Gifts from the Bank of Mom and Dad – Part 1: FHA

August 17, 2008 by Leave a Comment

NOTE: Guidelines constantly change – this was originally written in 2008! Please refer to our FHA guide for additional information.

Home buyers using FHA to finance the purchase of their home can get help from family members towards the down payment and closing costs in the form of a gift.  NOTE:  With the passage of HR 3221, parents will actually be able to contribute towards the down payment and closing costs as a loan instead of a gift (more info to follow–this is not in effect until October 1, 2008). [Read more…]

Filed Under: Home Buying, Mortgage Programs Tagged With: , ,

JP Patches & Gertrude Statue Unveiled in Fremont Tomorrow

August 15, 2008 by 2 Comments

Thumb_meandjp

You know I’m a Patches Pal–I grew up glued to the TV on weekday mornings watching  JP hoping he would see me through his ICU2-TV.   I wasn’t alone–if you are a Puget Sound native around my age, odds are, you’re a Patches Pal too!

Patches Pals have been waiting for this day and many have purchased Patches Pal Pavers to support this great cause (excess proceeds benefits Childrens Hospital).   I even added JP’s mug to the right on Mortgage Porter to make it easy for my subscribers/readers who are fellow Patches Pals to participate.

Well the big day is almost here…"the most anticipated event in human history" according to JP’s website.   You too can witness the great unveiling of the statue:

This Sunday, August 17, 2008 beginning at 1:00 p.m at the Solstice Plaza (N. 34th Street just east of the Fremont  Bridge).

Come celebrate the men (JP and Gertrude) who have touched so many local lives!

Filed Under: People, Seattle

Fannie Mae & Freddie Mac increasing Adverse Market Fees

August 14, 2008 by Leave a Comment

Effective October 1, 2008, Fannie Mae is adjusting the cost of mortgages from 0.25% to 0.50%.  Freddie Mac will follow on November 7, 2008 with an add of 0.50%.  Consumers will most likely not see this from their end–it will all ready be factored into the pricing of their rate. 

Some lenders will begin pricing in the fees before Fannie and Freddie (conventional financing) as the dates are for when loan files are delivered to them–not originated or locked.  A lender does not want to get caught with a rate where they’ll owe Fannie or Freddie 0.5% more in fees per file come October…in fact, I’ve noticed that a few lenders have all ready started incorporating these fees into rates this week.

A half point in fee (or 50 bps) typically equals about 0.125-0.25% to rate depending on what pricing is when the mortgage interest rate is locked.  The amount of the fee (referred to as LLPA or Adverse Market Fee) varies depending on credit score, loan to value and program.   Fannie Mae has added loan to value brackets from the previous guide over 70%.   The new LLPA (loan level price adjustment) matrix is more complicated than the earlier one as well.

This is one reason to work with a Mortgage Professional who has the ability to shop various banks and lenders during a transitional period such as this.  For example, assuming a lowest mid-credit score of 679 (two borrowers) at an 80% loan to value for a purchase, the difference between lenders who are all ready factoring the "adverse market fee" is 0.75% to fee.  Based on a loan amount of $400,000, this would cost an extra $3,000 for the same rate or about 0.25% more in rate!

The closer we near October, the more lenders will start pricing in Fannie’s adverse market fees.

Filed Under: Mortgage

FHA Minimum Down Payment Increasing January 1, 2009

August 13, 2008 by 4 Comments

With the passage of HR 3221, the minimum required investment of a home buyer utilizing a FHA insured mortgage is increasing from roughly 3% to 3.5% effective January 1, 2009.  You may think this sounds like small change, but with larger loan amounts, this adds up.

For example, if a home buyer is utilizing a FHA Jumbo and they are buying a home priced at $500,000.   Their current minimum required down payment of 3% is $15,000.  Effective January 1, 2009, the minimum required down payment of 3.5% is $17,500; a difference of $2,500 for the amount required to invest into the transaction.   With a home priced at $300,000; the current required investment from the buyer would be $9,000.  As of January 1, 2009, the new amount required will be $10,500.

What does this mean to you?

If you are planning to buy a home utilizing a FHA insured mortgage, be aware of the changes to the minimum down payment requirements.   After December 31, 2008, you’ll be required to come up with additional funds towards your down payment which may be a gift or loan from family members.

If you are wanting to take advantage of the lower down payment requirement, meet with a Mortgage Professional who is qualified to provide FHA loans.

If you would like me to provide a rate quote for a FHA mortgage on a home located anywhere in Washington, please click here.

Related: Please refer to our updated FHA guide for Washington homes.

 

Filed Under: Mortgage Programs Tagged With:

Conforming/FHA Jumbo Limit to Decrease January 1, 2009

August 12, 2008 by Leave a Comment

UPDATE: Please visit our Conventional Mortgage Guide or FHA Mortgage Guide for current loan limits for your home located in Washington. [Read more…]

Filed Under: Mortgage Programs Tagged With: ,

Down Payment Assistance Programs Days are Numbered

August 11, 2008 by 6 Comments

With the passing of HR 3221, Down Payment Assistance Programs will no longer be allowed with FHA mortgages as of October 1, 2008.    DPA’s such as Nehemiah, have been popular for helping home buyers come up with their down payment.  FHA allows Sellers to pay for closing costs and prepaids as long as the buyer has met their minimum required investment (which has also changed with the passing of HR 3221–another post will follow on this subject).   With DPAs, the seller contributes funds to the DPA (like Nehemiah) which is a “charity” (they collect a small fee from the seller which is used for charitable causes).   The DPA then contributes the funds towards the down payment for the buyer. [Read more…]

Filed Under: Mortgage Rates & Market Updates

A Sunday Drive to Healdsburg, Sonoma County

August 10, 2008 by Leave a Comment

As you may know, I was in San Francisco last month for the Inman Connect real P7250157estate conference.  I decided to add a few days to my trip and make the most of my air fare expenses by visiting Sonoma…specifically Healdsburg.  I know this isn’t quite a “neighborhood tour” like I’ve been promoting at Mortgage Porter…I’m hoping you’ll enjoy this post all the same. [Read more…]

Filed Under: Sunday Drive - Neighborhood Tours, Travel Tagged With: ,

Please Help Angie fight Breast Cancer

August 9, 2008 by Leave a Comment

Angie wants to walk in the Breast Cancer 3-Day event but needs to raise $2,200 or she will not be allowed to participate.  Angie is walking for her Aunt Em and so far has raised just over $500.  She has a ways to go to make the required amount to participate in the walk.   And does it really matter to us who she’s walking for?  We don’t know Aunt Emily and you may not know Angie.  We do know people who are fighting breast cancer.  I  personally lost a dear friend and co-worker this past year.  I’ve lost family members.  We have all lost someone to breast cancer.  Here is a woman who wants to do something by walking for 3 days (60 miles, I believe) and needs help in order to do so.  Breast cancer touches all of us.

Please consider making a donation for towards breast cancer and to allow her to walk for her Aunt Emily and for all of us.  Donate what ever you can.  For more information, or to donate, please click here.

THANK YOU!

Filed Under: Charity
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