The Tampa Bay Mortgage Pro's Mortgage Financing Guide

FHA Streamline Refinance - The Easiest and Most Conveniant Way to Reduce Your Mortgage Payment

Wed, 17 Jun 2009 20:34:16 -0500

With mortgage interest rates plummeting to record levels, and home sales plummeting as well, many people have a renewed interest in refinancing for lower interest rates and sometimes shorter mortgage terms.

The FHA streamline refinance is a great option for quite a few of them. Here are the rules which are currently in effect since January 1, 2009 for calculating FHA streamline refinances.

In order to qualify for an FHA streamline refinance you must be a homeowner who currently has an FHA-insured mortgage.

An FHA streamline refinance does not require any proof of income or any verification of funds to close. No repairs are required unless the house has lead paint. FHA does not require a credit report, but most lenders require one for loan pricing purposes and have new overlaying guidelines not allowing for streamline refinances if you have a score below 620. FHA guidelines require only a verification of the mortgage payment history for the last 12 months (or the length of time the mortgage has been held). HUD’s Credit Alert Interactive Voice Response System (CAIVRS) need not be checked, but a check of HUD’s Limited Denial of Participation (LDP) and General Services Administration (GSA) exclusion lists is still required for all borrowers.

FHA does not require a termite inspection letter for streamline refinances, however lenders are allowed to require one and some do. No mortgage credit underwriting is required. Individuals may be added to the property title without verification of credit worthiness. If any borrower is removed from the title and loan the remaining borrower must go through the full credit qualifying process unless the property was transferred without triggering the due on sale clause due to a divorce decree or inheritance more than 6 months ago and the borrower can prove (canceled checks) that they have been making the payments themselves.

At closing the borrower can receive no more than $500 or the loan must be sent back to the underwriter. This makes it extremely important for the loan originator/processor to verify all attorney/title fees, payoffs and lender fees prior to underwriting.

If there is a second mortgage or equity line, it may be subordinated (legally placed in second position again in spite of a new first mortgage) without regard for the total loan to value. Keep in mind that many second lien holders today are surprisingly difficult to negotiate with.

There are two types of streamline refinance - with an appraisal or without an appraisal. Several different factors will affect which version you choose.

If you purchased your home less than 12 months prior to applying for the refinance, no appraiser in his right mind is going to appraise it for much more than the purchase price in today’s market. Thus if you have reason to believe that the appraised value will be lower than your original sales price, then you would obviously try, if possible, to use the no appraisal FHA streamline refinance. Sometimes this is difficult unless there was a substantial down payment made at the time of purchase. HUD has made a nice accommodation in this area. If the appraisal has been done, but the value is such that it makes more sense for the borrower to proceed as if no appraisal has been done, the underwriter is allowed to ignore the appraisal.

For streamline refinances without an appraisal, the maximum loan amount is the lower of:

The original principal balance including the FHA upfront mortgage insurance premium from the original closing. (This can be obtained from the Refinance Authorization screen in the FHA Connection) minus any refund from the original upfront mortgage insurance premium, plus the new upfront mortgage insurance premium (1.5%) or

The total of the principal balance on the existing first lien plus up to one month of the monthly mortgage insurance premium plus the mortgage payment (PITI) that was due on the first of the month of closing (if not already paid), plus up to 30 days interest for the current month, plus any late charges or escrow shortages, plus borrower-paid closing costs plus prepaid expenses (per diem interest to end of month on new loan plus hazard insurance deposits plus real estate tax deposits plus reasonable discount points), minus the upfront MIP refund (if applicable) plus the new upfront mortgage insurance premium (1.5% of the base loan amount).

