Helping Washington State homeowners learn more about their mortgage options.
As I write this morning’s post (7:45 am) the DOW continues to slide down 125 points to 12695. When the markets are getting beat up, investors tend to seek the safety of bonds (like mortgage backed securities) which is what we happening right now. Mortgage rates continue to be very low.
If you would like me to provide you with a mortgage rate quote for your home located anywhere in Washington, please click here. [Read more…]
The Home Affordable Refi Program (HARP 2.0) is a refinance program to help home owners who have lost home equity take advantage of today’s historic low interest rates. In order to qualify for this program, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Learn more about the HARP 2.0 program here.
Loans with private mortgage or lender paid mortgage insurance (LPMI) who meet the securitization requirement are also eligible for HARP 2.0. The terms of the private mortgage insurance, as far as the rate, remains the same as what the home owner has on their existing loan. The existing coverage is transferred to the new HARP 2.0 mortgage if the coverage is still in effect.
Borrower Paid Mortgage Insurance (bpmi) is the most traditional form of mortgage insurance. Homeowners will see this in their monthly mortgage payment. If you currently have private mortgage insurance included in your monthly mortgage payment, you will have it in your new HARP 2.0 mortgage payment too.
Lender Paid Mortgage Insurance (lpmi) is not “seen” in your mortgage payment. LPMI is essentially financed into your loan. Homeowners who have LPMI probably traded the monthly pmi payment for a slightly higher interest rate when they obtained their last mortgage with a loan to value greater than 80%. Often times, LPMI scenarios offered lower payments than bpmi or combo loans at the time they were originated.
Some mortgages with LPMI were “single premium” meaning the coverage was paid for in one lump “single premium”. Single premium LPMI may be transferred to a new HARP 2.0 mortgage.
It’s also possible that the existing LPMI may be paid monthly by the lender. In this case, the private mortgage insurance company may be able to convert the “LPMI” from “lender paid” to “borrower paid”. The borrower is trading their higher rate mortgage with LPMI for a much lower rate with monthly pmi in their mortgage payment. The monthly savings has been significant.
It’s my understanding that once PMI is transferred to a new HARP 2.0 mortgage, private mortgage insurance companies consider this a new loan. This means that when the pmi may drop off is reset. Typically pmi drops off your mortgage when your loan to value reaches 78% of the mortgages loan to value based on the appraised value. If your home is significantly underwater, the private mortgage insurance will likely remain until you can refinance. PLEASE DO NOT LET THIS STOP YOU FROM GETTING A HARP 2.0 QUOTE. Mortgage rate quotes are free and it’s doesn’t hurt to find out what your options are. Click here for your HARP 2.0 quote for your home located anywhere in Washington state.
Here are two scenarios from quotes I provided yesterday, May 10, 2012, for HARP 2.0 mortgages with existing lender paid mortgage insurance (both borrowers have excellent credit):
Owner occupied home in Federal Way with a loan amount of $283,000 and an estimated value of $186,000 with LPMI single premium. With 30 year fixed mortgage and a rate of 4.375% (apr 4.515) they are reducing their monthly mortgage payment by $459 per month!
Owner occupied home in Renton with a loan amount of $311,000 and an estimated value of $215,000 with LPMI that was being paid monthly by the lender. 30 year fixed mortgage and a rate of 4.500% (apr 4.569%) they are reducing their monthly mortgage payment by $422 even with the lpmi converted to borrower paid.
NOTE: The difference in rate above due to having a mortgage priced with discount or rebate. How you have your mortgage priced (with discount or rebate credit) is up to you!
If you would like me to provide you a quote for your HARP 2.0 refinance on your home located anywhere in Washington, please click here.
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:
Our company has been waiting and waiting for banks to remove their restrictions on loan to values for HARP 2 – Home Affordable Refinance. It's simply not happening quick enough to help underwater home owners in the greater Seattle area. You can learn more about the Home Affordable Refi Program by checking out my online HARP 2.0 guide.
