Uncategorized March 14, 2012

Can You Refinance NOW? You can never ask too often …

I’m posting this because I talk to so many people who have tried to refinance but been turned down.  With the ever changing rules and regulations, it’s good to be up to date.  You just never know when the tides will change, and allow you to take advantage of opportunity when it shows up.

I’ve included the contact information for the lender who sent me this update below.  This way people can go straight to the source if that is their preference.

Let it be known, there is also a ton of info available online, or through other local lenders who can help you wade through the red tape.

My advice is always to find the professional who best fits with your personality and needs.  Ask lots of questions and, if you don’t know what to ask, look for the person who recognizes that and provides lots of answers without being asked!  🙂

 

UPDATE (March 14, 2012) : The government announced changes to its HARP program November 15, 2011. This post is accurate and up-to-date. Click here to get a HARP refinance rate quote.

If you’re underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.

Here are the details of the government’s new 2011 HARP refinance program.

 

What Is HARP?

HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.

The program is also known as the Making Home Affordable plan, the Obama Refi plan, DU Refi +, and Relief Refinance.

In order to be eligible for the HARP refinance program :

  1. Your loan must be backed by Fannie Mae or Freddie Mac.
  2. Your current mortgage must have a securitization date prior to June 1, 2009

If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.

HARP : Questions and Answers

Ø  Do these question-and-answers account for the “new” HARP mortgage program?

o    Yes, everything you are reading is accurate as of today, March 14, 2012. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011.

Ø  Is “HARP” the same thing as the government’s “Making Home Affordable” program?

o    Yes, the names HARP and Making Home Affordable are interchangeable.

Ø  How do I know if Fannie Mae or Freddie Mac has my mortgage?

o    Fannie Mae and Freddie Mac have “lookup” forms on their respective websites. Check Fannie Mae’s first because Fannie Mae’s market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.

Ø  If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?

o    No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

Ø  My mortgage is held by Fannie/Freddie. Now what do I do?

o    Find a recent mortgage statement and write “Fannie Mae” or “Freddie Mac” on it — whichever group backs your home loan — so you don’t forget. Give that information to your lender when you apply for your HARP refinance. Click here for a HARP rate quote.

Ø  My mortgage is backed by Wells Fargo. Am I eligible for HARP?

o    It’s possible that your mortgage is backed by Wells Fargo, but the more likely answer is that Wells Fargo is just your mortgage servicer; the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie Mac. Double-check with Fannie Mae and Freddie Mac before assuming Wells Fargo backs your loan.

Ø  My mortgage is backed by Bank of America. Am I eligible for HARP?

o    Bank of America does back some of its own loans, but the more likely answer is that Bank of America is your mortgage servicer; the bank that collects your monthly mortgage payments. Bank of America backs very few of its own loans. For most loans for which payments are sent to Bank of America, Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae and Freddie Mac to make sure Bank of America doesn’t hold your loan.

Ø  My mortgage is backed by Chase. Am I eligible for HARP?

o    There is a chance that Chase backs your loan, but what’s more likely is that Chase is just your mortgage servicer; the bank that collects your payments each month. Chase backs very few of its own loans. For most loans for which payments are sent to Chase, you’ll find that Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae’s and Freddie Mac’s websites to make sure your loan is not held by Chase.

Ø  What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?

o    If neither Fannie nor Freddie has record of your mortgage, your loan is HARP-ineligible. However, you may still be eligible for a “regular” refinance to lower rates. Use this form to get a rate quote to see your options. Or, if your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.

Ø  Does HARP work the same with Fannie Mae as with Freddie Mac?

o    Yes, for the most part, the HARP mortgage program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For everyone else, the guidelines work the same.

Ø  Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage?

o    No. You must be current on your mortgage to refinance via HARP.

Ø  What are the HARP program’s mortgage rates?

o    Mortgage rates for the HARP mortgage program are the same as for a “traditional” refinance. There is no “premium” for using the HARP program.

