Archives for February 2012

FHA Mortgage Insurance set to increase April 2012

Yesterday, HUD announced they are going to increase the annual (paid monthly) and upfront mortgage insurance premium on FHA insured mortgages effective on new case numbers obtained April 1, 2012 April 9, 2012 and later.

As of today, the upfront mortgage insurance premium for FHA insured mortgages is 1% of the loan amount. Most borrowers elect to finance this into their FHA loan although it can be paid for as a closing cost instead of including it in the loan amount.  HUD will be increasing the upfront mortgage insurance premium from 1% to 1.75% on April 1, 2012 April 9, 2012.

FHA's annual mortgage insurance (paid monthly) is set to increase by 0.10% for standard FHA loan amounts and will increase an additional 0.35% for "FHA Jumbos will take place on June 1. The additional 0.10% increase is due to "The Temporary Payroll Tax Cut Continuation Act of 2011. HUD has elected to tack the additional 0.25% on the larger loan amounts.

In the greater Seattle area, FHA base loan amounts of $417,000 or lower will see the annual mortgage insurance increase by 0.10%.  Seattle's current high balance (or FHA jumbo) impacts loan amounts of $417,001 to $567,500 and these loans will have increased annual mortgage insurance premiums by 0.35%.

How does this impact an FHA borrower?

Today a Seattle area homebuyer using an FHA insured mortgage at $417,000 with a minimum down payment of 3.5% and excellent credit would have a PIMI principal, interest and mortgage insurance) of $2,346.78 based on a 30 year fixed with a rate of 3.750% (apr 4.544). Effective April 1, this scenario will have a PIMI of $2,395.73 assuming the same rate (apr 4.665).  An increase in total monthly mortgage payment of $48.95 for the same scenario!

Currently a Seattle homebuyer using an FHA mortgage at $567,500 with a minimum down payment of 3.5% and excellent credit would have a PIMI (principal, interest and mortgage insurance) payment of $3,193.76 based on current rates of 3.750% for 30 year fixed rate (apr 4.541). Effective June 1, this high balance FHA loan, assuming the same rate (apr 4.817), the payment increases to $3,377.61! An increase in total monthly mortgage payment of $183.85 for the very same scenario!

NOTE: Rates quoted above are effective as of 2/28/2012 at 4:00 pm. If you would like me to provide you with a mortgage rate quote for your home located in Washington, click here.

If you are considering an FHA insured mortgage, whether it's for purchasing a home, FHA streamlined refinance or other refinance, you'll want to take action before the increased rates take effect. FHA case numbers are issued when you have a bona fide loan application (transaction) with a mortgage originator. I'm happy to help you if your home is located anywhere in Washington state.  UPDATE 3/6/2012: If your FHA mortgage was originated prior to June 1, 2009, you may qualifed for reduced FHA mortgage insurance.

If you would like a rate quote for an FHA mortgage on a home located in Washington, click here.

An official Mortgagee Letter is expected to follow soon. Don't wait!

Click here for FHA Loan Limits in Washington 

UPDATE 3/6/2012: It's official: Here's information about HUD's Mortgagee Letter.

LIVE POST: Mortgage Rates for Washington State and other Mortgage Miscellany

We have a lot of economic reports scheduled to be released this week which may influence mortgage interest rates.  Here’s a snapshot of what’s on deck:

Monday, February 27: Pending Home Sales

Tuesday, February 28: Durable Goods and Consumer Confidence

Wednesday, February 29: GDP, Chicago PMI and the Fed’s Beige Book

Thursday, March 1: Personal Income, Initial Jobless Claims, Personal Core Expenditures (PCE), Personal Spending and ISM Index

There are many factors that impact the pricing of a mortgage rate. If you would like me to provide you with a rate quote based on your personal scenario for a home located anywhere in Washington, please click here.


Are you really preapproved or just prequalified for a mortgage? Part 2

preapprovalA preapproval is the next step after becoming prequalifed.   Essentially, this means that you are supplying all of the documentation that is required to support your loan scenario.   Everything you have told the Loan Originator needs to be backed up for a “full doc” loan.   The mortgage originator will review your supporting documentation  (W2s, paystubs, asset accounts, credit report—tax returns if you’re self employed or paid commission…etc.) and make sure that they have a strong file for the underwriter.   Once you have selected your mortgage program, your information is typically submitted to an AUS (automated underwriting system aka a computer) which produces “findings”.   The findings detail what type of documentation is required for the loan approval.   Sometimes the findings will require less or more documentation than a mortgage originator has obtained. Different lenders may have their own underwriting overlays in addition to what the AUS has provided.

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Are you really preapproved or just prequalified for a mortgage? Part 1

I Spy FisheyeThere’s quite a difference between being prequalifed for a mortgage and preapproved.   The letters that Loan Originators provide when requested for a prequal or preapproval may appear very similar.  In fact, I’ve talked to borrowers on the phone who thought they were actually preapproved, when all they really had was a rate quote worksheet or possible a good faith estimate from a lender.  A good faith estimate, loan estiamte or rate quote worksheet are not a commitment to lend and do not indicate that someone has been prequalified.