The mortgage insurance refund for all loans originated after December 8, 2004 is only paid when refinancing to another FHA loan and not when any FHA loan is paid off as it used to be. The following chart shows the percentage of the original upfront mortgage insurance which will be refunded:

MIP Refund Chart

For an FHA streamline refinance with an appraisal, – with NO credit qualifying, the maximum loan amount will be the lower of the two calculations below:

The total of the principal balance on the existing first mortgage plus up to one month monthly MIP plus the mortgage payment (PITI) that was due on the first of the month of closing (if not already paid), plus up to 30 days interest for the current month, plus any late charges or escrow shortages, plus borrower-paid closing costs plus prepaid expenses (per diem interest to the end of the month on the new loan plus hazard insurance deposits plus real estate tax deposits plus reasonable discount points), minus the upfront MIP refund (if applicable) plus the new upfront mortgage insurance premium (1.5% of the base loan amount).
Multiply the appraised value of the property by 97.75%

Note: This article has been revised due to HUD guideline changes. The Housing and Economic Recovery Act of 2008 eliminated the variable loan to value requirements that had been in place for different states and also limited the amount of the mortgage plus upfront mortgage insurance payment to 100% of the appraised value. In Mortgagee Letter 2008-23, HUD originally used this 100% of appraised value standard and eliminated the 97.75% loan to value limitation. However, to simplify things Mortgagee Letter 2008-40 changed the standard back to 97.75% of the appraised value. A matrix outlining the new FHA refinance requirements is available here.

If you have questions about streamline refinancing which are specific to your own loan such as interest rates, whether refinancing is worth it, or closing cost questions, please contact me directly by clicking the link or by calling me at 727-488-7355.

FHA Loans Facilitate Home Ownership

Sat, 06 Jun 2009 15:34:39 -0500

The Federal Housing Administration (FHA) program first began in 1934 in an effort to encourage home ownership despite the difficult economic times of the era. Just like todays economic times, options for borrowers with less than perfect credit is critical to substain an economy as the housing market plays a large factor in the economy in general. The FHA program enables consumers who may not qualify for a standard loan to obtain the financing they need to purchase a home without income limitations.

FHA loans differ from typical loans in that they are insured by the Federal Housing Administration, which is a part of the Department of Housing and Urban Development (HUD). Because this insurance, both up-front mortgage insurance of 1.75% for purchase transactions, and .55% per year divided into monthly payments, reduces the lender's risk on the loan giving lenders a greater flexibility with regard to approving loans.

For example, FHA loans are not credit-score driven, so a client may be able to obtain a loan despite having had credit problems or even a bankruptcy in the past. Although FHA does not require a borrower to have a minimum credit score, lenders have developed underwriting overlays where a borrower needs at least a 620 score while conventional requires at least a 660 to even obtain a loan over 80% and forget about 96.5%. A bankruptcy with FHA loans are far more lenient than conventional loans with guidelines specifying that a bankruptcy must be discharged at least 2 years ago with some exceptions made for borrowers having a bankruptcy discharged 1 year ago under certain circumstances.

Unlike conventional loans, which have large loan level pricing hits for less than perfect credit, FHA loans have minimal loan level pricing hits for lower credit scores. For example, a borrower with 680 credit scores trying to purchase a home with 10% down would have a loan level price hit of approximately .75% which would be either paid in the form of points or by taking an increase in rate. Alternatively, an FHA loan would have no loan level price hits at all in the same scenario.

For consumers that do not have a traditional credit history, it is still possible to obtain financing by documenting payment histories on items such as rent and utilities. Alternative credit history can not make up for a poor credit history meaning if you have credit history with missed payments and collections with a score less than 620, you can not provide alternative trade lines such as rent history, cable, electric, etc with a good payment history to make up for the poor trade lines.

FHA loans also provide added flexibility when it comes to closing costs and the down payment. FHA allows for the seller to pay up to 6% of the purchase price towards your closing cost opposed to conventional loans only allowing 3%. The minimum down payment for FHA loans is only 3.5% while conventional loans require at least 5%.