Ø  Will the Home Affordable Refinance Program help me avoid foreclosure?

o    No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It’s meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today’s low mortgage rates.

Ø  What are the minimum requirements to be HARP-eligible?

o    First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP mortgage program before — only one HARP refinance per mortgage is allowed.

Ø  My mortgage was securitized shortly after the HARP deadline of May 31, 2009. Can I get a waiver or exception?

o    No, there are no “date exceptions” for HARP. If your loan was not securitized on, or before, May 31, 2009, you cannot use HARP.

Ø  If I refinanced with HARP a few years ago, can I use it again for HARP II?

o    No. You can only use the HARP mortgage program one time per home.

Ø  I refinanced into a HARP loan a few years ago, but my bank never told me it was a HARP loan. I feel like I was lied to. Can I use HARP again under the HARP II program?

o    No. You can only use the HARP mortgage program one time per home.

Ø  Is there a loan-to-value restriction for HARP?

o    No. All homes — regardless of how far underwater they are — are eligible for the HARP program. Click here for a HARP rate quote.

Ø  I am really far underwater on my mortgage. Can I use HARP?

o    Yes, you can. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use an adjustable-rate mortgage, your loan-to-value is capped at 105%.

Ø  Maybe I wasn’t clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?

o    Yes, I am sure. The new HARP mortgage program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.

Ø  If I refinance with HARP using an ARM, do I still get “unlimited LTV”?

o    No, if you use an ARM for HARP, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.

Ø  Will my home require an appraisal with the HARP mortgage program?

o    Sort of. Although your home’s value doesn’t matter for the HARP mortgage program, lenders will run what’s called an “automated valuation model” (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway — just to make sure your home is “standing”.

Ø  Is HARP the same thing as an FHA Streamline Refinance?

o    No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.

Ø  I have an FHA mortgage. Can I use the HARP 2.0 program?

o    No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA, and your home is underwater, use the FHA Streamline Refinance program.

Ø  I have a USDA mortgage. Can I use the HARP 2.0 program?

o    No, you cannot use the HARP 2.0 program for a USDA loan. If your current mortgage is backed by the USDA, and your home is underwater, use the USDA’s Refinance program. Click here to get USDA mortgage rates.

Ø  I have a VA mortgage. Can I use the HARP 2.0 program?

o    No, you cannot use the HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA, and your home is underwater, use the VA’s IRRRL program. Click here to get VA mortgage rates.

Ø  Does Ginnie Mae participate in the HARP Refinance program?

o    No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages — not conventional ones. HARP II is for conventional mortgages only.

Ø  Do I have to HARP refinance with my current mortgage lender?

o    No, you can do a HARP refinance with any participating mortgage lender.

Ø  So, I can use any mortgage lender for my HARP Refinance?

o    Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Click here for a HARP rate quote.

Ø  My current bank says that they’re the only ones who can do my HARP Refinance. Is that true?

o    No, that’s not true. Or, at least it shouldn’t be. There are very few instances in which a HARP applicant will be precluded from shopping for the best rate. It’s doubtful that your situation is one of them.

Ø  My current mortgage is with [YOUR BANK HERE] and I don’t like them. Can I work with another bank?

o    Yes, with HARP, you can work with any participating lender in the country. Click here for a HARP rate quote.

Ø  I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?

o    No, you won’t need to pay mortgage insurance. If your current loan doesn’t require PMI, your new loan won’t require it, either.

Ø  I pay PMI now. Will my PMI payments go up with a new HARP refinance?

o    No, your private mortgage insurance payments will not increase. However, the “transfer” of your mortgage insurance policy may require an extra step. Remind your lender that you’re paying PMI to help the refinance process move more smoothly.

Ø  My bank says I can’t refinance with HARP 2.0 because I have PMI. Is that true?

o    No, it’s not true. You can refinance via HARP 2.0 even if your current mortgage has private mortgage insurance.

