Where can I get a non income verification home loan with less than perfect credit?

Posted on Oct 13, 2012 in Stated Income Loans

Question by ohio_state98: Where can I find out current home mortgage rates for my area?
Does anyone know where I can find out the current mortgage rate averages for my geographic area? I’m looking at possibly refinancing and want to know if it would be worthwhile. Also, advice stomach can I expect any costs when trying to refinance?

Best answer:

Answer by orlandomortgagebroker
All over ONLINE. The only problem is, medical that you don’t get that rate until you lock it, or you have a honest mortgage broker on your side, which might be willing to lose on the Yield Spread if he doesn’t lock it, if rates happen to go up, from the day you were quoted on Good faith Estimate.

The minute you’re quoted a rate you like to proceed with, instruct lender or broker to lock, and provide form that states the fact and that their committed to lend at that rate.

When lenders “lock”, they commit to lend at a specified interest rate and points, provided the loan is closed within a specified “lock period”. (Points are an upfront charge expressed as a percent of the loan amount). For example, a lender agrees to lock a 30-year fixed-rate mortgage of $ 200,000 at 7.5% and 1 point for 30 days. A lock is contingent on the borrower meeting the lender’s underwriting requirements for the loan.

The need for locking arises out of two special features of the home loan market: volatility and process delays. Volatility means that rates and points are reset each day, and sometimes within the day. Process delays refer to the lag between the time when the terms of the loan are negotiated, and the time when the loan is closed and funds disbursed.

If prices are stable, locking isn’t needed even if there are process delays. If there are no process delays, locking isn’t needed even if prices are volatile. It is the combination of volatility and process delays that creates the need for locking.

For example, Smith is shopping for a loan on June 5 for a house purchase scheduled to close July 15. Smith is comfortable with the rates and points quoted on June 5, but a rate increase of 1/2% within the following 40 days could make the house unaffordable, and Smith doesn’t want to take that risk. Smith wants a lock, and lenders competing for Smith’s loan will offer it.

If locks were equally binding on lender and borrower, locks would not cost the borrower anything. While lenders would lose when interest rates rose during the lock period, they would profit when interest rates fell. Over a large number of customers they would break even.

In reality, however, borrowers are not as committed as lenders. The number of deals that don’t close, known as “fallout”, increases during periods of falling rates, when borrowers find they can do better by starting the process anew with another lender. Fallout declines during periods of rising rates.

This means that locking imposes a cost on lenders, which they in turn pass on to borrowers. The cost is included in the points quoted to borrowers, which are higher for longer lock periods. The lender who quoted 7.5% and 1 point for a 30-day lock, for example, might charge 1.125-1.25 points for a 60-day lock.

Years ago, lenders controlled lock costs by requiring borrowers to pay a commitment fee in cash. The fee was returned to them at closing but forfeited if they walked from the deal. But today, commitment fees have mostly died out. Borrowers don’t like them, and lenders and mortgage brokers don’t want to place themselves at a disadvantage in competing for customers.

To control lock costs today, many lenders refuse to lock until borrowers demonstrate commitment to the deal by completing one or more critical steps in the lending process. For example, one lender recently explained its lock policy to its mortgage brokers as follows:

Our loans are well priced, but we only commit to you when you commit to us. To lock, you must submit the completed lock form, application (original, no copies allowed), credit report, appraisal, and either a purchase agreement or escrow instructions.

The logic of this lender’s policy is that its procedural requirements reduce fallout costs, allowing it to offer lower prices. Lenders who make it easy to lock have large fallout costs because some shoppers will lock with them as protection against a rate increase while they continue to shop for a better deal elsewhere.

While the best (honest) quote is likely to be from a lender who requires extensive documentation to lock, these requirements impede effective shopping. For example, if the shopper identifies the lender offering the best deal but it takes 3 days to lock with that lender, the shopper is in limbo for 3 days. He has to hope that market rates don’t increase during the period, and if they do that the lender doesn’t pad the increase.

A mortgage shopper thus needs to know what each lender requires to lock, and how quickly the process can be completed if the shopper does her part. A good mortgage broker can help enormously. Brokers know lender lock requirements, can help expedite the process, and will keep the lender honest if the market changes during the lock process.

What do you think? Answer below!

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Question by Jackie: Where can I get a non income verification home loan with less than perfect credit?
Ok so I have less than perfect credit..but not enough debt for bankruptcy like 5, order 000 maybe.I have a house I want to buy its cheap good condition just what my family needs. Where can I get a non income verification home loan being a first time buyer with less than perfect credit? Dose anyone know? ( I have down payment money)

Best answer:

Answer by SPIFIMAN1
Hate to say it but with the economy the way it is right now you most likely will not find a mortgage loan that does not require proof of income.

Back in February my Wife and I refinanced our home that we have been in for 5-years, page we both have extremely good credit (all scores over 800) and we still had to prove our income.

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2 Comments

  1. LOL! I am sorry but these are exactly the kinds of mortgages that started the whole economic collapse. There are no non income verification loans available anymore.

  2. Those loans are dead and buried and none too soon. This is why all those banks and AIG took a nose dive. This type of loan program will never re-surface again…it is the very reason we have the current high foreclosure rate.

    Even if they did come back you’d have to have at least a 750 fico to qualify. But in this economic fiasco…don’t bet on it, they’re long gone.