The FHA down payment is extremely flexible and may be obtained through many different facets. To list a few, a gift from a family member, down-payment assistance programs, collaterilized loans, and employee assistance plans. You may contact me for a complete list of down payments acceptable by FHA. FHA loans are processed just like any other loan, opposed to the old way where there were FHA inspections and god forbid if there is a stain on the carpet! Over all FHA loans provide a wonderful opportunity for consumers who are seeking to achieve home ownership!

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc.
www.TheTBMortgagePro.com
Josh@TheTBMortgagePro.com
727-488-7355

Joshua Lerette, The Tampa Bay Mortgage Pro, is a mortgage specialist in St. Petersburg, Florida providing financing solutions for homeowners and homebuyers alike. The Tampa Bay Mortgage Pro specializes in First Time Homebuyer programs utilizing FHA, VA, and the USDA Rural Housing Loan.

Mortgage Interest Rate Myths

Fri, 05 Jun 2009 18:10:10 -0500

This may come as a shock to many borrowers, but it's absolutely true. Mortgage interest rates are not set by the Federal Reserve and, contrary to popular belief, mortgage rates are not directly tied to the yields of US Treasury bills, bonds, or notes – including the 10-year Treasury Note. That's right. Despite what you might hear in the media, mortgage interest rates are actually set by lending institutions, and are based solely on the performance of mortgage-backed securities.

For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true. The graph on this page, which shows interest rates for 30-year fixed-rate mortgages and the yield for the 10-year Treasury Note for 13 months, clearly demonstrates this fact.

At a quick glance, yes, it's easy to see why the mistake is made. As you can see, for 11 out of the 13 months recorded in the graph, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting about this graph is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.

Stop being misled. If you or someone you know is thinking about buying or refinancing a home, give us a call. We'll give the facts you need to make a truly informed decision.

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc.
(P) 727-488-7355
josh@TheTBMortgagePro.com
www.TheTBMortgagePro.com

Mortgage Boos - Tax Credit Down Payment Assistance...What a Crock

Mon, 01 Jun 2009 13:31:39 -0500

On May 29th, 2009 HUD/FHA announced the terms of the first time homebuyer tax credit and its use as a down payment assistance program. Read the entire HUD Mortgagee Letter 2009-15 by clicking on the HUD logo off to the right. Reader Beware, like many other ML's, you must be a lawer to dissect this information!

As we already know, Secretary Shaun Donovan released this information prematurely early this year at a National Association of Realtors summit. You may read this article for yourself. This Mortgagee Letter 2009-15 was quickly rescinded as Donovan did not check with the Offices of Management & Budget Officials prior to releasing the information. Ooops!

HUD finally has released the details of how a first time homebuyer may use their tax credit as a down payment!
Yay, jump for joy, right? Not so fast, like many of the other government programs, (cough) Hope for Homeowners, HUD's attempt to assist buyers has fell short once again.

There is two ways you may receive the first time homebuyer tax credit upfront and use it as part of your down payment on a FHA loan.

Option #1 Secondary Financing

This one is rocket science, HUD actually already allows eligible government agencies and instrumentalities of government to offer second lien's to be used as a down payment and closing cost. So what was the point of putting this in the letter? Considering if you read the last condition of the secondary financing, "The secondary financing may not require a balloon payment before ten years." So, if no balloon payment is allowed, then how would the agencies collect on the $8000 first time buyer tax credit. There is far too much risk for non-profit, government agency to issue a second mortgage based off the receipt of an $8000 tax credit that they can not require to be paid off right away.

Option #2 Purchase of Tax Credit

This options simply doesn't matter as ML 2009-15 clearly states that the funds derived from the sale of the tax credit can not be used as part of the 3.5% required minimum down payment on FHA loans. It may only cover an additional down payment, cost of buy down, and or closing cost. Now, if I'm a first time home buyer, why would I request my tax credit up front just to pay for my closing cost when I could ask the seller to pay up to 6% of the purchase price towards my closing cost on a FHA loan. I would rather keep that $8000 tax credit in my pocket and utilize the full benefits of FHA financing.

