Archives for March 2012

Buying a Vacation Home in Washington

WPointless Jones Island Aug 2014ashington State has so many great areas for folks to vacation in.  From the deserts in eastern Washington, rugged mountains, the Pacific coastline or the San Juan Islands; I think our state pretty much has it all to offer. It’s no wonder I’m seeing more clients taking advantage of lower home prices and interest rates to buy a second home.

Mortgage rates are essentially the same for a second home as they would be for a primary residence.  Here are some requirements lenders have for financing an vacation (or second) home:

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Less than two weeks remaining before FHA mortgage insurance premiums jump higher

If you are considering an FHA mortgage, you have less than two weeks to obtain an FHA case number at our current FHA mortgage insurance premiums.  Effective April 9, 2012, HUD is increasing the cost for FHA insured mortgages for purchases, FHA refinances and many FHA streamlined refinances that were endorsed after May 31, 2009.

NOTE: Some borrowers doing an FHA streamlined refinance may be eligible for reduced rates and should hold off on their streamlined refi – please check with your local mortgage originator to see if this applies to you.

Mortgage originators can only provide an FHA case number if they have a bona fide transaction, including a complete loan application. Borrowers in the process of obtaining FHA financing should confirm with their mortgage originator that they indeed have an FHA case number. I recommend you ask your mortgage originator for your case number.  

 Borrowers who are barely qualifying with higher debt to income ratios may find they qualify for less with FHA mortgage payments increasing.  If you are currently preapproved with FHA financing, double check with your lender to make sure you still qualify for the same loan amount and sales price once the increased mortgage insurance premiums go into effect.

FHA borrowers with "high balance" loan amounts will be whammo'd again as HUD increases their mortgage insurance premiums again effective for case numbers issued on or June 11, 2012.  In the greater Seattle area, this would be FHA loan amounts from $417,001 to $567,500.

Here's a link to 2012 FHA loan limits in Washington State.

If you've been considering an FHA streamlined refi – please do not assume that because your loan closed prior to May 31, 2009 that it was endorsed by May 31, 2009. Sometimes it may take a couple months for HUD to endorse (insure) the FHA loan. It's possible that you may have closed in March of 2009 and HUD may not have endorsed it until June, 1 2009 or later, making this loan not eligible for the reduced FHA mortgage insurance rates.

If you are interested in an FHA mortgage (or just about any home loan!) for your home located in Washington, I'm happy to help you!  I have been originating mortgages, including FHA, at family owned and operated Mortgage Master Service Corporation for the last 12 years.  

Best Places for Beer in Seattle

Ever since I learned that Jay Thompson has joined Zillow and is making a move to my home town of Seattle, I've been thinking about this post. You see, I was able to spend a little time with Jay when he was a fellow speaker at the Mortgage Tech Summit in Arizona last month and one thing I learned about Jay is that he appreciates good beer.

Here is a quick list of some of my favorite beer places around Seattle…yes, most are in West Seattle, since that's my stomping grounds. Please keep in mind that I tend to be a "wine" drinker – however I can be swayed to refreshing brew, like a Dog Fish Head Imortal Ale.

Jay, this bud's for you!

Super Deli Mini Market on SW 35th. This is an amazing place. You step in, and it's a mini mart. They have Twinkies, motor oil and diapers and they have beer on tap. You'll see folks walking around enjoying a nice glass of beer and not just any beer – this place has an amazing selection of beers. I've seriously have never seen anything like it before. You can even get a "taste cup" to sample what ever they're serving up on tap.  It can be a little "sketchy" – my first time there, I found myself almost ducking behind a row of diapers (with my beer) when a drunk came in yelling at the cashier. Thankfully that's only happened once. They also have an incredible selection of cigars.

The Beer Junction. This is similar to the mini mart where it has an incredible selection. Both of these spots must have hundreds and hundreds of bottles to select from.  Beer Junction is located in, as the name implies, "the Junction" neighborhood of West Seattle and is nowhere near as edgy as the Mini Mart. The last time I was in the shop, I learned they're getting ready to move to a larger location just off California.

