Back to Basics:Mortgage Lending

101Part #1October 9, 2015

Emily C IngramNew American Funding

Who is Emily C Ingram?• Local mortgage lender with New

American Funding• 14+ years experience • Loan originator, processor, and

underwriter• Bachelor’s degree in mathematics• Board member, Jefferson Co Home

Builders Association• Board member, Real Estate

Professionals for Affordable Housing• Occasionally skips work to go sailing.

Obligatory Disclosures

• I’m pretty smart, but I don’t know everything.• Change is inevitable.

Objectives

• Discuss types of mortgage lenders.• Recognize categories of mortgage products.• Identify potential red flags on a purchase &

sale agreement.

Types of Mortgage LendersOrigination Underwriting Funding Servicing

Depository Institution X X X XMortgage Bank/Lender X X X XCorrespondent Lender X X X

Mortgage Broker X

Categories of Mortgage Loans

• Conventional ConformingFNMA / FHLMC

• GovernmentFHA / VA / USDA

• Conventional Non-ConformingJumbo Loans / Funky Properties / Funky People

Conventional Conforming• Who is Fannie Mae & Freddie Mac?• Guidelines established by FNMA and FHLMC• Popular vanilla loan choice• Make sure your lender can choose!

The GSEs asset holdings – either through mortgage securitizations or direct portfolio holdings – have increased from approximately 7% of total residential mortgage market originations in 1980 ($78 billion) to 46.7% in 2010 ($5.3 trillion).- Federal Housing Finance Agency

Features & Benefits“Standard”

Conventional ConformingMy CommunityHome Possible

Minimum Down Payment 5% 3%Up Front Mortgage Ins private MI required with

< 20% downlower private MI

requirementsMonthly Mortgage Ins

Income Limits none $57,900 – 66,585

Property Type SFR, 2-4 units, manuf, condo SFR, condoOccupancy primary, 2nd, non owner primaryInterested Party Contribution 2% - 9% 3%Max Loan Amount $417,000 $417,000Max DTI 45% 43-45%Credit Score 620 660FTHB Restriction no yes and noHome Buyer Education not required required

Interested Party ContributionsOccupancy Down Payment Max Contribution

Primary/2nd

< 10% 3%

24.99 – 10% 6%

> 25% 9%

Investment all 2%

Government - FHA

• Who is FHA?• More lenient guidelines• Have a bad rap• Guidelines changed in September

Features & BenefitsFHA

Minimum Down Payment 3.5%Up Front Mortgage Insurance 1.75%Monthly Mortgage Insurance 0.85%Income Limits noneProperty Type SFR, 2-4 units, manuf, condo

Occupancy primaryInterested Party Contribution 6%Max Loan Amount $384,100Max DTI 45%’ishCredit Score 580FTHB Restriction noHome Buyer Education not required

Government - VA

• Who is VA• Eligible veterans (COE)• Big draw = 0% down• Ineligible fees• Tougher appraisals

Features & BenefitsVA

Minimum Down Payment 0%Funding Fee (MI) 0 – 3.30%Monthly Mortgage Insurance 0%Income Limits noneProperty Type SFR, 2-4 units, manuf, condo

Occupancy primary

Interested Party Contribution up to 4% for prepaids and funding fee

Max Loan Amount noneMax DTI 45%’ishCredit Score 580FTHB Restriction noHome Buyer Education not required

Government - USDA

• Who is USDA?• Rural properties / income limits• No down payment• Allow additional time for closing• No income producing properties

Features & BenefitsUSDA

Minimum Down Payment 0%Guarantee Fee (MI) 2.75%Monthly Mortgage Insurance 0.5%Income Limits $75,650Property Type SFR, condo

Occupancy primaryInterested Party Contribution 6%Max Loan Amount noneMax DTI 29/41% (32/44%)Credit Score 620FTHB Restriction noHome Buyer Education not required

Underwriting the P&S

complete property address

everyone on the mortgage must be listed

no personal property

sourced and seasoned

communication is keywithin 60 days

all inclusive

Occupancy Down Payment Max Contribution

Primary/2nd

< 10% 3%

24.99 – 10% 6%

> 25% 9%

Investment all 2%

Interested Party Contributions

X

1) Replace the missing shingles on the roof.2) Repair the leak around the bathroom skylight.3) Secure the loose railing around the back deck.

XReduce purchase price by $1.95

X

Per the home inspection:1) Replace the missing shingles on the roof (page 6, paragraph 3.2)2) Repair the leak around the bathroom skylight (page 8, paragraph 4.1)3) Secure the loose railing around the back deck (page 12, paragraph 2.4)

X

Why Refer to Emily C Ingram?(AKA shameless self promotion)

• Depth of experience• Go the extra mile• Not focused on volume• Better customer service

Contact Me!

emily.ingram@nafinc.com

www.facebook.com/emilycaryl

www.linkedin.com/in/emilycaryl

www.slideshare.net/EmilyCIngram1