Mortgage Rate update the week of September 24, 2012

September 24, 2012 by 1 Comment

We don’t have economic indicators set to be released today however mortgage rates are being influenced once again by the Eurozone.  There are more potential issues with Greece that may be revealed by the Troika report after our elections.

Here are some of the economic indicators scheduled to be released this week that may impact mortgage rates:

Tuesday, Sept. 25: S&P/Case-Shiller Home Price Index and Consumer Confidence

Wednesday, Sept. 26: New Home Sales

Thursday, Sept 27: Initial Jobless Claims; Durable Goods Orders; GDP (Gross Domestic Product); Pending Home Sales

TGI Friday, Sept 28: PCE (Personal Consumption Expenditures); Chicago PMI and Consumer Sentiment (UoM)

Mortgage rates continue to be at very low levels, even if you have refinanced a year ago, it may be worth considering a refinance. Today’s home buyers may qualify for “more home” thanks to how low today’s mortgage rates are. If you’re considering buying your first or move up home, an investment property or a vacation home, contact your local mortgage professional to get preapproved.

This morning, for a purchase with a sales price of $500,000 with 20% down payment with 740+ credit scores and taxes and insurance included in the mortgage payment, I’m quoting for 30 year fixed: 3.375% (apr 3.440) with a slight rebate credit towards closing cost or 3.250% (apr 3.340) priced with a small discount.

If you are interested in a mortgage for a home located in Redmond, Renton, Redondo or anywhere in Washington, I’m happy to help you!

Filed Under: Economy Tagged With: ,

Back to School!

September 20, 2012 by Leave a Comment

Today I’m doing something that mortgage originators who work for banks and credit unions don’t have to do: continuing education with an NMLS certified instructor. 

As a Licensed Mortgage Originator, every year I’m required to take 8 hours of continuing education – non-licensed (aka registered) mortgage originators are currently not required to. I hope this changes and I expect it will.  

Why there are different standards for mortgage originators who take residential loan applications is due to the SAFE Act. My suspicion is that powerful banks and credit unions lobbied their Congressmen to have softer rules for their mortgage originators…which they have. (Whenever a mortgage originator at a bank tries to say they are already regulated, I like to point to Washington Mutual). My personal opinion is that banks want to hire less experienced mortgage originators so they can pay them less since they are “bank fed” leads.

Any how, I always look forward to my “class” as my instructor is Jillayne Schlicke and her classes are always informative and very interesting.

I will be back to work tomorrow, Thursday, September 21, 2012.

Filed Under: Current Affairs Tagged With: , , ,

Should I refinance my car before buying a home?

September 19, 2012 by 2 Comments

Short answer: probably not.

Why? The refinance of the car will impact your credit score as if you have purchased a new car. Credit scoring favors established older debt over new debt. Once you have that new loan, even if the payment is lower and interest rate is lower, the established old debt is paid off and eventually loses the positive impact to your credit scores.

[Read more…]

Filed Under: Credit Scores and Reporting, Dear Rhonda, Residential Purchase Tagged With: , , , ,

Fannie Mae and Freddie Mac improve HARP 2.0 Underwriting Guidelines

September 18, 2012 by 2 Comments

On Friday, Fannie Mae and Freddie Mac announced much needed updates to underwriting guidelines for HARP 2.0. The Home Affordable Refinance Program (HARP 2.0) has helped many Washington state homeowners with conforming mortgages (securitized by Fannie Mae or Freddie Mac prior to June 1, 2009) take advantage of historically low mortgage rates regardless of their home’s current equity (or lack thereof). You can learn more about the HARP 2.0 program by clicking here.

The recent updates to HARP 2.0 will allow more home owners to have access to this program by reducing documentation requirements for some borrowers. Here are some of the improvements:

  • Reduced documentation for income and assets. NOTE: Form 4506 and verification of employment will still be required. Lenders will not be required to verify large deposits.
  • Allowing borrowers with assets to not have to document income. This is available when a home owner has at least 12 months of their proposed new mortgage payment (PITI) in savings. The assets may come from checking or savings, stocks or vested retirement accounts.
  • Improvements to when a borrower is removed from the mortgage. Previously if a borrower was being removed with the HARP 2.0 refinance, guidelines required proof that the remaining borrower made the mortgage payments for the last year with their own separate funds (except in the case of death). Now with HARP 2.0, in the remaining borrower can qualify on their own (debt to income at 45% or lower and credit scores of 620 or higher) they may qualify for a HARP 2.0 refinance.

