How to make getting a home loan easier; St Louis Mortgage Interest Rate Update

It is more important now than ever, as a result of increasing regulation and scrutiny of the mortgage industry, to plan ahead when you are planning on obtaining a mortgage loan to buy a house or refinance an existing loan to ensure that the process will go smoothly and as expected.  Your loan approval is subject to the financial information you provide at the time of your loan approval. Any subsequent changes in your financial situation before the actual date of closing could jeopardize your loan approval and delay your closing.

By following the simple guidelines below, you are assured a smooth and error-free closing.

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Nobody ‘wants’ to pay PMI; St. Louis Mortgage Interest Rate Update

Nobody ‘wants’ to pay PMI, it’s just that we have no choice, especially if you want to buy a house and don’t have say an extra $50k to $80k lying around for a down payment, which most first-time buyers don’t.”   Chris Durst, a first-time homebuyer and commenter on Investopedia.com.ask-the-expert
The credit experts at MGIC, the nation’s largest private mortgage insurer, wants Realtors® and Lenders alike to know that financing with MI creates opportunities for borrowers: Continue reading “Nobody ‘wants’ to pay PMI; St. Louis Mortgage Interest Rate Update

Interest Rate Change; St. Louis Mortgage Interest Rate Update

FHA Interest Rate  Change:  MHDC’s Cash Assistance  Loan  (CAL)  is now 4%! (APR 4.93)

MHDC is raising mortgage interest rates offered to  first-time homebuyers.  First-time  home buyers receive a forgivable 3% cash assistance loan for down payment and  closing costs.
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FHA Increasing Cost of Mortgage Insurance And Requiring Payment For Life of Loan

Federal Housing Administration Commissioner Carol Galante recently announced a series of changes to be issued that will allow the agency to better manage risk and further strengthen the health of the Mutual Mortgage Insurance Fund (MMI).

FHA will increase its annual mortgage insurance premium for most new mortgages by 10 basis points, or 0.10%.   The FHA will also require most borrowers to continue paying annual premiums for the life of their mortgage loan.
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Cancellation of Debt; St Louis Mortgage Interest Rate Update

As part of the fiscal cliff deal, Congress extended the cancellation of mortgage debt relief provision for 1 year, through the end of 2013.

It seems there is little focus on the importance of this law, it is crucial to foreclosure mitigation efforts such as principal forgiveness and short sales.

Normally, when a lender forgives all or a portion of a borrower’s debt, U.S. law decrees that the forgiven amount is considered taxable income to the borrower.   This “forgiveness” is also known as Cancellation of Debt (COD) Income. COD must be included in a taxpayer’s gross income. The Mortgage Forgiveness Debt Relief Act allows homeowners who received principal reductions or other forms of debt forgiveness not to pay taxes on the amount forgiven.

Consult your tax adviser to determine whether the Mortgage Forgiveness Debt Relief Act is relevant to your particular situation.

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Mortgage Interest is Tax Deductible Through 2013; St Louis Mortgage Interest Rate Update

Mortgage Interest  Tax Deductibility passed as part of the American Taxpayer Relief Act of 2012. This allows MI to be tax deductible for 2012 and 2013.  The provision extends the ability to deduct the cost of mortgage insurance on a qualified personal residence. The deduction is phased-out by 10% for each $1,000 by which the taxpayer’s AGI exceeds $100,000. Thus, the deduction is unavailable for a taxpayer with an AGI in excess of $110,000. The bill extends this provision for two additional years, through 2013.

Consult your tax adviser for further information and determine how this will benefit you.

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Optimism in the Mortgage Markets for 2013; St Louis Mortgage Interest Rate Update

Fannie Mae has declared that housing is finally providing a tailwind to economic growth. The company’s December Economic and Strategic Report says that the market “has turned the corner and a sustained recovery is under way.”  Looking into 2013, economists predict mortgage originations will increase by 15% while refinance volume is expected to fall 26%.

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Things You Should Know Before You Repair Your Credit; St Louis Mortgage Interest Rate Update

“Every single thing about housing is flashing green,” stated James Dimon, chief executive of J.P. Morgan Chase, in an interview with CNBC last month. “Household formation is rising, inventory is falling, and affordability is near a record high.”  This should mean many potential homebuyers will be assessing their finances in 2013 to get ready to buy a home.   Checking your credit score is at the top of the list, and in turn credit myths and credit misconceptions are plentiful.

