Helping Washington State homeowners learn more about their mortgage options.
This is my first “book release”…okay… it’s an “electronic book” or what I refer to as a “guide book”. I plan on writing several books on mortgage related topics. This book happens to be about buying your first investment property.
Although the book is focused on first time home buyers, the information also applies to investors who are buying their second or third investment property.
Watch for more topics to follow soon! You can find this and other slide books at the Mortgage Porter Library.
Today wraps up the two day FOMC meeting with the Fed statement due around 11:00 am PST followed by a press conference featuring none other than Ben Bernanke. A change to the Fed Funds rate is not anticipated. Investors will be parsing through the press release and what the Fed Chair has to say about quantitative easing. The Fed has been hands on with keeping mortgage rates at artificial lows with their purchase of mortgage backed securities.
As I write this post (7:30 am on March 20, 2013) the DOW is up 75 bps at 14531 and MBS are down about 19 bps.
3.625% for a 30 year fixed rate (apr 3.730) is priced with 0.479 in discount points for a 45 day lock.
Stay tuned – I’ll try to do an update to this post throughout the day and we’ll see if what the Fed says influences mortgage rates today.
UPDATE: No surprises here. The Fed leaves rates unchanged and plan to continue to manipulate mortgage rates until unemployment improves. From the FOMC statement:
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 agency 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. 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 of 11:27 the DOW is up almost 85 points and MBS are down about 15 bps. No significant change since this morning.
12:55 pm: MBS down 37 points.
There are just a few days left before FHA mortgages will have another increase to annual mortgage insurance premiums. Effective with case numbers issued April 1, 2013 and later, FHA annual mortgage insurance premiums will adjust an additional 10 bps to 15 bps.
This morning, mortgage rates are improving largely due to drama that’s taking place in Europe with the IMF and the island of Cypress. The IMF is taxing (some say stealing) from depositors causing a run on the banks.
Remember, mortgage rates are based on mortgage backed securities (bonds). And when investors will seek the safety of bonds over the potential higher return found with stocks, causing mortgage rates to improve.
FHFA has published their 2012 Refinance Report which includes some interesting stats on the Home Affordable Refinance Program (aka HARP 2.0). HARP 2.0 is a program to help home owners who have lost home equity refinance their property as long as the mortgage was securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. You can learn more about HARP 2.0 by checking out my guide.
December’s refinance report revealed that since the inception of HARP 2.0, over 2 million home owners have benefited from a HARP refinance.
According to the FHFA Refinance Report, 25% of the transactions in December were for homes that were significantly underwater, with loan to values over 125%. Almost half the refinances were for homes with loan to values over 105%.
One of the benefits of a HARP 2.0 refinance is that it allows the home owner to refinance without getting new private mortgage insurance regardless of loan to value. If the home owner currently has pmi, it needs to transfer to the new HARP refi (this happens in a majority of cases).
The report states that 18% of those who did a HARP refinance in December 2012 opted for shorter terms (15 or 20 year) instead of a 30 year fixed.
Remember, the HARP 2.0 program is set to expire on December 31, 2013.
If your home is located in Redmond, Renton, Ravensdale or anywhere in the State of Washington, where I’m licensed to originate mortgages, I am happy to help you. Click here if you would like a mortgage rate quote.
USDA mortgages are available with zero down payment to borrowers under certain income limits who want to buy in a designated rural area. USDA provides maps that illustrate whether or not a geographical area is allowed to have this program.
The maps for USDA were set to be revised late last month with revisions taking place at the end of this month have been postponed by Congress. USDA mortgages are proceeding “business as usual” until they hear otherwise from “the hill”.
The orange areas of this map shows areas that are currently not eligible for USDA zero down payment financing.
Congress has introduced bills that would change how a rural area is defined, including increasing the population to 35,000 based on the 2010 Census which would allow more homes to be eligible for zero down USDA mortgages.
USDA loans offer very competitive rates. Just yesterday on Twitter, I shared a quote based on a USDA loan in the Maltby area in the mid 3’s for a 30 year fixed with zero down payment for a $500,000 sales price based on a family of 5.
In addition to the property being in a designated rural area, to qualify for the USDA zero down mortgage program, your household income cannot exceed the current income limits. Current household income limits for properties in King and Snohomish counties are $93,450 for a family up to 4 and $123,350 for a family of 5 to 8 members living in the home.
If you’re interested in a USDA zero down mortgage in Duvall, North Bend, Port Townsend or anywhere in Washington state, I’m happy to help you.
The strong Jobs Report on Friday caused mortgage rates to trend higher. This morning rates are still at that level. Please keep in mind that although I talk about mortgage rates been higher – they’re still very low. However if you’ve been pricing mortgage rates over the last two months, you’ll notice that the price (discount) for the same rate you’ve been quoted, cost more.
Just for fun I thought I’d share one of my recent paintings that I did of my in-laws, Bob and Ruth Porter posing as Bonnie and Clyde.
Bob Porter actually founded Mortgage Master Service Corporation in 1976. Two of Bob and Ruth’s children, Marilyn and John, are still at Mortgage Master today.
This painting is currently entered in an online art competition for Daniel Smith’s 11th Annual Customer Art Contest.
If you’d like to vote for my painting, you can click here. You’ll need to search “rhonda” to find the painting…and vote often! 🙂 Enjoy your weekend!
Rhonda Porter is a Licensed Mortgage Originator MLO121324 living in the greater Seattle area. Rhonda began her career in 1986 in the title and escrow industry and began her mortgage career in 2000. She enjoys helping people understand the mortgage process and started writing The Mortgage Porter in late 2006. Read More…
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