FHA loans set to require minimum 640 middle score
The numbers have been considered and tossed around for some time and now most lenders and banks are making the official move to raise FHA minimum scores to 640 from a current 620. While there will almost certainly be those who claim they can and will still offer insured loans below 640 the reality is they likely will not close or be extremely difficult to close – especially if the advertiser is a correspondent lender or mortgage broker.
With bankers and lenders everything is about risk. It used to be about risk and market demands but with what has happened over the course of the last several months the market no longer gets what it wants and, just as the author predicted four years ago, the lenders once again make the rules and the people must work within them.
Each lender has a different time line for roll out and with the exception of less than a handful of banks every one is going to the 640 point. Even those who will still be offering solutions for borrowers with less than a 640 middle score will be charging extra points to the borrowers. This means if someone with a 650 score receives a loan at, for example, 4.5% interest the borrower with a 638 score may pay 5.5%. While increased pricing does not mitigate risk it does, technically, create a profit drip to cover losses in that pool.
According to an indisclosued source in the secondary marketing department of a major national lender “loans below 640 have a 10% greater delinquency rate than loans with scores about 640″. This means if the delinquency rate above 640 is 5% the delinquency rate below 640 is 15% and that’s a big hit for any lender to take.
Make sure you are working with a lender who knows how to work with borrowers who have credit challenges because it is still getting tighter in some arenas of lending. A select few lenders do have true in-house re-scoring systems to work with borrowers who have faced past issues but who are starting over or overcoming challenging times.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mark@themortgagemark.com
Wednesday, September 29, 2010
Thursday, September 16, 2010
Veteran’s Administration Home Loans over $417,000
Veteran’s Administration Home Loans over $417,000
Did you know that you can get a VA Home Loan over the $417,000 limit? With Mortgage Insurance rates for jumbo loans being so high, a “VA Jumbo Loan” might be the most affordable option!
VA Home Loans require that the Veteran make a down payment equal to 25% of the Balance over $417,000. This means that if the Sales Price on a property is $550,000 the calculation looks like this:
$550,000 – $417,000 = $33,250 That means you are making about a 6% down payment! In addition to this, there’s no monthly PMI. On a Jumbo Conforming loan (where you made a 10% downpayment) your mortgage insurance premium could be $317.00 a MONTH!
With a VA Home Loan, the funding fee would be 1.5%. This means on our $550,000 sales price, with a loan amount of $516,750 the Funding Fee adds less than $45.00 a month to your payments!! WOW!
Every situation is different – but if you qualify we would strongly suggest that you consider a VA home loan for your next purchase!
Contact The Mortgage Mark with any Questions! http://wwwthemortgagemark.com/ mark@themortgagemark.com
Did you know that you can get a VA Home Loan over the $417,000 limit? With Mortgage Insurance rates for jumbo loans being so high, a “VA Jumbo Loan” might be the most affordable option!
VA Home Loans require that the Veteran make a down payment equal to 25% of the Balance over $417,000. This means that if the Sales Price on a property is $550,000 the calculation looks like this:
$550,000 – $417,000 = $33,250 That means you are making about a 6% down payment! In addition to this, there’s no monthly PMI. On a Jumbo Conforming loan (where you made a 10% downpayment) your mortgage insurance premium could be $317.00 a MONTH!
With a VA Home Loan, the funding fee would be 1.5%. This means on our $550,000 sales price, with a loan amount of $516,750 the Funding Fee adds less than $45.00 a month to your payments!! WOW!
Every situation is different – but if you qualify we would strongly suggest that you consider a VA home loan for your next purchase!
Contact The Mortgage Mark with any Questions! http://wwwthemortgagemark.com/ mark@themortgagemark.com
Wednesday, September 15, 2010
How and Why You Get Your Money Back by Refinancing
How and Why You Get Your Money Back by Refinancing
Many are bemoaning the fact that their home has lost value in the last three years. They purchased the home in the early 2000s and saw some nice increase for a few years. Then the housing market flattened and even turned downward. Then it kept going down, and down, and down. It has not stopped for many homeowners in many markets. Folks are wondering if real estate prices will ever go back up.