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Things You Should Know Before You Repair Your Credit:

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Saving interest…shorten your term; St Louis Mortgage Interest Rate Update

Mortgage rates have flattened out, but some borrowers are lowering their rates further by opting for a loan with a shorter term.

Freddie Mac says about 30% of borrowers this year have opted for shorter-term home loans when they refinance, with most picking a 15-year mortgage.  Shorter-term loans are particularly attractive to people “who have been homeowners for a number of years…or who want the security of knowing they will own their home free and clear when they retire,”

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Changes in the Mortgage Industry; St Louis Mortgage Interest Rate Update

After the problems we have seen over the past few years in the real estate, mortgage and banking industries, it is not surprising we have seen significant changes in the loan process making it more challenging for a home-buyer to obtain a mortgage. Some of the changes borrowers see when they attempt to obtain a mortgage to buy or refinance a home include:

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Home prices on the rise; St Louis Mortgage Interest Rate Update

According to Lawrence Yun, Chief Economist for the National Association of Realtors, home prices nationally are up 11.1% in October compared to this point last year.  The number of homes available for sale nationally fell reducing the available supply to a level below that of one year ago.  The result is tighter supply of homes helping boost the national median existing-home price level to $178,600 in October; price increases have helped home owners regain equity lost during the housing crisis.

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Streamline Your FHA Mortgage; St Louis Mortgage Interest Rate Update

The Federal Housing Administration (FHA) has lowered mortgage insurance premiums on Streamline Refinance transactions. It will now be it easier for borrowers to take advantage of record low interest rates and save money each month.  Under this program, up-front mortgage insurance premiums will be reduced to 0.01 percent of the total loan amount for borrowers with FHA loans made before June 1, 2009. In addition, the annual MIP will be cut to 0.55 percent.  This streamlined refinance program is available to borrowers who are current on their FHA mortgage and may qualify even if they owe more than their homes are worth…no appraisal required.

For more information about this program,contact me by clicking below.

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Step by Step Process of Buying a Home; St Louis Mortgage Interest Rate Update

Get pre-qualified for a loan:  talk with your mortgage banker.

First Time Homebuyer Interest Rates Fall

Qualified first-time home buyers can receive a forgivable 3% cash assistance loan for down payment and closing costs on a home.   The Missouri Housing Development Commission (MHDC) provides a competitive interest rate on a safe 30-year fixed rate 1st mortgage. Your 3% advance loan is treated as a 2nd mortgage completely forgivable after five years of continuous occupancy. New, Constant Funding means MHDC will have the monies available for the borrowers regardless of bond issuance.

For more information about this program,contact me by clicking below.

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The Benefits of ARM’s; St Louis Mortgage Interest Rate Update

Over the past few years, ARM’s (adjustable rate mortgages) have received somewhat of a “bad name” however, there are truly benefits to utilizing an ARM, which include:

  • ARM rates are now more attractive than ever before.
  • Rates have fallen to 2.625% for a 5/1 ARM.

 

  • ARM’s are predictable:
  • Rates are capped so there are no surprises for borrowers.
  • Rates adjust only on the remaining principal of the loan.
  • Rate adjustments could decrease/increase, but the adjustments are limited to a prevailing market index in which the ARM is based.
  • Most ARM’s do not have a pre-payment penalty
  • Lower Monthly Payments which Increase your buying power.

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Give your mortgage an annual once over; St Louis Mortgage Interest Rate Update

If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over. New loan programs and opportunities to leverage your home equity can bring you lower mortgage payments and new investment opportunities.

Is a fixed rate mortgage the best choice for you?

Many of us opt for the certainty of a 20 year or 30 year fixed rate mortgage when we get our first mortgage. If you anticipate selling your home within the next 10 years, one of our new hybrid loans may be a better financial fit for you. Hybrid loans typically have a lower fixed rate than a traditional 20 or 30 year mortgage. The savings you receive can well be worth switching to a hybrid loan. Continue reading “Give your mortgage an annual once over; St Louis Mortgage Interest Rate Update

Time needed to close a mortgage loan up by almost 25 percent; St Louis Mortgage Rate Update

“The time needed to close a mortgage loan has increased by almost 25 percent over the last year, from an average of 40 days to 49,” reports Mortgage News Daily, “and it was refinances that drove the change.”