The Beverage Place Pub. Also off California in Seattle, the Beverage Place Pub is an actual pub located in a historic building with a great selection of beers. My first time there was for a barly wine event. Great atmosphere but no food!  However, you can order food to be delivered from several of the great West Seattle restaurants.

My last recommendation for Jay to check out is a place that a former Zillow-ite used to love when he lived in Seattle… yep, David Gibbons (aka David G)'s favorite hamburger spot:  Latona Pub.  Latona Pub is also a spot where a few Seattle reBarCamp planning sessions would take place over probably one of the best hamburgers in Seattle and a nice brew. Unlike my other suggestions, Latona Pub is not in West Seattle – it's in Greenlake (north Seattle).

Jay, you'll find we have no shortage of great micro-breweries, winerys or coffee in Seattle!  I know I am missing many other great places for Jay to check out – remember, I tend to be more of a "wine person".  Feel free to share your favorite finest beer spots with me (my hubby would probably really appreciate this info too).

Welcome Jay and Francy to Seattle!  


Why May 31, 2009 is the cut-off date for Home Affordable Refi Program (HARP 2)s

I'm on a confererence call with Fannie Mae regarding the updates made to HARP 2. Someone has asked about how the date was selected for the cut-off of when when a mortgage is eligible for HARP 2.  The answer from a gentleman representing Fannie Mae said (paraphrased – this is a conference call):

Because anyone who bought a home or obtained a mortgage June 1, 2009 or later, knew the they type of housing marketing were getting into.  

The Fannie Mae rep insinuates that those who financed prior to June 1, 2009 may have not been aware of the dramatically changing climate in the housing industry.  

By the way, the date of May 31, 2009 is not the closing date – it is the date Fannie Mae securitized the loan which may be weeks after the closing date. I have had clients who have missed qualifying for a HARP refi because Fannie Mae securitzed their loan ON June 1, 2009, disqualifying them by one day!

I was surprised by the Fannie Mae rep's response. I assumed there was a more scientific reason for the date of loans securitized prior to June 1, 2009 instead of "these borrowers knew better".

In my opinion, the date should be removed. Why punish borrowers who happened to refinance or buy after that time period. If Fannie Mae's argument is that these borrowers knew better, how could they continue to have mortgage programs available during that time? I feel that if borrowers are qualifed and can benefit from a HARP refi, they should be allowed to have access to this program to help their personal finances and therefore, the economy to improve.

Other factors Fannie Mae is stressing is that loans are still underwritten based on risk – especially borrowers in a negative equity position.  It's not guaranteed that HARP refi's will receive an appraisal waiver and not all scenarios will receive an approval for a HARP refinance.  I've been contacted by Washington area home owners who lack steady income or have blemished credit assuming they will qualify – they may not. We won't know until we submit your loan scenario to Fannie Mae's automated underwriting system DU Plus and have a response before we can determine IF someone qualifies for HARP and what documentation will be required.

If you are interested in a Home Affordable Refi (HARP 2) for your home located anywhere in Washington, please click here.

The 10 Factors of Pricing a Mortgage Interest Rate Quote

MortgageAs an established Mortgage Originator in the greater Seattle area, I’m often asked “what are the current rates” and that’s often answered with “that depends”.

Mortgage rates have layers of risk factored into them. Fannie Mae refers to them as LLPAs (Loan Level Price Adjustments).

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HARP 2.0 Update

Last weekend, Fannie Mae and Freddie Mac updated their automated underwriting systems (AUS) respectively known as DU and LP to allow expanded loan to values and other improvements to their guidelines.  Many Washington home owners have been anxiously waiting (along with mortgage originators, like yours truly) for the expanded guidelines to be available. 

It appears that HARP 2.0 has hiccups.  Expanded guidelines are not being fully released to mortgage originators. Banks continue to have their overlays for Fannie Mae DU Plus and Freddie Mac Relief Open Assess HARP refinances, restricting what other lenders can do to help home owners. This is especially frustrating when banks/lenders are reportedly outsourcing many of their clients to large internet lenders with mostly inexperienced mortgage originators. Why these large banks would treat some of their clients as a "cold lead" instead of allowing consumers to have access to all lenders leaves me scratching my head.

