100% Financing has new Requirements
According to a Countrywide bulletin this morning, the private mortgage insurance companies have raised the bar for 100% mortgage loans in Charlotte and the entire country. Now to qualify for a conforming conventional mortgage loan, you will need to have at least a 620 credit score to get mortgage insurance coverage above 95%. And since all Fannie Mae and Freddie Mac conventional and conforming loans require PMI over 80% loan amont to home value, this effectively puts the brakes on all lenders offering 100% loans.
This does not affect FHA and VA loans however, as they have self-financed mortgage insurance programs. With these government mortgage loans, you can still get 100% regardless of credit score! However, the deal must make sense. (Call me for clarification on that one!)
Alternative Credit loans are also exempt from this requirement, which makes sense. Typically alternative credit is used when there is no credit file, thereby no credit score!
Getting to know your credit has never been more important than it is today. If you are considering buying a home, you need to know where you stand before you begin shopping. With credit score requirements being raised to qualify for a Charlotte home loan, don’t leave this critical part of the equation to chance! Get pre-approved now and know how much home you can buy.