Archives for July 2012

What May Impact Mortgage Rates this Week: July 30 – August 3, 2012

I’m actually on vacation this week with my son. We haven’t gone on a trip “just the two of us” since he was about 7 or 8 years old…now he’s in college! I will be back to work on Monday, August 5, 2012. This week is jam packed with economic data that may impact mortgage rates, winding up on Friday with the Jobs Report. There are no economic indicators scheduled to be released today.

Tuesday, July 31: ADP National Employment Report, Personal Consumption Expenditures (PCE and Core PCE), Employment Cost Index, Personal Spending, Personal Income, Chicago PMI, ISM Index and Consumer Confidence 

Wednesday, August 1: FOMC Meeting

Thursday, August 2: Initial Jobless Claims

Friday, August 3: The Jobs Report and ISM Services Index

Whew! After all of that, I feel like I need a vacation. Seriously, if you need anything while I’m away, please contact my office at 253-859-5300 or Marilyn Porter, my sister-in-law and President of Mortgage Master Service Corporation at 206-669-2746. 

Taking a Break!

I’m on vacation and will be back to work on Monday, August 5, 2012.  I haven’t been on a vacation with my son since we went to Disneyland. He was around seven … he turns twenty this year! 

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Should you need anything while I’m away, please contact my office at 253-859-5300, or my sister-in-law and President of Mortgage Master Service Corporation, Marilyn Porter, at 206-669-2746.

FHA Streamlined Refinance: Credit vs Non-Credit Qualifying

With an FHA streamlined refi, most folks have the misconception due to the program name “streamlined” that the refinances are close very quickly and are a slam dunk with little to no paperwork. While they do close quicker than a typical refinance since more often than not, you’re not waiting on an appraisal, if you’re going for a lower cost or better rate, you’re probably opting for a “credit qualifying” FHA streamlined refi. What’s the difference?

FHA streamlined credit qualifying basically means that the borrower is providing income and asset documents, just like a regular refinance. By providing documentation that shows they actually qualify for the new mortgage, lenders provide preferred pricing. Since it is a “manual” underwrite (a real human is underwriting the loan and not a computer program) the debt to income ratio is limited to 45%.

FHA streamlined non-credit qualifying is when income documentation is not provided and not stated on the loan application. The borrower’s income is not a consideration. Because of the higher risk, the rate or pricing is often slightly higher.

EDITORS NOTE: Rates quoted below are expired (years old!!)for a current mortgage rate quote for your home in Washington state, click here.

Right now (July 25, 2012 at 11:00 am) I’m working on a quote for an FHA streamlined refinance for a home located in Seattle. The rates quoted below are based on mid credit scores of 680 –  720 with no appraisal and the base loan amount is $289,000.

FHA credit qualifying 30 year fixed: 3.375% (apr 4.548) priced with just over 1 point in rebate credit which will cover closing cost and some of the prepaids/reserves. Principal and interest payment is $1300.01.

FHA non-credit qualifying 30 year fixed: 3.750% (apr 4.934) priced just under 1 point (about 0.25% difference in fee) which covers closing cost and some of the prepaids/reserves. Principal and interest payment is $1361.82.

NOTE: for a current rate quote on a home located anywhere in Washington state, based on today’s pricing and your scenario, click here.

What type of supporting documentation is required?  This is in additional to a complete loan application and credit report.

Non-credit qualifying:

  • Copy of your existing mortgage Note
  • Copy of your mortgage statement (we need to document a “Net Tangible Benefit”)
  • Bank statement (all pages) if funds are due at closing. Large deposits may be required to be documented.
  • Drivers license
  • Social security card
  • Payoff obtained from escrow company documenting that the current month’s mortgage payment has been made

Credit qualifying: all the above, plus…

  • last two years W2s
  • last two years tax returns (if self employed)
  • most recent paystubs documenting 30 days of income
  • most recent bank statements (all pages) documenting at least funds for closing. Large deposits may be required to be documented.

Additional documentation may be required depending on your personal scenario.

Whether you opt for non-credit qualifying or credit qualifying is your choice and depends on your financial scenario. When rates and pricing are the same for both scenarios, most would opt for “non-credit” qualifying. Since recent changes with how HUD prices FHA mortgage insurance for some loans, there has been major changes with which banks are offering FHA streamlines and how they’re pricing them.

If I can help you refinance your FHA loan on your home located anywhere in Washington state, please contact me.

How Long Will PMI Stay on my HARP 2.0 Mortgage?

This is a question that I’m often asked by Washington  home owners who are considering refinancing their current conventional mortgage using the HARP 2.0 program. The answers I’ve received from private mortgage insurance companies vary from “it’s up to the mortgage servicer” to “when the new loans principal reaches 78% loan to value”.  

If your current loan to value is triple-digit because of being underwater, the thought of paying private mortgage insurance for years may not sound appealing. Here are some points I encourage my clients to consider:

  • determine when your existing private mortgage insurance is set to terminate. If it’s before December 2013 (assuming the HARP program is not terminated early, which Fannie and Freddie have reserved the right to do) you could consider delaying your HARP refi so that you won’t have PMI on the new loan.
  • compare your existing principal and interest payment (excluding the private mortgage insurance) to the proposed HARP payment including principal, interest plus mortgage insurance.  Many of my clients are saving hundreds of dollars each month – even with keeping their mortgage insurance.
  •  consider how long you plan on keeping your home and what your alternatives may be. If you are underwater and are planning on staying in your home or eventually converting it to a rental property, reducing your payment now may be beneficial. If you are planning on doing a short sale, then refinancing at this time would probably not pencil out.

