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There is currently a “mini refi boom”, so 15 day contingencies are the rule in purchase contracts now, even though lenders can still close escrow in 3-4 weeks.
For lower priced home FHA loans (conforming under $625,000) can now be secured with as little as 3.5% down. Â FICO scores as low as 600 may still allow a buyer to get a loan.
Loan files are being audited now with 4506T forms signed by borrowers, allowing the lender to verify to verify income repored to the IRS in earlier tax filings.
Jumbo non-conforming loans require 30% down or more and good FICO scores (720 is the magic number for the best rates). Â It is not untypical for higher priced home to also have creative financing with a conforming 1st loan and owner carried second. This may not be a bad deal for a seller, who will usually get more for their home, plus a relatively high return on their investment compared with other options.
Don’t expect jumbo non-conforming rates to come down anytime soon as they are driven by liquity, which may not improve until the second half of this year.
Some lenders will allow up to 3% seller concession credits back to the buyer (for closing costs) in order to make the deal happen. Â If the seller concession involves repairs, the money should be held in escrow to be paid to the contractor for specified work on the home. Â Cost of repairs may be deducted from the value of the home for LTV purposes.