New financing options make homes for affordable

One of the great mortgage brokers I work with, Ray Mayer, sent me the following information regarding some new lending programs.

Pre-Sales nearing Completion? For those wishing to take advantage of their equity gains during the construction period; we can now provide financing based on the present value vs. the original pre-construction purchase price.

Relaxed Debt Service Requirements: Until recently most lenders followed the standard Debt Service Ratios of 32% GDS and 40% TDS. With a good credit score we have programs that will now ignore the GDS (Gross Debt Service ratio and only look at the TDS (Total Debt Service ratio). TDS ratios of up to 50% are now available. The combination of increased DS ratios and extended amortization periods (up to 40 years) make it much easier for buyers to enter or move up in the market.

These seem to be great programs and offer buyers more options in financing their new home, but we must remain vigilant to keep our personal debt loads under control.