Low Interest Rates and Tougher Underwriting Standards; St. Louis Mortgage Interest Rate Update

I continue to hear in the news about incredible low interest rates, but the catch is getting approved for a mortgage loan, either for a purchase or refinance.  The process is getting harder and harder.  In this tighter credit environment, FHA remains to be a great alternative for buyers with limited resources for a down payment and closing costs or past credit problems.  Underwriting guidelines are more lenient than conventional guidelines.

Highlights of FHA financing:

  • Minimum funds required from the buyer are 3.5% of sales price. 100% of the buyers’ contribution can be in the form of a gift.  No reserves are required.
  • The seller can contribute 6% of the sales price to closing costs, prepaids, or points.
  • Debt to Income ratios are 31%/43% (A ratio exceeding 43 percent may be acceptable with compensating factors)
  • In most cases, underwriters do not have to count any debt with 10 or less payments remaining.
  • Non-permanent resident aliens are eligible for maximum financing.
  • Moderate credit scores and past credit issues are not necessarily a deal killer.
  • A Chapter 7 bankruptcy will not disqualify a borrower if 2 years have passed since the bankruptcy was discharged; for and foreclosure, 3 years must have passed.
  • A borrower could obtain financing during a Chapter 13 bankruptcy if at least 1 year has passed since it was filed, all Chapter 13 payments have been on time, and the court gives permission to the borrower to incur additional debt.

St. Louis MORTGAGE INTEREST RATES for September 26, 2012:

  • Conventional 30-Year Fixed 3.375%/ 3.428% APR
  • Conventional 15-Year Fixed 2.75%/ 2.845% APR
  • Conventional 5/1 ARM 2.625%/ 3.625% APR
  • FHA/VA 30 Year Fixed 3.25%/ 3.302% APR
  • Jumbo 5/1 ARM 2.750%/ 2.427% APR
  • Jumbo 15 yr Fixed 3.375%/ 3.630% APR
  • Jumbo 30 yr Fixed 4.875%/ 5.125% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.


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