The Seattle – Bellevue – Everett area named as a Top 5 Place to Sell Your Home

February 26, 2013 by Leave a Comment

Wall Street Journal’s Market Watch has named the Seattle – Bellevue – Everett area as one top five markets in the nation for selling your home. From the article:

Homes are flying off the market in Seattle. Listed properties spent a median of 56 days on the market as of January, down 38% from a year ago, according to Realtor.com. That’s almost half the median time homes are listed nationally….

….buyers have been left with a smaller number of homes to bid on, which in turn encourages multiple offers on properties that can push the purchase price higher than the asking price, experts say. There were fewer than 4,000 homes for sale in the Seattle metro area as of January, down 44% from a year prior, according to Realtor.com.  

This morning’s S&P/Case-Shiller Home Price Index also provides some positive data revealing that the Greater Seattle’s prices are up 8.2% year-over-year.

For hopeful home buyers, this means they need to make sure they have their ducks in a row before making an offer on a home. Home buyers in competitive markets like Seattle, Bellevue or Everett should contact a mortgage professional early on to start the preapproval process. The preapproval process typically only takes a day or two once the home buyer provides all the necessary supporting documentation. However it pays to get started early just in case there are situations that could be improved (such as credit scores, savings, etc.). 

The FHFA released their report on mortgage interest rates showing that rates trending higher since late November 2012 for the 30 year fixed conforming mortgage. If you’ve been following my rate quotes on Twitter, you may have realized this trend. Although rates are still very low, they are trending higher and have been for a few months.

If you are considering selling your home in the greater Seattle area, please don’t rule out buyers who are approved with FHA or VA financing. FHA and VA loans are much easier to underwrite and process in today’s market. In fact, they’re pretty much like a conventional mortgage. Plus buyers who qualify for FHA or VA loans are able to have higher loan amounts than conforming in our area.

Loan Limits for Seattle – Bellevue – Everett

Conforming: $506,000

FHA: $567,500

VA Jumbo: $1 million. $500,000 is the loan limit if the Veteran is looking for a zero down home. After $500,000, the down payment is 25% of the difference between the $500,000 limit and the sales price.

NOTE: Congress has been discussing rolling back loan limits. This is another reason to consider selling now if you have a home that would be impacted with reduced loan limits.

By the way, I have been in the real estate industry for just shy of 27 years. My first fourteen years were in the title and escrow industry and for the last 13 years, I have been a mortgage originator at Mortgage Master Service Corporation. I’ve worked with many real estate agents over my career and I’m happy to recommend one to you if you are considering selling or buying a home.

Filed Under: Fannie, Freddie and FHFA, Real Estate Agents Tagged With: , , , , , , , ,

How much home do I qualify for with a $70,000 down payment?

January 24, 2013 by Leave a Comment

I’m working with a couple in Seattle who would like to buy a home. They have excellent credit (scores of 740 or higher) and are planning on using $70,000 for their down payment and closing cost. They want to know how much home they can buy based on their down payment.

The following rate quotes are effective as of January 24, 2013 at 12:20 pm. Rates change constantly, for your personal rate quote for a home located in Washington state, click here.

Conforming High Balance allows them to buy a home priced at $576,000.

The conforming loan limit in Seattle/King-County is currently $506,000. Using a conventional mortgage, they could buy a home priced at $576,000. 

Current mortgage rates for a 30 year fixed conforming high balance ($417,001 – $506,000) based on this scenario is 3.750% (apr 4.094).  

3.750% is priced as close to “par” as possible meaning there is as little rebate credit or discount points priced with the interest rate. We could adjust the rate slightly higher to create more rebate credit to help pay for closing cost or we could reduce the rate by paying more in discount points. 

The loan to value based on a sales price of $576,000 and loan amount of $506,000 is 87.874% which means the Seattle home buyers will have private mortgage insurance (pmi). For this client, we’re opting to include the pmi in their mortgage payment instead of paying it as an upfront additional closing cost or doing “split premium” mortgage insurance.  

The principal and interest payment is $2,343.36 plus private mortgage insurance of $282.52 gives us a “PIMI” payment of $2,625.88. Property taxes and home owners insurance are additional.

The Seattle home buyers will negotiate the seller paying for remaining closing cost and prepaids/reserves estimated at $7900, leaving their amount due at closing very close to $70,000.  If the sellers opt to not pay for closing cost and prepaids, the buyers can use rebate pricing (slightly increasing the mortgage rate) to offset the cost.

