Let’s discuss the new changes to mortgage requirements, mortgage deferment, and how the issues with forbearance - Thanks! Add me on Instagram: GPStephan
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JP Morgan Chase, one of the nations LARGEST mortgage lenders, just raised its standards as to who can get a loan, and many lenders followed. Some of the new requirements include:
One, making sure you’ll still employed, and this is verified 3 days before your loan actually closes.
Two, they’re only using the most recent bank statements as possible within the last 60 days.
Three, if you’re self employed and UNABLE to show bank statements with proof of income - then your qualifying income, as in - what’s on your tax return - will be reduced by 25%, just to give a little more wiggle room if anything was to happen.
Four, and this is HUGE for real estate investors…Rental Income can ONLY be used if you have a FICO score ABOVE 700, and you can document 6 months of reserves for each financed property in which rental income is being used to quality.
Five, banks have lowered their maximum debt to income ratio - meaning, your mortgage payment can’t exceed 50% of your take home pay.
Six, Bank of America just raised it’s credit score requirement from 660…all the way up to 720 for anyone wanting to cash out of their home equity.
HOWEVER…even though lending is tightening up, here’s where we get into the NEW potential concern of the week: Home buyers NOT making their mortgage payments, and I’m calling for the “MORTGAGE FORBEARANCE TRAP.”
What many buyers must understand is that Forbearance is different than DEFERMENT…which is where you can miss a few of your payments, and apply that to the END of your loan. HOWEVER…that’s not an easy process to go through. This is done ONLY on a case by case basis, for pre-approved borrowers, when they know EXACTLY how long you’re not going to be paying for…because, while you’re not paying your mortgage, the mortgage servicer STILL needs to make your interest payments to the fund that now owns your loan. And, the mortgage servicer is unlikely to want to make these payments on your mortgage - on your behalf - without wanting to catch up on those payments upfront, and that’s where the problem lies.
So, I have a feeling - that, after this forbearance period is up - if buyers are STILL unable to pay, they’re going to be processed through a different application for either a loan modification, which allows for the buyer to add those missed payments to the end of the mortgage, or a payment plan which allows the buyer to make small, extra payments towards paying down the outstanding debt.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1400): https://act.webull.com/k/Vowbik9Tm5he/main
NEW: JOIN THE WEEKLY MENTORSHIP - https://the-real-estate-agent-academy.teachable.com/p/graham-stephan-mentorship-program/
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
JP Morgan Chase, one of the nations LARGEST mortgage lenders, just raised its standards as to who can get a loan, and many lenders followed. Some of the new requirements include:
One, making sure you’ll still employed, and this is verified 3 days before your loan actually closes.
Two, they’re only using the most recent bank statements as possible within the last 60 days.
Three, if you’re self employed and UNABLE to show bank statements with proof of income - then your qualifying income, as in - what’s on your tax return - will be reduced by 25%, just to give a little more wiggle room if anything was to happen.
Four, and this is HUGE for real estate investors…Rental Income can ONLY be used if you have a FICO score ABOVE 700, and you can document 6 months of reserves for each financed property in which rental income is being used to quality.
Five, banks have lowered their maximum debt to income ratio - meaning, your mortgage payment can’t exceed 50% of your take home pay.
Six, Bank of America just raised it’s credit score requirement from 660…all the way up to 720 for anyone wanting to cash out of their home equity.
HOWEVER…even though lending is tightening up, here’s where we get into the NEW potential concern of the week: Home buyers NOT making their mortgage payments, and I’m calling for the “MORTGAGE FORBEARANCE TRAP.”
What many buyers must understand is that Forbearance is different than DEFERMENT…which is where you can miss a few of your payments, and apply that to the END of your loan. HOWEVER…that’s not an easy process to go through. This is done ONLY on a case by case basis, for pre-approved borrowers, when they know EXACTLY how long you’re not going to be paying for…because, while you’re not paying your mortgage, the mortgage servicer STILL needs to make your interest payments to the fund that now owns your loan. And, the mortgage servicer is unlikely to want to make these payments on your mortgage - on your behalf - without wanting to catch up on those payments upfront, and that’s where the problem lies.
So, I have a feeling - that, after this forbearance period is up - if buyers are STILL unable to pay, they’re going to be processed through a different application for either a loan modification, which allows for the buyer to add those missed payments to the end of the mortgage, or a payment plan which allows the buyer to make small, extra payments towards paying down the outstanding debt.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
Expeditetools,com saved me from bad credit .They got a transfer of $50,000 directly to my bank account .
I could not qualify to buy the home i bought 5 years ago, just with that debt to income ratio change. Terrifying.
Do a quick google search for ECOM BAZZOID someone posted your courses Graham
Do a quick google search for ECOM BAZZOID someone posted your courses Graham
Good info, thanks!
I am currently looking into Real Estate as a career path. Could you do a video on how you would approach getting your license now since there are more hurdles with the quarantine? Any other advice would be greatly appreciated. Thank you!
Dude I just love all these Andy Hacks spam messages.
Is he a midget
So why are all the multifamily homes I've been looking at have give up drastically in the last few months? It seems like everyone is raising prices on their properties.
jesus look at all the propped up poster scams below
i pay cash. Homey don't pay interest. So I don't care about loans or loan rates. I am just hoping for some price drops as I am prepared to buy my retirement home. I have a fair price range in mind. I will buy at that point and since I plan to stay in the house any subsequent price changes are not relevant.
“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” Mark Twain
"If your mortgage is $3,000 a month"
Excuse me, what?
So is it gonna be a bad time to become a real estate agent?
Great information
This is no crisis
HULK SMASH BUTTON!!!!!!
A lot of these new stipulations have been in place in Canada for the last decade if not longer
20% down min
2 of your most recent pay stubs
2 of your most recent tax returns
Letter of employment from employer
45%-50% DTI
If you have rental property only 50% of rental income can be used
Good stuff
Hospitalised lol. No title shot for 10th planet now 😂
Whenever I watch your videos I automatically “smash that like button for the YouTube algorithm” 😂
We’ve been there already, forbearance, modifications are BS!
I have my house up for sale for 493K BEFORE the manufactured crisis.
I had 88 'saves'.
2 days after the lockdown. 22 saves.
I lowered the price of my house 30K and still nothing.
Thats whats REALLY happening.
@grahamstephan Chase is not offering the HELOC as of now. LOL
As a tax payer who just bailed out the banks in the Trillions with no questions asked. The banks Making it harder and more expensive for people to borrow money pisses me off.
"…you and *me*…"
I am going through this mess right now. Qualified for mortgage, made an offer, accepted offer on my old place and now they changed the terms. I am in good shape with credit score and down-payment but part of my income is rental. And now they want so much crap from me its crazy. Also you would think prices are down….nope, everything is going above asking
forebearance rules have changed where youre not required to make up the lump sum in one payment.
Now is not a good time to buy. Hold off, wait for the upcoming real estate crash in the next year
Market will crash facts History
Not prediction, you suggested it, LoL!
So after 2 years of working to fix my credit score bad timing pushes that minimum up again? This is like the carrot on the fishing line.