Typically on the first Friday of every month, the Bureau of Labor Statistics releases the Employment Situation Summary, otherwise known as The Jobs Report. This report details specific employment trends, including how many Americans are employed with “non-farm” jobs, trends in various fields of employment, income and hours worked. It also includes the “official” unemployment rate. The data contained in the Jobs Report carries a lot of weight and is considered one of our country’s stronger economic indicators.
Why is the Jobs Report so important to mortgage rates?
May 3, 2013 by 1 Comment
Reader Question: Can Closing Cost be financed with a VA Loan?
May 2, 2013 by 3 Comments
I received this email from one of our subscribers:
”…with a VA mortgage, can you finance buyer closing costs in excess of the purchase price (e.g. not ask for seller financing contributions, but just borrow them in excess of the purchase price)”
With a VA mortgage, the buyers closing cost cannot be financed, with exception to the VA funding fee, regardless of the appraised value.
The VA loan amount is limited to the purchase price, appraised value or VA county loan limit (or VA jumbo loan amount)*, whichever is less.
*NOTE: VA does not set actual loan limits on counties. They do set a limit as to their maximum guarantee (meaning zero down financing). In the greater Seattle/King-County area, the loan limit for zero down financing is currently $500,000. Click here for a complete list of VA loan amounts per county. VA loan amounts exceeding $500,000 in the Seattle/King County area are considered VA Jumbos and will require some down payment depending on the difference between the sales price and county loan limit.
USDA loans, on the other hand, will allow for buyers closing cost to be financed IF the appraised value is higher than the sales price. The loan amount is limited to the appraised value and must be applied to bona fide closing cost.
USDA loans are also zero down programs and are only eligible in specific designated rural areas, like Snoqualmie, Carnation or Duvall, and to borrowers who meet certain household income limits.
Sellers can contribute towards closing cost for both of these mortgage programs and currently, low mortgage rates are often paired with enough rebate pricing to cover a majority of the closing cost.
Thanks for your question!
The Fed to continue keeping mortgage rates low
May 1, 2013 by Leave a Comment
The Fed just wrapped up their two day meeting and have issued their press release. Here are the tid-bits relating to keeping mortgage rates at artificially sweet and low levels.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agenc mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.
As expected, there was no change to the Fed Funds rate.
If you would like to lock in a sweet and low mortgage rate for your home purchase or refinance for homes located in Washington state, please contact me.
One month left before FHA mortgage insurance is permanent…SO WHAT??
May 1, 2013 by Leave a Comment
Borrowers not wanting to have FHA mortgage insurance as part of their mortgage payment for the life of the loan have about thirty days to take action. This shouldn’t be a reason to panic. 🙂
Effective FHA case numbers issued June 3, 2013 and later, FHA mortgage insurance will become a permanent part of the FHA mortgage payment.
Why do I say “SO WHAT?”
S&P Case-Shiller reports homes prices up in Seattle
April 30, 2013 by Leave a Comment
The S&P/Case-Shiller Home Price Index was released this morning showing that home prices across the country are up 9.3% year over year through February based on the 20-City Composite. All 20 cities in the composite have reported increases in home prices over the last two months.
Some cites are experiencing double digit increases. Seattle’s home prices are up 9.3% year over year per this report.
From the report:
“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005….”
If you are considering buying a home in Seattle or anywhere in Washington state, I strongly recommend that you meet with a licensed mortgage originator and start the preapproval process early. I’ll often meet with home buyer six months to a year before they’re planning on buying a home. If I can help you, please let me know!
What may impact mortgage rates the week of April 29, 2013
April 29, 2013 by Leave a Comment
This week is jam packed with economic data that may move mortgage rates, including the Fed meeting wrapping up on Wednesday and Friday’s Jobs Report.
This morning’s PCE came in with inflation continuing to be tame (good news for bonds, like mortgage backed securities). And more good news for housing, Pending Home Sales for March came in much stronger than expected.
Here are some of the economic indicators scheduled to be released this week:
Monday, April 29: Personal Consumption Expenditures and Core PCE; Pending Home Sales
Tuesday, April 30: Employment Cost Index (ECI); S&P/Case-Shiller Home Price Index; Chicago PMI; Consumer Confidence
Wednesday, May 1: ADP National Employment Report; ISM Index; FOMC Meeting
Thursday, May 2: Productivity and Initial Jobless Claims
Friday: The Jobs Report; ISM Services Index
As I get ready to publish this post (9:30 am) the DOW is up 94 points at 14,806 and mortgage backed securities are up 12 bps (FNMA 30 year 3.0%).
If you want to keep current with the results from the economic indicators for the rest of this week, you can follow me on Twitter @mortgageporter or Facebook.
Of course if you are considering buying or refinancing a home located in Everett, Edmonds, Enumclaw or anywhere in Washington state, where I’m licensed, I’m happy to help you – click here for a mortgage rate quote.
Buying a Duplex to live in with an FHA mortgage
April 26, 2013 by 4 Comments
One of my favorite blogs to follow, Get Rich Slowly, recently published Reader Stories: I bought a duplex to save money on rent. The author of the post describes how he used an FHA mortgage to buy a duplex and with renting out the unit he was not living in, he wound up paying less for his housing than when he was renting.
Why you should compare FHA to a Home Advantage Mortgage
April 24, 2013 by 2 Comments
If your credit scores are 680 or higher and you’re considering buying a home located anywhere in Washington state using FHA for your mortgage, you may want to consider the Home Advantage Mortgage program.
Home Advantage is a mortgage program created by the Washington State Housing Finance Commission. Only Loan Officers, like yours truly, who have completed WSHFC training are allowed to offer this program.
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