Archives for November 2010

The Mortgage Porter’s 4th Anniversary

I'm not sure if it's an anniversary or birthday, but I do know that this blog was created four years ago today.   Here's the post that launched The Mortgage Porter.

I cannot imagine not having my blog.  It has become a significant part of my career.  It helps me communicate with my clients, has become a resource to help educate my readers, some days it serves as a form of therapy when I can "vent" frustration and it's also brought me amazing opportunities.   There are so many wonderful people whom I have had the opportunity to know because of Mortgage Porter and social media.

Thank you so much for reading Mortgage Porter.

What Determines How Much Home You Qualify to Buy: Part 1 – Your Payment

seesawPreapproval letters typically begin stating that a home buyer has been qualified or preapproved to buy a home priced at specific amount.  What it really boils down to is how much mortgage payment the home buyer qualifies for based on the borrowers monthly income and the debt to income ratio that is being allowed by the program guidelines.   Your proposed mortgage payment determines the loan amount that you’re qualified for.   Add the funds to cover your down payment less the closing cost and you’ll have the sales price.

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Happy Thanksgiving

Happy Thanksgiving to you and your family from ours.

Thanksgiving 035

Mortgage Master Service Corporation is closed today and tomorrow.  We will reopen for business as usual on Monday, November 29, 2010.  

Seattle Scenes

Just a few photos I caught with my Droid-X while we were cruising through Seattle today.  With the "s" word in the forecast, we stopped by REI for some mittens and other warm winter wear.  

The first two photos are of Seattle's historic Steam Plant.




You can just see part of Qwest Field, where the Seahawks and Sounders play, to the right of King Street Station from Pioneer Square.

2011 Conforming Loan Limits for Washington State

Fannie Mae issued their confimation that the current loan limits of 2010 will continue through 2011 with certain "high cost areas", like Seattle, Bellevue, Everett or Tacoma, retaining the temporary high balance loan limits for loans originated through September 30, 2011.    

High Balance loans are set to roll back to lower limits previously set with loans originated October 1, 2010.  For the great Seattle area, that means that loan amounts over $506,000 will be considered non-conforming (jumbo rates and underwriting guidelines) for a single family dwelling.   I'll be sure to write more about this as that time approaches.  Click here for loan limits effective October 1, 2011 through December 31, 2011 in Washington.

High Balance Loan Limits for Washington State until September 30, 2011:

King, Pierce and Snohomish Counties

 1 Unit – $567,500

 2 Unit – $726,500

3 Unit – $878,150

4 Unit – $1,091,350

Clark and Skamania Counties

1 Unit – $418,750

2 Unit – $536,050

3 Unit – $648,000

4 Unit – $805,300

Jefferson County

1 Unit – $437,500

2 Unit – $560,050

3 Unit – $677,000

4 Unit – $841,350

Kitsap County

1 Unit – $475,000

2 Unit – $608,100

3 Unit – $735,050

4 Unit – $913,450

San Juan County

1 Unit – $593,750

2 Unit – $760,100

3 Unit – $918,800

4 Unit – $1,141,850

NOTE:  The following Washington counties do not have "high-cost area loan limits": Adams, Asotin, Benton, Chelan, Clallam, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Kittitas, Klickitat, Lewis, Lincoln, Mason, Okanogan, Pacific, Pend Oreille, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima.

Conforming Loan Limits for 2011

1 Unit – $417,000

2 Unit – $533,850

3 Unit – $645,300

4 Unit – $801,950

Download loan limits here.

Reader Question: Converting Current Home to Rental

I enjoy receiving email like this from my readers:

I currently own a condo as my primary residence and am getting married soon.  The mortgage and title is in my name only.  We will soon like to look at moving to a bigger place and would apply for a mortgage on our new primary residence together while still keeping the condo to rent out.  How will this situation affect getting approved for the new loan?  Are there any changes that will need to be made to my current condo mortgage since it will no longer be my primary residence?  Thanks in advance for your help! 

Unless you're planning on refinancing your existing condo, there shouldn't be any changes that you need to make that mortgage because you are renting it out.  If you are currently refinancing or planning to refinance the condo, you should let your mortgage originator know of your intentions to use the property as an investment property.  On a side note, you may also want to check with your Home Owners Association or condominium bylaws to make sure that investment properties are allowed.

Qualifying for the new home will be impacted by the type of financing you select and the amount of home equity you have currently in the condo.  If you have less than 30% home equity, you'll need 6 months reserves for all of your mortgages (your current residence/future rental and the new home) if you're considering conventional financing or you must qualify with both mortgage payments.  FHA does not have this guideline at this time. 

In addition, if you do not have a documented current two year history as a landlord, you may find that the entire mortgage payment (including the home owners association fees) may be factored into your debt with no credit for any rental income you receive on the new home.

Lenders are looking for extra reserves and making sure that people who are leaving their current homes have enough "skin in the game" (equity) so that they're less likely to walk away from their former residence once they've closed on their new home.

By the way, if the home you're buying with your future bride is located in Washington state, I'm happy to help you with your mortgage!


Buying a Condo or Townhome?

iStock_000061440694_MediumCondos come in many forms including high-rises, converted apartment buildings and even some town-homes may be condominiums depending on how they are legally described.  If you’re planning on buying a condo and not paying cash for your purchase, here are a few things to look out for where lenders may have an issue with.

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Veterans Day

Today we thank and remember those who have served our country.  

Mortgage Master Service Corporation is closed in observance of Veterans Day today.  We will re-open for business as usual on Friday, November 12, 2010.

Hat tip to my mother-in-law, Ruth Porter, for the Kiss video!