While interest rates remain at all time lows, lenders are busy filling up their pipelines with refinances.  Realtors with purchase transactions could get squeezed trying to “break in line” with a lender to get their clients’ deals done. “That’s why it is important to select a lender who can close within a time-critical deadline,” offers Amber Schwartz, Processing Manager with Paramount Mortgage headquartered in St. Louis, Missouri.   Continue reading “Time needed to close a mortgage loan up by almost 25 percent; St Louis Mortgage Rate Update

New Law Improves VA Loan Benefits; St. Louis Mortgage Interest Rate Update

The new legislation is titled: Honoring America’s Veterans and Caring for Camp Lejeune Families Act (H.R. 1627) and has been signed into law on August 6, 2012.

Congress expanded the scope of the legislation and specifically mandated improvements in VA home loan benefits through the VA Home Loan Guaranty Program.  Realtors and lenders will now be able to help more veterans and their families become homeowners. A portion of the new law makes VA loans available to more surviving spouses, provides easier funding fee waivers for disabled vets and helps single and dual-duty parents with occupancy hurdles. Continue reading “New Law Improves VA Loan Benefits; St. Louis Mortgage Interest Rate Update

Low Interest Rates and Tougher Underwriting Standards; St. Louis Mortgage Interest Rate Update

I continue to hear in the news about incredible low interest rates, but the catch is getting approved for a mortgage loan, either for a purchase or refinance.  The process is getting harder and harder.  In this tighter credit environment, FHA remains to be a great alternative for buyers with limited resources for a down payment and closing costs or past credit problems.  Underwriting guidelines are more lenient than conventional guidelines.

Highlights of FHA financing: Continue reading “Low Interest Rates and Tougher Underwriting Standards; St. Louis Mortgage Interest Rate Update

Things You Should Know Before You Repair Your Credit; St. Louis Mortgage Interest Rate Update

Make Sure You Get Your “Real” Scores!

Most banks and lenders use scores calculated by FICO (also known as Fair Isaac) and derived from your reports with the major national credit bureaus Equifax, Experian, and TransUnion. Be careful, the credit scores sold at popular credit report monitoring websites are NOT the same scores that lenders use!

Mortgage Banker versus Mortgage Broker; St Louis Mortgage Interest Rate Update

On my way into the office this morning, I received a frantic phone call from a real estate agent I have known for years…it turns out, her client’s lender is unable to close on time because they still have to send out the loan to their “investor” to review and underwrite the loan.

It is important to understand the difference between a Mortgage Banker and a Mortgage Broker. The mortgage company I am with a mortgage banker with over 41 years of serving our community. What does that mean? Picture your community bank and take away everything but the mortgage department. We use our own money to close the loan and select a servicer to handle your monthly mortgage payments. In essence, a mortgage banker controls the loan process from application to closing. Continue reading “Mortgage Banker versus Mortgage Broker; St Louis Mortgage Interest Rate Update

The Top Four Appraisal Questions Sellers Ask; St Louis Mortgage Interest Rate Update

During periods of economic growth, when home values are typically going up, most homeowners do not question appraisals much.  In times of turmoil when property values are declining, home owners/sellers and even listing agents quite often question appraisals.

An appraiser is looking at several things when determining the value of a property: improvements, size and square footage of the living area, neighborhood amenities, location and the market trends around the area. It all boils down to comparable sales to the subject property.

Since the appraised value of home is a key element when considering a purchase or refinance, the following are the top four most common questions about appraisals asked by sellers: Continue reading “The Top Four Appraisal Questions Sellers Ask; St Louis Mortgage Interest Rate Update

A quick guide for using seller concessions when buying a home; St. Louis Mortgage Interest Rate Update

What are sellers’ concessions?

A seller concession can be any negotiation where the seller, builder, developer, salesperson or any interested party gives a credit to the borrower at closing.   The seller concession can help lower or eliminate the amount of money a borrower is required to bring to the closing table.  Continue reading “A quick guide for using seller concessions when buying a home; St. Louis Mortgage Interest Rate Update

FHA Financing is Great Alternative; St. Louis Mortgage Interest Rate Update

FHA remains to be a great alternative for buyers with limited resources for a down payment and closing costs or past credit problems. Underwriting guidelines are more lenient than conventional guidelines. Continue reading “FHA Financing is Great Alternative; St. Louis Mortgage Interest Rate Update

Successful homeownership is the result of a well informed buyer; St Louis Mortgage rate update

ARE YOU PRE-QUALIFIED?  Have you given much thought to how much of a mortgage payment would be for your dream home?

