HARP 2 Expanded Guidelines Available Next Month

February 17, 2012 by 1 Comment

During the weekend of March 17, 2012, possibly while you're enjoying an Irish HARP's at The Celtic Swell off the shores of West Seattle, Fannie Mae and Freddie Mac will be releasing the next set of expanded guidelines for the Home Affordable Refinance (coined HARP 2 or 2.0).

Many Washington area home owners with conventional mortgages closed prior to June 1, 2009 are eagerly looking forward to this St. Patty's Day so they can take advantage of the current low mortgage rates.  If you've been turned down for a HARP refinance before, you should consider trying again with this expansion.

HARP enhancements on the March 17 release include:

  • No maximum LTV (loan to value) ratio for fixed rate mortgages;
  • 105% maximum LTV for adjustable rate mortgage;
  • More properties will qualify to have the appraisal waived, including primary residences, second homes and investment properties.

Borrowers still need to qualify with income, employment, credit and assets. If a borrower is relying on income from a second job to qualify, there cannot be any gaps of employment for that job in the last 12 months.  Fannie Mae DU Plus will also require 2 months of reserves for second homes and six months reserves to be verified for investment properties.

Some Washington home owners are not waiting until next month to refinance. If Fannie or Freddie are accepting the home's current value (generally it's underwater no more than 105% LTV) they may receive an appraisal waiver.  You may not have to wait either!  If we do not receive an response from Fannie or Freddie with an appraisal waiver, we can work on improving your credit or savings while we wait for the next expanded guidelines next month.

If your home is located in Washington state, I'm happy to review your scenario.  For your HARP rate quote, click here.

For more information about HARP 2.0, 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:www.freddiemac.com/mymortgage orhttp://www.fanniemae.com/loanlookup/

 

Filed Under: HARP - Home Affordable Refi, Refinance

What Do You Need for a Preapproval?

February 16, 2012 by 5 Comments

preapprovalIf you’re considering buying a home, many real estate agents and/or sellers will require a preapproval letter. A preapproval letter is different than being “prequalified”. Being prequalifed means that you have provided verbal information to a mortgage originator to get an idea of what you qualify for. Being preapproved means that you are providing documentation that supports the information you have provided. Income, employment, assets and credit are verified for a preapproval.

Some preapproval letters aren’t worth the paper they’re written on. Especially if the mortgage originator you’re working with does not require supporting documentation before preparing the letter. If you have not provided supporting documentation (listed below) to your mortgage originator – you’re probably just prequalified and not actually preapproved.

Here is a list of documents you may be required to provide in order to obtain a preapproval:

[Read more…]

Filed Under: First Time Home Buyer, Residential Purchase, The Mortgage Process Tagged With: , , , , , , ,

Mortgage Rate Market Movers for the Week of February 13, 2012

February 13, 2012 by Leave a Comment

We have plenty of economic indicators on the plate for this week not to mention to continued Euro-story. Remember, positive information, when the stock market is doing well or data that indicates positive inflation tends to cause mortgage rates to rise. Mortgage rates are based on bonds (mortgage backed securities) and investors tend to trade the safety of bonds for better return found with stocks when possible.

There are no economic indicators scheduled for today and the DOW is currently up 34 at 12,836 as I publish this post on 7:45 am PST on February 13, 2012.

Here's are a few reports that are scheduled for this week:

  • Tuesday, February 14, 2012: Retail Sales.  HAPPY VALENTINES DAY!

  • Wednesday, February 15, 2012: Empire State Index, Industrial Production, Capacity Utilization and FOMC Minutes

  • Thursday, February 16, 2012: Building Permits, Housing Starts, Producer Price Index (PPI), Initial Jobless Claims and Philadelphia Fed Index

  • Friday, February 17, 2012:  Consumer Price Index (CPI)

    • Today's my first day back from a couple days off at Mortgage Tech Summit in Scottsdale so I won't have time to update this post with live rate quotes. I will share live rate quotes on Twitter AND I'm happy to provide YOU with a no obligation mortgage rate quote for your home located anywhere in Washington state.  For your personal mortgage rate quote, click here.

    Filed Under: Economy, Interest Rates

    Getting ready to pick up my paint brush

    February 12, 2012 by Leave a Comment

    Just for fun, I thought I'd share a new project that I'm starting: warning, this has NOTHING to do with mortgages. I'm going to attempt a black velvet painting. Not the paint by number stuff we did as kids, this painting is going to be over five feet tall. Here's my first draft (pencil) of the painting.

     

    2012-02-11_19-07-21_196

     

    This is a recreation of a Mucha painting, and I'm sure he didn't imagine having this done on black velvet.  We'll see how she turns out!  I've made her wine glass larger and added a label to the wine bottle… who knows, maybe I'll paint West Seattle's Luna Park in the background (don't count on it!).

    I'm having a tough time finding much material about "how to paint on black velvet". I cannot find a book and this is probably the best advice I've found on the internet for painting on black velvet.

    I will share the final results with you…good, bad or ugly! 

    Filed Under: Just for Fun

    What’s the difference between Fannie Mae Homepath and Freddie Mac Homesteps?

    February 11, 2012 by 1 Comment

    EDITORS NOTE: Fannie Mae is no longer offering the FannieMae HomePath mortgage program. If you are considering buying a Fannie Mae HomePath property (foreclosure that is owned by Fannie Mae) in Washington state, I’m happy to help you.

    [Read more…]

    Filed Under: Fannie, Freddie and FHFA, Homepath, Homesteps, Residential Purchase Tagged With: , ,

    Do I have the best rate possible?

    February 6, 2012 by 1 Comment

    One of my preapproved first-time home buyers asked me if they have the “best rate possible”.  The phrase “best rate” can mean different things to different people, in my opinion, the most common definitions to a borrower would be:

    • best rate possible based on qualifying; or
    • lowest rate possible based on current market pricing.