Ø  Why does my loan officer tell me I can’t refinance with HARP because my current mortgage has PMI?

o    The new HARP program is exactly that — new. There are new rules and guidelines and not every bank is up-to-speed on what’s going on. If you’re hearing that you can’t refinance your current mortgage because it has PMI on it, that’s a signal that you’re working with sub-optimal loan officer. You may want to shop around. Click here for a HARP rate quote.

Ø  My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?

o    Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI). It’s your loan officer’s responsibility to make sure that your new mortgage carries, at minimum, the same amount of coverage.

Ø  I have no idea what that means. How do I choose my PMI “coverage” when I refinance a HARP loan that has LPMI?

o    Don’t worry about it. Your loan officer will know what to do. Just make sure you disclose that your mortgage has LPMI so the bank knows what to do. Otherwise, your loan could be delayed in processing. Click here to get a HARP rate quote.

Ø  How do I know if my mortgage has Lender-Paid Mortgage Insurance (LPMI)?

o    To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.

Ø  I don’t see an LPMI disclosure in my closing package but I think that I have it. How do I know if my mortgage has LPMI?

o    If there is no LPMI disclosure, first check if your first mortgage’s loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you’re likely carrying LPMI.

Ø  What’s the bottom line with HARP refinances and mortgage insurance?

o    With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The key is that the new loan has mortgage insurance coverage at least equal to the mortgage insurance coverage on your current mortgage.

Ø  What if my lender won’t give me a HARP refinance because I have mortgage insurance?

o    Find a new lender. There are plenty that can help you. Click here for a HARP rate quote.

Ø  What’s the biggest mortgage I can get with a HARP refinance?

o    HARP refinances are limited to your area’s conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.  You can look up your area’s conforming loan limits by clicking here.

Ø  Can I do a cash-out refinances with HARP?

o    No, the HARP mortgage program doesn’t allow cash out refinance. Only rate-and-term refinances are allowable.

Ø  Can I refinance a second/vacation home with HARP?

o    Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.

Ø  Can I refinance an investment/rental property with HARP?

o    Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you’re an “accidental landlord” via HARP. The loan must meet typical program eligibility standards.

Ø  I rent out my old home. Is it HARP-eligible even though it’s an investment property now?

o    Yes, you can use the HARP Refinance program for your former residence — even if there’s a renter there now.

Ø  How long do I have to stay in my house if I use HARP on my primary residence?

o    There is no specific timeframe for which you’re required to stay in your home if you use HARP 2.0. Just like any other mortgage, if you plan to stay in your home post-closing, it’s your primary residence. If you plan to turn it into a rental, it’s an investment property. Click here to see today’s HARP mortgage rates.

Ø  These things I’m reading here… Why, when I call my bank, do they tell me it’s not true?

o    It’s possible that the call center representative to whom you’re speaking is neither knowledgeable about HARP, nor the actual mortgage underwriting process. This post is researched and cross-referenced against Fannie Mae and Freddie Mac guidelines, and publicly-available reports from the FHFA.

Ø  Are condominiums eligible for HARP refinancing?

o    Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.

Ø  Can I consolidate mortgages with a HARP refinance?

o    No, you cannot consolidate multiple mortgages with the HARP refinance program. It’s for first liens only. All subordinate/junior liens must be re-subordinated to the new first mortgage.

Ø  What happens to my second mortgage when I refinance my first mortgage using HARP 2.0?

o    HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You’ll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.

Ø  My second mortgage isn’t backed by Fannie Mae or Freddie Mac. Is that a problem?

o    No, it doesn’t matter if your second mortgage isn’t backed by Fannie Mae or Freddie Mac. Second mortgages are ignored as part of HARP. They can’t be refinanced, and they can’t be consolidated. Second mortgages are a non-factor in HARP 2.0.