Should you talk to you mortgage professional before house hunting?

Absolutely!  Even if you haven’t so much as selected a Realtor®, it’s important to talk with your mortgage professional first.   Why? Continue reading “Successful homeownership is the result of a well informed buyer; St Louis Mortgage rate update

What borrowers need to know about mortgage bankers;  St Louis mortgage rate update

Recently I was contacted by a prospect that was referred to me from a past client.   This prospect was interested in a VA loan and had some general questions about the loan process and VA loans.  He had mentioned he was currently working with the VA on some credit issues, but the process was taking a long time.  It turned out, the prospect was “working” with a mortgage company that had “VA” in their name and there was no affiliation with the VA.  I’ve seen this happen numerous times with both VA and FHA where a prospective homebuyer contacts or is contacted by a lender that implies they are who they are not.  Know  who you are dealing with. Continue reading “What borrowers need to know about mortgage bankers;  St Louis mortgage rate update

St. Louis Mortgage Rates Drop Even Further;  Which refinancing option is best for you?

Every borrower’s situation is different.  My goal is to provide various options/loan programs that are available to meet the borrower’s needs.  When considering a refinance, the following are typical situations borrowers face:

Are you refinancing primarily to lower your rate and monthly payments? Your best option might be a low fixed-rate loan. Maybe you have a fixed-rate mortgage now with a higher rate, or maybe you have an ARM — adjustable rate mortgage — where the interest rate varies. Even if it’s low now, unlike your ARM, when you qualify for a fixed-rate mortgage you lock that low rate in for the life of your loan. This is especially a good idea if you don’t think you’ll be moving within the next five years or so. On the other hand, if you do see yourself moving within the next few years, an ARM with a low initial rate might be the best way to lower your monthly payment. Continue reading “St. Louis Mortgage Rates Drop Even Further;  Which refinancing option is best for you?

The truth about VA loans;  St. Louis Mortgage rate update

Recently, I heard a radio commercial about “special” financing for certain veterans implying this “special” loan is available for a “limited time only.” The good news is that the Veterans Administration (VA) offers an ongoing mortgage loan program to benefit members of the armed forces who have generally served for two years in peace time, or 90 days during conflict. Members of the National Guard or Reserves who have served for six years are eligible along with widows of veterans if the veteran died in a service-related incident. The VA offers loans to: Purchase a New or Existing Home, Rate Reduction Refinance, and Cash-Out Refinance. Borrowers are evaluated by their credit worthiness and their ability to show stable and sufficient income to cover the costs of owning a home, cover other obligations and expenses and have enough left for family support. Traditional credit scoring is not used by the VA in underwriting. Non-married co-borrowers are not permitted. VA loans must be the borrowers’ primary residence. Continue reading “The truth about VA loans;  St. Louis Mortgage rate update

What to do about a low appraisal?;  St. Louis Mortgage rate update

The sale price for a house is $200,000, but the appraisal comes back at $190,000. Should the borrower still try to purchase this property or just leave it be? This is not unusual circumstance common in today’s real estate market; appraisals are coming in conservatively.

What action should the borrower take when there is a mismatch between the seller’s asking price and the home’s appraised value? Remember, the maximum loan amount is based upon the lower of the sale price or the appraised value, whichever is less. Continue reading “What to do about a low appraisal?;  St. Louis Mortgage rate update

What’s The Difference Between A Single Family, Second Home and Investment Property?; St. Louis Mortgage rate update

When applying for a mortgage, a borrower’s “Occupancy Type” is a major factor in determining maximum loan-to-value (equity), loan program available and mortgage interest rate. An Owner Occupied property will have better terms (less down payment, better rates) than a Non-Owner Occupied property.

Three Types of Occupancy:

Owner Occupied / Primary Residence -According to HUD, a principal residence is a property that will be occupied by the borrower for the majority of the calendar year. At least one borrower must occupy the property and sign the security instrument and the mortgage note for the property to be considered owner-occupied. Continue reading “What’s The Difference Between A Single Family, Second Home and Investment Property?; St. Louis Mortgage rate update