Principles of Locking or Floating Your Mortgage Rate

At some point during the application process, your mortgage rate needs to be locked in.  This short video will provide you with the basics regarding “locking” or “floating.”  For more information, follow our interest rate forecasting page or call your loan officer for details.  Enjoy the show! Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is …

Fannie Mae and Freddie Make Mac Move to NO Loan to Value Limit Loans on HARP

The Federal Housing Finance Agency, with Fannie Mae and Freddie Mac, has announced a series of changes to the Home Affordable Refinance Program (HARP). This program was designed to be able to help people who were in a position of negative equity. Now, it someone is upside down on their home, there will be no limit to how far upside down they are in order to qualify for these loans. This program will continue to be available to borrowers with loans sold to the Fannie Mae or Freddie Mac on or before May 31, 2009 with current loan-to-value (LTV) ratios …

Criteria NEEDED by all Loan Originators to quote you a rate.

The lending environment has changed. I’m sure we’ve all heard this on the radio and TV for years now… right? We also know that the Government wants to make “mortgage rates” a commodity and make it EASY to shop for. But the problem arises when someone calls up and says “whats your rate?” and truly expects to get an instant answer back. I certainly wish I could answer that question with a simple “we’re at 4.25% today” or “3.5% for a 15 yr”… but its not that simple. In general I (and everyone else you talk to) needs to get …

FHA’s Short Refi Program

The FHA Short Refinance Program has always existed in an unofficial form but became a formal program on December 16, 2009 with Mortgagee Letter 09-52.  It was “refined” on August 6th of 2010 with Mortgagee Letter 2010-23.  It was designed to provide more mortgage options to those that owe more than their house is worth.  There are many requirements for this loan but for most borrowers who are upside down on their home and have good credit; these criteria are likely to be met with the cooperation of the existing lenders about to be paid off. For these transactions to …

Converting a Primary Residence into a Second Home or Investment Property

You may not be familiar with the term “buy and bail” but lenders are. And if you’re not familiar you may be very surprised when a lender denies your loan when you try to convert your primary, current residence into a second home or rental.  That is, unless you stumbled upon this blog.  First let’s talk about conventional loans (those backed by Fannie Mae and Freddie Mac.) If you are applying for a conventional loan, the guidelines are as follows: Borrowers who currently own their own home typically have three (3) options when they decide to purchase a new Primary …

What are extenuating circumstances?

Many people trying to buy a home after a short sale find it difficult to navigate through loan programs that they may be eligible for and various waiting periods that may be applicable.  If late payments occur, most people are told that the waiting period for buying a home after a short sale is 3 years because that’s what FHA requires if late payments occur.  Then they learn that Fannie Mae will back a loan for someone after a short sale after 2 years with a 10 percent down payment if there are “extenuating circumstances.”  But what are extenuating circumstances? Fannie …

Minnesota Home Prices Headed for a Double Dip? – Don’t Believe the Hype

If you’ve been watching the evening news or reading what’s been coming off the press, you might be thinking that the sky is about to fall on Minnesota home prices. You’ll hear a lot of doom and gloom and a lot about the S&P/Case-Shiller Home Price Indices. I assure you that the media will not do an adequate job of explaining what this does and more importantly does not mean to you as a Minnesotan. Since the great recession hit, metropolitan areas have increased in home values 3 percent from their lows. There were 5 major metropolitan areas that bucked …

Fannie Mae Guideline Changes – Gifts, 97% Financing and Mortgage Insurance

There has been some recent excitement about Fannie Mae (FNMA) changing her guidelines on down payments and allowing gift funds as an acceptable form of down payment in lieu of a borrower’s own funds. Before we all get excited about FNMA getting a little FHA in her with respect to gift funds, we need to realize that the guidelines for mortgage insurance and FNMA are not aligned. So long as they aren’t, this change will only have minimal effect. This chart outlines the new accepted forms of down payment from FNMA’s perspective: Here’s the Fannie definition of acceptable donors for …

FHA vs. Fannie Flex 97 for Low Down Payment Buyers

For those of you who are such industry dinosaurs that you remember how to do a FLEX 97 loan with Lender Paid Mortgage Insurance (LPMI), you’re in luck because, aside from 95% conventional with single premium financed mortgage insurance (SPMI), the time has come where this is the best high loan-to-value product for purchases. Soon, allowable seller concessions for FHA loans will be lowered from six percent to either four or three percent. When that happens, there will nearly no instance where FHA is superior to this loan product choice.  Take a 200000 dollar purchase for a buyer with a …

Monthly Private Mortgage Insurance – It Doesn’t Make Any Sense. . .

Few know that there are more than 22 different types of private mortgage insurance that can be used what a homebuyer puts less than 20% down on a conventional loan.  Most assume they’ll be saddled with monthly mortgage insurance which, more often than not, makes the least mathematical sense.  A different application of private mortgage insurance to a conventional loan can reduce monthly payments, add tax advantages, increasing a homebuyer’s purchasing power and save many thousands of dollars. As though there isn’t already enough to know, real estate professionals need to know the differences between the mortgage insurance providers (i.e. …