FHA allows them to buy a home priced up to $637,500.

FHA mortgages in the Seattle/King County area have a loan limit of $567,500. With a down payment of $70,000 they could buy a home priced up to $637,500. The big difference between FHA and conventional financing is the mortgage insurance. FHA has both upfront and monthly mortgage insurance. 

The current mortgage rate I’m quoting for their FHA scenario is 3.375% (apr 4.059%).

This rate is priced with a little more rebate to help reduce closing cost. If the Seattle home buyers want a lower rate with less rebate credit, they certainly can opt for that. Mortgage rates are not locked until we have a bona fide contract and the rates will be “floating” while they shop for a home.

The principal and interest on this rate and loan amount is $2,552.80 with mortgage insurance at $562.43 providing a PIMI payment of $3,115.23. Property taxes and home owners insurance are additional.

After the rebate credit, if the buyers negotiate the seller paying the remaining balance of their closing cost, prepaids and reserves in the amount of $4,000, the buyers will need around $70,000 for funds due at closing.

VA loans allow them to purchase up to $780,000 with a “VA Jumbo” loan.

The VA zero down loan limit in Seattle is $500,000. When a loan amount exceeds the limit, eligible Veterans can have a down payment based 25% off the difference between the sales price and loan amount.  

For example, a sales price of $780,000 less $500,000 loan limit = $280,000. $280,000 x 25% = $70,000 down payment.

The current rate I’m quoting for this VA Jumbo 30 year fixed loan is 3.250% (apr 3.379).

The principal and interest payment on this loan is $3,136.31. There is no mortgage insurance on a VA loan. Property taxes and home owners insurance are additional. 

If the seller pays for $4500 of the Veteran’s closing cost and prepaids, then the amount due at closing will be around $70,000.

USDA loans are not eligible in the Seattle area because it’s not a rural area.

If you are interested in buying a refinancing a home located anywhere in Washington state, I’m happy to help you. I’ve been originating residential mortgages at Mortgage Master Service Corporation since April 2000. 

Filed Under: Fannie, Freddie and FHFA, FHA, Residential Purchase, VA Mortgage Loans Tagged With: , , , , ,

2013 Conforming Loan Limits for Washington State Mortgages

November 29, 2012 by 1 Comment

The Federal Housing Financing Agency (FHFA) who oversees Fannie Mae and Freddie Mac, confirmed that conforming limits for 2013 will be unchanged from 2012. This means that a single family 1-unit residence in the greater Seattle area has a conforming loan limit of $506,000. Loan amounts above conforming limits are considered “jumbo” or non-conforming.

Four counties in Washington continue to have “high balance” loan limits above the “general” loan limits:

King County, Snohomish County and Pierce County:

1 Unit: $506,000
2 Unit: $647,750
3 Unit: $783,000
4 Unit: $973,100

San Juan County:

1 Unit: $483,000
2 Unit: $618,300
3 Unit: $747,400
4 Unit: $928,850

The remaining Washington counties have “general” loan limits:

Adams, Asotin, Benton, Chelan, Clallam, Clark, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Jefferson, Kitsap, Kittatas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit, Skamania, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima Counties:

1 Unit: $417,000
2 Unit: $533,850
3 Unit: $645,300
4 Unit: $801,950

Filed Under: Fannie, Freddie and FHFA Tagged With: , , ,

FHFA Announces Increase in G-Fees for Conforming Fannie/Freddie Mortgages

September 4, 2012 by 2 Comments

Last Friday, the FHFA announced they’re increasing the “guarantee fee” (aka “g-fee”) by an average of additional 0.10 basis points on single family mortgages.  What is a guarantee fee? From the FHFA annual report:

Fannie Mae and Freddie Mac acquire single-family mortgages from mortgage companies, commercial banks, credit unions, and other financial institutions. Lenders may exchange loans for mortgage-backed securities (MBS) backed by those mortgages or sell whole loans for cash proceeds.

When lenders receive MBS in exchange for their loans, they may hold them as an investment or sell them in the capital markets. The Enterprises also issue MBS backed by pools of loans acquired from multiple lenders.

Each Enterprise [Fannie Mae or Freddie Mac] guarantees the payment of principal and interest on its MBS and charges a fee for providing that guarantee. The guarantee fee covers projected credit losses from borrower defaults over the life of the loans, administrative costs, float income (or expense), and a return on capital.

