If negotiated in your purchase and sales agreement, a Seller may agree to chip in towards some or all of your bona fide closing costs, prepaids and reserves. They cannot contribute towards your down payment. The amount the seller can contribute varies depending on the program type and the amount of home buyer’s down payment. The percentage is based on the sales price and if the credit exceeds the closing cost, the mortgage originator can often use it towards discount points to buy down the interest rate.
How to Buy an Investment Property with a 10 Percent Down Payment with no PMI: Fannie Mae Homepath Mortgage
April 26, 2011 by 1 Comment
EDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.
Seattle area investors are taking advantage of current lower home prices and are buying rental properties. One of the issues with investment property is that it often requires a larger down payment and more stringent underwriting guidelines. However, if you buy a qualified property that is owned by Fannie Mae, the Homepath guidelines will allow as little as 10% down for an investment property with NO private mortgage insurance and NO appraisal.
Fannie Mae Homepath Mortgage Incentives are BACK!
April 15, 2011 by Leave a Comment
NOTE: This program has been extended through October 31, 2011.
Fannie Mae is trying to sweeten the pot for buyers to considering using a Fannie Mae Homepath Mortgage for purchasing a foreclosed home that is now owned by Fannie Mae by offering 3.5% in closing costs on eligible transactions that close by June 30, 2011.
Here are some details for qualifying for the Fannie's Homepath Mortgage special (from the Homepath website):
- Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible.
- The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive.
- The sale must close on or before June 30, 2011. No exceptions will be made to this deadline.
- Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive.
- Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.
- If a buyer's total closing costs are under 3.5%, the difference will not be available as a credit to the buyer.
Don't forget, the Fannie Mae Homepath Mortgage does not require an appraisal and there is no private mortgage insurance for credit scores over 660. Fannie Mae will lend up to the high balance conforming loan limit, which is currently $567,500 in the greater Seattle area. For more information, click here.
NOTE: If you're considering a Fannie Mae HomePath Mortgage…I recommend checking out FHA rates which are currently lower, offers down payments as low as 3.5% and the mortgages are assumable. It never hurts to compare your options!
If you have questions or would like a rate quote for a home located anywhere in Washington, please contact me!
The Home Affordable Refinance Program is extended…again!
March 22, 2011 by Leave a Comment
Update: Home Affordable Refi Program has been extended through December 2013!
Good news for home owners who have a qualified conventional mortgage where their home has depreciated in value and they want to refinance to a lower rate or more stable program, the Fannie Mae Home Affordable Refinance Program and Freddie Mac's Relief Refinance have been extended to next summer (notes dated on or before June 30, 2012).
In addition to extending the cut off date for this program, which was scheduled to sunset this summer, Fannie Mae has expanded the loans they will consider for this program. From their March 14, 2011 announcement:
"Currently to be eligible for Refi Plus or DU Refi Plus the existing mortgage loan being refinanced had to be purchased by Fannie Mae prior to March 1, 2009 or in an MBS pool with an issue date prior to March 1, 2009. With these program changes, mortgage loans are now eligible if they were purchased by Fannie Mae prior to June 1, 2009 or in an MBS pool with an issue date prior to June 1, 2009….
Loans purchased by Fannie Mae between March 1, 2009 and June 1, 2009 will not recognized by Fannie's underwriting system (DU) until April 11, 2011.
I am thrilled that Fannie is adding three months of their loans to be eligible for the HARP program which makes the qualifying dates consistant Freddie Mac's program.
Remember, you do not have to go to your mortgage servicer (who you make your mortgage payment to) for this program…unless you have pmi. Wouldn't it be great if some of the big banks who have been refusing to consider borrrowers with private mortgage insurance for the HARP program loosen up? One can hope! If you're a borrower who's been refused a Home Affordable refi by your bank due to privatate mortgage insurance, you may want to sign this petition.
Related post:
The Home Affordable Refinance Program extended until next summer [includes info on Fannie Mae's Home Affordable program].
Freddie Mac's Home Affordable Refinance - Refinance Relief Program
Adjustments to Conventional Mortgage Pricing Means Higher Rates on January 1, 2011
December 30, 2010 by 1 Comment
UPDATE DEC 19, 2013: New (more expensive) LLPA’s have been released.
UPDATE JAN 3, 2011: Not all lenders are implementing this fee increase (yet). This is perfect example of an advantage of working with a correspondent lender since we work with more than one bank or one banks products/rates.
Conventional mortgages (Fannie Mae and Freddie Mac) are increasing their LLPA, also known as “Loan-Level Price Adjustment” effective on all mortgages with a term greater than 15 years on loans they purchase on April 1, 2011 or later. Although this doesn’t go into effect until April Fools, wholesale lenders will make these adjustments to their rate sheets well in advance so that they don’t have to take the price hit when the sell the loan to Fannie or Freddie. I am receiving memos from the lenders we work with stating that these price adjustments will go into effect on loans locked January 3, 2011.
The new price adjustments are outlined in the red box below. The changed adjustements are in bold in the red box (click on image to enlarge). You can view Fannie Mae’s complete LLPA schedule here – there are additional hits that may apply depending on your scenario (such as condos, subordinate financing, etc.).
LLPA’s are nothing new. We’ve had them for the past couple of years and the adjustments are typically factored into your rate. Remember, typically (but not always) 1% in fee equals 0.25% in rate. So if your “low-mid” credit score is 700 – 719 and your loan to value is 75.01% or higher, your interest rate is going to be about 0.25% higher in rate than someone with a 740 or higher credit score with a loan to value of 60.01 – 75%.
The hardest hit with this adjustment is borrowers with credit scores of 699 – 640 with loan to values over 80%. These borrowers should consider FHA insured loans for financing which do not have the same level of price hits as conventional (at this time).
The best pricing is for borrowers with credit scores 700 or higher AND a loan to value of 60% or lower. Borrowers with a 740 or higher credit score and less than 25% down payment or home equity will now be hit with a 0.25% adjustment.
These price hits impacts loan amounts of $567,500 or lower for homes located in King, Snohomish and Pierce Counties. For a complete list of Washington state conforming loan limits, click here.
Risk based pricing is one more reason why people who are considering a mortgage, regardless of if it’s to purchase a new home in Seattle or refinance their existing home in Bellevue, should start early with the preapproval process. Just being one digit off on your low-mid credit score may cost you. A qualified mortgage professional can help you make the right moves with the goal of improving your credit score if given enough time.
If you need a mortgage for a home located in Washington State, I’m happy to help you. I’ve been originating mortgages at Mortgage Master Service Corporation since April 2000 and I’ve been licensed since 2007 (when mortgage originator licensing was first mandated in Washington).
2011 Conforming Loan Limits for Washington State
November 19, 2010 by Leave a Comment
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
Fannie Mae’s HomePath Program
October 15, 2010 by Leave a Comment
EDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.
Fannie Mae’s HomePath program is available to purchase qualified foreclosed homes (owned by Fannie Mae) with expanded conventional guidelines, competitive mortgage rates and often times, with special incentives.
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