Merry Christmas and Happy Holidays from our home to yours.
Mortgage Master Service Corporation will be closing at 3:00 pm today for the holidays and will reopen for business on Tuesday, December 27, 2011.
USDA Rural Development Mortgage Guarantee Fees for 2012
December 23, 2011 by Leave a Comment
USDA offers zero down financing in designated rural areas to households under certain incomes. In rural King County neighborhoods, like Carnation or Duvall, the income limit for a 1-4 family household is $92,600.
Similar to an FHA or VA insured mortgage, USDA has an upfront "funding fee" which is technically called a "guarantee fee". Typically this cost is added to the loan amount and financed. For 2012, the upfront USDA guarantee fee for purchases is 2% and effective December 7, 2011 and through 2012, refinances are 1.5% of the loan amount.
USDA has supplemented this with an annual fee which is paid monthly (like FHA). The annual fee is charged with both purchase and refinance transactions at a rate of 0.3%. For example, if you have a loan amount of $300,000, the monthly cost would be $75 (300,000 x 0.3% divided by 12 months).
If you're interested in a zero down USDA loan for a home located anywhere in rural Washington, I'm happy to help!
How Much Money are You Spending on Credit Cards?
December 22, 2011 by Leave a Comment
Tis the season to buy gifts and many of us rely on our credit cards to do so. Not just at Christmas time, but throughout the entire year. It's a convenience many are dependent on. With the fees and interest banks charge for the convenience of credit cards, it's amazing what you really end up paying over the year(s) if you carry a balance.
I encourage you to read your credit card statements this month as your statement will disclose just how much you paid in interest and fees this year. You may be rethinking the value of your mileage plan (like I am) or what ever "benefit", like airline miles, the bank is extending in trade for this indebtedness. It may be real tempting to close the account after seeing how much the cost for the credit is. Closing your established credit accounts may actually hurt your scores!
If you're considering a mortgage over the next few years, you may want to consider working on paying off the account and only using it once a month for small purchases (like gas or groceries) and paying it off monthly in order to optimize your credit score. Established credit helps your credit scores and your closed account, depending on what else you have impacting your credit, may lower your score. Likewise, new credit may bring down your credit scores – even if it's for doing something that is financially wise, like transferring credit card debt to a lower interest credit card. If you don't use credit cards, you may discover that you need to have established credit (typically three to four different active credit lines that are at least 1 – 2 years old) in order to qualify for a mortgage. Credit is a real catch-22 when it comes to qualifying for a mortgage and your credit scores.
If you own a home and have not yet refinanced, it could be worth your consideration. The additional savings from with your monthly mortgage payment could go towards reducing debt, like credit cards.
I often work with my clients who are getting ready to buy a home to develop a strategy on paying off their debts, increasing credit scores and/or building savings, depending on what their financial goals are. If you are considering a mortgage to buy or refinance a home, do contact your local mortgage professional before taking action. I've often met with people who have done what would seem like "the right things" to improve their financial scenario, such tapping savings to pay off and closing all debts, only to learn they've wound up dropping their scores and reducing their savings.
I'm licensed to originate mortgages on homes located in Washington state and happy to help you with your home finance needs.
Should You Refinance Now or Wait for the New HARP Program?
December 20, 2011 by Leave a Comment
Today someone body found my blog by googlineg: "Should I refi now or wait for the new HARP program". This is such a great and timely question that I thought I'd take a few moments to answer.
The "new HARP" is actually available now on applications that are dated December 1, 2011 and later. HARP (Home Affordable Refinance Program) is for mortgages that were securitized by Fannie Mae or Freddie Mac prior to May 31, 2009. This is different than who your mortgage servicer is (who you make your mortgage payments to) and the date the mortgage was securitized is often several weeks after the actual date your transaction closed.
Washington State home owners are eligible for this program are especially excited for the "new HARP" (also referred to as HARP 2) because of the expanded loan-to-value guidelines. Owner occupied homes will eventually have the 125% loan to value limit removed making it possible for more home owners who have made their payments on time but have lost equity in their homes to refinance into a fixed rate mortgage. Those opting for an adjustable rate mortgage will have a maximum LTV of 105%.
Why would somebody wait to refinance? HARP 2 is releasing the expanded guidelines in phases. Fannie and Freddie are allowing lenders to offer HARP (DU Plus and Open Access) with March 15, 2012 being the date that loan to value restrictions are removed for this program.
Another reason some home owners are waiting is that some private mortgage insurance companies and mortgage servicers are working out the final details on how to transfer or reissue pmi certificates. With HARP 2, borrowers with pmi should have more possibility of being able to refinance.
Why you should begin the refinance process now. I'm currently helping several Washington home owners with their HARP refi without an appraisal being required. After we receive the full loan application, we submit the loan to Fannie or Freddie's automated underwriting system to see what our approval is and what the conditions may be. Many HARP refi's are being now approved with the apprasial being waived which allows my client to decide if they'd like to lock in today's low rate now or wait and float their interest rate.
