With all of the chatter around the mortgage regulators making it tougher for buyers to qualify for financing, it’s good to know that there are plenty of programs out there that empower home buyers to stretch their qualifications. As you’ve read, Qualified Mortgages (QM) have restrictions like 30-year terms and lower debt-to-income ratio requirements. However, there are programs out there that have 40-year terms, lower qualifying rates and higher debt-to-income allowances. Those programs allow for almost 30% greater purchasing power than the QM mortgages.
For example, let’s say you have a client who makes $200,000 per year. With a QM mortgage and using a 5/1 ARM program, the client qualifies for a $1,200,000 purchase. However, using the same 5/1 ARM program with a 40-year term, the client can move up to a $1,550,000 home!* In this environment with a surplus of buyers and a shortage of sellers, these more aggressive mortgage financing solutions may make the difference between searching for homes and buying a home.
For a comprehensive review of what financing solution works best for you or your clients, please contact your favorite Absolute Mortgage Advisor or visit us at www.absolutemortgage.com for more information.
*This example presumes 20% down, great credit, using a 3% note rate.