Take heart. They will rise again. If inflation is a reality, which it almost certainly will be, then along with everything else, home prices will rise too.
But the key is to make wise decisions based on today’s economic realities. This is a principle I’ve written about before, but it’s worth repeating.
The premise here is that when the [free] market corrects in one category, as it has in the housing market, it usually creates a few opportunities in other areas of the market at the same time.
Inflation, for example, is very low right now. Potentially even negative depending on where you are. This gives many households the unique opportunity to spend a little less on groceries and vacations. This has been true for our family these past two years.
Combine the inflation numbers with what is happening in the stock market. Prices in the stock market are low relative to the recent past creating a good opportunity for making investments with some of the “low-inflation” generated savings.
The clearest example I can give though is in the housing market. A very close connection exists between the drop in housing values and the drop in interest rates. If the housing market had not dropped as much as it has, we would almost certainly not have interest rates as low as they are right now.
If you purchased your home five years ago for $300,000, and today it’s worth $200,000, then you’ve lost $100,000 in equity.
But if you refinance your 5.75% 30-year mortgage (which has 25 years remaining on it) to a (near 4%) 15-year fixed loan, your payment increases just a little bit, but you cut 10 years (or 120 payments) from your loan term. In this example, the total savings is upwards of $150,000 (120 payments of $1260 per month).
The market takes care of the wise and requires very little intervention to do so. Refinancing for a shorter term mortgage is the best way to get back the money you lost in your home’s value – and then some.
Contact The Mortgage Mark with any questions!
Apply today Online!!!!!!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Many are bemoaning the fact that their home has lost value in the last three years. They purchased the home in the early 2000s and saw some nice increase for a few years. Then the housing market flattened and even turned downward. Then it kept going down, and down, and down. It has not stopped for many homeowners in many markets. Folks are wondering if real estate prices will ever go back up.
Take heart. They will rise again. If inflation is a reality, which it almost certainly will be, then along with everything else, home prices will rise too.
But the key is to make wise decisions based on today’s economic realities. This is a principle I’ve written about before, but it’s worth repeating.
The premise here is that when the [free] market corrects in one category, as it has in the housing market, it usually creates a few opportunities in other areas of the market at the same time.
Inflation, for example, is very low right now. Potentially even negative depending on where you are. This gives many households the unique opportunity to spend a little less on groceries and vacations. This has been true for our family these past two years.
Combine the inflation numbers with what is happening in the stock market. Prices in the stock market are low relative to the recent past creating a good opportunity for making investments with some of the “low-inflation” generated savings.
The clearest example I can give though is in the housing market. A very close connection exists between the drop in housing values and the drop in interest rates. If the housing market had not dropped as much as it has, we would almost certainly not have interest rates as low as they are right now.
If you purchased your home five years ago for $300,000, and today it’s worth $200,000, then you’ve lost $100,000 in equity.
But if you refinance your 5.75% 30-year mortgage (which has 25 years remaining on it) to a (near 4%) 15-year fixed loan, your payment increases just a little bit, but you cut 10 years (or 120 payments) from your loan term. In this example, the total savings is upwards of $150,000 (120 payments of $1260 per month).
The market takes care of the wise and requires very little intervention to do so. Refinancing for a shorter term mortgage is the best way to get back the money you lost in your home’s value – and then some.
Contact The Mortgage Mark with any questions!
Apply today Online!!!!!!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Monday, September 13, 2010
What can Football tell us about the economy?
Can we measure the economy based on a football game?
Are you a diehard football fanatic?
Can you fathom the thought of not watching your favorite team on TV?
Blackout restrictions are in place between NFL teams and their local television markets. If the game sells out it is on TV. If the game is not a sell out, local fans become “blacked out” of signal and cannot watch their teams play. Or in other words, it will no longer be televised on your local network. NFL rules state a game must be sold out 72 hours prior to kickoff.
