The Mortgage Porter

HUD issues Mortgagee Letter Conforming Changes to Mortgage Insurance Premiums

March 6, 2012 by Rhonda Porter Leave a Comment

Hot off the press! HUD just released Mortgagee Letter 12-4 addressing all of the changes to FHA mortgage insurance premiums. *Unless your doing an FHA streamlined refinanced of a mortgage that was "endorsed" on or before May 31, 2009; your FHA mortgage insurance premiums are going up.

Upfront mortgage insurance premium increasing effective April 9, 2012. Currently the rate is 1% of the loan amount. Effective with case numbers issued April 9, 2012 and later, the premium will increase to 1.75%.

Increase to annual mortgage insurance premiums go into effect April 9, 2012. This increase is due to the Temporary Payroll Tax Continuation Act of 2011. NOTE: if you have a 15 year amortized FHA mortgage with a 78% loan to value, there is no annual mortgage insurance premiums.

FHA's annual mortgage insurance is paid monthly. The bps is multiplied by the FHA base loan amount to determine the premium and then divided by 12 months. A $100,000 loan with a loan to value over 95% would have an annual MIP of $1200. Divide this by 12 and the monthly premium is $100.

High Balance FHA annual mortgage insurance premiums will increase an additional 25 bps with case numbers assigned on or after June 11, 2012. In the greater Seattle area, this will impact FHA loan amounts of $417,001 to $567,500. If you have a higher FHA loan amount originated on or after June 11, 2012, add an additional 25 bps to the figures in the table above.

The above increases will impact all newly originated FHA mortgages for purchase and refinances, unless the home owner qualifies for the new reduced mortgage insurance rates with an FHA streamlined refi. The changes to mortgage insurance do not apply to FHA's reverse mortgages. Keep reading…

FHA Streamlined Refinances will have reduced FHA mortgage insurance premiums IF the FHA loan being refinanced was *endorsed on or before May 31, 2009 effective on case numbers issued on or after June 11, 2012. Upfront mortgage insurance premiums will be reduced from 1% to 0.01% of the base loan amount and the annual mortgage insurance will be reduced to 0.55% of the loan amount. Borrowers must be current on their existing FHA insured mortgage.

If your FHA loan being refinanced was endorsed June 1, 2009 or later, then the reduced rate does not apply. Your FHA mortgage insurance rates will be increasing based on the information above effective April 12, 2012.

NOTE: *Endorsed means when FHA actually insures the mortgage. This often happens months after closing!

If I can help you with your FHA refinance or purchase for your home located anywhere in Washington, please contact me.

FHA to reduce mortgage insurance premiums for some FHA streamlined refi's

Filed Under: FHA, Mortgage Insurance

FHA to Reduce Mortgage Insurance Rates for some FHA Streamlined Refi’s

March 6, 2012 by Rhonda Porter 1 Comment

Today HUD announced that beginning June 11, 2012, FHA will REDUCE the cost for an FHA streamlined refinance for FHA insured mortgages that were originated prior to June 1, 2009. A mortgagee letter will follow to make the following changes official:

Upfront mortgage insurance (UFMIP) will be reduced to 0.01% (from 1.00%).

Annual mortgage insurance (typically paid monthly) will be reduced to 0.55% (cut in half from 1.10%).

This is great news to those who originated their FHA loans prior to June 1, 2009. Once I receive the mortgagee letter from HUD, I'll be sure to update you. We'll need clarification on how HUD defines "origination". UPDATE: FHA's Mortgagee Letter clarifies that loans must be "endorsed" by HUD prior to June 1, 2009. This is different than your closing date and typically takes place weeks after closing.

FHA streamlined mortgages are popular right now considering today's low mortgage rates and that they do not require an appraisal.

Currently, a Seattle area home owner doing an FHA streamlined refinance with a loan amount of $400,000 and credit scores of 720 or higher would have a rate of 3.750% (apr 4.449) with a principal, interest and mortgage insurance (PIMI) payment of $2,234.59. With the proposed reduced FHA mortgage insurance, assuming the home owner originated their FHA loan prior to June 1, 2009, their PIMI payment would be $2,034.45 (apr 4.071): a difference of $200 per month!

If you would like more information about refinancing your FHA insured mortgage for your home located anywhere in Washington, please contact me. I have been originating FHA insured mortgages for Washington home owners since April 2000 at Mortgage Master Service Corporation and I'm happy to help you.

