Your mortgage payment typically includes principal and interest and may also include property taxes, home owners insurance. This is often referred to as PITI in the mortgage industry (principal, interest, taxes and insurance). If you have less than 20% down payment or home equity, then you probably have some form of mortgage insurance as well (unless you qualify for a VA mortgage). Some portions of the mortgage payment may change over time. [Read more…]
Mortgage Payment Breakdown
January 23, 2019 by Leave a Comment
Higher Property Taxes Impacts Everyone
February 23, 2018 by Leave a Comment
If you live in King, Pierce, Snohomish or many other Washington state counties, you have some sticker shock when you see your 2018 property taxes. King County is reporting that the average home will see their taxes increase by 17%. The City of Sumner in Pierce County may see a whopping 22% jump to their property tax. [Read more…]
A compromise for waiving your escrow reserve account
September 26, 2012 by 3 Comments
An escrow reserve account is used to collect and “reserve” the real estate taxes and home owners insurance portion of your monthly mortgage payment for when your taxes and insurance bills are due. In Washington state, property taxes are paid twice a year and home owners insurance is paid annually.
Fannie Mae and Freddie Mac improve HARP 2.0 Underwriting Guidelines
September 18, 2012 by 2 Comments
On Friday, Fannie Mae and Freddie Mac announced much needed updates to underwriting guidelines for HARP 2.0. The Home Affordable Refinance Program (HARP 2.0) has helped many Washington state homeowners with conforming mortgages (securitized by Fannie Mae or Freddie Mac prior to June 1, 2009) take advantage of historically low mortgage rates regardless of their home’s current equity (or lack thereof). You can learn more about the HARP 2.0 program by clicking here.
The recent updates to HARP 2.0 will allow more home owners to have access to this program by reducing documentation requirements for some borrowers. Here are some of the improvements:
- Reduced documentation for income and assets. NOTE: Form 4506 and verification of employment will still be required. Lenders will not be required to verify large deposits.
- Allowing borrowers with assets to not have to document income. This is available when a home owner has at least 12 months of their proposed new mortgage payment (PITI) in savings. The assets may come from checking or savings, stocks or vested retirement accounts.
- Improvements to when a borrower is removed from the mortgage. Previously if a borrower was being removed with the HARP 2.0 refinance, guidelines required proof that the remaining borrower made the mortgage payments for the last year with their own separate funds (except in the case of death). Now with HARP 2.0, in the remaining borrower can qualify on their own (debt to income at 45% or lower and credit scores of 620 or higher) they may qualify for a HARP 2.0 refinance.
Remember, banks and lenders may layer their own underwriting guidelines to Fannie Mae and Freddie Mac’s HARP 2.0 program.
If you have been turned down for a HARP 2.0 refinance before, it may be worth checking with your local, licensed mortgage originator to see if you are now eligible. HARP 2.0 is available for owner occupied, vacation homes and investment properties. I can help you if your home is located anywhere in Washington State – click here for your HARP 2.0 rate quote.
How Long Will PMI Stay on my HARP 2.0 Mortgage?
July 25, 2012 by Leave a Comment
This is a question that I’m often asked by Washington home owners who are considering refinancing their current conventional mortgage using the HARP 2.0 program. The answers I’ve received from private mortgage insurance companies vary from “it’s up to the mortgage servicer” to “when the new loans principal reaches 78% loan to value”.
If your current loan to value is triple-digit because of being underwater, the thought of paying private mortgage insurance for years may not sound appealing. Here are some points I encourage my clients to consider:
- determine when your existing private mortgage insurance is set to terminate. If it’s before December 2013 (assuming the HARP program is not terminated early, which Fannie and Freddie have reserved the right to do) you could consider delaying your HARP refi so that you won’t have PMI on the new loan.
- compare your existing principal and interest payment (excluding the private mortgage insurance) to the proposed HARP payment including principal, interest plus mortgage insurance. Many of my clients are saving hundreds of dollars each month – even with keeping their mortgage insurance.
- consider how long you plan on keeping your home and what your alternatives may be. If you are underwater and are planning on staying in your home or eventually converting it to a rental property, reducing your payment now may be beneficial. If you are planning on doing a short sale, then refinancing at this time would probably not pencil out.
With HARP 2.0 refinances, when you have private mortgage insurance, most pmi companies are transferring the pmi certificates over to the new lender without any issues. The pmi rates stay the same so if you’re currently paying private mortgage insurance monthly, you can estimate that the new pmi payment will be roughly the same with your new mortgage payment.
If you have lender paid mortgage insurance, often times it was paid for upfront and there will be no private mortgage insurance for the home owner to pay. Sometimes the lender paid mortgage insurance (LPMI) was being paid monthly by the lender and in those cases, the pmi company may convert the policy to “paid monthly” so the borrower can assume it.
If you’re interested in a mortgage rate quote for a HARP 2.0 refinance for your home located anywhere in Washington state, contact me.
Can I Pay My Own Taxes & Insurance?
February 8, 2007 by 1 Comment
Unless you have 20% or more of equity in your home, chances are you have an escrow account (also referred to impounds or reserves) for your home owners insurance and property taxes. Lenders want to make sure that they reduce risk by requiring taxes and insurance to be included in your monthly mortgage payment. Property taxes are one of the few items that can take precedence over lien position in the event they were to not be paid. Your first mortgage wants to stay just that, a first mortgage (in the event of a worse case scenario, foreclosure).
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