Ø  My bank is not setup for HARP and I want to refinance. What do I do?

o    If your current bank is not setup for HARP, find a new lender. HARP is available through any participating bank (and there are a lot of them). Click here for a HARP rate quote.

Ø  Can I “roll up” my closing costs with a HARP refinance?

o    Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash.  In no cases may loan sizes exceed the local conforming loan limits, however.

Ø  I am unemployed and without income. Am I HARP-eligible?

o    Yes, you do not need to be employed to use the HARP mortgage program. HARP applicants do not need to be “re-qualified” unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.

Ø  What is the maximum income that a HARP applicant is allowed?

o    The HARP refinance program has no maximum income limits. You cannot “earn too much” to qualify. Click here to get a HARP rate quote.

Ø  So, I can’t earn too much money to use HARP 2.0?

o    No, there are no income restrictions for the Home Affordable Refinance Program (HARP). A similar-sounding program, though — Home Affordable Modification Program (HAMP) does have income limitations. Many people confuse the two.

Ø  Is HARP the same thing as HAMP?

o    No. HARP stands for Home Affordable Refinance Program. HAMP stands for Home Affordable Modification Program. Both programs are supported by the Making Home Affordable initiative, but that’s about where the similarities end.

Ø  I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?

o    Yes. With HARP, a borrower on the mortgage can be removed via a HARP refinance so long as that person is also removed from the deed; and has no ownership interest in the home. Click here for a HARP rate quote.

Ø  Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?

o    Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely. For example, there are no LLPAs for fixed-rate HARP refinances with terms of 20 years or fewer. For all other loans, loan-level pricing adjustments are capped at 0.75 points.

Ø  Does a HARP Refinances require LLPAs for a 15-year fixed rate mortgage?

o    No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.

Ø  Is there a minimum credit score to use the HARP program?

o    No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

Ø  Do I have to refinance my mortgage with my current lender?

o    No, you can do a HARP refinance with any participating lender you want. Click here for a HARP rate quote.

Ø  My current lender tells me that if I want to do a HARP refinance, I have to go through him. Is that true?

o    No, it’s not true that you can’t shop for the lowest HARP refinance rates available. You are allowed to do a HARP refinance with any HARP-participating lender.

Ø  My bank called me for a HARP refinance. The rate seems high. Should I shop around?

o    Yes, it’s always a good idea to shop for the best combination of mortgage rates and loan fees. However, be sure to shop with reputable lenders that have experience underwriting and approving HARP mortgages. HARP 2.0 is a new refinance program and not many banks have expertise with them. You don’t want to have your loan approval fall apart because your lender failed to underwrite to HARP mortgage standards.

Ø  Where can I get the lowest rates on HARP loans?

o    The HARP program is just like any other mortgage — you’ll want to shop around for the best rates and service. However, because HARP is a “specialty loan”, you may want to limit your shopping with reputable lenders that know how to specifically handle HARP loans. Click here to see HARP mortgage rates.

Ø  What are the costs to refinance via the HARP program?

o    Closing costs for HARP refinances should be no different than for any other mortgage. You may pay points, you may pay closing costs, you may pay neither. How your mortgage rate and loan fees are structured is between you and your loan officer. You can even opt for a zero-cost HARP refinance. Ask your loan officer about it.

Ø  What does the term “DU Refi Plus” mean?

o    “DU Refi Plus” is the brand name Fannie Mae assigned to its particular flavor of the HARP mortgage program. “DU” stands for Desktop Underwriter. It’s a software program that simulates mortgage underwriting. “Refi Plus” is a gimmicky-sounding term that could have been anything. The name has been trademarked, however.

Ø  What does the term “Relief Refinance” mean?

o    “Relief Refinance” is the Freddie Mac equivalent of DU Refi+.

Ø  For how long should I lock my mortgage rate via the HARP Program

o    Lock for 45 days, at minimum. This is because the HARP mortgage program, while streamlined for simplicity, still has some grey areas that can lead to delay. It’s better to have a rate lock that lasts too long than not long enough.

