Home Loans No Longer Requires Perfection
Only a few short months ago both homeowner and property had to perfectly fit the ideal mortgage mold in order to qualify for financing. Most banks, especially the big ones, just couldn’t afford to put more home loans into their portfolios, and since the real estate bubble burst many have simply been unwilling to listen to legitimate explanations for nonconformity.
Now, however, more mortgage money is becoming available, and many community banks are being much more understanding when it comes to circumstances outside the norm. With New Jersey home prices down an average of 21% from their peak, and with some areas down as much as 35%, it’s a good time to be a buyer. All of which is good news for those who want to purchase homes or trim their mortgage rates, especially since interest rates are still at historical lows.
According to Marc Sovelove, the chief retail lending officer for Unity Bank, a community bank with branches in Central Jersey and Pennsylvania, many area homeowners would do well to review their mortgage with a community bank officer at this time.
“We’ve had many people come to us who thought they were stuck with a high interest rate,” says Sovelove. “Many of them had been turned away by larger banks and finance companies because of some small complication with their title, property or credit history; but we looked at the big picture and found them to be great candidates for a new mortgage.”
For homeowners looking to finance a number of criteria generally apply. Bank regulators consider any credit score below 660 to be subprime. The FHA minimum credit score is 620. Currently, average credit scores have dropped below 680, which is the Fannie Mae requirement. Mortgage insurance companies are not offering mortgage insurance on loans with credit scores under 720. Mortgage insurance is required on loans being sold to Fannie Mae/Freddie Mac with less than 20% down payment or equity. Stated income programs for self-employed borrowers have disappeared from the secondary markets. All this adds up to many borrowers not being eligible for loans which will be sold to Fannie Mae or Freddie Mac. Often the consumer is not aware of the fact that community banks generally hold their loans; as such they can be very flexible with terms and conditions.
“Loans generally have a story,” says Marc Sovelove, “because most often they have a good reason for not fitting the mortgage mold. That’s why here at Unity we don’t just look at a sheet of facts and figures. We listen to our customers and come up with solutions for their financial need.”
Unity Bank has branches in Hunterdon, Middlesex, Somerset, Union and Warren counties in New Jersey, and Northampton County in Pennsylvania. The bank began as First Community Bank in 1991 with two branches and thirty employees. It now has over one hundred and sixty employees.
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- Rosemary Fellner
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- Unity Bank
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