No Exaggeration
There are a staggering number of Florida mortgage customers that will be impacted by the changes in the mortgage industry. Maybe you have heard that twenty percent of all homes purchased nationwide in recent years were purchased using subprime mortgage products. The Florida real estate market is one of the most active in the country and the percentage of subprime mortgages utilized here in the last five years is over twenty-five percent. These subprime products, although not entirely extinct yet, are vanishing at an accelerating pace. What are the implications?
Sorry, No Refinance For You
If you are one of the millions of Florida mortgage customers that purchased homes using a subprime mortgage it is time to examine your situation. Most subprime mortgages have adjustable rate features. The most typical subprime product is fixed for a period of two years before it adjusts. Some are timed to adjust after three years. Do you have an adjustable rate mortgage? Do you know when it will adjust? Will you be able to afford the higher payment? If you used subprime financing to purchase your home and your situation has not improved enough to allow you to qualify for a conventional mortgage you may not be able to refinance. If you cannot afford your new adjusted payment and you cannot qualify for a refinance, what will you do?
The Spillover Effect
Subprime borrowers are not alone in their quandary. As the subprime mortgage market has shut down, lenders that offered creative financing options to prime borrowers have begun to rethink their product line. Stated income programs, also known as SISA, or no-income verification mortgages are in danger of extinction as well. Guidelines are being tightened daily. Of some additional concern are the possible actions of the States who have begun to discuss banning these mortgage products within their borders. This has not occurred in Florida, but given the recent upswing in mortgage defaults, it is conceivable.
The Florida Prime Mortgage Market Impact
I’m thinking of all of the prime Florida mortgage customers, even those with exemplary scores in the seven hundred plus range that utilized SISA or no-doc programs in the past. As a Florida mortgage broker I can attest to the popularity of these products among my customers. I can’t predict the impact of the elimination of these prime products, but at the very least these borrowers will face considerably more paperwork when they apply for a mortgage. In some cases these borrowers may no longer qualify for financing at all. I do expect, however, that mortgage lenders will find a way to continue to offer some form of low-doc financing options to borrowers with excellent credit.
He Who Hesitates is Lost
Do yourself a big favor. Take action today. Take a close look at your situation. Pull out your mortgage note if you need to. Figure out when your mortgage will adjust. Should you refinance right now while there are still mortgage programs that will accommodate your credit and income profile? Call your friendly Florida mortgage broker and have a chat. I promise you that there is some action that you can take today to make sure that there is a reasonable solution tomorrow.
Credit Repair
Credit repair is entirely legal and often underestimated. Most borrowers that are relegated to the subprime category have credit issues. Without exception, every credit impaired subprime borrower can take action to improve their credit and graduate into a prime borrower class. How is your credit? If you have had credit issues in the past it is essential to become pro-active about your credit. Please, please, never imagine that there is nothing that you can do about your credit. Too many people simply give up on themselves. A bit of attention could very well mean a one hundred point improvement in your credit score and a whole new outlook on life. Don’t doubt. Speak to a credit repair professional.
Knowledge is Power
Whatever your situation in life you will always be better off truly knowing the facts as well as your options. Everyday is an opportunity to turn your situation around. Pick up the phone. Call your Florida mortgage broker or a credit repair expert. Ask questions. Almost every reputable financial professional offers a free consultation. Take advantage. Learn something new everyday. You will, without fail, discover that you have infinitely more control over your future than you thought. Invest some time in your own life. That investment will pay amazing dividends.
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