NFL ticket sales have been down for the past three years and it looks as if this year may be the worst yet. According to USA Today at least 11 NFL teams could be facing blackouts as franchises fight through a downward trend of stadium attendance. Last year the league had 22 blacked out games, a five year high.
Today’s economy has many consumers ultra focused on spending habits and an increasing number of consumers with no disposable money available. Maybe NFL franchise owners have priced themselves out of consumers comfort zones and now the economy will force ticket prices and the overall stadium experience back in place. Maybe consumers are at fault for paying the asking price for season tickets and supporting team revenue by shelling out for concessions and team jersey’s and such.
Tampa Bay Buccaneers: Blackouts likely.
Jacksonville Jaguars: Seven blackouts last year.
Oakland Raiders: Seven blackouts last year.
Detroit Lions: Four blackouts last year.
Can football tell us anything about the economy?
Let’s see… the cities above located in California, Michigan and Florida… States which just happen to lead the country in foreclosures. And the NFL expects it to get worse this year. I for one think this is a very viable measurement on the state of our economy. Just examine the statistics of the number of TV blackouts for NFL games and come to your own conclusion.
In fact, if you really want to feel the pulse of the economy, ask the following shops you patronize how’s business: your favorite restaurant, your cleaner, your car dealer, your real estate agent, your neighborhood pub, your car mechanic…. get my point?
Go Eagles!
Contact the Mortgage Mark with any questions! www.themortgagemark.com mwilkins@capitalfmc.com
Thursday, September 9, 2010
Mortgage Definition: VA Loan Certificate of Eligibility
Today’s Mortgage Definition is: VA Loan Certificate of Eligibility
VA Loan Certificate of Eligibility — A Simple Definition:
The VA Loan Certificate of Eligibility is a key ingredient to getting a VA loan which is very popular with people who are Military Active Duty, Reservists, Veterans, and their immediate families. Simply put – if you can’t get a VA Certificate of Eligibility, you can’t get a VA loan.
VA Loan Certificate of Eligibility — An Expanded Definition:
There is a long list of potential people who could get a VA loan – but rather than break those out, I can offer a simple rule of thumb:
If you are in the military or have served in the military, or you are a spouse or a dependent of someone who was or is in the military you may be eligible for a VA loan and a Certificate of Eligibility.
You can visit the Dept of VA website to check military service requirements for VA loan eligibility.
From a more technical standpoint, the VA loan eligibility certificate is called Form 26-1880 and you can get it directly from any VA regional center, or you can get it online at the Veterans Information Portal.
Most VA lenders can also help you with getting your certificate if needed.
The certificate does not say that you are qualified for a VA loan, it simply means that you are eligible for a VA loan.
To qualify for a VA loan you will have to apply and qualify for it with a VA lender. It is during the application process where you will need to prove your eligibility for a VA loan with your certificate.
Lastly, the Certificate of Eligibility informs your VA lender what loan amount you are eligible to get which is based on your level of military service. In general, full eligibility without a down payment will get you up to a mortgage amount of $417,000. If you are eligible for the full amount and you don’t borrow all of the $417,000 in one mortgage, it is possible to get another mortgage on another property if you meet certain qualification requirements.
For more specific details on this, or other items relating to the VA Loan Certificate of Eligibility, you can speak to your loan officer.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
VA Loan Certificate of Eligibility — A Simple Definition:
The VA Loan Certificate of Eligibility is a key ingredient to getting a VA loan which is very popular with people who are Military Active Duty, Reservists, Veterans, and their immediate families. Simply put – if you can’t get a VA Certificate of Eligibility, you can’t get a VA loan.
VA Loan Certificate of Eligibility — An Expanded Definition:
There is a long list of potential people who could get a VA loan – but rather than break those out, I can offer a simple rule of thumb:
If you are in the military or have served in the military, or you are a spouse or a dependent of someone who was or is in the military you may be eligible for a VA loan and a Certificate of Eligibility.
You can visit the Dept of VA website to check military service requirements for VA loan eligibility.
