Mortgage World’s take on things …

I like to provide unbiased info for folks, so you’ll find I occasionally plunk down some good blogs or articles from other professionals who deal with the real estate world.


From Troy Clute, Mtn. West Bank, Spokane:


Typically Conventional rates are lower than FHA / VA rates, but for some time now FHA and VA rates have been lower than Conventional rates and here is more proof of that.  Rates are certainly still great and even with an increase in the monthly Mortgage Insurance, payments and affordability are very low.  Couple this with the home prices we are seeing and it continues to be a great time to buy for First Time Buyers, Move up Buyers and Investors.


Did you know Mountain West Bank has a 15% down Investor loan available?


To your success in 2012.


Two Things You May Have Missed 

Before the end of the year, Congress and the President agreed to extend the payroll tax cut. In that bill, there were two items of interest for those involved in real estate.

1.) The hike in the Guarantee Fees charged by the GSEs Fannie Mae and Freddie Mac.

The 10 basis point increase in the fees has translated to a .375% to .5% increase in mortgage rates for conventional loans. Many customers who started their loans a couple of months ago are being “surprised” with higher than expected rates. Heck, everything you read in the papers says rates are at historic lows and will likely stay there through 2014. Many consumers feel as if their lender is being unscrupulous. However, your lender has fallen victim to the increase in Guarantee Fees and how the secondary market is passing on the cost. What looks like possible lender greed is just a passing on of the increased expense imposed by the government. Sadly, the increased revenue isn’t even being used to help aid an ailing Fannie Mae or Freddie Mac. It is being turned over to the US Treasury to cover the temporary extension of the payroll tax cut.

2.) Permission for HUD to increase the insurance premiums they charge on FHA loans.

If you remember, HUD charges two insurance premiums – a monthly one and an up-front one that is usually added into the loan. Most recently, they reduced the up-front mortgage insurance premium (UFMIP) and dramatically raised the monthly fee (MMIP). It is widely anticipated that, maybe as soon as April, we will see a hike in the UFMIP with no adjustment to the MMIP. While this will help shore up the reserves in the insurance fund, it will simultaneously make buying a home more expensive. No one knows the effective date or amount of the increase. Buyers should look to buy before the increase in fees.

We always hear how our government officials tuck away things in their bills. In this case, while the headlines during the holidays praised Washington for preserving the payroll tax cut, they may have hurt us more in the long run.

Troy Clute
Mountain West Bank
WK  509-944-4083
Cell 509-994-4607
Fax 509-944-4090
NMLS # 337416


Posted on February 16, 2012 at 9:20 am
Becky Ruark | Category: Uncategorized | Tagged , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *