserves should be 2 months PITI.
Gifts: If LTV > 80%, then borrower must contribute 5% of sales price with their own funds - the remainder can be gifted.
If LTV < 80%, then full down payment, closing, and prepaids may come from a gift.
JUMBOS - We offer fixed & ARM jumbo loans for loans exceeding $359,650.
INTEREST ONLY – We offer several interest only options.
ARMS - We offer 1,3,5,7,& 10 yr adjustable rate mortgages. The mortgages are fixed for a set number of years and then adjust based on an index. Each has a maximum adjustment for the first few years and a maximum lifetime cap. The arms are amortized over 30 years.
BALLOONS - We offer 5 and 7 year Balloons. They are fixed for a set number of years. At the end of the period the remaining balance is due. The balloons are amortized over 30 years.
INVESTMENT PROPERTY - We can finance purchases with as low as 10% down. We can do cash out refinances up to 85% loan to value.
SELF EMPLOYED - We can finance self employed borrowers. For conventional financing we require the last 2 years of signed business and personal taxes. For borrowers with income on taxes that are too low to qualify, we can finance them with no ratio programs.
NO RATIO - Normally must have 20% down. Credit must be good. Must have middle credit score of 680 or higher. Employment will be verified, but income will not be asked for or put on application. Therefore ratios will not be computed. Borrower must have 2 years of employment in the same line of work. The applicant must have 6 months reserves of payments.
BUYDOWNS - Buydowns are when the borrower or seller pays an upfront fee to buy the loan down for a certain period of time such as the first two years of the loan. Buydowns are used to allow borrowers to obtain a higher loan amount because they can qualify based on the buydown rate and allow them to have significantly lower payments for the first two years.
CONDOS - It is sometimes difficult to finance condos due to their status, age, percent of completion and occupancy rate, but we can finance most condos.
LENDERS TITLE INSURANCE – Buyers that have a mortgage are required by the lender to have lenders title insurance. The insurance protects the lender against unrecorded liens, title defects, etc.
OWNERS TITLE INSURANCE – This insurance is optional and therefore is not included in initial good faith estimates. The insurance protects the owners equity in the property based on the value at closing. The insurance protects the owner against unrecorded liens, title defects, etc. We encourage buyers to purchase owners title insurance.
SURVEYS – We do not require a survey.
PEST INSPECTION – We do not require a pest inspection.
