York 103% Home Loans
103% LTV is a conventional fixed rate home loan where the monthly payments remain
the same over the life of the loan. Once the mortgage is in effect, the interest
rate does not fluctuate but remains constant. Furthermore, the loan is 103% of
the sales price of the home. This allows for 3% of the loan amount to be used
towards the buyer's closing costs.
fixed rate loan is one of the most commonly used mortgages for residential financing
in America. The greatest advantage for a home buyer is the predictability of the
payments each month because it never changes. This type of loan is often recommended
for home buyers living on a fixed income, a set budget, or those planning on living
in their home for more than five years. If interest rates increase, the loan rate
will remain the same. Unfortunately should rates decline below the set interest
rate on the loan, the only way to change it is to refinance the mortgage and incur
a loss of equity or additional closing costs to take advantage of the lower interest
key disadvantage of this type of loan is the high loan amount in relation to the
value of the home. Generally a home buyer must occupy the home for at least three
to five years before he/she is able to cover normal selling costs should that
become necessary. Otherwise there may not be enough equity to cover real estate
commissions and typical seller costs when the home is sold.
following are highlights of this loan program:
Payment Requirements: No down payment required. The loan amount is 100% of
the lesser of the appraised value or the sales price. Excess loan proceeds may
be used towards traditional closing costs, prepaid items, and consumer credit.
If the borrower elects to use the excess proceeds towards consumer credit, revolving
or installment debt may be paid at closing to help the borrower qualify.
and employment: There are no limitations placed upon income requirements.
As for employment, there are no limitations on a specific length of time at a
particular job. However, a 2 year history is required, preferably in the same
line of work (education can be counted towards this 2 year history if it is for
the same profession the borrower is currently in).
properties and occupancy requirements: Single family attached and detached
homes, 2 to 4 unit properties, planned urban developments (PUDs), and Fannie Mae
or Freddie Mac approved condominiums. Investment properties are not allowed with
Costs: Closing costs and prepays may be paid by interested parties (i.e. seller)
as long as they are considered in the contribution limitation. For primary and
second homes, the seller may contribute up to 3% of the sales price. Excess loan
proceeds may be used towards traditional closing costs, prepaid items, and consumer
credit. If the borrower elects to use the excess proceeds towards consumer credit,
revolving or installment debt may be paid at closing to help the borrower qualify.
This type of loan is not assumable.
Penalty: Not applicable.
Reserves: The borrower is required to have a minimum of two months cash reserves
in the bank by the close of escrow. Six months cash reserves may be required for
borrowers with less than a 680 credit score.
Funds: Not allowed
Scoring: Generally Fannie Mae and Freddie Mac require a minimum credit score
of 620 for owner occupied and second homes.
(Non-Occupant Co-Borrowers): Not allowed.
Ratios: A borrower's total debt (proposed monthly payment plus monthly payments
towards credit cards, student loans, car payments, and other installment and revolving
credit) cannot exceed 45% of their gross monthly income.
Insurance: Not required.