The Suntrust Mortgage
The changes in financing choices for residential investment properties over the last 5 years are staggering. Lenders have relaxed the credit and income recommendations for qualification that formerly deterred many would-be investors from entering the actual estate. In addition, the deposit requirement has been eliminated for borrowers who meet the requirements. This article surveys the actual landscape for lenders offering residential investment financing products.


Kinds of Suntrust mortgage Lenders:


The lender landscape can be broken into the following broad categories:


Conforming


Alt-A


Non-Conforming or Sub prime


Hard Money


Each of these offers loans for residential investment properties (1-4 unit properties).


Conforming


Conforming lenders would be the A-Paper mortgage banks that focus on borrowers with excellent credit history and a chance to document income. Conforming banks offer loan products which can be considered? plain vanilla? within today? s world of interest-only ARMs and low down payment loans. In terms associated with investor loans, conforming lenders offer complete doc and stated loans up to a 90% LTV. A loan from a conforming lender with an LTV more than 80% will incur personal mortgage insurance, or PMI. (Find out more about PMI at: http: //www. andersonlendinggroup. com/faq_a16. html) Conforming lenders always require a minimum of a 620 credit score, and use a computerized underwriting process to determine approval. Besides credit rating, other important factors for approval include: payment history for home finance loan and revolving accounts during the last 24 months, debt-to-income proportion, employment history, amount of down payment, and the amount of liquid reserves.


A few examples of leading conforming loan companies are Countrywide, Wachovia, Suntrust mortgage, as well as Flagstar. While these are national lenders, any local bank or savings and loan would get into this category.


Alt-A


Option? A? credit lenders, or Alt-A, offer aggressive loan reduced stress products catering to borrowers with credit ratings from 660 and upward. While these lenders provide programs to borrowers with scores down to 620, the aggressive programs are typically not available to consumers below a 660 middle score. Alt-A banks have driven the creation of innovative loan products during the last few years.


These programs have the many interest-only products, the choice Arm loan, loans requiring as little as 5% and now? no deposit, as well as regular fixed-rate and arm products. The big difference using these lenders is the relaxed debt-to-income ratios available, the reduced income documentations (mentioned income, no income / no asset, and no hello), and the ability to add interest-only to the majority of products. Alt-A lenders have popularized the usage of 80-10 and 80-15 loans for investors to prevent PMI.


A few examples of leading Alt-A loan companies are Aurora, GreenPoint, SunTrust mortgage, First Horizon, and IndyMac. Besides these, there are literally hundreds and hundreds of lenders that have surfaced to fill certain niches.


Non-conforming / Sub prime


Non-conforming or sub prime lenders fill an expanding niche? borrowers with past credit problems. These loan companies offer fixed and flexible loan programs for borrowers with bankruptcies, foreclosures, choice, tax liens, charge-offs, and several other credit blemishes.


These lenders typically price their loans utilizing a matrix that evaluates credit score with regards to loan-to-value. Sub prime lenders will pay financing to borrowers with as low as a 500 middle rating, and even have programs that focus on borrowers with excellent 700+ results. The sweet spot for many of these lenders is a 580 or better middle, as they are going to provide 100% financing for owner-occupied properties at which score. For investors using sub prime lenders start to offer products for borrowers having a 550 credit score.


The main thing to understand about these loans is that they are priced much higher than the usual conforming or even Alt-A loan.


The most famous product with these lenders is really a 2-year Arm, with the idea being the borrower will certainly refinance or sell the property in 2 years. Also very common with these lenders is a mandatory a few year pre-payment penalty.


A few examples of leading Sub prime lenders are LongBeach Mortgage(division of Washington Mutual), Fremont Investment and Loans, Meritage Home loan (division of NetBank), and New Century Mortgage. Besides these, there are literally hundreds and hundreds of lenders that have emerged to fill certain various sub prime niches.


Hard Money


Hard money lenders serve a simple purpose? they allow the actual purchase of? fixer-upper? or rehab properties without any money down. These lenders offer programs that none from the


Hard money lenders are usually private individuals or small companies which make very high interest price loans (between 12% and 18%) based on the after repaired value of a property. They will lend the money to both acquire and fix-up the property, up to a LTV of 65% or 70%. The loan term for many hard money lenders is 6-mos.


These lenders best, albeit expensive, way to purchase rehab properties. After doing the renovation, one can refinance out of the hard money loan with a conforming/Alt-A/Subprime long-term loan.


A great national hard money loan company is InvestWell --- learn more about them at: www. pleaseclose. com/andersonlending.


Wide range of Products


A few of the various products that can be obtained today include:


100% investor loan? 1 loan or 80/20


Credit scores begin at 660? just available from Alt-A lenders


95% buyer loan? 1 loan or 80/15


Credit ratings begin at 600? available from Alt-A and Subprime lenders


90% buyer loan? 1 loan or 80/10


Credit ratings begin at 620 for Conforming and Alt-A lenders and 560 for Subprime lenders


80% investor loan


Credit ratings begin at 620 for Conforming and Alt-A loan companies and 560 for Subprime loan companies


All the above are available in either a fixed or even ARM, and can usually have an interest-only option put into help maximize cash-flow. While any loan with a LTV above 80% will certainly typically incur PMI, you are able to avoid this unnecessary expenditure by? piggy-backing? a first and second mortgage with each other? eg. 80% first along with a 15% second.


These is a real brief introduction towards the residential mortgage landscape, and should help orient new investors towards the available lenders and items available.

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