June 22nd, 2021 3:35 PM by Devin Murray
Little more than a year ago in April 2020 we saw conventional and government mortgage rates slide to the lowest levels in history. It has been epic yes for the homeowner and homebuyer as long as you maintained a 660 or better credit score. At the same time in the blink of an eye lenders raised the bar on credit scores for all government loans from a 600-660, jumbo loans were impossible to find, and non-QM lenders (literally all of them) just stopped funding loans. Like most absurd acts acceptable in 2020 our industry has come to its senses and this situation has mostly smoothed itself out with some subtle but important differences.
As of April 6th, 2021 most non-QM lenders (who we could call out of the box lenders) who survived 2020 have ramped back up their product offerings and are once again funding jumbo loans, bank statement loans and non-warrantable condos. With prices skyrocketing nationwide jumbo mortgage loans aren't just a tool for the wealthy. Bank statement loans (jumbo and non-jumbo) are an excellent resource for the self employed borrowers with 680 credit and above and not enough can be said about that topic. In early 2021 Fannie Mae has cracked down and has started labeling condos as non-warrantable even when by all senses they sometimes are 100% warrantable so non QM-condo loans for non-warrantable condos are HUGE right now. Right now that means you can buy a non-warrantable condo and borrow 90% on primary residences, 80% on second homes, and 75% on investment properties with acceptable credit and assets (condotels excluded).
If you are a veteran be comforted to know that the industry in general is once again accepting 620 and 600 range scores on VA purchases and VA refinances. The great news is that VA rates are insanely good and are trending toward to mid and upper twos back toward the lower two range especially if you have a 660 score. Some lenders are advertising a 580 benchmark is being offered (which we do not) but we have not seen anything below this mark for VA loans so far in 2021 regardless of down payment.
For those using FHA the benchmark for credit score across the marketplace seems to be 620. If you are below this mark you can get purchase or refinance yes but it might be worthwhile to figure out if something minor is keeping your score down that can be fixed. That last statement isn't new to 2020 or 2021.
Today if your scores are 720+ conventional purchase and conventional refinance mortgage rates are still below 3% after a nice market correction in the last three weeks but most notable is the15 year is trending back in the low 2% range and the 10 year is hovering near and below 2%. We highly encourage EVERY conventional borrower, buying or refinancing to consider the 20 year. For many years prior to 2020 the 20 year pricing most mimicked the 30 year but that is always the case. In most market conditions and scenarios, rates are typically lower and the payment can be more affordable that the 15 year term creates.
There is more to say here and likely something that could help in your scenario. This is why finding a mortgage broker, not just a bank, who understands the entire marketplace is key. If you to buy, build, or refinance in Florida or Alabama we would love to give you information 100% risk free and point you in the right direction.
You can reach us by emailing us, applying online or calling us today at 888-269-8335.