Primary Residence — A Simple Definition:
When getting a mortgage, one of the factors that will influence the rate and terms of your loan is whether or not you will occupy the property as a primary residence. Generally speaking, the best deals on mortgage terms are available to people who are going to occupy the property as their primary residence. Also, generally speaking you can only have one FHA insured loan at one time.
Primary Residence — An Expanded Definition:
When getting an FHA loan, it is generally not possible to have more than one FHA loan per borrower. Anyone who owns a home (either alone or with someone else) that is insured by FHA generally can’t get another FHA insured loan except under the following circumstances:
Relocation – if you are relocating to another area that is not within a reasonable commuting distance from your current home, you can get another FHA loan without being required to sell your existing home that currently has FHA financing.
Increase in Family Size – You can get another home with an FHA loan if you have an increase in the number of legal dependents where your present house no longer meets the family’s needs. If this is the case, you must pay your current FHA loan down to 75% LTV and a current appraisal must be used when determining the 75%.
Vacating a Jointly-Owned Property – If you are getting divorced and are moving out of your house that is currently financed with an FHA loan, you can get another FHA loan if you can qualify for it financially.
Non-occupying co-borrower — A non-occupying co-borrower on a property that is being purchased with an FHA-insured mortgage as a primary residence by other family members. This is often the case with what is known as “FHA kiddie condo loans”.
Primary residence.
It matters whether the property you are buying is going to be your primary residence or not. When getting a conventional loan, it matters for the rates and terms of the loan and when getting an FHA loan, it often matters whether or not you can get a loan at all.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Wednesday, October 20, 2010
Monday, October 18, 2010
What is an escrow account?
Understanding Escrow
What is an escrow account?
An escrow account is used to collect and hold funds to pay your property taxes, homeowners insurance premiums or other charges when they become due.
The account is often established for you by your mortgage company when you take out your mortgage. However, if an escrow account was not set up when you took out your mortgage, you may be able to do so now.
Real estate taxes and insurance premiums must be paid regularly — typically, payments are due once or twice a year — and failure to pay these bills on time may cost you money in tax penalties or result in cancellation of your insurance coverage.
What are the benefits of an escrow account?
An escrow account helps you:
Manage your budget: You do not have to make lump sum payments when your taxes and insurance are due. You have made monthly payments throughout the year to cover those obligations.
Gain peace of mind: You don’t need to keep track of when your tax and insurance bills are due. The payments will be made, on time, on your behalf.
Ensure that your home is protected: With paid-up insurance coverage and taxes, you protect your investment in your home and meet your lender’s requirements.
Most mortgage companies require an escrow account for mortgages with less than a 20 percent down payment.
How does an escrow account work?
Your monthly mortgage payment includes an amount for property taxes and insurance in addition to the amount you owe for principal and interest.
The amount of your monthly mortgage payment that is for taxes and insurance is placed by your mortgage company into an escrow account. The funds can be used only to pay taxes and insurance on your behalf.
Your mortgage company pays the taxes and insurance bills for you when they are due. Your mortgage company examines any changes in your tax and insurance costs (for example, your local government may change the amount of your real estate taxes). Your mortgage company sends you a statement each year showing the prior year's activity — amounts collected from you and placed in escrow as well as the payments made on your behalf — and showing any adjustments that may be needed based on changes in your tax and insurance costs.
Here is a simplified example* of how escrow payments are calculated:
Annual real estate taxes: $1,800 ÷ 12 months = $150 per month
Annual property insurance: $720 ÷ 12 months = $60 per month
Total monthly taxes and insurance: $210
So in this example, $210 would be added to your total monthly mortgage payment and applied to your escrow account. You might hear your total monthly mortgage payment referred to as your “PITI” — for principal, interest, taxes and insurance.
Do you have an escrow account?
If you are not sure if you have an escrow account, check your monthly mortgage account statement or contact your mortgage company. Your account statement will typically indicate your “Escrow Balance” and the amount of your total monthly mortgage payment that is applied to escrow.
Should you establish an escrow account?
If you do not have an escrow account, you may want to establish one. Ask your mortgage company for more information.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
What is an escrow account?
An escrow account is used to collect and hold funds to pay your property taxes, homeowners insurance premiums or other charges when they become due.
The account is often established for you by your mortgage company when you take out your mortgage. However, if an escrow account was not set up when you took out your mortgage, you may be able to do so now.
Real estate taxes and insurance premiums must be paid regularly — typically, payments are due once or twice a year — and failure to pay these bills on time may cost you money in tax penalties or result in cancellation of your insurance coverage.
What are the benefits of an escrow account?
An escrow account helps you:
Manage your budget: You do not have to make lump sum payments when your taxes and insurance are due. You have made monthly payments throughout the year to cover those obligations.