With HARP 2.0 refinances, when you have private mortgage insurance, most pmi companies are transferring the pmi certificates over to the new lender without any issues. The pmi rates stay the same so if you’re currently paying private mortgage insurance monthly, you can estimate that the new pmi payment will be roughly the same with your new mortgage payment.   

If you have lender paid mortgage insurance, often times it was paid for upfront and there will be no private mortgage insurance for the home owner to pay. Sometimes the lender paid mortgage insurance (LPMI) was being paid monthly by the lender and in those cases, the pmi company may convert the policy to “paid monthly” so the borrower can assume it.

If you’re interested in a mortgage rate quote for a HARP 2.0 refinance for your home located anywhere in Washington state, contact me.

What May Impact Mortgage Rates the week of July 23, 2012

mortgageporter-economyThere are no scheduled economic indicators due to be released today. However, mortgage rates are trending lower this morning due to steepened worries from the Euro-zone, namely Spain and Greece. How could Greece and Spain’s pain cause lower mortgage interest rates? Investors are seeking the safety of bonds, like mortgage backed securities. As I write this post (6:35 PST), the DOW is down about 121 and the Euro has fallen to a two year low.

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Thank You, JP

 I learned tonight of the passing of my childhood hero, JP Patches. If you didn’t grow up in the greater Seattle area in the late 70’s, you my not have had the privilege of knowing how wonderful JP Patches is. Some of my earliest childhood memories are of starting our morning off in our Renton home first (having to) watch Zoom until JP Patches came on. I was so excited just to hear the theme song start of the early morning coo-coo clock sounds. JP Patches made my day. I loved his funny skits and that he was always kind and seemed to know what was going on. He provided normalcy while my parents were going through a divorce and trying to work things out with their relationship  He played my favorite cartoons and I would wait on the edge of my seat with ever other kid within KIRO’s viewing area, hoping he would mention my name when he peered at us through the ICU2TV. I remember being absolutely honored in kindergarten when the photographer for our class photo called me Getrude because of my dress that my Mom made me. (I love that dress, by the way).

He is my childhood hero.

When my husband and I were making plans for our wedding. We actually had hired Chris Wedes (JP) to perform our ceremony. He said he had never officiated a wedding before, which we were fine with. We had planned on doing the ceremony with JP at our home.

The home wedding plans wound up being not what wanted to do. When we decided not to have him perform our ceremony, he was gracious and I promised him a bottle a wine. He was so gracious.

Much to my surprise, my husband surprised me on my birthday with…my most favorite clown…the best present ever! I’m wearing a t-shirt that I had bought years ago and proudly wore all the time. Of course, JP autographed it for me.

Not only was I thrilled to have JP as a guest in our home, and my birthday guest were all equally thrilled. He has the ability to make everyone feel like a child again.

I love JP. This year, when I decided to try painting on black velvet, I wanted to have my first painting to be of JP.

J.P. is so loved and will be very missed. I can’t help but feel grateful that he has been a part of my life. Than you, Chris Wedes for J.P. Patches.

Here are some of my photos of JP.

How to Prepare for the Final Phase of the Mortgage Process: Underwriting

You’ve completed a loan application and have provided your mortgage originator with your income and asset documents. You’re told your loan is being submitted to “underwriting”. During the stage, the information you’ve provided is being scrutinized by a person (the underwriter) to make sure that it meets your specific program guidelines and the investor/lender guidelines. 

Hopefully your mortgage originator has done a solid job with your application by addressing possible questions the underwriter may have and gathering supporting documentation. Even if your mortgage originator and you have prepared the perfect loan ap for the underwriter, additional items are often called for after the underwriters review. These additional items are referred to as “conditions” to the loan approval. 

Here are a few quick tips to help make this process a little smoother.

  • Save everything. If you’re a shredder, like me, it’s time to stop… at least until after your loan has funded. Keep your paystubs, bank statements, retirement and asset accounts – you will probably have to continue to provide updated information to the lender.
  • Be prepared to document where large deposits ($1000 or more) came from on your statements. This means providing deposit slips and/or copies of the cancelled checks.
  • Provide “all pages” of items requested unless otherwise instructed. If an underwriter sees that your bank statement shows 1 to 4 pages, and you’re missing the last page (even if it’s blank), you will be required to provide this. “All pages” also needs to be provided of your tax returns, divorce decrees, child support orders and other documentation if requested by the underwriter. Just providing pages you feel are purtinent may delay your loan approval.
  • Avoid moving funds around. You will need to show where the funds came from and just saying “can’t you see I have gazillions in this account” won’t cut it with the underwriter.
  • Do not apply for credit. This creates an “inquiry” on your credit report. Your credit report is checked prior to closing and, if you have a new inquiry on your credit report, you will have the opportunity of explaining this to the underwriter. If you do obtain new credit, your loan will need to be re-underwritten with the new debt — even if there is no payment due (such as 60 days same as cash, etc.)
  • Provide requested documents promptly
  • If you’re planning a vacation, let your mortgage originator know as soon as possible.

Quickly providing everything that is being requested will help avoid delays with the mortgage process. 

In my opinion, a professional Mortgage Originator will essentially “pre-underwrite”  you as they take your application. They know what questions to ask and what documentation to provide the underwriter.  This is much better than working with a mortgage originator who has little to no experience in closing transactions, which you will probably find at large banks or large internet lenders.

If you’re interested in getting preapproved for a mortgage on a home located anywhere in Washington, I’m happy to help you!

Mortgage Porter Moves…

After six years of pounding out posts about everything mortgage, I’ve finally moved my blog to WordPress.  To my friends who have been encouraging me to do this with your playful jabs and jeers, THANK YOU!!  

Today is the first day for my revamped blog to be unveiled so if you happen to catch any broken links or something that doesn’t seem right, please let me know.

Thanks again for reading my blog!