Reduced Down Payment Conventional Loans may require Compensating Factors

Mel_WattMel Watt, Director of the FHFA, has released his prepared remarks for the National Association of Realtors Conference. In his remarks, he addresses the lower down payment options that should be available soon with conforming mortgages and that they will require compensating factors.

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Home Buyers Seminar in Northgate

Seattle Home Buyer Classes

I will be teaching a home buyer class in Seattle with Jim Repppond of Coldwell Banker Danforth on Saturday, November 15, 2014 at the Coldwell Banker Danforth’s Seattle office, which is located just south of the Northgate Mall.

The class is sponsored by the Washington State Housing Finance Commission. Students who attend are eligible for programs like Home Advantage or House Key Opportunity (the Washington state bond program) or Freddie Mac Home Possible. Students are also eligible for various down payment assistance programs and MCC (mortgage credit certificates).

If you are considering buying a home with your spouse, partner or friend, they will need to attend the class with you to qualify for the programs.  You do not need to be a first time home buyer to qualify for many of the mortgage programs. And of course, you’re welcome to attend if you’re not interested in down payment assistance programs and you just want to learn more about the home buying process. [Read more…]

What May Impact Mortgage Rates this Week: November 3, 2014

MortgagePorter-JobsReportBlack Knight Financial Services says at least 7.4 million mortgages should refinance, due to where rates are today and looking at borrowers with current notes at 4.5% and above. This may also be a good time to refi into a conventional mortgage if you have an FHA mortgage with a rate in 3% range with expensive FHA mortgage insurance.

Last week the Fed formally wrapped up their aggressive buying of mortgage backed securities (QE) which helped to keep mortgage rates at such a low level over the past couple of years. This was not a surprise to the markets as the Fed had continuously reiterated their plans to end QE in October. Mortgage rates seem to be slowly trending higher.

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Why use an FHA Mortgage for your home loan?

mortgageporter-thinkingWhen Washington state home buyers and home owners request a mortgage rate quote from me, they have many options, including FHA or conventional financing. Over recent years, conventional financing has become a more popular mortgage than FHA, despite FHA’s lower down payment requirements.

What’s not so hot about FHA?

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What the Fed Said

20140504_210758In a nutshell, the Fed will no longer be manipulating mortgage rates at artificially low levels. As I write this, I’m receiving intraday rate sheets from some lenders with pricing for the worse.

This is from the Fed’s Press Release:

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What May Impact Mortgage Rates this Week: October 27, 2014

10584108_10152349540866046_1789571015476639111_nWill this week bring tricks or treats with mortgage rates? The stage is set to be another volatile week for mortgage rates with scheduled economic events/indicators. The Fed is expected to retire QE3 this week, in which they were buying bonds and treasuries to keep mortgage interest rates at artificial low levels.  In addition, the economic issues taking place in Europe and other uncertainties in the world, just adds to the drama we may see play out with mortgage rates.

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Fannie Mae HomePath now offering Financial Flexibilities

financial_flexibilityEarlier this month, Fannie Mae retired the Fannie Mae HomePath Mortgage program which was available exclusively to homes owned by Fannie Mae as a result of foreclosure. This popular program offered mortgages with no private mortgage insurance and no appraisal was required. Investors were able to buy HomePath properties with reduced down payments.

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Conforming Mortgages set to Reduce Minimum Down Payment

Mel_WattAt the MBA Annual Convention this week, Mel Watt, Director of the FHFA announced that Fannie Mae and Freddie Mac will be reducing the minimum down payment.

From his prepared speech:

“To increase access for creditworthy but lower-wealth borrowers, FHFA is also working with the Enterprises to develop sensible and responsible guidelines for mortgages with loan-to-value ratios between 95 and 97 percent. [Read more…]