Flagship Mortgage works to fund futures

Graf and the Flagship Mortgage staff in the Lockport office are in business to fund futures, not pasts, he says. “We continue to grow because we are mortgage consultants,” he said. “I do analyses (of customers’ finances) constantly.” Graf says many lenders have had to yank mortgage product lines. He calls the lines “exotic products,” such as interest-only loans, variable loans and negative amortization loans, which helped create a climate of collapse.

“Because borrowers need to make educated decisions, we act as the borrower’s advocate. I take time with people, giving special attention to their financial condition,” he said. Graf says he works with customers to prepare them for financing, whether it is a home or investment property. New guidelines The biggest news is mortgage insurance companies tightening guidelines.

Private mortgage insurance and government mortgage insurance programs help a lender make a loan that might otherwise be considered a risk for the lender. For instance, if a borrower has less than 20 percent of a home’s sale price as a down payment, mortgage insurance will become part of the lender’s requirement. New lending guidelines taking effect in March could squeeze homebuyers and investors even further. Nationwide, new standards for borrowers’ credit scores will rise.

What this means, Graf says, is borrowers will need higher credit scores, maybe 680 or better, and at least 5 percent to 10 percent equity, instead of financing a home’s total value. Cash-outs on investment property lending will not be eligible no matter what the credit score, Graf said. “Reduced document loans will require a minimum 10 percent down and 50 percent of borrower’s income must be from a self-employment source, that is, commissions or actual business,” he said.