From Housing Wire:

Lenders paid an average 28 basis points in 2011 for Fannie and Freddie to guarantee their loans in the bonds issued to investors, up from 26 bps the year before, according to a report released by the FHFA Friday.

The GSEs raised their fees by 10 basis points in April in order to pay for a tax cut passed by Congress in December. But before the enactment, the FHFA pledged to raise the fees through 2012 in order to allow private issuers room to compete.

Do not expect banks or lenders to absorb this cost. The 0.10% increase in basis points will be passed on to consumers and factored into the pricing of mortgage interest rates. This is set to happen towards the end of this year, however I wouldn’t be surprised to see lenders factoring in the fee increase much earlier.

Filed Under: Fannie, Freddie and FHFA Tagged With: ,

What’s the difference between Fannie Mae Homepath and Freddie Mac Homesteps?

February 11, 2012 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.

[Read more…]

Filed Under: Fannie, Freddie and FHFA, Homepath, Homesteps, Residential Purchase Tagged With: , ,

President Obama’s Refi Plan for Non-HARP Qualified Homeowners #MyRefi

February 1, 2012 by 3 Comments
Refi

On last week’s State of the Union Address, President Obama announced a plan to help underwater homeowners who do not qualify for a Home Affordable Refinance.  In order to qualify for a Home Affordable Refi (aka HARP 2.0) the home owner’s mortgage needs to have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009 and meet other qualifications.  If the home owner currently has a jumbo loan, they are instantly disqualified for HARP 2.0. since jumbo mortgages are non-conforming (not Fannie or Freddie programs). HARP is also restricted by existing conforming loan limits and in the greater Seattle area, the current conforming loan limit is $506,000.  Even if you have a conforming loan amount of $567,500 (last year’s conforming loan limit in Seattle), current HARP guidelines limit you to a $506,000 loan amount.

President Obama’s proposal is to help underwater home owners who have made their mortgage payments on time and who do not qualify for HARP 2.0 is to allow them to have an FHA insured mortgage without an appraisal.  FHA insured mortgages have different loan limits than conforming. In the Seattle area, the FHA loan limit is $567,500. Obama’s new refi program, should it come to fruition, will be limited to FHA loan amounts. 

FHA mortgages are a great program, however they’re also very expensive when compared to conventional loans.  This is because they have both upfront and monthly mortgage insurance fees, which are constantly being raised by Congress. FHA mortgages have both upfront and monthly mortgage insurance regardless of the loan to value of the property. 

As of 8:30 this morning, an FHA rate on a loan amount of $567,500 in Seattle – Bellevue with a 720 or higher credit score is 3.750% for a 30 year fixed rate (apr 4.767).  Principal and interest with the financed UFMIP is $2,654.46 and the monthly mortgage insurance premium is an additional $515.85 for a total (PIMI) payment of $3,170.31, not included property taxes and insurance.  This PIMI payment equals an interest rate in the low-to-mid 5% range if you compare it to a conventional mortgage.

NOTE: Rates quoted in this post are from February 1, 2012; for a current rate quote for your home located in Washington State, click here.

This program is also costly as Obama plans to pay for it by charging banks additional fees and we all know that this trickles down to the consumer. The Temporary Payroll Tax illustrates how banks have increased mortgage rates AND the cost to extend a rate lock commitment.

It’s reported that the new program will not require an appraisal or proof of income and will be available for primary residences only. Employment will need to be verified and mortgage payments must have been made on time for the last 6 months.  Although this is “Obama’s Refi Plan”, we have to wait and see if Congress approves it and how the big banks and lenders will embrace this program.

If you currently have an FHA insured mortgage, you don’t need to wait and see if Obama’s refi plan will help you. You may already be able to refinance with an FHA streamlined refi without an appraisal. 

If you would like to stay informed of mortgage programs like this, please subscribe to my blog (upper right corner) or follow me on Twitter and Facebook.  You can unsubscribe anytime!

If you are interested in a mortgage for a home located anywhere in Washington state, I’m happy to help you! I have been originating all types of loans at Mortgage Master Service Corporation since 2000.  Click here for your no-hassle mortgage quote on your Washington property.

Filed Under: Current Affairs, Fannie, Freddie and FHFA, FHA, Mortgage, Refinance Tagged With: , ,

LOCK IN SOON!! Mortgages will Cost More thanks to Temporary Payroll Tax Cut

January 10, 2012 by 1 Comment

UPDATE: Since publishing this post this morning, another major bank announced a significant increase in their extension fees as noted below.