Gain peace of mind: You don’t need to keep track of when your tax and insurance bills are due. The payments will be made, on time, on your behalf.
Ensure that your home is protected: With paid-up insurance coverage and taxes, you protect your investment in your home and meet your lender’s requirements.
Most mortgage companies require an escrow account for mortgages with less than a 20 percent down payment.
How does an escrow account work?
Your monthly mortgage payment includes an amount for property taxes and insurance in addition to the amount you owe for principal and interest.
The amount of your monthly mortgage payment that is for taxes and insurance is placed by your mortgage company into an escrow account. The funds can be used only to pay taxes and insurance on your behalf.
Your mortgage company pays the taxes and insurance bills for you when they are due. Your mortgage company examines any changes in your tax and insurance costs (for example, your local government may change the amount of your real estate taxes). Your mortgage company sends you a statement each year showing the prior year's activity — amounts collected from you and placed in escrow as well as the payments made on your behalf — and showing any adjustments that may be needed based on changes in your tax and insurance costs.
Here is a simplified example* of how escrow payments are calculated:
Annual real estate taxes: $1,800 ÷ 12 months = $150 per month
Annual property insurance: $720 ÷ 12 months = $60 per month
Total monthly taxes and insurance: $210
So in this example, $210 would be added to your total monthly mortgage payment and applied to your escrow account. You might hear your total monthly mortgage payment referred to as your “PITI” — for principal, interest, taxes and insurance.
Do you have an escrow account?
If you are not sure if you have an escrow account, check your monthly mortgage account statement or contact your mortgage company. Your account statement will typically indicate your “Escrow Balance” and the amount of your total monthly mortgage payment that is applied to escrow.
Should you establish an escrow account?
If you do not have an escrow account, you may want to establish one. Ask your mortgage company for more information.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Wednesday, October 13, 2010
Today’s Mortgage Definition is: Subordination
Today’s Mortgage Definition is: Subordination
Subordination — A Simple Definition:
In the mortgage arena, most of the time when someone refers to a subordination, they are referring to a process involving second mortgage on a property. If you are interested in refinancing your home and you have a second mortgage, you will need to get a subordination agreed to by the lender who holds the second mortgage. In plain English: getting a subordination completed by the lender who holds the second mortgage means that the lender agrees to have their loan remain in second position while the loan in first position is refinanced.
Subordination — An Expanded Definition:
In most cases, your loan officer or a member of the loan officer’s team will do virtually everything required to get a subordination completed. The general steps to getting a subordination completed include:
Contact the lender who holds the second mortgage and get a copy of the subordination requirements.
Complete a subordination application with the information required – typically it is information about the current first mortgage, the new first mortgage and appraised value.
Follow up with the lender who holds the second mortgage until the subordination is approved.
Now that rates are low, many people are going through the refinance process and subordination(s) are a common occurrence. While it can be tricky to get a subordination approved, if you have a second mortgage it is important you remember that you will want to discuss the subordination requirements with your loan officer before either of you spend a great deal of time and effort into refinancing your first mortgage.
Why?
Because if your second mortgage lender won’t subordinate your loan, there is virtually no chance that you can refinance your first mortgage.
Be sure to ask your loan officer about subordination of your second mortgage if want to refinance.
Contact The Mortgage Mark if you have any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Subordination — A Simple Definition:
In the mortgage arena, most of the time when someone refers to a subordination, they are referring to a process involving second mortgage on a property. If you are interested in refinancing your home and you have a second mortgage, you will need to get a subordination agreed to by the lender who holds the second mortgage. In plain English: getting a subordination completed by the lender who holds the second mortgage means that the lender agrees to have their loan remain in second position while the loan in first position is refinanced.
Subordination — An Expanded Definition:
In most cases, your loan officer or a member of the loan officer’s team will do virtually everything required to get a subordination completed. The general steps to getting a subordination completed include:
Contact the lender who holds the second mortgage and get a copy of the subordination requirements.
Complete a subordination application with the information required – typically it is information about the current first mortgage, the new first mortgage and appraised value.
Follow up with the lender who holds the second mortgage until the subordination is approved.
Now that rates are low, many people are going through the refinance process and subordination(s) are a common occurrence. While it can be tricky to get a subordination approved, if you have a second mortgage it is important you remember that you will want to discuss the subordination requirements with your loan officer before either of you spend a great deal of time and effort into refinancing your first mortgage.
Why?
Because if your second mortgage lender won’t subordinate your loan, there is virtually no chance that you can refinance your first mortgage.
Be sure to ask your loan officer about subordination of your second mortgage if want to refinance.
Contact The Mortgage Mark if you have any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Wednesday, September 29, 2010
FHA loans set to require minimum 640 middle score
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
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
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
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