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My first painting: JP Patches

Mortgage Master Service Corporation is closed today in observance of Presidents Day and will reopen for business as usual tomorrow. Since it’s a holiday weekend, I thought I’d share something personal with you.

My new hobby that I’ve recently picked back up is painting. With my son off to college, in the evenings and weekends, I’m really enjoying picking up the paint brush.

Here’s my first finished project: JP Patches on black velvet.


For those of you who are not originally from Seattle or who didn’t grow up in my era, JP Patches is a local treasure who many of us would spend our mornings or afternoons with while watching him on TV.

My husband surprised me when he had JP Patches show up at my 40th birthday. I adore this clown.  

I don’t plan on posting all of my art on Mortgage Porter.  I’m starting a new blog for that.  Your regular scheduled programing will return tomorrow.

Happy Presidents Day.

HARP 2 Expanded Guidelines Available Next Month

During the weekend of March 17, 2012, possibly while you're enjoying an Irish HARP's at The Celtic Swell off the shores of West Seattle, Fannie Mae and Freddie Mac will be releasing the next set of expanded guidelines for the Home Affordable Refinance (coined HARP 2 or 2.0).

Many Washington area home owners with conventional mortgages closed prior to June 1, 2009 are eagerly looking forward to this St. Patty's Day so they can take advantage of the current low mortgage rates.  If you've been turned down for a HARP refinance before, you should consider trying again with this expansion.

HARP enhancements on the March 17 release include:

  • No maximum LTV (loan to value) ratio for fixed rate mortgages;
  • 105% maximum LTV for adjustable rate mortgage;
  • More properties will qualify to have the appraisal waived, including primary residences, second homes and investment properties.

Borrowers still need to qualify with income, employment, credit and assets. If a borrower is relying on income from a second job to qualify, there cannot be any gaps of employment for that job in the last 12 months.  Fannie Mae DU Plus will also require 2 months of reserves for second homes and six months reserves to be verified for investment properties.

Some Washington home owners are not waiting until next month to refinance. If Fannie or Freddie are accepting the home's current value (generally it's underwater no more than 105% LTV) they may receive an appraisal waiver.  You may not have to wait either!  If we do not receive an response from Fannie or Freddie with an appraisal waiver, we can work on improving your credit or savings while we wait for the next expanded guidelines next month.

If your home is located in Washington state, I'm happy to review your scenario.  For your HARP rate quote, click here.

For more information about HARP 2.0, please click here.

I am required to have the language below if I am soliciting your Home Affordable Refi for your home in Washington…and yes, I would love to help you with your HARP (or any) refinance:

Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance program (HARP) and you may be eligible to take advantages of these changes.  

If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.

You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following or


What Do You Need for a Preapproval?

preapprovalIf you’re considering buying a home, many real estate agents and/or sellers will require a preapproval letter. A preapproval letter is different than being “prequalified”. Being prequalifed means that you have provided verbal information to a mortgage originator to get an idea of what you qualify for. Being preapproved means that you are providing documentation that supports the information you have provided. Income, employment, assets and credit are verified for a preapproval.

Some preapproval letters aren’t worth the paper they’re written on. Especially if the mortgage originator you’re working with does not require supporting documentation before preparing the letter. If you have not provided supporting documentation (listed below) to your mortgage originator – you’re probably just prequalified and not actually preapproved.

Here is a list of documents you may be required to provide in order to obtain a preapproval:

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Mortgage Rate Market Movers for the Week of February 13, 2012

We have plenty of economic indicators on the plate for this week not to mention to continued Euro-story. Remember, positive information, when the stock market is doing well or data that indicates positive inflation tends to cause mortgage rates to rise. Mortgage rates are based on bonds (mortgage backed securities) and investors tend to trade the safety of bonds for better return found with stocks when possible.

There are no economic indicators scheduled for today and the DOW is currently up 34 at 12,836 as I publish this post on 7:45 am PST on February 13, 2012.

Here's are a few reports that are scheduled for this week:

  • Tuesday, February 14, 2012: Retail Sales.  HAPPY VALENTINES DAY!

  • Wednesday, February 15, 2012: Empire State Index, Industrial Production, Capacity Utilization and FOMC Minutes

  • Thursday, February 16, 2012: Building Permits, Housing Starts, Producer Price Index (PPI), Initial Jobless Claims and Philadelphia Fed Index

  • Friday, February 17, 2012:  Consumer Price Index (CPI)

  • Today's my first day back from a couple days off at Mortgage Tech Summit in Scottsdale so I won't have time to update this post with live rate quotes. I will share live rate quotes on Twitter AND I'm happy to provide YOU with a no obligation mortgage rate quote for your home located anywhere in Washington state.  For your personal mortgage rate quote, click here.