Keep me posted!

February 8, 2013 by Leave a Comment

I forgot that postage rates were going up on January 27, 2013. Some of my clients who will be receiving my quarterly newsletter will see an extra $0.01 in postage on this issue! 

“Going postal” will soon mean “taking the weekend off” this summer when Saturday mail delivery ends. It will be interesting to see how this impacts the mortgage process, especially refinances with the right of rescission period. Currently with an owner occupied refinance, three business days must pass after signing before the loan can close. Many consider “three postal” days as three business days. This could cost additional time with some rate lock commitments. Stay tuned!

By the way, I do have a couple extra of my newsletters left over – if you would like me to mail one to you, please send me your name and address.  

Of course if you’re interested in residential mortgage for home purchase, refinance or even a reverse mortgage, I’m happy to help you as long as the home is located in Washington state.

Happy Friday!

Filed Under: Current Affairs Tagged With: , , ,

Reader Question: Should I Wait to Refi?

January 23, 2013 by Leave a Comment

One of my returning clients is considering a refinance, however, they’re not sure if they should wait or not.  Their Seattle area home is really close to that magically 80% loan to value – based on best estimates – which would allow them to avoid private mortgage insurance if their home’s value increases.

There are pros and cons to waiting to a refi, similar to those with having an extended closing when you’re buying a home.  Here are a few:

  • changes to home value. Your home’s value may increase as the Seattle markets seems to be doing well with purchase inventory… or a home in the neighborhood that’s a potentially a strong comparable for your appraisal might become a short sale or foreclosure, which may negatively impact your home’s appraised value.
  • changes to employment. If your or your spouse decides to change jobs and it’s not in the same line of work or the new job has a different pay structure, this may impact qualifying.
  • credit scores vary. Credit scores impact the pricing of your rate and underwriting decisions. Lately I’ve been encountering clients who have paid off credit cards and closed them which sounds great, however they now have “shallow credit” and lower credit scores. I’ve also seen late payments on a credit report caused by a parent co-signing for their child. Sometimes it may be worth deciding to delay a refi if you’re trying to improve your scores, or proceeding with the refi and rechecking scores prior to closing.
  • interest rates. Mortgage rates change daily. Sometimes rates change throughout the day. Although it’s anticipated that mortgage rates will remain low for the remainder of the year, members of the Fed have hinted that the Fed should consider no longer buying mortgage backed securities, which has kept rates at their manipulated lower levels. As the economy improves, mortgage rates tend to trend higher.
  • loan programs and guidelines may change. Currently, unless our elected officials take action, HARP 2.0 is set to expire at the end of this year. Banks and lenders currently adjust their underwriting guidelines (aka overlays). And we’re waiting for FHA to increase their mortgage insurance premiums which impacts FHA streamline and non-streamline refi’s. 

Refinancing now is gambling that your home will appraise high enough or you may be out the appraisal fee unless mortgage insurance or a piggy-back second mortgage makes sense to proceed with the refi.

Delaying the refinance adds other potential risk factors assuming you’re satisfied with the current low mortgage rates and you qualify.

I recommend reviewing possible refinance options that are available now and weigh out the pro’s and cons. Refinancing now, should you decide to, also means that you’re reducing your payment and higher interest sooner. 

If you are interested in a mortgage rate quote for your refinance or purchase of a home located anywhere in Washington, click here.  I’m happy to help you!

Filed Under: Refinance Tagged With: , , , , , , ,

Should I refi my 15 year fixed mortgage if my rate is 3.250%?

January 8, 2013 by Leave a Comment

I’m reviewing a scenario for one of my returning clients who currently have a 15 year fixed mortgage at 3.250% from when they purchased their Seattle home 1.5 years ago.  The current balance is around $387,600 with a principal and interest payment of $2930.13. They do not have taxes and insurance included in their mortgage payments. My clients are considering another 15 year fixed mortgage or possibly a 10 year fixed mortgage.

Quotes below are with impounds waived (lenders typically charge 0.25% in fee when taxes and insurance are paid by the borrower instead of included in the monthly mortgage payment). Rates are based on mid-credit scores of 740 or higher and a loan to value of 80% or lower.  Mortgage rates are as of January 8, 2013 and may (and will) change at any time. 