Mortgage Master Service Corporation has recently brought on additional lenders who offer expanded HARP 2.0. We are now able to broker Fannie Mae – DU Plus HARP 2.0 loans with unlimited loan to values. We are in the process of adding other lenders who will allows us to broker Freddie Mac HARP 2.0 refinances with unlimited loan to values. Currently, we are able to help if your loan to value is 105% or lower with a Freddie Mac HARP 2.0 mortgage. UPDATE 5/11/2012: I'm pleased to announce we now have unlimited LTVS for both Fannie Mae and Freddie Mac HARP 2.0 refinances.
For your HARP 2.0 rate quote on your home (primary, second or investment) located anywhere in Washington state, please click here. You DO NOT have to return to your current bank or mortgage servicer (where you make your mortgage payments to).
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:
On my recent post, Comparing 15 and 20 Year Fixed Rates, a reader asks how do I decide which program is best for my clients? The short answer is: I don’t. The decision of what type of mortgage to select is up to my client (assuming they qualify for the shorter term mortgage with the higher payment, of course). I feel it is my duty to help my clients understand the mortgage programs, so they can make an educated decision and to provide them with various scenarios to consider. [Read more…]
This week is packed with economic indicators that tend to impact mortgage rates. Remember, mortgage rates are based on mortgage backed securities (bonds) and may change throughout the day. Signs of inflation tend to cause mortgage rates to rise higher. The release of economic data is not the only thing that impact rates – unplanned (and planned) world events may also impact mortgage rates. Typically, investors will seek the safety of bonds when the stock market is deteriorating and the reverse is true. When the DOW is tanking, mortgage rates tend to improve. During a volatile day, it’s not unusual to have 3 – 5 rate changes.
It's National Openhouse Weekend and I'm promoting a new listing for of one of my West Seattle clients. This townhome is conveniently located in Highland Park at 7705 11th Avenue SW, Seattle and will be open today, Saturday, April 28, 2012 from 11:00 am – 3:00 pm by Wendy Hughes-Jelen of Mountain to Sound Realty. For photos and more information about this property, click here: MLS#349459.
Here are a few financing options based on the list price of $219,950. Rates quoted are as of April 27, 2012 and are based on credit scores of 720 – 739 with closing towards the end of May, just in time to move in for Memorial Day. Home owners insurance is estimated at $50 per month. This is not a condo, so there are no Homeowner Association Dues.
FHA 30 Year with a minimum down payment of 3.5%.
3.750% has a total estimated payment of $1437.04 with funds due at closing in the amount of $8963 including net closing cost, prepaids and reserves (apr 4.728).
Here is a detailed video review of the above quote:
Conventional financing with 10% down payment using private mortgage insurance with debt to income ratios under 45%.
3.875% (apr 4.397) using monthly private mortgage insurance with a total estimated monthly payment (including estimated insurance and taxes) of $1,259.02 and estimated funds due at closing in the amount of $28,478.26.
or…
4.125% (apr 4.465) using split premium mortgage insurance. Similar to FHA, a portion is paid upfront which reduces the monthly premium. I'm pricing this rate slightly higher to create rebate credit to help reduce net closing cost for the buyer of this West Seattle townhome. Total estimated monthly payment is $1,223.22 with funds due at closing estimated in the amount of $27,671.44.
Here is a video where I review both of the 10% down scenarios with private mortgage insurance quoted above:
This is just a small sample of possible mortgage programs for this home. In addition to conventional and FHA financing, the sellers will accept VA and cash.
If you would like me to prepare a personal rate quote based on your scenario on this or any home located anywhere in Washington, please click here.
UPDATE: There will be a Brokers Open (public welcome) this Wednesday, May 9, 2012 from 11:00 am to 1:00 pm at this home.
It's been a bit disappointing that HARP 2 has not been made as available to consumers as it should be. First, underwater homeowners had to wait a couple months for the program to become available and now, those who have the more challenging HARP refi's (loan to values over 105% or with private mortgage insurance) are finding that their options are even more limited. In addition, many banks are "cherry picking" which of their consumers they'll help and who they'll pawn off to large internet mortgage companies.