Summary: Another fantastic flop by HUD! Why announce that you will allow a tax credit to be used as down payment assistance when in fact it can not be used for your minimum contribution of 3.5%. The real funny part, government is trying to eliminate mortgage brokers through HR 1728 because there thoughts are that brokers were manipulative and misleading. Talk about the pot calling the kettle black!

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc.
(P) 727-488-7355
josh@TheTBMortgagePro.com
www.TheTBMortgagePro.com

Home Buyers Down Payment FAQ's

Fri, 29 May 2009 08:42:08 -0500

With today's combination of lower home prices, some of the lowest interestrates the industry has ever offered, and the $8000 tax incentive for first-time buyers, buying a home has never been so attractive. The only real hurdle left for many Americans is coming up with a down payment. With this in mind, I have put together some of the most frequently asked questions I get about down payments in today's market.

Q. Are there any no-down payment programs left?

Yes. While it's true that most of the popular no-down payment programs disappeared in the wake of the subprime mortgage collapse, there are still two longstanding government-backed programs that offer mortgages with no down payment: the USDA Rural Development Program and the VA Loan Program.

A USDA Guaranteed Loan is a government-insured, 100% purchase loan. This means there is no down payment required if you – and the house you intend to buy – qualify for the program. Not all areas qualify, but you'd be surprised at how many neighborhoods in your area do. If you intend to purchase in Florida and are intrested to see if your potential property qualifies for the USDA Guaranteed Loan, you may check for eligibility at the USDA website. There are income and other limitations, but if coming up with a down payment is challenging, you might want to consider this program.

If you or your spouse is a military veteran, you may qualify for a 100% financed loan from the US Department of Veterans Affairs. More than 29 million veterans and service personnel qualify for this service benefit. Give us a call to find out if you're one of them.

Q. Are there any other government-insured programs that can help someone struggling with a down payment?

Yes. In 1965, the federal government created the FHA loan programs to encourage homeownership throughout the country. FHA-insured mortgages offer many benefits, including a minimum down payment of 3.5%. FHA-insured loans have grown in popularity recently due to the seller's ability to pay closing costs up to 6% and a temporary increase in loan limits up to $729,750 in certain high-cost areas, which allows more potential buyers to utilize this program. If you are interested in a FHA mortgage in Florida, here are the latest Florida County Loan Limits.

Q. May I use a gift from family members as part of my down payment?

Yes. In many cases, immediate family can provide monetary gifts to be used as a down payment. There are restrictions of course, and strict documentation will be required, but we will gladly walk you through the finer details of this process. Be sure to mention this option when you're filling out an application with us.

Q. May I use funds from my IRA for my down payment?

Yes. First-time home buyers can use funds from an IRA under certain circumstances for a down payment. The rules regarding this option, however, can be complicated, especially with a Roth IRA, and it's important to understand any and all tax implications before tapping into these accounts. Please talk to your tax professional before making any decisions. If you don't have one, we'll gladly refer you to one we work with on a regular basis.

Q. May I use the $8,000 tax credit as my down payment?

No. At the time of the writing of this article, qualified first-time home buyers do not have direct access to the $8,000 credit to use as a down payment. In May, HUD officials made an announcement to the contrary, but statements backing the announcement were quickly withdrawn from the HUD website. This doesn't mean that HUD and lawmakers will not allow this in the future. For complete details you may read my blog about the $8,000 tax credit. We're following this issue closely and will let you know if anything changes.

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc.
(P) 727-488-7355
josh@TheTBMortgagePro.com
www.TheTBMortgagePro.com

Your Credit Score - What It Means to You as a Prospective Home Buyer Part III - The Five Factors of Credit Scoring

Fri, 22 May 2009 13:14:50 -0500

Credit scores arecomprised of five factors. Points are awarded for each component, and a high score is most favorable. The factors are listed below in order of importance.

