Important loan updates
This just in from Half Moon Bay office of Princeton Capital Mortgage consultant, Susan O’Driscoll:
No longer doing any 2nd mortgages that are not combined with their 1st mortgages.
It used to be that you could get a 1st mortgage from Wells Fargo (for example) & 2nd mortgage from Countrywide. No more. The only time Countrywide will issue a 2nd mortgage is if they are doing the 1st, at the time of purchase. They will no longer do HELOC’s as stand alone transactions. Note: I have a client with a $850,000 HELOC with Countrywide. They have a $40,000 balance at the moment. Countrywide wrote them a letter to inform them that are cancelling the HELOC. No discussions, no modifications, just closing it. Borrower will be allowed to pay back the $40k over 30 years. Expect to see a lot more of this with equity lines either as part of a purchase or as loans after close of escrow. Also, please keep in mind that it will become harder to obtain an equity line after buying a home. So, for those folks who are considering a large downpayment and then intend to get the money back (for repairs, or whatever) via an equity line, be aware of this in your planning.
Chase will now only allow up to maximum 75% loan-to-value of the property.
The same applies to Wells Fargo with respect to their 2nd mortgages as described above with Countrywide.
I guess the thrust of all this is Mortgage Insurance may be making a comeback.
MB’s 2 cents…Bottom line is work with a mortgage professional you know or a trusted referral and ask questions to understand your product. We are fortunate to have several excellent professionals here on the Coast. I also work with Ed Diaz (spanish/english) and Sam Siew (chinese/english). The mortgage industry is continuing to work through needed changes. Even with these changes, you might be able to get into your first or dream home sooner than you thought.