The MBA projects that mortgage volume will be about 1.8 Trillion for 2019, which is stable compared to 2018 but down compared to 2017. The major reason for this downward change is less opportunities for refinances due to the current rates and other factors. That prediction means we need to stay focused on the primary mission of being a great (and long lasting) mortgage business. This means focusing on purchase business.
My first few years in the mortgage business I worked as a loan officer. I had great mentors that helped me in that journey. One of the common messages was “Focus on purchase business and the refinances will follow”. This statement was true then, and remains true today. By building your business mainly off purchase loans; when the clients need a refinance, they will come back to you.
Home Possible Improved
Both Fannie Mae and Freddie Mac have been doing their part to help us in that mission. Announced in bulletin 2018-13 Freddie is now consolidating their 3% down programs Home Possible and Home Possible Advantage into one new and improved offering.
In case you are not familiar with these 3% down programs, they are a great way to overcome the biggest challenge of purchasing your first (or next) home, which is the down payment. I have found that many renters pay as much for rent monthly as it would cost them to purchase a similar property in the same market. The reason that they did not purchase??? You got it, MONEY!!
Let’s go over some of the improvements!
- Non-Occupant Co-Borrowers are now allowed
- Borrower can own other properties
- Super Conforming Mortgages allowed up to 95% LTV
- Second mortgage’s allowed on loan up to 97% LTV
- Debt ratios up to 45% on AUS approved loans across the board
In one of our previous blogs, I went over how we need to do “better” for our clients. To many people think that home ownership is not possible for them due to how “hard” it is to get a mortgage. Programs like Home Possible are able to lower the barrier and move more people into home ownership.
That is all for this week, I hope this helps you “stay on mission”