1. PAYMENT HISTORY - 35% IMPACT

Paying debt on time and in full has the greatest positive impact on your credit score. Late payments, judgments and charge-offs all have a negative impact. Delinquencies that have occurred in the last two years carry more weight than older items.When it comes to collections, there is a general rule of thumb. Any collections within two (2) years should be paid off. Any outside of 2 years should be left alone. As stated before, your last two years history is the most important. So anything outside of two years that is paid off will bring it to a current status and negatively impact your score.

2. OUTSTANDING CREDIT CARD BALANCES - 30% IMPACT

This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit at least 2-3 months prior to trying to purchase a home. If you have had some mistakes in the past, i.e. late payments, collections, and are trying to repair your credit, it is important that you use your credit cards often, but pay them off completely. This will help to establish new "good" credit.

3. CREDIT HISTORY - 15% IMPACT

This portion of the credit score indicates the length of time since a particular credit line was established. A seasoned borrower will always be stronger in this area. Too often I run in to potential buyers that had closed a credit card after they paid it off thinking it will help their credit score. The opposite is actually in effect. You want to keep your most established accounts, and if anything close newer accounts.

4. TYPE OF CREDIT - 10% IMPACT

A mix of auto loans, credit cards and mortgages is more positive than a concentration of debt from credit cards only. You should always have 1-2 open major credit card accounts.

5. INQUIRIES - 10% IMPACT

This percentage of the credit score quantifies the number of inquiries made on a consumer's credit within a twelve-month period. Each hard, i.e. auto loan, mortgage, credit card, inquiry can cost from two to 25 points on a credit score. Lower score clients will actually have a larger decrease in credit scores by inquiries than a better score borrower. Note: When shopping for large ticket items such as an auto or a mortgage, credit pulls from the same industry done within a couple of days will not have as great of an impact as if you were to have your credit pulled from a credit card company one day, and a auto dealer the next. It is understood that you shop and therefor credit inquiries will be made. The maximum number of inquiries that will reduce the score is ten. In other words, 11 or more inquiries within a six to tweleve-month period will have no further impact on the borrower's credit score. Note: If you pull a credit report yourself, it will have no effect on your score.

Remember that the credit score is a computerized calculation. Personal factors are not taken into consideration when a credit report is generated. It is merely a snapshot of today's credit profile for any given borrower, and it can fluctuate dramatically within the course of a week.

Your Credit Score - What It Means to You as a Prospective Home Buyer

Part I - The History of Credit Scoring

Your Credit Score - What It Means to You as a Prospective Home Buyer

Part II - Why Your Credit is So Important

Joshua Lerette, The Tampa Bay Mortgage Pro is available for all of your St. Petersburg, Florida mortgage needs.

Your Credit Score - What It Means to You as a Prospective Home Buyer Part II - Why Your Credit is So Important

Fri, 22 May 2009 12:38:47 -0500

The credit scoring model seeks to quantify the likelihood of a consumer to pay off debt without being more than 90 days late at any time in the future. Credit scores can range between a low score of 300 and a high score of 850. The higher the score, the better it is for the consumer, because a high credit score translates into a low interest rate. This can save literally thousands of dollars in financing fees over the life of the loan. Only one out of 1,300 people in the United States have a credit score above 800. These are people with a stellar credit rating that get the best interest rates. On the other hand, one out of every eight prospective home buyers is faced with the possibility that they may not qualify for the home loan they want because they have a score falling between 500 and 600. Finding out what your credit is prior to applying for any credit is crucial. After all, you do not want to be that one out of 8 home buyers that is denied for credit.

Your Credit Score - What It Means to You as a Prospective Home Buyer
Part I - The History of Credit Scoring

Your Credi Score - What It Means to You as a Prospective Home Buyer
Part II - Why Your Credit is So Important

Your Credit Score - What It Means to You as a Prospective Home Buyer
Part III - The Five Factors of Credit Scoring

Joshua Lerette, The Tampa Bay Mortgage Pro is available for all your St. Petersburg, Florida mortgage needs.