I am constantly checking with the lenders I work with to see what's new with HARP guidelines.  If you're reading this post, keep in mind that mortgage underwriting guidelines change constantly – what is published here, depending on when you read it, may be outdated. To stay updated, please subscribe to my blog (upper right corner). I'm also continuing to update my HARP 2.0 guide (button to the left).

Here's what I know, effective as of today, March 20, 2012 as of 8:30 am:

  • HARP is allowing for more waived appraisals on both Fannie and Freddie programs.  
  • Waived appraisals may be available to 1-unit primary residence, investment property or second homes. It's not available to 2-4 unit properties.  NOTE: not every home owner will qualify to have their appraisal waived.
  • Currently, the banks I work with are limiting the LTV to 105% for the first mortgage. There are no LTV limits with second mortgages/HELOCs, however the second lien holder needs to agree to be subordinated or be paid off – it cannot be included in the new HARP refi.
  • Private mortgage insurance: bank overlays (restrictions) are allowing us to go up to 95% LTV with a few allowing up to 105% LTV.  
  • Some private mortgage insurance companies are more agreeable than others with HARP refi's.  If your existing pmi is with UGIC, your HARP refi may take months

I'm hopeful that banks will pick up the pace and update their overlays so that HARP is more widely available to home owners while mortgage rates are still low.  I am told by the banks we work with that updated guidelines are coming soon.

I will continue to keep you posted! 

If you would like me to provide you with a HARP 2.0 refi quote for your home located in Washington, click here.

2:30 pm UPDATE: I'm already hearing that some of the banks we work with will begin releasing HARP to us possibly later this week.  Stay tuned!

HARPy St Patty’s Day

image from

I’ve been checking Fannie Mae’s website for the much anticipated release of the expanded HARP guidelines (often referred to as HARP 2) which is scheduled to take place this weekend.

Click here for your HARP 2 rate quote for your home located anywhere in Washington.

Once the guidelines are released, I will review them and plan on posting them here on my blog to share with Washington homeowners hoping to refinance and my readers. Many home owners have put their HARP refi’s “on hold” waiting for the expanded guidelines which will allow more home owners who have lost home equity to refinance their conventional mortgages (if securitized by Fannie or Freddie prior to June 1, 2009).

We don’t know what the bank or lender guidelines (underwriting over-lays) will be. Some major banks have already pawned off some of their clients to large internet lenders who tend to have very inexperienced mortgage originators.

We do know there is significant pent-up demand for HARP 2’s expanded guidelines because of the delay in releasing this until this weekend. Home owners planning on refinancing should be well prepared and patient. The release of HARP 2 this weekend combined with the increase in FHA mortgage insurance premiums taking place on April 9, 2012 will cause many Washington home owners with both conventional and FHA underlying mortgages to want to refinance.

I will keep you posted as soon as I have any information.

Happy St. Patty’s Day

Should I pay off my car before buying a house?

Of course I have to start this post off by saying, everyones financial scenario is different and before taking any actions – please consult with your local licensed mortgage originator

It seems logical that paying off a car might help someone qualify for more home. Did you know it may have negative impacts on getting preapproved for a mortgage?

First of all, paying off a car loan reduces the amount of funds available for possible down payment or any reserves (savings after closing) that may be required.  

When you pay off the car, that old credit tradeline is also closed. Credit scoring modules favor older established debts with good payment history. Once you pay off and close that car loan, believe or not, your credit scores will most likely go down.  

As far as your debt to income ratios are concerned, many program guidelines will not count installment debts when there are less than 10 months of payments remaining on the term of the loan.  Assuming you have enough funds for down payment and reserves, you could possibly pay down (instead of paying off) your car loan to have only 8 payments remaining on your term.  This may cause you to not have the car payment considered in your DTI ratios for qualifying for a mortgage.

****WARNING**** PLEASE talk to your mortgage originator before you take any significant actions with your debts or assets if you are considering buying a home. There may be other stragegies you should be considering for your home buying goals.

If you're considering buying a home located anywhere in Washington, I am happy to help you!  I've been originating mortgages at Mortgage Master Service Corporation since April 2000.  Simply click on the quote or apply link at the top of this page.