If you obtain a new mortgage next year for a refinance or purchase (for any purpose) and it is securitized by Fannie Mae or Freddie Mac or insured by FHA, you're helping to pay for the recently passed payroll tax cut bill.

From the FHFA:

“On Dec. 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011.  Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac( the Enterprises) by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities. This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 basis points greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the Enterprises…. FHFA will announce plans for further guarantee fee increases or other fee adjustments that will then be implemented gradually over the two-year implementation window, taking into consideration risk levels and conditions in financial markets…"

What I'm seeing from some of the various banks and lenders we work with ranges from announcements they're increasing their extension fees 0.25% 0.40% across the board and other lenders announcing fee increases to up to 0.5% to take effect in the next couple weeks. 

On a $400,000 loan, a 0.5% fee to interest rate increase means you'll be paying $2000 more for the same rate once the fee increases go into place!  

With a rate lock extension, currently the charge from one bank who has announced the price increase, 7 days cost 0.125% and now with the 0.4% add, the 7 day extension cost 0.525%.  Where an extension before would have cost $500 on a $400,000 loan, now it will cost $2,100 for the same seven days! This will force many borrowers to consider longer rate locks in order to avoid such a hefty penalty.

What can you do? 

If you are considering refinancing your mortgage, contact your local mortgage professional to discuss current rates and securing your lower (pre-fee) rate today. If your home is located anywhere in Washington state, I can help you.  

If you are buying a home and are in contract, but not yet locked, you may want to investigate locking.  

Whether you are buying or refinancing your home, make sure that the lock is for a long enough period to avoid possibly higher extension fees.

Different lenders have different guidelines and ways they're implementing their fee structures. One of the benefits of working with a correspondent lender, like Mortgage Master Service Corporation, is that I work with several different banks and lenders and can filter out who is offering the most competitive price for your program at the moment you are ready to lock.

If you would like a rate quote for your home located in Washington, click here or contact me.

Filed Under: Fannie, Freddie and FHFA, FHA, Interest Rates

Home Affordable Refi aka HARP 2.0 Phase 1

November 30, 2011 by Leave a Comment

Fannie Mae and Freddie Mac' s Home Affordable Refi enhancements will be released in phases with the first version of HARP 2.0 becoming available tomorrow, December 1, 2011.  The next phases will allow for expanded loan to value requirements and pricing enhancements. Fannie Mae will have an update to their selling guide in mid-December (so more information to follow).  Freddie Mac and Fannie Mae plan on having their underwriting system (DU and LP) updated on or before mid-March 2012. I will continue to keep you posted as we learn more information.

Here's my recommendation for Washington area home owners who may be eligible for a Home Affordable Refinance:

  • You can apply for HARP 2.0 tomorrow, December 1, 2011.  
  • We should be able to determine whether your loan qualifies based on the current "phase" available.  We are able to re-run your scenario during the next phase of HARP, if needed.
  • Loan to values under 80% may not qualify for the new Home Affordable program but you may still be able to take advantage of today's lower rates. 
  • Some of my refinance clients have already had their appraisals waived with their Fannie-to-Fannie DU Plus refinances. 
  • Unless you have an owner occupied or second home and are opting for an amortized mortgage of 20 years or less, the pricing difference with HARP 2.0 may not be that significant.
  • I'm happy to provide you with a Home Affordable Refi rate quote.

Here are some pointers on what you can do to prepare for your Home Affordable Refinance. 

I'm still waiting to hear from all of the private mortgage insurance companies to see if and how they will participate in this program.  We are also waiting to see how the lenders and banks we work with are going to treat this and if they've added layers of overlays to this program.  

UPDATE 12/15/11: If you qualify for a HARP refinance and have borrower paid private mortgage insurance, as long as the insurance can be transferred, we can help you. Lenders (secondary markets) and private mortgage insurance companies are working on allowing this for lpmi (lender paid mortgage insurance). More info on LPMI to follow. 

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 websites: www.freddiemac.com/mymortgage or http://www.fanniemae.com/loanlookup/

If you have any questions about this or any mortgage program and your property is located in Washington state, I'm happy to help you.  I am only licensed to originate mortgages in Washington state.

Bottom line: we are still receiving (and waiting to receive) more information about the HARP 2.0 enhancements and bank/lender overlays.  However you can start your application on December 1, 2011 and "float" your rate, if needed.

Filed Under: Fannie, Freddie and FHFA, HARP - Home Affordable Refi, Refinance
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