Fannie Mae has introduced a new loan program that offers borrowers a chance to reduce their mortgage payment with no minimum credit score or mortgage insurance with a maximum loan to value of 105%. Home owners who were previously turned down because of credit score and LTV issues can now enjoy the benefits of a lower fixed interest rate loan.

What types of properties are eligible under this program? 1-4 unit primary residences and warrantable condos; investment properties included. There is no limit on the number of mortgages to the same borrower. Loan limits in the State of New Jersey are $625,500.00 on 1 family- homes and up to $1,202,925.00 on 4 family-homes.

The new mortgage offered by this program must result in a tangible net benefit to the borrower. This benefit can be in the form of a reduced interest rate with a lower monthly payment; the replacement of an adjustable rate mortgage with a fixed interest rate or a reduction in the term of the existing first mortgage. Existing subordinate financing is allowable with no maximum combined loan to value. However, no new subordinate financing is allowed.

The loan being refinanced must have been sold to Fannie Mae. The borrower on the existing loan must be the borrower on the new loan. An additional borrower may be added with no seasoning requirement. Loan documentation is limited to 1 current pay stub or 1 year’s federal tax return for self employed individuals.
Aequor Funding urges the readers of our news letter to contact us for more details of this truly remarkable loan program.

Gregory J. Greco Jr.
Aequor Funding Corp.
VP of Sales

When we first opened our doors here at Aequor Funding Corp. (AFC) we had a mission to ensure the education of our clients. As you have all heard me say in the past, consumer education will be essential to our economic recovery and also be instrumental in making sure we avoid repeating this same economic history again in the future. We take our job of educating our clients while they are in process with us very seriously, however, we want to take it a step further and have the ability to reach a broader audience. We figured that our monthly newsletter would be the perfect medium to do just that. Starting with this month’s newsletter, we are going to have a section dedicated to providing you knowledge, insight and even terminology of the mortgage industry. The information that we will share with you will range from explaining to you what it is underwriters look for in a loan to how we calculate you’re DTI (Debt to Income Ratio). Everything that we cover will make you more of an informed consumer and put you in a position where you can ask the proper questions of your mortgage professional to ensure he or she has your best interests at heart.

I feel that a great place to begin in regards to mortgage education is how to calculate your DTI (Debt to Income Ratio). We are living in a time where consumer debt has dramatically increased while at the same time many families have lost income. It is important to know how much of your income is going towards your mortgage(s), credit card bills, auto loans, real estate taxes, homeowners insurance and condo fees if applicable. It is important to have an idea of your DTI, because it is important to know exactly where your money is going on a monthly basis. It is also one of the key factors that lenders and underwriters will look at when preparing to make a decision of approval. So, what is your DTI? Your DTI is the percentage of money going out each month compared against your GROSS monthly income. The lower that this percentage is, the stronger your loan application will be. We like DTI’s to be less than 45% for approval purposes; however we have seen loans close with a 60% DTI, as long as there are very strong compensating factors such as a significant amount of liquid assets. The impact that the DTI percentage will have will vary depending on which lender and loan program you’re applying for. Again, please keep in mind that these figures are for loan approval purposes only. In reality, I would love nothing more than to see all of my clients have a 20% DTI or less. The reason being, I would rather see you getting to enjoy you’re hard earned paychecks rather than having to use it to pay creditors. How is the DTI calculated? Very simply, we add up all of your monthly payments that are active and open on your credit report plus your real estate taxes and homeowners insurance and divide that figure by your GROSS monthly income. There are certain items that do not get factored into your DTI. This would include your monthly telephone, gas, water and electric bills just to name a few. So, in between now and the next newsletter, take a few minutes, sit down and calculate your own DTI. The next time you’re dealing with a mortgage professional, present him with the figure and they will immediately know that they are dealing with someone who knows how this industry works!
All the Best!

Many home owners have been waiting too long before refinancing their mortgages to lower fixed interest rates and consolidating their debt. As the credit market continues to shrink, it has become apparent that the ability to use the equity in one’s home has also started to recede. Lenders have reduced the maximum cash out available to borrowers due to the continuing decrease in property values. Especially hard hit is the condominium market place.

Today’s economic climate has left many home owners with little or no cash reserves. Losses in investment portfolios have further deteriorated their ability to have ample monies for emergency needs. I have always recommended to my clients, that if possible, one should have a minimum of six months reserves to cover their mortgage payment, utilities and other fixed debt. This is not easily accomplished with the monies available in savings and checking accounts. Whereas, many people are unwilling or unable to liquidate their investments without taking severe losses at this time. Taking out a second mortgage on one’s home has virtually become a thing of the past, while home equity lines of credit are available to only a few people with credit scores in the mid to high 700 fico range.

Time is not on your side. It will be a number of years before home owners will see a loosening of lender guidelines. Now may be your best time to take advantage of today’s low fixed interest rates to consolidate debt, circle the wagons so to speak, and put money in the bank. Until the financial crisis we are facing takes an upturn for the better, we must take these steps in order to survive this recession. I am told that when your neighbor is out of work, it’s considered a recession, when you’re out of work it’s a depression.

The Federal Reserve recently took action to help decrease interest rates for homeowners looking to refinance their current loan.

Take advantage of the lowest interest rates in over 30 years now! You can use a FHA Refinance to reduce your payments and start saving money today. This is often the best option for those stuck in subprime or ARM mortgages or anyone interested in simply reducing their payments.

FHA Refinances

We provide a variety of information if you are considering a refinance of your current loan. You can learn about your refinance options, including an FHA Refinance as well as other types of loan refinances. It is important to be aware of current interest rates to ensure that you will be able accomplish your financial goals with a mortgage refinance.

If you are having trouble meeting your monthly mortgage payments, or would just like to free up some cash to make home improvements, a mortgage refinance can help. Let us help you find the solution.

FHA Loans offer many advantages. A FHA Home Loan is a government-subsidized loan that is popular with first-time homeowners. FHA Refinances are also becoming increasingly popular among home-owners trying to refinance out of subprime loans.