Financing Your Mammoth Dream Home
Lending varies by area and Mammoth Lakes has some tough rules in order to obtain financing on property here. Here’s the current breakdown on the lending requirements in Mammoth Lakes from Doug Magit at Wells Fargo Home Mortgage in Mammoth Lakes.
There will be a tightening up of the debt-to-income ratio allowed for buyers from 45% to 43% as of January 2014. Lending has gone back to full documentation requirements even to get a pre-qualification letter.
If you are thinking about making a purchase in Mammoth Lakes, be sure to get a pre-qualification letter before starting your property search to avoid the pitfall of falling in love with a property you cannot afford to purchase.
The documents required for a pre-qualification letter with Wells Fargo Home Mortgage are:
- 30 days of paystubs from your employer
- 2 months of bank statements
- 2 years of completed tax returns & W-2’s & K-1’s
- Investment statements
- Credit report
- Explanations of all deposits made into your bank accounts
The process to obtain a pre-qual letter can take up to 3 weeks as all documents must be sent to the lender’s underwriter for approval.
There are 3 types of loans available at Wells Fargo depending on how much you need to borrow:
- Conforming Loan carries a balance up to $417,000
- Mono County Conforming High Balance Loan goes up to $529,000
- Jumbo Non-conforming Loan offers loans up to 3 Million and requires a 700 minimum credit score.
First Time Buyer Loans:
If you are a first time buyer and purchasing your primary residence you have a few options:
- You can obtain an FHA loan in Mammoth Lakes with as little at 3 ½% down. These loans are available on single family residences only in Mammoth, not on condos. These loans have the most lenient requirements overall and do have income limits. They are funded by the Federal Housing Association and are not conventional loans funded by Fannie Mae and Freddie Mac.
- If you prefer a conventional 30-year or 15-year loan, you can get one with 5% down with a 740 credit score.
- With 10% down you can get a conventional loan with a 720 credit score.
- With 20% down you can get a conventional loan with a 680 credit score.
Regarding how lenders determine your credit score:
Everyone has 3 different credit scores from the 3 major credit bureaus, Experian, Equifax and Transunion. Lenders in Mammoth Lakes will use your middle credit score of the 3 as the basis on which to give you financing. If you are married, they will use the lower of the couple’s middle scores as the score on which to give you financing.
2nd Homeowner Loans in Mammoth Lakes:
Second homeowners who are purchasing in Mammoth Lakes will need a credit score of 620 minimum and have a few options as well:
- If you are purchasing a condo, there is a 25% down payment requirement in order to obtain a “streamlined review” of the condo project, which means that the lender will not require a Homeowner Certification. These pesky documents have precluded lending in many of the local condo associations for years on end in the past.
- If you are purchasing a single family residence, you will need only 20% down.
Land and Construction Loans in Mammoth Lakes:
- These loans will require a credit score of 680. Land loan programs are available with 50% down only to current Wells Fargo customers of at least 2 years.
- Construction loans can be wrapped in with land loans as well with the same requirements.