2008 Banking Update - Major Changes in the Secondary Market

10 major changes in financing that occurred during the 1st half of 2008. All of these changes were made at a National level, although not all of the changes directly affect Bellingham.

1.    Minimum down payment 3% (no more 0 down payment) can use conventional products with income limitations but FHA better pricing.

2.    Minimum down payment on other owner occupied products is 5%.

3.    Minimum down payment with piggy back 2nd 10% (80/10/10)

4.    FHA risked based pricing 3% down, lower financed MI, high monthly MI based on credit score.

5.    ARM and Interest Only products must qualify at full payment (not interest only payment).

6.    Refinances, must have continuity of title and obligation (i.e. one person on original loan must remain on title).

7.    Declining Markets, policies in effect for maximum LTV’s 90% in some areas, Whatcom County and Bellingham have not been affected.

8.    Certain areas may be on a private mortgage insurance list, not on list used by lender, can’t get private mortgage insurance.

9.    2nd Home or Investment property purchase max LTV 90% (85% in some parts of the country).

10.    Number of properties financed other than primary residence changed from 10 to 4.

For information about home loans in Bellingham call Cathy Digby at 360-738-7857.