Spam prevention
Ambassador
939,709
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

I can't speak to specific program offerings without more detail, however I know most conventional 3% down options suck compared to FHA simply because the monthly PMI payments are incredibly expensive

While the permanency of FHA PMI quite frankly sucks....the lower rates and lower monthly PMI payments usually make it a better choice for first time buyers than a 3% down conventional option

Jun 08, 2016 07:49 AM
Ambassador
5,074,626
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Generally a catch somewhere that will lead to rich bankers, homeless mortgagees and taxpayers paying the bills somewhere down the road.

Jun 08, 2016 05:34 AM
Rainer
7,651
Tawny Lynn
Washington First Mortgage Loan Corporation - Seattle, WA
NMLS-57806 Loan Officer Mortgage Originator


I’m a mortgage broker with 50+ lenders to select from and to me these bank ads look pretty conservative. Borrowers can still get FHA loans with low interest rates/pricing even with a 560 credit score. If need be, I have lenders that finance FHA down to a 500 credit score. Plus, the conventional 3% down mortgage options are not new. This loan program has been around for a while and as long as the borrower has good credit scores these low down payment options price out really well, even on the high balance option. The mortgage insurance can be the deal killer if the credit scores are less than excellent because the MI is credit score driven and poor credit leads to a significantly higher MI rate and that is what pushes the payment so much higher. However, for those buyers with great credit the 3% down option is priced amazingly well even if you do split MI or lender paid MI. It’s definitely a great option for the well qualified buyer that has great credit but very little savings for the down payment.

 

Jun 08, 2016 05:49 PM
Rainer
295,801
Caroline Gerardo
Sun West Mortgage Corporation - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

MANY ins and outs in the rules- mostly outs and denied

12 months reserves, MI payments...  Jonathan writing about this knows there are no single family homes in OC (or San Francisco where these ads run) for under $417000. Condos are difficult to get approved under this program (projects need 51% owners and no lawsuits - all in OC in built in last 9 years have these scammy builder lawsuits. Then condo + MI + $400 HOA makes the buyer of a $415000 condo need to be earning $150000. which is too high of income for this program... 

Why are Wells and Chase running ads in market areas (Bay Area and OC) where the program doesn't fit?? Just to make phone ring?? 

Jun 08, 2016 06:44 AM
Rainmaker
598,542
Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

I can see many homebuyers eyes getting wide as they now think they can afford something bigger and better...since the cash outlay is peanuts.

UP to $417,000 with only 3% down needed?  If they don't have more money saved, I guarantee they won't be able to keep up the payments.

(If they can't save up money with no mortgage, no taxes and no home maintanence, how are they going to afford the morgage when their car needs new tires?)

Eve

 

 

Jun 08, 2016 06:31 AM
Rainmaker
6,210,913
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

There is nothing new about competitive 3% down programs.

Jun 08, 2016 09:22 PM
Rainmaker
3,858,752
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

I leave this topic to the mortgage professionals I work with to explain.  It's nice to have a general knowledge of programs but the specifics are best left to those who know best.  

Jun 08, 2016 09:21 PM
Rainer
178,015
Harjeet Bhatti
FITH THIRD BANK - Chicago, IL
Home Mortgage Consultant 25 States

Wells Fargo  is offering home buyer education class also which will educate all not just the 1st time home buyer.  Its not mandatory but will give them education as well as lower interest rate also. There are already some of program with 3% down payment but this program has taken out some of those restrictions which was stopping qualified buyers to buy home.

Jun 08, 2016 06:55 AM
Rainmaker
1,157,329
FN LN
Toronto, ON

There are many mortgage products.  It would be necessary to see which products a specific client can qualify for and then compare those products to determine which is a best fit.

Jun 08, 2016 05:46 AM
Rainmaker
1,675,986
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Bring them all on. I'll sell houses with them.

Jun 09, 2016 05:30 AM
Rainmaker
3,701,336
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

I hope it does not lead to another high foreclosure rate.

Jun 09, 2016 05:08 AM
Rainmaker
1,613,947
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

I think it is fine, but these buyers will still need to get through underwriting and that has been the biggest issue for most marginal buyers.

