Mar 27 2008
Other Players Slowing Down CHFA Process!
This is a great time to be a first time home buyer. Prices are right, FHA rates are low and down payment assistance from the Colorado Housing and Finance Authority (CHFA) is easier than ever to get. That is why my business and the business at Universal Lending is BOOMING.
So what is the problem? The mortgage industry. All the fall out from the past that actually has brought FHA and CHFA back from the dead is now bringing other players into the mortgage decision process. This time it is the companies that provide mortgage insurance, at one time a mortgage service that was taken for granted is now part of the decision process.
If you are doing a 100% conventional CHFA loan in a declining market (almost all of the front range), such as My Community or Home Possible you now need to supply the mortgage insurer the following: the loan application, credit report, income documentation, sales contract and appraisal for their review.
What does that mean? Best case scenario -more time (4-5 days as of today). Worst case scenario - they say no.
This is so true Jeff, this adds another hurdle to the loan approval. However the good news is Genworth Mortgage is still allowing CHFA to do 100% LTV on My Community and Home Possible which has been reduced to 97% in the local market.
Jeff, these days, how much down do you have to place to avoid mortgage insurance? In the past it’s been somewhere near 20%. Are the insurance companies requiring higher down payments?
It is still 20% down payment to not have mortgage insurance. The changes are coming in that they always offered mortgage insurance if you put less than 20% down. Now, in declining markets, which is basically all of Colorado front range, they will not do mortgage insurance on investment properties or on any cash out refinances. They also have credit score requirements in deciding if they will do mortgage insurance. They are not just a service provider anymore, they are a decision maker!