NOTE: Mortgage Master Service Corporation has recently added new lenders that offer loan to values over 105%!! For your HARP 2.0 rate quote on your home located in Washington State, please click here.
According to this article in Housing Wire, banks are making huge profits by not allowing for more competition, enabling them to charge hire rates to consumers.
HARP demand is rising at the banks, and they are generating new profits from it. Revenue at the Wells Fargo ($33.84 0%) mortgage department jumped by $1.6 billion in the first quarter as originations spiked. The bank said 15% of the originations completed in the first three months of the year were refinances under the new HARP.
Anthony Sanders, a professor of finance at George Mason University, told the panel Bank of America ($8.27 0%) received more than 30,000 HARP applications since mid-January.
A Senate subcommittee is currently reviewing how to make HARP 2.0 more readily available to consumers who qualify. In order to qualify for the Home Affordable Refinance Program, the mortgage needs to have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Other conditions apply as well.
Expanded LTVs are available – just not as available as they should be if we really want our housing to have a chance to recover.
Mortgage Master Service Corporation has recently added new lenders who are offering loan to values over 105%. If I can help you with your HARP 2 refinance on your home located in Washington, click here.
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/
I’m noticing more “bidding wars” on new listings in the greater Seattle-Bellevue area. Because of the lack of non-distressed inventory and current low interest rates, multiple offers may occur driving the sales price higher than the original offered price. Sellers and listing agents may try to create an environment for a bidding war by slightly delaying the review of offers and by pricing the home either at or slighltly under what may considered “market value”.
Here are a few tips to remember should you find yourself in a possible “bidding war”.
Be prepared to provide a strong offer. Get preapproved early. This will help you know how much you qualify for and the seller will most likely require a strong preapproval letter that illustrates you are strongly qualified and that your loan will successfully close.
Determine your financial boundaries. What is the most you want to pay for the home and for your monthly mortgage payment? Bidding wars can be charged with emotion – keep your financial goals in mind.
I often will provide several preapproval letters at staggered amounts for clients when they’re getting ready to make an offer. The letters might start at their preferred offer price and go up to the limit of their financial comfort zone is (of course they have to for that amount).
Work with a reputable lender. It is not unusual for listing agents to contact the mortgage originator to confirm the preapproval letter and to do a “sniff test” of your mortgage originator. If the listing agent is comparing two offers that are essentially the same, the mortgage originator may be a deciding factor.
Consider a shorter time period for closing. Depending on the seller’s situation, for example if the home is vacant, a shorter closing might help you win the bid. Contact your mortgage originator to see what time frame they can realistically close a transaction before writing an offer for a quick close.
Don’t forget the appraisal. Regardless of what you and five other bidders are willing to pay for a home, it still needs to appraise based on what other homes like have recently sold and closed for. The seller does not have to accept a lower appraised value. Your lender will rely on the lower of the appraised value or sales price for your mortgage scenario.
Making a non-contingent offer. Sometimes a real estate agent may suggest that you need to make an offer “non-contingent”. Consider how much earnest money you’re willing to lose if something happens where you elect not to proceed with your transaction (for example, if your appraisal comes in lower than the sales price and you’ve waived your financing contingency). NOTE: making an offer non-contingent on financing may be less risky depending on your personal scenario.
Be prepared to do your home inspection prior to making an offer. It’s not unusal for greater Seattle area homes that are preparing a bidding war to request inspections be done prior to your offer. This will also help you make your offer “less contingent” it’s not subject to an inspection.
Being as prepared as possible may help give you an advantage over other offers. The sellers and listing agent wants to be assured that what ever transaction they select in a multiple offer situation has the best odds of successfully closing.
I am happy to assist you with your preapproval and financing of your next home located anywhere in Washington state. I have been originating mortgages, including conventional, FHA and VA at family owned and operated Mortgage Master Service Corporation since April 2000. We are a well respected correspondent lender established in 1976 by the Porter family.
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…
Recent Comments