    Best rate based on qualifying means that your credit scores are as high as they can possibly be and you’re putting enough money down (or have enough equity) to where there are as few price adjustments to your scenario.

    With FHA loans, there are no price improvements after a credit score of 720 or higher. There is a slight improvement to mortgage insurance premiums with FHA at 5% down. With FHA a 720 score with 5% down will provide you the “best payment”.

    With conventional financing, you can see by Fannie Mae’s chart below that there are different price adjustments based on credit score and loan to value. The best pricing on this chart is with 40% down (or equity) with credit scores of 700 or higher. There are additional charts for conventional depending on program features, such as an adjustable rate or the Home Affordable Refinance.

    FannieLLPA

    Below is a chart from a lender showing various adjustments based on program, credit score and loan to value.

    LenderPricing

    If you’re interested in obtaining the best rate possible based on qualifying, consider starting the preapproval process very early so that you have time to work on your credit, debts and/or down payment. I enjoy helping my clients develop a plan to put them in best possible situation based on their scenario. Sometimes this may take a month or two and sometimes it may be a year or more, depending on what my clients situation is.

    Best rate based on pricing may be the very lowest rate available at that moment, which would take paying additional discount points and would increase your closing cost. Some might think “best rate” is lowest rate at the least amount of cost (par pricing or using rebate pricing).  Whether you want your rate priced with discount (higher fees/lower rate) or rebate credit to pay for closing cost (lower fees/higher rate) is up to the borrower. 

    Keep in mind that mortgage rates are a moving target, much like buying stocks. Rates often change several times a day. A mortgage interest rate is only secure once it is locked. Once you pull the trigger to lock in a rate, rates may improve or deteriorate. You can lock in a rate once you have a signed around contract with a specific closing date if you’re buying a home. If you’re refinancing a home, you can lock in whenever you know what your approximate closing date should be.

    Mortgage originators are restricted from advertising that they have the “best rate” since this is something a lender cannot guarantee. It’s impossible to know what all our competitors are currently offering in pricing and therefore, no lender can truly say they have the “best” or “lowest” rates.

    As a correspondent lender, we work with several banks and lenders and utilize a pricing engine which compares their mortgage rates based on a borrower’s specific scenario so that we can select who has the most competitive pricing at that time available to our company for that borrower.

    If you’re considering buying a refinancing a home anywhere in Washington, from Redmond to Walla Walla (and everywhere in between), I’m happy to help you with your mortgage needs. Click here for your personal rate quote.

    Filed Under: Interest Rates Tagged With: ,

    I’m speaking at Mortgage Tech Summit next week!

    February 4, 2012 by Leave a Comment

    At last year's Mortgage Tech Summit, I presented a session on my "talking" good faith estimates and rate quotes. This is something that I do for my clients to help review their personal mortgage scenario.

    On February 9 and 10, I'll be in Scottsdale at MTS to share how I am able to work with clients I really enjoy from my blogging and other social media efforts. I'm often contacted by mortgage originators across the country wanting my advice on social media – here's your chance to learn from some of the folks I consider the best in our industry.  I'm honored to be one of the speakers in this line-up and can't wait to attend the other sessions.

    If you're a mortgage or real estate professional, I encourage you to check out this event. Learn more at www.mortgagetechsummit.com.

     

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    And of course, I will be checking my email and voice mail on breaks while I'm away. 

    Filed Under: Events

    Should I Refinance my 4.5% Mortgage?

    February 2, 2012 by Leave a Comment

    I'm pricing out a scenario for one of my returning clients where I helped them with their refinance for their home in Seattle in May of 2009 to a 4.5% 30 year fixed rate. During that time, 4.5% was the lowest rate any of us had seen. Now mortgage rates have been in the high 3s to low 4s depending on current pricing and scenarios.  I thought it would be interesting to share the quotes I've provided my client because I know many others have rates around 4.5% and may be wondering the very same thing: should I refi?

    This Seattle home owner has excellent credit (scores above 740) and has an estimated loan to value of 80% or lower. It's possible they may qualify for a Home Affordable Refi since Fannie Mae has securitized their mortgage, however they closed right at the time where it's possible the mortgage may not have been securitized before the May 31, 2009 cut-off. Once we run the loan through Fannie Mae's automated underwriting system, we'll know whether or not it qualifies to have the appraisal waived. At this point, I'm assuming not and therefore an appraisal fee is factored into the APR. 

    Here's what I quoted as of 10:30 this morning on February 2, 2012:

    3.750% will reduce the monthly payment by $150 and has estimated closing cost of $5620 (apr 3.909). My client will return to their current principal balance in approx. 15 months per the amortization schedule.

    3.875% will reduce the monthly payment by $133 and has an estimated closing cost of $3660 (apr 3.891). My client will return to their current principal balance in approx. 14 months.

    4.000% will reduce the monthly payment by $121 per month with estimated closing cost at $1779 (apr 4.080). My client will return to their current principal balance in approx. 11 months.

    NOTE: Mortgage rates change constantly. For your personal rate quote on your Washington home, please click here.

    The monthly savings is only one consideration. If this client were to sell in the near future, retaining his existing mortgage may be the better route as the payoff would most likely be lower with the existing mortgage for this scenario. However, if the home owner does not have plans on selling or is considering converting his home into a rental in the distant (more than 12 months) future, or if the home owner is going to use the extra monthly savings to pay off high interest credit card debt or to build savings, the refinance gains more value.

    Whether or not someone should refinance is a personal decision where short and long term financial plans should be reviewed. 

    If you are considering refinancing your home located anywhere in Washington, I'm happy to help you. Click here for your personal rate quote.

    Filed Under: Refinance
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