UPDATE 3/6/2012: INFORMATION ON HUD'S MORTGAGEE LETTER.

Filed Under: FHA, Mortgage Insurance Tagged With: fha, mortgage insurance, streamlined

What May Move Mortgage Rates the week of March 5, 2012

March 5, 2012 by Rhonda Porter Leave a Comment

This week ends with probably one of the most important scheduled economic indicators: The Jobs Report. Not only does the Jobs Report reveal whether or not more Americans are going back to work, it also indicates signs of inflation (wage inflation). Both good news and inflation may cause mortgage rates to trend higher. Numbers that are weaker than expected may cause rates to improve. This is because mortgage rates are based on mortgage backed securities (bonds) and investors will either seek the safety of bonds or possible improved returned with stocks depending on data.

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Filed Under: Economy, Interest Rates

Big Banks and Lenders preparing for HARP 2

March 3, 2012 by Rhonda Porter Leave a Comment

Yesterday I read that a huge internet lender is hiring thousands of loan originators to prepare for the volumes of business they're anticipating in two weeks once expanded guidelines of the Home Affordable Refi Program (aka HARP 2) are released by Fannie and Freddie over St. Patty's weekend.

I'm also hearing that some of the big banks are planning on using these internet companies to handle their volumes of mortgages they currently service.

You do not have to return to who you make your mortgage payment to for your HARP 2 refinance. If your home is located in Renton, Woodinville, Seattle, Samammish or anywhere in Washington state, I can probably help you with your HARP refinance.

Click here for your HARP 2 refinance quote for your home (primary residence, investment or vacation property) located in Washington.

Mortgage rates and closing cost are not the only things you should be considering when you select your lender for your HARP refinance. I highly recommend that you research your mortgage originator. Thanks to the NMLS, you can quickly enter your mortgage originators name, company name or license number and get a snapshot of their employment history. Many of the LO's being hired by the online mortgage companies are inexperienced and may have closed few (if any) mortgage transactions before. They just know how to pass the LO exam to be licensed and how to fill in the blanks on a loan application. "Filling in the blanks" is vastly different than completing a loan application and knowing which questions to ask from your client in order to assure a smooth closing.

Was your mortgage originator flipping burgers last month or closing loans? Click here to learn more about your mortgage originator: NMLS Consumer Access. In addition to verifying your mortgage originator on NMLS, you can also try "googling" their name to learn more about them. A slightly lower rate quote (or any lower rate quote) doesn't mean anything if that mortgage originator is not capable of closing your loan.

Regardless of where home owners go for their refinance, they'll need to be a little more patient. It's my understanding that some banks are informing their clients they are taking up to 90 days to close refinances.

We are expecting increased volumes at Mortgage Master Service Corporation too. Every mortgage company and bank should be. Our office is family owned and operated with our main office located in Kent, Washington. A majority (I'm guessing 90% or more) of our transactions are processed and underwritten at our main office. We also prepare your loan documents and fund your loan from our credit lines. Many of large banks or lenders don't have local processing or underwriting; they're often located outside of Washington. I have been working with my team at Mortgage Master Service Corporation for just shy of 12 years.

I would love to be your mortgage originator for your refinance (or purchase!) for home located in Washington.

Filed Under: HARP - Home Affordable Refi

FHA Mortgage Insurance set to increase April 2012

February 28, 2012 by Rhonda Porter Leave a Comment

Yesterday, HUD announced they are going to increase the annual (paid monthly) and upfront mortgage insurance premium on FHA insured mortgages effective on new case numbers obtained April 1, 2012 April 9, 2012 and later.

As of today, the upfront mortgage insurance premium for FHA insured mortgages is 1% of the loan amount. Most borrowers elect to finance this into their FHA loan although it can be paid for as a closing cost instead of including it in the loan amount. HUD will be increasing the upfront mortgage insurance premium from 1% to 1.75% on April 1, 2012 April 9, 2012.

FHA's annual mortgage insurance (paid monthly) is set to increase by 0.10% for standard FHA loan amounts and will increase an additional 0.35% for "FHA Jumbos will take place on June 1. The additional 0.10% increase is due to "The Temporary Payroll Tax Cut Continuation Act of 2011. HUD has elected to tack the additional 0.25% on the larger loan amounts.

