If youâ€™re in the process of buying a home or if youâ€™re a real estate agent working with a buyer thenÂ there are a few thingsÂ you need to know about the imploding loan marketplace. Basically, the stated income party is over. In fact the party has been over for a while for a great number of folks but things just turned nasty for those still hanging around. Iâ€™ll leave the explanation of whyÂ and how to others.
All I can say is a lot of the stated income, no ratio, and no documentation loans will be gone by the end of the week. If youâ€™re pre-qualified on any of these doc types with anything over 90% loan to value then you need to call your lender immediately. Ask them if the loan is still available. This is especially true if the loan has not been locked.
If you have sufficiently good credit then ask your lender if any of the agency loans (Fannie, Freddie) would work. Otherwise your only choice is to go full documentation with complete income verification or save up 10% for a down payment. Dad and mom just came home and weâ€™re back to old school.