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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)

Free Resources for Divorcing Couples in Portland, Oregon

Posted On: April 24th, 2011 by James Posted In: Financial Health • Refinancing

If someone you know is contemplating a divorce, do them a favor and send them a link to this blog post.  Helping families in a divorce is one of my core services as a mortgage professional.  I can help families get their finances and debts clarified and organized, as well as help them make clear decisions about what their options are with any real estate holdings.  Not only have I been specially trained in analyzing real estate, liabilities and credit and how they apply to a divorcing family, but I also offer a FREE online resource for divorcing couples in Portland called “Divorce Shield”.

The divorce shield service is a completely free, anonymous website where you can download a customized plan for yourself that will highlight the specific decisions you will have to make.

Visit my site to DOWNLOAD YOUR DIVORCE SHIELD PLAN today.

Continue Reading – Free Resources for Divorcing Couples in Portland, Oregon

Potential Jumbo Refinancing Candidates

Posted On: January 28th, 2011 by James Posted In: Financial Health • Mortgage Programs • Mortgage Rates • Mortgages • Portland Real Estate • Refinancing

So, if you pay attention to this blog, you know that interest rates have popped up from their mind-boggling lows in early November.  Mortgage Refinances still make a ton of sense for many, but some are waiting for a return to the glory of those heady days… and I believe they will continue to wait for a long long time.  However, there are two types of borrowers that I believe will still benefit GREATLY  from a refinance:

 

  1. Those who tried to refinance and couldn’t qualify due to an appraisal issue.
  2. Those who currently have a Jumbo mortgage and think that Jumbo rates haven’t improved enough to warrant starting the process. Continue Reading – Potential Jumbo Refinancing Candidates

Mortgage Rate Volatility and the End of the Refinance Boom

Posted On: December 2nd, 2010 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Mortgage Rates • Mortgages • Refinancing

Kind of feels like an epic hangover.  The low low rate party that seemed like it would never end, has come to a decidedly abrupt change in direction.  The sunlight is streaming into the windows, our clothes are all wrinkled, and there are spilled drinks and confetti everywhere.  We’ve seen a handful of days in the bond market this month that have been extremely precipitous in speed and size of the deterioration.   Since April of 2010, every time I have locked a loan it has been a bittersweet and slightly regrettable experience.  Of course every loan must be locked at some point in the process, but it was a strange new frustration to see rates improve so steadily and relentlessly.  We would lock and fund, and then within a day or so rates would just get better.  I got in the habit of floating everyone for as long as possible to capture as much of the improvement as we could.  Continue Reading – Mortgage Rate Volatility and the End of the Refinance Boom

The Difference Between New & Old FHA Rules

Posted On: September 27th, 2010 by James Posted In: FHA Mortgage • Government Actions • Mortgage Insurance • Mortgage Programs • Refinancing

FHA will become $69 more per month on a 300k purchaseJust recently for Portland Home Loan, I prepared an analysis for 4 purchase scenarios on the same property.  It is a purchase of $300,000 here in Portland, OR, and the 4 options are:

- 5% down conforming

- 10% down conforming, and

- 2 FHA options

    One FHA option is the current FHA cost structure, which has been in place since April of 2009.  The other option is the new FHA cost structure, which becomes unavoidable after October 4th of 2010.  FHA mortgage insurance has always been paid in two places on the loan:

    1. The monthly premium (which is discounted based on a large upfront lump sum), and
    2. The Upfront Mortgage insurance Premium (which is 2.25% of the loan amount and automatically added to, and financed into the life of the FHA mortgage.

    The major change starting Oct 4th 2010  is a shift of the mortgage insurance cost away from that  “financed upfront premium” and more towards the monthly premium.

    In short — FHA loans are about to become a little bit more expensive.

    I have prepared an interactive FHA loan report that shows the breakdown more clearly.

    The new Upfront FHA mortgage insurance premium will be reduced from 2.25% to 1% of the loan amount.  However, the monthly mortgage insurance cost will almost double — being increased from 0.55% annually to 0.90% annually.  In my example above, this shows up as a jump in payment of $69 per month on the same $300k mortgage.

    Ultimately, FHA loans are still going to be amazingly popular, and continue to make a lot of sense for borrowers as we move forward.  They still have the smallest available down payment requirement (at 3.5%) as well as the most flexibility around borrower credit history.

    But I do think that this change will make a loan with 5% down and private mortgage insurance more attractive to borrowers with top credit scores.  Additionally, the FHA streamline refinance will become much less attractive for many borrowers.  I am scouring my client list and the wider community for last minute FHA streamline refinances! Last call for the good stuff!