Remember, banks and lenders may layer their own underwriting guidelines to Fannie Mae and Freddie Mac’s HARP 2.0 program.

If you have been turned down for a HARP 2.0 refinance before, it may be worth checking with your local, licensed mortgage originator to see if you are now eligible. HARP 2.0 is available for owner occupied, vacation homes and investment properties.  I can help you if your home is located anywhere in Washington State – click here for your HARP 2.0 rate quote.

Filed Under: HARP - Home Affordable Refi, Refinance Tagged With: , , , , , ,

Mortgage rate update for the week of September 17, 2012

September 17, 2012 by Leave a Comment

Last week the Fed announced they’re stepping up their purchase of mortgage backed securities to help keep mortgage rates low. While they are doing this, the FHFA (oversees Fannie Mae and Freddie Mac) is increasing the cost of conforming mortgages by increasing the “g-fees”. I’m seeing banks and lenders increasing rates from 0.25 to 0.50 in fee (the cost for a certain rate) and up to 0.625% more with extension fees (when your loan does not close in time). 

My advice with mortgage rates tends to be that if you like the rate, you should consider locking it. When it comes to locking rates, do a “gut check”. If you’re more uncomfortable with having a certain rate secured (locked) while rates may improve or if you can stomach not being locked and having mortgage rates increase. 

Here is a list of some of the economic indicators scheduled to be released this week:

Monday, Sept. 17: Empire State Index

Wednesday, Sept 19: Building Permits, Housing Starts and Existing Home Sales

Friday, Sept. 21: Initial Jobless Claims and Philadelphia Fed Index

As I write this post (9/17/12 at 8:45am PST) I’m quoting 3.500% for a 30 year fixed based on a loan amount of $400,000 with a sales price of $500,000 (80% loan to value). Seattle area home buyer has credit scores of 740 or higher and the purchase is closing by October 25, 2012. (apr 3.566) with closing cost estimated at $3525 and a principal and interest payment of $1,166.67 (taxes and insurance are not waived).

If you would like me to provide you with a mortgage rate quote on a home located anywhere in Washington, please contact me.

Filed Under: Economy Tagged With: , ,

How can a preapproval change?

September 14, 2012 by 2 Comments

MortgageWhen someone becomes “preapproved” for a mortgage, it boils down to they qualify for a certain mortgage payment based on their income and debts (DTI aka debt to income ratio).  A home buyer qualifies for the loan amount of the new mortgage and their funds available for down payment and closing cost determine the sales price.

[Read more…]

Filed Under: Residential Purchase Tagged With: , , ,

The Fed Says…Let’s Twist

September 13, 2012 by Leave a Comment

No surprise that the FOMC is not making any changes to the Fed Funds rate. What may have surprised some is the Fed’s focus on trying to keep mortgage rates low with it’s purchase of mortgage backed securities.  From today’s press release:

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 agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it 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. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

….If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities….

The efforts to keep mortgage rates low will be in contrast to the increase in the “g-fees” by Fannie Mae and Freddie Mac. It will be interesting to see how much of an impact the Feds efforts will make.

Stay tuned for Ben Bernanke’s press conference happening in a few hours. Meanwhile… let’s twist!

Filed Under: The Fed - FOMC Tagged With: , , , ,

Major Bank Jacks up the Cost to Extend Rate Locks

September 10, 2012 by Leave a Comment

When a mortgage rate is locked, it’s committed for a certain period of times, such as 30, 45 or 60 days. When a mortgage refi or purchase that has been locked does not close by that date, the lender may charge a fee to extend.  The fee is essentially the cost to buy additional days to add to the original lock commitment. 

I just received this notice from one of the lenders we work with that they’re dramatically increasing their extension fees and, even worse, they’re only giving us ONE DAY’S NOTICE!  Kind of stinky if you ask me. This is the same bank that increased their fees just over a month ago.  The bank is doing this as a result of the 0.10% increase to G-Fees by Fannie Mae and Freddie Mac.

Extension Fees 001

Thankfully we work with several lenders and we’re not limited to only working with this bank.

More often than not, it’s better to error on having a longer lock period than a shorter one and paying for an extension.

UPDATE: Another bank just announced they are increasing their pricing by 0.500% basis points to their rates (not extension) as a result of the “G Fees”.

Filed Under: Interest Rates Tagged With: , ,
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