Homeownership with the HEART Loan

ProgramBrought to you by

The HEART of San Mateo CountyMeriwest Mortgage

Today’s Agenda

• HEART – Housing Endowment and Regional Trust of San Mateo County– Paula Stinson

• The Financing Process– John Souza – Meriwest Mortgage

• The HEART Down payment Assistance – John Souza – Meriwest Mortgage

Fannie Mae Underwriting Guidelines

• DEBT TO INCOME RATIO– What is a debt to income ratio?– What ratio is acceptable under Fannie guidelines?

• CREDIT SCORE – What is a credit score?

– What scores do you need to get approved for a loan?– How does your credit score affect the cost of your loan?

• LOAN TO VALUE– What does loan to value mean?– How does down payment affect loan to value?– How much down payment is required to get a loan?

• RESERVES– What is reserves? PITI = principle, interest, tax and insurance– How much reserves do you need to qualify?

Loan Preparation• Preparing to purchase a home – Importance of a pre-

approval letter• 4 key parts of the Equation

– Income from all sources (W2s, tax returns if self-employed)

– Debt:Credit cards, student loans, car payments, etc.

Anything that comes from your credit report plus legal obligations

Not all debt is treated the same way– Assets: Bank Accounts, CDs, Retirement Accounts,

401Ks, Cash, Stocks, Investments Anything of Value– Credit History: Derived from your Credit Report

Key Mortgage Terms

• Points (Origination versus Discount)• Pre-payment Penalty• PMI (Private Mortgage Insurance)• Underwriting• ARM (Adjustable Rate Mortgage)• Loan Approval

Meriwest vs. Competition• Direct Lender – NO Broker Fees• Less Expensive Fees• Competitive Rates• Fast and Efficient Processing• Loan Servicing• No Pre-payment Penalties• Wide Variety of Mortgage Products• Relationship Advantage Rebates

• Fast Pre-approval

Underwriting Criteria & Guidelines:– Residence Status:

• US Citizen• Permanent Resident Aliens: Provides evidence of

Green Card.• Non-Permanent Resident Aliens: Provides

acceptable evidence of legal residency issued by the INS with legal permit to work in the U.S.

– Minimum down payment 5% required by Borrower.– Property Type: Single Family Residential Detached

and attached PUDS– HEART 2nd Lien interest rate will be based on Meriwest

Mortgage Company, LLC 30-year conforming fixed rate plus 150Bps.

Underwriting Criteria & Guidelines:(continued)

– Maximum purchase price: $781,000 (10% down payment required for loan amounts from $417,001 to $625,500.

– Maximum purchase price: $521,250 (5% down payment required for loan amounts from $50,000 to $417,000)

– Maximum debt to income percentage of 45%.– HEART 2nd Lien will have a 15-year term with a

balloon payment and amortized over 30-years.

– Impounds will be required for all transactions.

– Subordinate Financing is allowed but must be subordinate of 2nd lien.

– Underwriting guidelines will be based on Meriwest Mortgage Company, LLC guidelines.

Underwriting Criteria & Guidelines:(continued)

– Income limits of $150,000.– Minimum FICO score of 680.– Maximum CLTV of 95%.

Underwriting Criteria & Guidelines:(continued)

How do you apply?• Please go to the HEART of San Mateo

County Website: WWW.HeartofSMC.Org

• Click on “Homebuyer Loans” Link

• Choose the “Click Here to Apply” Link– That link will take you to a HEART and

Meriwest Mortgage co-hosted site for your application

Meriwest MortgageJohn Souza jsouza@meriwest.com

(408) 849-7115

HEART of San Mateo CountyPaula Stinson pstinson@heartofsmc.org

650-872-4444 ext #4

For more info, please contact