In the greater Seattle area, FHA base loan amounts of $417,000 or lower will see the annual mortgage insurance increase by 0.10%. Seattle's current high balance (or FHA jumbo) impacts loan amounts of $417,001 to $567,500 and these loans will have increased annual mortgage insurance premiums by 0.35%.

How does this impact an FHA borrower?

Today a Seattle area homebuyer using an FHA insured mortgage at $417,000 with a minimum down payment of 3.5% and excellent credit would have a PIMI principal, interest and mortgage insurance) of $2,346.78 based on a 30 year fixed with a rate of 3.750% (apr 4.544). Effective April 1, this scenario will have a PIMI of $2,395.73 assuming the same rate (apr 4.665). An increase in total monthly mortgage payment of $48.95 for the same scenario!

Currently a Seattle homebuyer using an FHA mortgage at $567,500 with a minimum down payment of 3.5% and excellent credit would have a PIMI (principal, interest and mortgage insurance) payment of $3,193.76 based on current rates of 3.750% for 30 year fixed rate (apr 4.541). Effective June 1, this high balance FHA loan, assuming the same rate (apr 4.817), the payment increases to $3,377.61! An increase in total monthly mortgage payment of $183.85 for the very same scenario!

NOTE: Rates quoted above are effective as of 2/28/2012 at 4:00 pm. If you would like me to provide you with a mortgage rate quote for your home located in Washington, click here.

If you are considering an FHA insured mortgage, whether it's for purchasing a home, FHA streamlined refinance or other refinance, you'll want to take action before the increased rates take effect. FHA case numbers are issued when you have a bona fide loan application (transaction) with a mortgage originator. I'm happy to help you if your home is located anywhere in Washington state. UPDATE 3/6/2012: If your FHA mortgage was originated prior to June 1, 2009, you may qualifed for reduced FHA mortgage insurance.

If you would like a rate quote for an FHA mortgage on a home located in Washington, click here.

An official Mortgagee Letter is expected to follow soon. Don't wait!

Click here for FHA Loan Limits in Washington

UPDATE 3/6/2012: It's official: Here's information about HUD's Mortgagee Letter.

Filed Under: FHA, Mortgage Insurance

LIVE POST: Mortgage Rates for Washington State and other Mortgage Miscellany

February 27, 2012 by Rhonda Porter Leave a Comment

We have a lot of economic reports scheduled to be released this week which may influence mortgage interest rates. Here’s a snapshot of what’s on deck:

Monday, February 27: Pending Home Sales

Tuesday, February 28: Durable Goods and Consumer Confidence

Wednesday, February 29: GDP, Chicago PMI and the Fed’s Beige Book

Thursday, March 1: Personal Income, Initial Jobless Claims, Personal Core Expenditures (PCE), Personal Spending and ISM Index

There are many factors that impact the pricing of a mortgage rate. If you would like me to provide you with a rate quote based on your personal scenario for a home located anywhere in Washington, please click here.

Filed Under: Interest Rates

Are you really preapproved or just prequalified for a mortgage? Part 2

February 23, 2012 by Rhonda Porter 1 Comment

A preapproval is the next step after becoming prequalifed. Essentially, this means that you are supplying all of the documentation that is required to support your loan scenario. Everything you have told the Loan Originator needs to be backed up for a “full doc” loan. The mortgage originator will review your supporting documentation (W2s, paystubs, asset accounts, credit report—tax returns if you’re self employed or paid commission…etc.) and make sure that they have a strong file for the underwriter. Once you have selected your mortgage program, your information is typically submitted to an AUS (automated underwriting system aka a computer) which produces “findings”. The findings detail what type of documentation is required for the loan approval. Sometimes the findings will require less or more documentation than a mortgage originator has obtained. Different lenders may have their own underwriting overlays in addition to what the AUS has provided.

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Filed Under: Residential Purchase Tagged With: preapproval, preapproved, prequal, prequalified

Are you really preapproved or just prequalified for a mortgage? Part 1

February 21, 2012 by Rhonda Porter 3 Comments

There’s quite a difference between being prequalifed for a mortgage and preapproved. The letters that Loan Originators provide when requested for a prequal or preapproval may appear very similar. In fact, I’ve talked to borrowers on the phone who thought they were actually preapproved, when all they really had was a rate quote worksheet or possible a good faith estimate from a lender. A good faith estimate, loan estiamte or rate quote worksheet are not a commitment to lend and do not indicate that someone has been prequalified.