Archives for July 2012

What may impact mortgage rates this week: July 16 – 20

This week is packed with scheduled economic indicators that may influence mortgage rates.  Let's face it, mortgage rates have been extremely low and have been for quite a while. Its very easy to assume they will stay this way for months or a few years – do keep in mind that this is an election year and, even if not an election year, things change. Even when rates stay low, banks may add on risk based pricing or price a program to where it's not very attractive to control their inventory. All I'm trying to say is please don't take the current low interest rate environment for granted.  With that said, here are some of the economic indicators scheduled to be released this week that may impact mortgage rates:

Monday, July 16:  Retail Sales and Empire State Index.  NOTE: Retail sales came in weaker than expected today.

Tuesday, July 17: Consumer Price Index, Industrial Production and Capacity Utilization. NOTE:  Fed Chairman Bernanke is on Capitol Hill tomorrow and Wednesday for his semi-annual testimony on the economy.

Wednesday, July 18: Housing Starts, Building Permits and the Beige Book

Thursday, July 19: Initial Jobless Claims, Existing Home Sales and the Philadelphia Fed Index

I'm writing this post late Monday evening taking in the last of the Seattle sunset. I am astonished at how low mortgage rates have been for this amount of time. Despite the low mortgage rates, mortgages are getting a little trickier to obtain depending on your circumstance.  Many banks are turning their noses up at borrowers who do not have their existing mortgage with them – pretty pathetic when you consider how much our of tax dollars went to bailing them out, in my humble opinion.

If you would like me to provide a mortgage rate quote for your home purchase or refinance on a home located anywhere in the beautiful State of Washington, please click here.  We are a correspondent lender who has been serving Washington since 1976.

Freddie Mac HARP 2.0 Loans Getting Tougher

One of the lenders that we work with for Freddie Mac HARP 2.0 refi’s has announced today that they are not accepting applications for loans locked after July 20, 2012.

The bank states they’re doing this to get a handle on their pipeline. If you’re in the process of refinancing via HARP 2.0 and you have a loan to value that exceeds 105%, you may already know that the process seems to be taking a couple months.

If you qualify for a HARP 2.0 refinance: if you have lost equity in your home and your current mortgage is securtized by Freddie Mac prior to June 1, 2009 – please do not delay starting your HARP 2.0 refinance… your options may be dwindling.

If your home is located in Washington state, I’m happy to help you with your refinance.

Survey Says!

According to Fannie Mae’s Monthly National Housing Survey, many Americans believe that home prices are on the rise. If you are shopping for a home in the Seattle area, you probably know this to be true and may have experienced a bidding war or two.   


If you are considering taking advantage of today’s very low mortgage rates and home prices, it’s crucial that you get preapproved by a qualified local mortgage originator.

A preapproval means that you have provided your supporting income and asset documents to prove you have the ability to purchase the home. If you have not provided income and asset documents to your lender, you are most likely not “preapproved” and may only be “prequalified”.  

I’m happy to assist with the financing of your home located anywhere in Washington state.  It all starts with a review of your financial scenario – click here to start the application process.

Should I do an FHA streamline refi if my rate is 4.875%?

This is a scenario I’m reviewing for one of my clients who lives in Seattle.  His existing mortgage is a 30 year fixed FHA at 4.875%. He closed on this loan after June 1, 2009 so it does not qualify for FHA’s reduced mortgage insurance premiums*. However, he can still take advantage of today’s low mortgage rates as long as the refi meets HUD’s “net tangible benefit” requirements of reducing his payment by at least 5%.

HUD’s Net Tangible Benefit requires that the “PIMI” (principal, interest and mortgage insurance) payment be reduced by at least five percent or the refinance cannot happen. This has been an issue for home owners who would like to refinance from their FHA 30 year fixed to an FHA 15 year fixed as HUD does not make an exception for those who would like to shorten their mortgage term if the payment increases — even if the borrower qualifies with documenting their income (some FHA streamlines do not require income to be documented). 

The Seattle client I’m working with is doing a “credit qualifying” FHA streamline refi for a 30 year fixed.  His current principal and interest is $1171.55 and the monthly mortgage insurance payment is $95.90 for a total PIMI payment of $1,267.45.  His new PIMI payment needs to be less by at least 5% ($63.37) which means his new PIMI needs to be $1,204.08 or lower.

As of 10:00 am this morning (July 6, 2012) I’m quoting 3.375% for a 30 year fixed FHA streamline refi with no appraisal (apr 4.554) with a base loan amount of $212,750.  After his upfront mortgage insruance premium credit from his existing FHA insured loan and interest rate credit, he’ll need to bring in about $1200 at closing. He won’t have a mortgage payment due until a month after closing and receiving a refund of his existing reserve account balance a couple weeks after closing.  

But what about the new PIMI?  Principal and interest is $957.01 and the monthly mortgage insurance is $210.85 for a total PIMI of $1,167.86.  The new refinance meets HUD’s net tangible benefit requirement.  

The Seattle homeowner is reducing their payment by $100 per month. **And after 60 payments and when the loan balance reaches 78% loan to value, the monthly mortgage insurance will terminate.  

**UPDATE 12/19/2012: FHA mortgage insurance will not be cancelled on new mortgages effective January 2013. It will remain on the life of the loan (until it is paid off or refinanced to a non-FHA mortgage).** Read more here.

*NOTE: If the FHA mortgage being refi’d was endorsed by HUD prior to June 1, 2009, the savings would be even greater as it would qualify for reduced mortgage insurance.

If you have an FHA insured mortgage and are interested in an FHA streamlined refinance on your home located anywhere in Washington, please contact me.  I’m happy to help you!

Has your Bank turned down your refi?

IStock_000014142621XSmallIn a time when one might assume that their bank would work with them to refinance their home, many Washington homeowners are finding quite the opposite. I’m hearing from local homeowners who have made their mortgage payments on time and who qualify for refinance (income, employment and assets) yet their bank is either unwilling to provide the refinance or is taking several months to close it.

For example, several large banks will only do FHA streamline refinances on mortgages they currently service.  You can have your checking and savings accounts any of these banks, but if they don’t currently service your mortgage, it’s my understanding they will not assist you with your FHA streamlined refinance.  NOTE: We can help you refinancing your FHA streamlined mortgage from any bank as long as your home is located in Washington.  

Banks are also being very selective when it comes to HARP 2.0 (home affordable) refinances. Some are electing not to help mortgages they currently service because of lpmi (lender paid mortgage insurance) or pmi when many of these loans are eligible to refinance. 

Bottom line, if your bank or mortgage servicer has turned down your refinance (or if they’re stalling the process) and your credit, income and assets are good: get a second opinion.  

If your home is located anywhere in Washington state, I’m happy to review your scenario. I’ve been originating and closing refinance and purchase mortgages at Mortgage Master Service Corporation since April 2000. 

Happy Independence Day!

Our family, including Scupper, hope you and yours have a wonderful, safe and sane Independence Day.

2012-07-01 19.47.50

Mortgage Master Service Corporation is closed today and will reopen for business as usual on Thursday morning.

What May Impact Mortgage Rates: July 2 – July 6, 2012

Seattle_fireworksWe have a short week packed with economic data with Independence Day on Wednesday and the Jobs Report on Friday.  Here are some of the economic indicators that are scheduled to be released this week:

  • Monday, July 2: ISM Index.
  • Wednesday, July 4: Happy Independence Day!
  • Thursday, July 5: ADP National Employment Report, Initial Jobless Claims and ISM Services Index
  • Friday, July 6: THE JOBS REPORT

[Read more…]