Ø  When does the HARP program end?

o    If you are HARP-eligible, you must close on your mortgage prior to January 1, 2014 –days from now.

Ø  How do I apply for the HARP program?

o    Use this form to get a rate quote. If the rate looks good, you can accept it. There is no fee for applying.

Ø Apply For Home Affordable Refinance Program

 

Call or email with any questions!  We are here to assist!

 

“The gift that God blesses us with each day is a new canvas upon which to paint our lives and legacy… create something beautiful today!”

LAURA A. WELLS, CMPS

Certified Mortgage Planner, NMLS # 330328

(509) 279-2320 Ext. 25 – Direct

(509) 714-9411 – Cell

(877) 290-1604 – E-Fax

12209 E. Mission Avenue, Suite 7

Spokane Valley, WA  99206

Uncategorized March 1, 2012

HUD Mortgage Cost Increases – Effective April 2012

Unfortunately the mortgage market continues to get harder and more expensive. Below is an explanation of the moves HUD is making on FHA insured loans starting in April. The impact isn’t huge, but it’s a negative impact none – the – less and will make purchasing a home using FHA financing more expensive.  Stay informed and on top of the changes:

Rising Mortgage CostsHUD Increases Costs – Effective April

In a move to increase their financial standing (and to get the FHA back into required capital requirements), on Monday, HUD announced their anticipated increases in the premiums they charge borrowers. Simply stated, the cost of borrowing is going up.

FHA loans, by design, are more liberal in their underwriting guidelines than most conventional loan products (in terms of credit, income ratios, required investment from the borrower, and maximum loan amount). HUD is not a lender. Rather, it is a federally-insured insurance company. They insure lenders against default on loans underwritten in compliance with their published guidelines. It is because of this insurance that lenders approve and close loans with more liberal guidelines.

As an insurance company, HUD charges two types of premiums on the FHA mortgages:

The UFMIP (Up Front Mortgage Insurance Premium) will be raised effective April 1, 2012 from its current 1% to 1.75%. One advantage to the UFMIP is the fact that it is typically built into the loan amount and does not require additional cash outlay at closing. However, the increase in loan amount does impact monthly payment and cash flow.

The MMIP (Monthly Mortgage Insurance Premium) will be raised 10 basis points on April 1, 2012 to cover the requirements of the payroll tax extension approved last year. This is a direct increase of 10 basis points in the borrower’s mortgage payment, and has the effect of a 10 basis point increase in interest rates. As a kicker, loans over $625,000 will be bumped 35 basis points from today’s levels effective June 1, 2012. This bump is substantial, as you can see in the chart below.

HUD Costs Chart

For a larger version, follow this link:  HUD Costs Chart.

On a loan amount of $300,000, we are seeing an increased payment of $36.41, which doesn’t sound too bad. However, we know that home buyers buy homes comparing what their monthly payment will be after they close. This hike in payment is equivalent to borrowing an additional $7000. Starting next month, it’s as if the home became $7000 more expensive. What is the result? Buyers are going to have to pay more OR they’re going to have to offer less to the seller (to maintain the same mortgage payment they were comfortable with today). A $7000 lower offer is like another 2.5% decline of home prices. Not good for anyone.

Advice:

Sellers, price correctly and get into contract in March.

Buyers, today is the cheapest mortgage you are likely to see in your lifetime (all things considered)! Get off the fence and buy NOW!

______________

P.S. – Rumors are strong that FHA is looking to reduce the allowable sellers’ concession from 6% to 3% in April as well. This move will have a huge impact on how much cash will be needed to buy (especially in places like NY with the NYS Mortgage Tax). Hurry—get in the game!

Troy Clute
Mountain West Bank
WK 509-944-4083
Cell 509-994-4607
Fax 509-944-4090
NMLS # 337416
www.mountainwestbank.com/lo/tclute

Uncategorized February 16, 2012

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:
02/16/12

 

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

 

Market UPdates February 9, 2012

Market UPdate February 2012

Happy February Everyone!

