Blog of the Mortgage

We have about 4+ more weeks of this product being allowed and we'll be funding it for only 4+ more weeks.

The Question is: what are you going to do to prepare yourself for its removal?

Your borrowers are going to need to come up with the 3% (Soon to be 3.5% in as of January 1st) in some form or another.

I'm going to spell out some borrower options that will help to soften the blow in many instances.

1. Down Payment can still be a gift (every penny)

2. Gifts may come from: Relative (Mom, Dad, Sister, Brother etc.)

    a. Non-Purchasing Spouse

    b. Union

    c. Employer

    d. Non-Profit Organization (like a church)

    e. A Close friend with familial ties to the borrower

    f.  City/State funded 2nd mortgage program

3. Gifts that are wired into Escrow don't need to be sourced or seasoned.

4. Gifts that are made by check deposit into Escrow must also show the source from where the came and that the funds were available (but not seasoned)

5. Gifts can come from Credit Cards (see #4)

6. Any funds that are deposited in the borrowers account must only be seasoned for 30 days. ie. if your borrower has a bank statement with a 30 day window showing a beginning and ending balance and there are no "unusual" deposits made during that time we may never know of the "gift" activity.

7. Funds deposited inside of 30 days into the borrower's account must otherwise be both sourced to show that funds were available for gifting. They do not need to be seasoned.

8. Borrower's can raid their 401k's/IRA's and other tax sheltered investment vehicles for up to $10k or more depending on the account - 401k loans do not count against our borrower for DTI Calulcations

9. Your borrower's may be eligible to obtain additional assistance through their local city or county programs. The following links provide information to some of these available programs. HUD Programs by County - CA , HUD Programs by City - CA

10. There are also 2nd Mortgage's provided by some cities, counties and CALHFA as well which would possibly alleviate the down payment stress.