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THE CONVENTIONAL ADVANTAGE

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Presentation on theme: "THE CONVENTIONAL ADVANTAGE"— Presentation transcript:

1 THE CONVENTIONAL ADVANTAGE
June

2 Product Facts Products 97/100% Conventional 97/100% Home Ready
Loan purpose Purchase Same Amount of Assistance on 2nd: 3% of s/p or a/v whichever is less 1st: Conforming Conventional limits 2nd: Rate will be 2% over the 1st TD rate. Amort. 10 years. A payment is counted in DTI. Occupancy and Property type: Owner occupied, 1 unit SFR, Condo or PUD, no manufactured homes Minimum Fico 640 Borrower Contribution 0% Seller Contributions Up to 3% on a 95%+ LTV Gifts – Family Members Okay No need for borrower’s own contribution June

3 How do the products differ?
97/100% Conventional 97/100% Home Ready Income Limits None 8033% of AMI or none if in low income census tracts Other Income Normal FNMA guidelines Boarder or Accessory Dwelling units – see more info on the following screens First Time Homebuyer (FTHB) At least 1 borrower must be a FTHB Not Required Non Occupant Co Borrowers N/O/O permitted to max 95% LTV with max 43% DTI for occupying borrower (no income limits) Same as Conventional but income for N/O/O will be considered in income limits June

4 More differences: Product 97/100% Conventional 97/100% Home Ready
Ownership of other Property Both occupant and N/O/O MAY NOT have ownership in other property Both occupant and N/O/O MAY have ownership in other property Homeownership Education At least one borrower one must do one of the following: complete the Framework homeownership education course ($75 fee paid by the borrower to Framework) prior to closing; or receive housing counseling from a HUD-approved nonprofit housing counseling agency (as evidenced by a signed Certificate of Completion of Housing Counseling (Form 1017)) Mortgage Insurance % 35% MI Coverage 25% Coverage (LTV’s 90.01% to 97.00%) June

5 Sample Rate Sheet Always check for the most current pricing – see page 8 of rate sheet
June

6 Major “pricing benefits” when using Home Ready
Agency fee hits for Condos and FICO HITS are limited based on FICO FICO 680+ capped at 0% for agency hits FICO – capped at 1.50% for agency hits Example: You have a 682 FICO + Condo Normally: Pricing Hits: 682 (1.50%) condo (.75%) Home Ready you would be capped at 0% fee hits – a saving 2.25% Example: You have a 644 FICO + Condo Normally the hits would be 2.75% for FICO and .75% for Condo Home Ready you would be capped at 1.50% fee hits – a savings 2% June

7 Home Ready Other Income
Boarder income (relatives or non-relatives): Up to 30% of qualifying income Documentation for at least 9 out of the most recent 12 months Averaged over 12 months Proof of shared residency for the past 12 months Accessory Dwelling Units: Rental income can be used if the appraiser can provide comps that support the value of it and provide comparable rental data. It does not necessarily have to be permitted. June

8 Homeowner Education At least one borrower on each Home Ready purchase mortgage must do one of the following: Complete: $75.00 fee(paid by the borrower to Framework – prior to closing; or Receive housing counseling from a HUD approved non profit housing counselling agency (as evidenced by a signed Certificate of Completion of housing Counseling (Form 1017) prior to the borrower signing a purchase contract. June

9 Screen shot on how to show 2nd on 1003 and DU - 97% conventional & 97% Home Ready
Be sure you to indicate on the 1003 on details of transaction that you have a 2nd. Also on your Declaration Questions on the 1003. DU details: June

10 Sample MI Chart June

11 Submit – Fees – Product Codes
Upload a 1st and 2nd – two loan numbers On the 1st package – we need complete credit package & submission sheet. On the 2nd package – only need submission sheet Fee for the 1st is $1350 Fee for the 2nd is $250 If using Contract Processor, max $1125 and indicate on submission sheet, include billing (not counted on the 3% max points and fees) Product Codes Conventional 1st 1030CH 2nd: 4030CHC Home Ready 1ST 1030HRCH 2nd: 4030HRCH June

12 Locking your loan PLEASE CALL YOUR AE WITH ANY QUESTIONS
This is a MANUAL LOCK. This will not price thru the Broker Connect. Loan must have an approval and underwriter must have reviewed the appraisal. Loan must be locked by 1:00 PST. When you have reviewed the rate sheet and you are ready to lock, PLEASE CALL YOUR AE WITH ANY QUESTIONS THANK YOU FOR CHOOSING ESSEX MORTGAGE June


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