If we discover that Fannie or Freddie are not accepting the value based on the current phase of HARP we are in, we continue the application and wait for the next phase to try again. This gives us time to work on anything that may need a little extra attention such as reducing debt to income ratios or improving credit scores.
This also provides an opportunity to get our ducks in a row and have your application completely ready so that when and if your transaction is approved without an apprasial being required, you're in position to close rather than starting with volumes other home owners hoping for their HARP refi.
We are currently accepting applications for HARP 2 refinances for homes located in Washington, even if some of the refinances may have delayed closings. I have several clients who are getting ready to close just after the new year, enjoying the benefit of their much reduced mortgage payments.
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/
Santas Occupy Seattle
December 18, 2011 by Leave a Comment
Not really! Yesterday we started our Christmas shopping in Seattle and were delighted to bump into hundreds of Santas for Santacon 2011. Aparently all over the world, there were thousands of Santas coming out to be jolly before the big day.
More photos of Seattle Santacon 2011
By the way, Christmas shopping in Seattle is one of my favorite things to do in the holidays. I highly recommend getting out to Pikes Place Market – especially on a sunny day.
Merry Christmas and Happy Holidays to you and yours!
Refinancing when you have an existing Second Mortgage or HELOC
December 15, 2011 by 62 Comments
When you are refinancing your primary mortgage and you have an existing second mortgage or HELOC (home equity line of credit), the new lender will require to stay in “first lien position”. This boils down to who has first dibs on a property in the event of a foreclosure. Lien position is determined by the date the mortgage was recorded. When you refinance your first mortgage and you have an existing second mortgage, the new mortgage will have a recording date that is after the existing second mortgage. Technically, that would put the second mortgage or HELOC in “first lien” position, which would not be allowed with the new lender. Click here for a no-hassle mortgage rate quote for your Washington state home. [Read more…]
Income Limits and Property Qualifications for USDA Rural Loans in Washington
December 10, 2011 by Leave a Comment
NOTE: INCOME LIMITS HAVE BEEN UPDATED SINCE THIS POST WAS PUBLISHED.
USDA is a government backed program that allows zero down payment on homes that are in a designated rural community for families earning less than a certain income. A majority of Washington State single family residences (homes and condos) qualify…of course if you live in metropolitan areas like Seattle or Bellevue, odds are your home will not. To qualify, families must be without “adequate housing” (may not own a home or adequate home), must have reasonable credit history and be able to afford the mortgage (29/41 is the debt to income ratio guidelines).
Income limits vary by county and the entire household income is considered (not just the primary borrowers or those borrowers on the mortgage) for determining if the income meets the guidelines. This is separate from income considered for “debt-to-income” ratios. USDA loans allow incomes up to 115% of the median income for the area. Income limits vary on household size from 1-4 person or 5-8 person.
As of the publishing of this article, in Washington, the income limits by county are:
- King and Snohomish Counties: 1-4 Person $92,600 | 5-8 Person $122,250
- Island County: 1-4 Person $89,550 | 5-8 Person $118,200
- Kitsap County: 1-4 Person $85,700 | 5-8 Person $113,100
- Thurston County: 1-4 Person $85,100 | 5-8 Person $112,350
- Clark County: 1-4 Person $82,800 | 5-8 Person $109,300
- Pierce County: 1-4 Person $81,450 | 5-8 Person $107,500
- San Juan County: 1-4 Person $78,050 | 5-8 Person $103,050
- Whatcom County: 1-4 Person $76,850 | 5-8 Person $101,450
- Benton and Franklin Counties: 1-4 Person $75,750 | 5-8 Person $100,000
- All other Washington counties: 1-4 Person $74,050 | 5-8 Person $98,650
You can check current USDA income limits by visiting the USDA site (clicking here)…be sure to click the “guaranteed” option. Income limits can and do change. You can also use USDA’s income eligibility calculator which will factor in deductions to income, select the “guaranteed” results (not “direct”).
Income used to determine if a family is under the household income limits includes all those (18 years and older) who will be living in the home regardless of whether or not they’re on the mortgage. Incomes of children over 18 who working AND who are full time students are not factored.
Once you’ve determined that you meet the household income limits, the next step is to see to see what communities in your area are eligible for USDA financing. You don’t have to go too far from Seattle or Bellevue to find homes that do qualify for this type of mortgage. Using the USDA site, under “Property Eligibility” click “Single Family Dwelling”. From there you can either enter a specific address or click on the map to narrow down your search.
Sellers and real estate agents who are working in neighborhoods that qualify should be sure to include this program as an option they’ll consider for financing on their offers.
I’m pleased to offer USDA financing as an option for borrowers who meet the criteria since there is no private mortgage insurance and the program is a 30 year fixed rate. If you have any questions regarding USDA or other mortgage programs for financing homes located anywhere in Washington State, please contact me, I’m happy to help!
Information about HARP 2.0: Fannie & Freddie’s Home Affordable Refi
December 9, 2011 by Leave a Comment
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