Even in a tough lending market like this, there are a lot of new products coming out, or a lot of old products that some people don’t know about. We’re starting to see some rehab products. There are 203k loans; it’s an FHA product that allows you to purchase or refinance and also get money to rehab the house. There are a lot of stipulations and restrictions, but now we’re starting to see more than just the 203k. There are other rehab loans out there that have better options, which is great because there are a lot of houses out there that can use some work. We need these products so that people can buy some of these houses, and if they don’t have money in their pocket to do the work, they can get this mortgage, which includes the money to buy the house and do the work to update it. Depending on the product you end up using, the rate can be close to the same rate as a non-rehab product. It depends on the situation, but it’s nice to see these products out there.
As I’ve mentioned before, there are all kinds of lenders and all kinds of products. I work with some small local lenders that do common sense lending where they keep their own loans. They’re not quite as guideline driven. Maybe someone has tons of assets and they’re buying a primary residence. They’re putting 30% down, but maybe their credit isn’t as good as it needs to be, but they have a job and they have a good reason for it. Those are the type of loans small lenders like.
Another option is USDA loans. The USDA loan is one of the few 100% financing options out there; it’s based on location so you can only get a USDA loan in parts of New Jersey. It’s also based on income, so you can’t make too much, but it’s 100% financing, just like VA loans. VA loans are out there for veterans. It’s 100% financing, and it’s one of the best products out there for those veterans that still have their benefits available.
We’re seeing lots of creative new products coming out. It’s slow, because they’re taking things slowly, unlike the sub-prime days where they created outlandish products with 100% financing plus 10% on top for home equity loans, or the no document loans for anyone and everyone. Those aren’t going to come back, but we are going to start seeing more creative products. Maybe some asset-based loans where someone has $600 to $700,000 or more in assets, but can’t show much income, and they can pledge assets against the loan.
You won’t likely find a lot of these new programs at your local bank. You’ll usually find them at the small local lenders, which I have access to. As an advisor, I’m always keeping up to date on what programs are coming out, and what my lenders are doing. I get emails daily that I’m sifting through to make sure I don’t miss anything. It’s really helpful when you meet someone who has this specific strange situation and they’re having a difficult time, but they want to get into a house. They’re deserving, but they have a tough situation. There are open programs out there for them.
Let me help you find the RIGHT loan program for your needs – call or email me today!