From a more technical standpoint, the VA loan eligibility certificate is called Form 26-1880 and you can get it directly from any VA regional center, or you can get it online at the Veterans Information Portal.
Most VA lenders can also help you with getting your certificate if needed.
The certificate does not say that you are qualified for a VA loan, it simply means that you are eligible for a VA loan.
To qualify for a VA loan you will have to apply and qualify for it with a VA lender. It is during the application process where you will need to prove your eligibility for a VA loan with your certificate.
Lastly, the Certificate of Eligibility informs your VA lender what loan amount you are eligible to get which is based on your level of military service. In general, full eligibility without a down payment will get you up to a mortgage amount of $417,000. If you are eligible for the full amount and you don’t borrow all of the $417,000 in one mortgage, it is possible to get another mortgage on another property if you meet certain qualification requirements.
For more specific details on this, or other items relating to the VA Loan Certificate of Eligibility, you can speak to your loan officer.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Friday, September 3, 2010
FHA monthly mortgage insurance increases
Effective for FHA loans for which the case number is assigned on or after October 4, 2010 the Upfront Mortgage Insurance will decrease from 2.25 to 1.00 (100 basis points) on most FHA insured loans except Home Equity Conversion (HECM – “reverse mortgage”). Chances are you have heard this or some version of it but until yesterday, September 1, 2010, it was not in writing in the official form from HUD.
When are FHA case numbers assigned?
Case numbers must be assigned prior to ordering third party services such as the appraisal. Appraisals are not ordered until there is a fully executed sales agreement in the lender’s possession. The lender orders the FHA case number and assigns it to the loan application where it becomes permanent record.
Monthly Mortgage Insurance also changing.
With UFMIP going down MMIP is heading up. Much more dangerous to the industry because it impacts monthly payment and thus debt-to-income ration (DTI). Currently on loans of over 95% the MIP is .55% annually and from 95% and lower it is .50% annually. Effective October 4, 2010 those numbers will be .85% and .90% which results in an increased monthly payment.
Contrary to some reports there has been no notification of change in the amount of closing contributions by the seller which can be contributed to cover closing costs which is 6% and has not (yet) changed. The buyer must contribute 3.5% of their own money but it can be a gift.
This information applies to 203b and 203k loans.
Examples – top row is now, second row is after 10/4 and the $43.39 is the monthly payment increase:
Sales Price Down Loan Amt UFMIP Total Loan P&I Pmt MIP P&I&MIP
200,000 7,000 193,000 4,342.50 197,342.50 1,054.98 88.46 1,143.44
200,000 7,000 193,000 1,930.00 194,930.00 1,042.08 144.75 1,186.83
43.39
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
When are FHA case numbers assigned?
Case numbers must be assigned prior to ordering third party services such as the appraisal. Appraisals are not ordered until there is a fully executed sales agreement in the lender’s possession. The lender orders the FHA case number and assigns it to the loan application where it becomes permanent record.
Monthly Mortgage Insurance also changing.
With UFMIP going down MMIP is heading up. Much more dangerous to the industry because it impacts monthly payment and thus debt-to-income ration (DTI). Currently on loans of over 95% the MIP is .55% annually and from 95% and lower it is .50% annually. Effective October 4, 2010 those numbers will be .85% and .90% which results in an increased monthly payment.
Contrary to some reports there has been no notification of change in the amount of closing contributions by the seller which can be contributed to cover closing costs which is 6% and has not (yet) changed. The buyer must contribute 3.5% of their own money but it can be a gift.
This information applies to 203b and 203k loans.
Examples – top row is now, second row is after 10/4 and the $43.39 is the monthly payment increase:
Sales Price Down Loan Amt UFMIP Total Loan P&I Pmt MIP P&I&MIP
200,000 7,000 193,000 4,342.50 197,342.50 1,054.98 88.46 1,143.44
200,000 7,000 193,000 1,930.00 194,930.00 1,042.08 144.75 1,186.83
43.39
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Subscribe to:
Posts (Atom)
