Boise Idaho, Your Loan is Approved! Maybe Not?

It is pretty exciting news for first time home buyers when your loan officer calls to say, YOU ARE APPROVED! That is great news! Hold on, not so fast! Maybe not?

If a home buyer is applying for a conventional loan with less than 20% down, private mortgage insurance approval is necessary. Potential home buyers and Realtors, need to know that just because the lender has issued a loan approval, it doesn’t mean the deal is done.

PMI companies have really cracked down on guidelines recently. In the “good old days”, 6 months ago, we could obtain PMI approval, in house, instantly. Now a COMPLETE loan package must be submitted to a PMI underwriter. Until PMI issues an approval, home buyers and all parties involved are at their mercy. Appraisals can be cut, incomes can be reduced (especially self employed) for example. Credit scores HAVE TO be above 700 and total debt to income ratio can’t go over 41%-period.

Not trying to ruin your day, but this stuff can’t be sugar coated. Industry professionals have to, once again, reset expectations with home buyers.

PMI companies are now “calling the shots” because they are taking the risk.

A couple of years ago, the 80/20 loan was the hot item and PMI companies we begging for business. That has now all changed.

I am not trying to bash conventional loans. Just raise awareness. There are many great home buyer programs available. Lenders just need to make a double effort to make sure that home buyers COMPLETELY understand the PMI approval process. It is as critical as the actual home loan itself

Guild Mortgage – Boise Home loans – Craig Ballhagen 208-713-3309

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