Jun 09, 2016 02:53 AM
Rainer
69,538
Shawn and Angela Miller
Berkshire Hathaway HomeServices Amabassador Real Estate - Lincoln, NE
Lincoln and Omaha, NE REALTORS®

With the shortage of good properties in our area and home prices going up quickly it will probably lead to bust.

Jun 09, 2016 12:26 AM
Rainmaker
817,653
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

I've seen 3% down conventionals being offers for months. Reducing FICO might be risky. Next we'll be seeing Stated Income / No Doc loans.

Jun 09, 2016 12:19 AM
Rainmaker
790,066
Susan Laxson CRS
Palm Properties - La Quinta, CA
Local Knowledge & Global Network

I would have to know more about the program, but the PMI or MI would be important.

Jun 09, 2016 12:18 AM
Rainmaker
3,069,284
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

I don't - I let our preferred lender do that thinking!

Jun 08, 2016 11:00 PM
Rainmaker
4,433,283
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

John has a good answer.

Jun 08, 2016 10:50 PM
Rainmaker
901,767
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

My first home loan was from WF - they come up with some interesting programs

Jun 08, 2016 10:04 PM
Rainmaker
634,222
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

John Meussner and Caroline Gerardo are two of  the experts on this. As an agent I caution my clients to read the fine print on these offerings. 

Jun 08, 2016 06:18 PM
Rainmaker
1,508,825
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I like that they come up with some aggressive ways to fund.

Jun 08, 2016 05:26 PM
Ambassador
4,310,074
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Fred Griffin what's the catch? I do not think loan products are that easy....

Jun 08, 2016 04:49 PM
Ambassador
1,771,155
Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

I would like to hear more about the specific details.

Jun 08, 2016 01:41 PM
Ambassador
3,722,076
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

I like to see consumers given lots of options.  

Jun 08, 2016 01:29 PM
Rainmaker
1,946,860
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

the 620 credit score makes me nervous

Jun 08, 2016 01:12 PM
Ambassador
3,986,387
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

We have a lender in town doing 100% conventional with 680 scores. We are a 100% VA market so this is getting lots of attention.

Jun 08, 2016 12:53 PM
Rainmaker
1,345,213
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I don't know too much about these, haven't really been following them (I just send my clients to a mortgage lender and they find the best program for them).  As long as the requirements are strong and not "just make up a number for you income and debts" I think it has the potential to benefit the market.  Especially since most of the big banks have stopped doing FHA loans (technically most have made the requirements insanely hard so while they still offer them, no one can qualify for them, while some have flat out said "No Mas!").

Jun 08, 2016 10:29 AM
Rainmaker
1,434,944
Yolanda Cordova-Gilbert
Richmond, TX

 Fred,

 I think you need to have more skin in the game, I hear some lenders are doing the old no income no docs again will we ever learn?

Jun 08, 2016 10:12 AM
Rainer
222,865
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

The 3% down is nothing new. I've had it for over a year now, and the down payment can be all gifted. The monthly payment is lower than FHA (not by much) and you don't have the 11 year wait on PMI insurance that you have with FHA. IMO, I do think that this is a recipe for disaster, if not done by a lender that explains everything and makes the borrower understand it.

Jun 08, 2016 09:14 AM
Rainmaker
3,985,753
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

WE will see a repeat of history...

Jun 08, 2016 09:09 AM
Rainmaker
1,123,223
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I feel uncomfortable with these with low credit score. Candidates for default not a good sign.

Jun 08, 2016 09:04 AM
Rainmaker
506,244
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

It's a starting point but $417,000?  Anyone buying that size home should be able to afford more for a down payment.  Would make me wonder if they will be on the foreclosure list down the road.  It might not end well.

Jun 08, 2016 08:15 AM
Rainmaker
1,623,965
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

I think it would be great if the debt to income ratio was lowered, and the percentage of income for a housing allowance lowered so people aren't getting themselves into mortgage prison.  it would help people buy homes they can actually afford.

Jun 08, 2016 07:45 AM
Rainmaker
2,595,020
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

its good for hitting the ground running

Jun 08, 2016 07:00 AM
Rainmaker
4,799,256
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I think it will help those folks who don't have savings for a down payment.  I doubt it will lead to a boom or a bust.

Jun 08, 2016 06:00 AM