 

Anyone else remember telling themselves back in the late 90’s early 2000’s, “I should’ve bought then!?”  Well, here we go again, folks!  The real estate market is rapidly shifting, and anyone with an eye on opportunity will want to read up on the state of our local progress.  So, here’s an update for our area:

 

Our inventory shrank considerably over the past few months, and buyers were feeling the crunch with considerably less to choose from. Now, however, homeowners are seeing the unusual trend and jumping onto the bandwagon.  Sellers are not waiting for spring! They’re realizing they better beat the competition, and are getting listed early in 2012.

 

Facts to back this up?  Active listings dropped consistently from mid 2011 through December.  January saw the first increase since last August: up from 2325 in December 2011 to 2849 in January 2012.

 

Helping this along, closed sales were up October through December 2011.  Comparatively, we saw 355 homes closed in December 2011 (from 336 in 2010), and 205 homes closed in January 2012 (from 184 in 2011).  For chart aficionados look here:

 

http://www.spokanerealtor.com/associations/5294/files/activelistings2012.jpg

http://www.spokanerealtor.com/associations/5294/files/closedsales2012.jpg

 

It’s a hay day for some!  Historically, home buyers have looked to investor activity to time their buy, and – look out! – investors are entering the market heavily now.  This is a good sign that we’re at or have already hit bottom, and things are likely to go up from here; namely prices and, shortly thereafter, interest rates.

 

If that’s not enough, another promising sign is that rental rates are projected to continue to increase which makes buying an even more enticing scenario for many folks out there.  We’re seeing quite a number of first time home buyers and people buying rental properties in an effort to supplement current income and secure their retirement income. This is supported in the fact that unit sales (up to $150,000) have increased monthly since the middle of 2011 compared to 2010.

 

Maybe most importantly, the Fed just made a mega deal to help homeowners who are upside down in their mortgages in the next 12 months.  This will begin to take away the “smoking deals” on foreclosures and short sales.  Not only that, they’re aiming to compensate families who were forced out of their homes prematurely due to improper foreclosures.  Read more about it here:

 

http://money.cnn.com/2012/02/09/news/economy/mortgage_settlement/

 

 

Summary, if you’re considering buying or selling:

 

Sellers (if you’re not upside down in your mortgage), it may be the right time to beat the competition.  Consider getting your property listed sooner rather than later.

 

Buyers, it may be the right time to get your financing in place and find your new home.  Beat the  crunch, before interest rates go up and the banks get buried (again) in the Fed’s mandated refi’s and principal reductions.

 

~ Becky
Market UPdates December 26, 2011

Market Update December 2011

In case you’re wondering, here’s what’s happening with real estate in Spokane:

 

Many Realtors, including myself, have seen an increase in calls, online traffic, home showings, and closings this December.  The market feels like there’s been a substantial shift in confidence, and the numbers say the feeling is right.

 

Active listings have continued to decline thru the last two months reportings (October/November), dropping down to just under 2600 properties (from close to 3000 in September).  This equals sold homes, and we know why; successful closings held steady in the range of 320 completed transactions. Usually, they dip down a bit in November… I am very interested to see what December’s numbers show us.  From the buzz around the office, a lot of people were getting new homes for Christmas!

 

Proof positive is seen in the fact that sales this November were up 15.7% over 2010.  Even though average sales prices dropped another 3% the past couple months, if the trends stay the same as the past two years, we should see them leveling off and possibly increasing slightly with the increase in activity and somewhat boosted buyer confidence, not to mention the decrease in inventory.

 

Best of all, interest rates are still holding steady below 4%!

 

I hope this information is useful for you.  Give me a call, text, or email if you’re ready to make your move, just want to say hello, or have any questions regarding the state of the Spokane market or real estate in general.