2.875% for a 15 year fixed (apr 2.979)  has a rebate credit which brings the estimated net closing cost down to $1229 based on a loan amount of $389,000. The principal and interest payment is $2663.04 reducing their monthly mortgage payment by $267.09.  

2.750% for a 15 year fixed (apr 2.886) has closing cost estimated at $4195. The principal and interest payment is $2660.20 with a loan amount of $392,000. This scenario reduces their payment only slightly more to $269.93. If it were my choice, I’d opt for the slightly higher rate with lower closing cost.

Currently, the 10 year fixed rate for this scenario is actually priced slightly higher than the 15 year fixed.

2.875% for the 10 year fixed (apr 3.020) with $1700 in net closing cost after rebate credit. The principal and interest payment would be $3,733.81 based on a loan amount of $389,000.

Again, I would opt for the 15 year at 2.875% as the pricing is slightly better and I could always make the additional principal payment of $1070.77 (3733.81 less 2663.04) in order to pay down my mortgage in 10 years vs 15.  

If you are interested in refinancing or buying a home located anywhere in Washington state, please contact me.

Filed Under: Refinance Tagged With: , , , ,

Obama Administration considering new Refi Program #MyRefi

December 26, 2012 by 1 Comment

The WSJ reports that the Obama Administration is “eyeing” a refi program that would allow underwater home owners who currently do not qualify for HARP 2.0 to refinance their homes. Currently in order to qualify for the Home Affordable Refinance Program (aka HARP 2.0) the existing mortgage must be securitized by Fannie Mae or Freddie Mac and the “securization” must have taken place prior to June 1, 2009.

According to the article, White House officials and the Treasury would like to include mortgages that were not securitized by Fannie Mae or Freddie Mac. This program would possibly include non-conventional, “alt-a”,  subprime and mortgages held by private lenders. There is no mention of expanding or removing the securitization date requirement in WSJ’s article, which many homeowners are desperately hoping for (also known as HARP 3.0).

In order for these expanded refi programs to be a reality, using Fannie Mae or Freddie Mac, Congress and the FHFA must approve them.  When and IF this happens, I’ll be sure to announce that here at Mortgage Porter. 

Stay tuned! Subscribe in the upper right corner of this blog or follow me on Facebook or Twitter.

Filed Under: Refinance Tagged With: , , ,

HUD’s Net Tangible Benefit Requirement is Hampering FHA Streamline Refinances

November 18, 2012 by 1 Comment

HUD has a requirement that in order for a borrower to do a streamline refinance their  existing FHA mortgage, their scenario must have a “net tangible benefit”. FHA streamline refinances are popular today because they do not require an appraisal and FHA mortgage rates are very low.

[Read more…]

Filed Under: FHA Tagged With: , , ,

President Obama and HARP 3.0 aka #MyRefi

November 7, 2012 by 5 Comments

HARP 3 0

With the re-election of President Obama, in my opinion, the odds of HARP 3.0 becoming a reality improved. HARP is an acronym for the Home Affordable Refinance Program. HARP was created to help home owners who would qualify to take advantage of today’s extremely low mortgage rates and refinance except their homes have lost equity. HARP is available for mortgages that were securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. We are currently on version “HARP 2.0” which was offered expanded guidelines from when HARP first rolled out. For more information about HARP 2.0, click here.

At the beginning of this year, HARP 2.0 was expanded in phases to make the program more available for employed and credit worthy home owners. Fannie Mae and Freddie Mac reduced the requirement for appraisals and made efforts to make the program more for banks and lenders to offer. However, many banks and lenders have not fully adopted HARP 2.0 guidelines as created by Fannie Mae and Freddie Mac. Some will only offer HARP 2.0 home owners who currently have their mortgage serviced by that bank (where they make their mortgage to). And some lenders have limited what types of HARP 2.0 loans they will accept, for example, refusing to offer HARP 2.0 on loans that have existing private mortgage insurance or LPMI. Or by adding overlays to loans they will accept with limits to loan to value or not accept Fannie Mae or Freddie Mac appraisal waivers. Some wholesale lenders are offering HARP 2.0, however, the demand is so great for these borrowers that it’s not unusual for HARP 2.0 refi’s to take several months to close.  In fact a couple of the these wholesale lenders who were accepting HARP 2.0’s with higher loan to values or pmi have either stopped accepting applications until they can catch up with what they currently have in process.

President Obama and members of Congress have been pushing for a refinance program that would go beyond HARP 2.0. This program has been nick-named HARP 3.0 and has been assigned a hashtag of #MyRefi by the White House.

It is anticipated that HARP 3.0 will have many of the same features available with HARP 2.0 along with:

  • expanding or eliminating the Fannie Mae/Freddie Mac securitization cut-off date of May 31, 2009;
  • open to mortgages that are not securitized by Fannie Mae or Freddie Mac, including qualified borrowers who used jumbo, subprime or other alternative programs. 
  • allow borrowers who have refinanced under earlier versions of HARP to refinance again;
  • expand loan amounts to previous conforming high balance limits. Borrowers in the greater Seattle area with loan amounts at the previous conforming high balance limit of $567,500 may qualify for HARP 2.0, however, they often need to bring in cash to close with the current King County loan limit set at $506,000.

President Obama’s refi plan would probably look more like an FHA refinance and would be available to home owners who have lost equity in their home and have made their mortgage payments on time for the last six months. President Obama has been pushing for programs to become more available to home owners so they they can take advantage of today’s lower rates and help our economy.

When and if HARP 3.0 #MyRefi becomes available to Washington home owners, I will be sure to announce it here!  To stay informed, you can subscribe to my blog, follow me on Twitter or “like” me on Facebook.  For a mortgage rate quote or to start a loan application for a refi on your home located any where in Washington state, where I’m licensed, please click one of the links above.

Filed Under: HARP - Home Affordable Refi, Politics, Refinance Tagged With: , , , ,

Give yourself a raise: Refinance!

October 12, 2012 by Leave a Comment

About three years ago, I helped a couple buy their first home. They were my first clients to lock in at 4.500%. I remember sitting across the table from them at a coffee shop in West Seattle and telling them that they would probably never need my services again since their rate was so low. I was wrong.

We are refinancing their mortgage of $359,000 into another 30 year fixed rate at 3.375% (apr 3.544) with net closing cost of $1145.  They are reducing their monthly mortgage payment by $418! That’s a significant amount of savings to put back into their household to pay off revolving debt, build savings or retirement or help fund a college account.

They could even take that $418 and apply it towards additional principal, making the same payment they have been for the past three years while whittling seven years off of their new mortgage. This would save them $67,000 over the life of the loan.

My point is that mortgage rates are extremely low. Even if your current rate is 4.5%, it may very well make sense to refinance.

If your home is located in Washington state and you would like me to provide you with a written rate quote, click here.

Filed Under: Refinance Tagged With: , , ,

Comparing Closing Cost

October 11, 2012 by Leave a Comment

Sometimes I see quotes from competitors that befuddle me. This morning, a home owner in Maple Valley asked me to review their FHA streamlined refinance quote that they received from a big bank.

The great big bank not only has a much higher interest rate, their closing cost are more expensive too. In fact, when I review the closing cost, it makes me wonder if the loan officer has originated many FHA loans.

Here are the bank’s closing cost for an FHA streamline refi…

Bank FHA
Big Bank’s Closing Costs

…and there’s only a $10 closing cost rebate with an interest rate that is 0.5% higher than mine! 

Compare this to my closing cost (BELOW), which are covered with a rebate credit (which also pays for my clients prepaids and reserves). 

My closing cost
My closing costs

I really don’t understand how our quotes could be so far apart…but you can see, they are. Many consumers would trust their bank would provide the most competitive rates and closing cost. The quotes I’m looking at today illustrate this isn’t always true. If this Maple Valley homeowner did not shop his rate quote and only trusted his big bank, he would be paying a much higher rate over the life of the loan and overpaying in fees. 

Yet those in Congress feel that mortgage originators who work for banks can be held to lower standards per the SAFE Act. Remember, bank mortgage originators are not required to be licensed, they are only registered. I recently met a nice loan officer who works for a different big bank and who presented herself to be NMLS licensed, when I asked her directly if she was “registered” or “licensed” she did correct herself. Believe me, there is a  difference.

If you are considering refinancing or buying a home anywhere in Washington state and have a rate quote from another lender or bank, I’m happy to review it to see if I can offer a better rate and/or lower closing cost. Send me an email with a pdf of the rate quote you would like me to review. Remember, I can only help with homes located in Washington state, where I’m Licensed to originate mortgages.

Filed Under: Closing Cost, Mortgage Tagged With: , , ,
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