Your Credit Score - What It Means to You as a Prospective Home Buyer Part I - The History of Credit Scoring

Fri, 22 May 2009 11:57:48 -0500

Introduction

The subject of credit scoring has become an increasingly hot topic, and for good reason. For many years, the general public only associated the concept of credit scoring with the need to purchase high-ticket items such as a new car or a home. Today, credit scoring goes much further. Your credit score can affect your ability to get a good rate on commodities such as car insurance, cell phones, or even determine whether or not you get the job or promotion that you want and deserve. Indeed, the financial snapshot provided by the credit score has also become a gauge for many employers, especially those who seek to place employees in a position of management or financial responsibility.

The History of Credit Scoring

The credit score system used today has evolved since the 1950s. It was originally designed to provide lenders with financial profiles on consumers who wished to borrow money. The lenders' biggest concern was whether or not an individual had the ability to repay a loan, and establish what percentage of risk might be involved. Congress passed the Fair Credit Reporting Act in 1971 to establish guidelines for fair practices in regard to the use of credit scoring. This law was designed to promote accuracy in reporting and protect the privacy of consumers. In light of the increased use of credit scoring and a growing fear of identity theft, recent legislation has been passed to further protect Americans and improve consumer awareness. The Fair and Accurate Credit Transactions Act of 2003 (sometimes referred to as The FACT ACT or FACTA) was signed by President George W. Bush on December 4, 2003. This amended the Fair Credit Reporting Act, enabling each American to obtain one free credit report every 12 months from each of the three main credit reporting agencies (CRAs); Equifax, Experian® and TransUnion®. Those bureaus have created a central web site, www.annualcreditreport.com, to accommodate Americans who wish to obtain copies of their credit report.

Your Credit Score - What It Means to You as a Prospective Home Buyer
Part I - The History of Credit Scoring

Your Credit Score - What It Means to You as a Prospective Home Buyer

Part II - Why Your Credit is So Important

Your Credit Score - What It Means to You as a Prospective Home Buyer

Part III - The Five Factors of Credit Scoring

Joshau Lerette, The Tampa Bay Mortgage Pro is available for all of your St. Petersburg, Florida mortgage needs.

First Time Homebuyer Tax Credit Loan...On the Horizon?

Thu, 21 May 2009 16:06:32 -0500

The following is an article from The National Association of Realtors:

Daily Real Estate News | May 18, 2009

Detailed guidance on the federal government's plan to provide short-term loans to borrowers using the First-Time Homebuyer Tax Credit is expected to be out shortly, but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.

HUD policy staff are "still working out the details on it," HUD spokesperson Lamar Wooley told REALTOR® Magazine today. "So we expect it to be published shortly."

The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit NAR hosted on the opening day of its 2009 Midyear Legislative Meetings in Washington last week.

At the summit, Donovan said the loans would enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash could be used as a downpayment.

"FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to 'monetize' the tax credit through short-term bridge loans," Donovan said. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly."

It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.

There are 10 states today that have such a loan program, according to the National Council of State Housing Agencies: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.

You can access details of these loan programs on the NCSHA's Web site, "First-Time Homebuyer Tax Credit Loan Programs."

When it's released, the guidance is expected to be issued as a HUD Mortgagee Letter and will likely discuss which federal, state, and local governmental agencies and nonprofit organizations will be permitted to make the loans, and whether lenders such as FHA-approved mortgagees will be permitted to make the loans.

The guidance could also cover how loan amounts will be limited, what happens if repayment problems occur, and what repayment terms would look like.

REALTOR® Magazine will be checking with HUD regularly on the status of the guidance and will report its availability as soon as it's issued.

—By Robert Freedman for REALTOR® Magazine

Hopefully the tax credit loan will be put in place with enough time for potential home buyers to take advantage of it. With short sales and REO's taking a couple of months for approval and underwriting turn times taking longer than before, time is ticking.

