Are you in the market to purchase a home or refinance a home? Have the recent guideline changes effected your ability to qualify? In this video, I discuss how mortgage lending guidelines have recently changed and making it more difficult for borrowers to qualify.
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Chase Bank (JPM) announced today that they are now requiring 20% down payment and 700+ credit scores on all new purchases and refinances. While they will honor loans that are currently in process, this will be the new lending guidelines for the time being until covid-19 is under control.
Recent Updates to Lending Guidelines include age of documentation, verification of employment, market based asset changes as well as appraisal and credit score changes.
Verification of Employment (VOE)
Needs to be within 10 days of closing and also confirmed on the day of loan docs and the day of funding the loan
If you are self employed, lenders want to verify that the business is open and operating within 10 days of closing. They want to make sure you have not been affected by covid-19.
Age of Documentation
Was 120 days, now 60 days but most lenders have an unwritten rule of 30 days.
Market Based Assets
If you are used market based assets like stocks, bonds, 401K or IRA for down payment or closing costs, you have to document proceeds from liquidation. If they are being used for reserves, the lender is only going to use 70% (versus 100%).
purchase loans – most lenders are doing exterior only
cash out refinance – full appraisal required
There are some of the most common changes amongst lenders / mortgage brokers. As we get more information on additional guideline changes, I’ll be sure to update you.
If you have additional questions about buying a home or refinancing during covid-19, please comment below or contact me directly.
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