Why is Mortgage Underwriting So Crazy?
Posted On: January 25th, 2012 by James Posted In: Financial Health • Government Actions • Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
Why is the loan approval process so difficult these days? Well, the answer is complicated. The truth is that the approval and funding process for a conforming, FHA, or VA, government insured mortgage has never been more complex since I’ve been in the business (since 2003). To get to the root of this issue we need to get into the way-back machine and go back to the year 2004.
This is the year of the ascendancy of the sub-prime mortgage industry. These companies realized that there was a HUGE appetite for AAA rated mortgage backed securities. So they began Continue Reading – Why is Mortgage Underwriting So Crazy?
New HARP loan “HARP 2″ + new FHA loan limits 2011
Posted On: November 21st, 2011 by James Posted In: FHA Mortgage • Government Actions • Mortgage Programs • Mortgages • Refinancing
Christmas might be coming early for homeowners in Oregon and Washington! The Obama administration has been putting pressure on banks to come up with ways to extend opportunities to refinance into lower rates in recent months, and it appears that we’re getting some movement on this finally. The original HARP loan (aka: Home Affordable Refinance Program) has been around since early 2009, and allows homeowners to refinance their existing first mortgages into lower rates, EVEN if the value of the securing property has gone down dramatically. The program allows you to borrow 125% of the appraised value of the home, but most major lenders only really allow for 105%. Continue Reading – New HARP loan “HARP 2″ + new FHA loan limits 2011
Is it Possible to Buy Real Estate with Less Than 20% Down?
Posted On: October 28th, 2011 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Mortgage Insurance • Mortgage Programs • Mortgages
A realtor colleague of mine was recently relating his shock to me about how often he is talking to renters who aren’t considering buying real estate because they are under the impression that a purchase requires a 20% down payment. This idea couldn’t be further from the truth, and this message is sadly often relayed on TV from uninformed talking heads and people who are obviously not real estate professionals. I’m here to tell you the truth, dear blog reader! Isn’t that why you read blogs?!
The truth is that just about every borrower in the market could qualify to put less than 20% down if they chose to. The FHA loan is one of the easiest loans to qualify for and it isn’t just for first time home buyers, nor is there an income cap on this program… and it only requires a 3.5% down payment, but I digress… let me break this down for you in internet-friendly bullet point fashion. Continue Reading – Is it Possible to Buy Real Estate with Less Than 20% Down?
Low Rates and the Return of Private Mortgage Insurance (PMI)
Posted On: May 17th, 2011 by James Posted In: Financial Health • Mortgage Insurance • Mortgage Programs • Mortgage Rates • Mortgages • Portland Real Estate • Refinancing
Its happening again. Rates are tumbling and tumbling more. I read recently that avoiding closing costs in a declining rate environment is a wise approach and I completely agree. By avoiding closing costs two things happen:
1. The net benefit of the improved cash flow is immediately realized, and
2. You are in a position to refinance AGAIN as rates continue to slide. Because you haven’t paid any of your equity there is not much downside.
I’ve been making loans since 2003, and rates have pretty much always been really attractive with a few exceptions (sorry purchasers of the summer of 2006! I hope you’ve refinanced out of your 6.625% fixed). Continue Reading – Low Rates and the Return of Private Mortgage Insurance (PMI)
Mortgage Loan Officer Compensation after April 1st 2011
Posted On: March 22nd, 2011 by James Posted In: Government Actions • Mortgage Programs
Big changes coming in a few weeks… Seismic changes, in fact (for this mortgage broker and blogger). Many of you have heard about so called “sweeping financial reforms” for a while now, and guess what — residential mortgages are going to be included in these reforms in the name of consumer protection. I can’t decide if it is going to be a big deal for mortgage borrowers, but it really might, and if it does influence the market significantly, I can’t imagine any other result for borrowers than a more expensive loan: higher rates and higher fees. The main thing that is changing is the nature in which I will be compensated for originating mortgages starting April 1st, 2011. Up until now, my compensation was very simple: every time a new mortgage is identified and funded, a single fee is created. Now, my company (that provides all manner of support and guidance) and I split this fee. But here is another fact about my current compensation: my fee is NEGOTIABLE for my clients. Continue Reading – Mortgage Loan Officer Compensation after April 1st 2011