Making Home Affordable - Home Affordable Refinance Program Now Avaialble

Tue, 07 Apr 2009 14:01:26 -0500

If you have been looking to refinance your existing mortgage only to find your value has dropped and refinancing was not an option, help has finanlly arived. In response to the Homeowner Affordability and Stability Plan (HARP), Fannie Mae's Home Affordable Refinance Program, or other wise known as Making Home Affordable, has finanlly been made available for home owners in need of refinancing. The Home Affordable Refinance program is available to any home owner with a current loan that was sold to Fannie Mae. To find if your loan was sold to Fannie Mae, visit http://www.fanniemae.com/index.jhtml.

Features of the Fannie Mae DU Refi Plus Program include:

Loans must be a Full Doc loan with salaried borrowers submitting one paystub and self-employed borrowers qualifying off last year's federal income tax return.
Up to 105% Loan to Value.
No maximum Combined Loan to Value.
All existing subordinate financing must be re-subordinated. New subordinate financing not allowed.
No minimum credit score requirement.
Standard conforming, and high balance loan limits are eligible.
All existing loan types are eligible, as long as it was sold to Fannie Mae.
No seasoning requirement.
Salaried borrowers require one month paystub; self-employed borrowers require one year’s federal income tax return.
If you current mortgage did not require Mortgage Insurance (MI), your new loan will not require MI.
Program available to single family homes, 1-4 units, condos, townhouses, second homes, and investment properties

To find out more about the program and to see if you qualify, contact The Tampa Bay Mortgage Pro.

Joshua A. Lerette - Home Loan Specialist
The Tampa Bay Mortgage Pro
727-488-7355

Investors Dream Loan - Fannie Mae HomePath

Mon, 16 Mar 2009 13:00:46 -0500

With the number of REO properties increasing, Fannie Mae has decided to follow Freddie Mac in offering the HomePath Mortgage. HomePath financing is available for Fannie Mae REO’s with the HomePath logo found on HomePath.com. There are approximately 200 homes available in the Pinellas County Region today that are eligible for this financing. I’ve personally noticed a significant increase in questions about this financing so I thought I would cover the basics.

Here is a quick synopsis of the HomePath Mortgage:

Minimum 5% down for primary residence, 10% down investment property
Borrower can own up to 10 financed properties (but need 25% down if they own more than 4)
NO APPRAISAL NEEDED
NO MORTGAGE INSURANCE
High balance (jumbo) and interest only products available
Seller contributions can be 6-9% on primary residence (the larger the down payment, the larger the allowable contribution), only 2% on investment property
This loan does price with a higher rate than your average 30 year fixed conforming loan. If you want an equivalent rate to the going 30 year fixed, this loan would price with an additional approx 1% to 3.75% discount points. Keep in mind, much of this can be covered by the seller and there is no mortgage insurance. Of course one can just opt for the higher rate in lieu of the discount points.
Same basic underwriting requirements of a conforming loan, but without the property issues (appliances missing - no problem)

This program is especially perfect for seasoned investors or even first time investors. For anyone who has been in investing knows that guidelines for investment properties tightened greatly over the past few years. Now, you have the opportunity to buy very reasonably priced homes with as little as 10% down with fantastic interest rates and NO MI. I personally think this is a fantastic program that will help you take advantage of a wonderful market to buy your first home or buy your next home! Take advantage of a down economy and invest in your future.

Joshua A. Lerette - Home Loan Specialist
Innovative Mortgage Solutions, Inc.

Visit Me at www.TheTBMortgagePro.com

Inside Story: New Stimulus Bill and Homeowners

Fri, 20 Feb 2009 13:25:50 -0600

Tax Credit for Home buyers

First-time home buyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing —This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance — This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future

Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

Will the $7500 tax credit (loan) become a "True Credit"?

Thu, 29 Jan 2009 14:04:46 -0600

If you're thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that's now before Congress...Again!

Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.

Technically, the stimulus bill is actually changing the terms of the $7,500 tax credit that was issued as a part of the Housing Recovery Act, which Congress passed last summer. That legislation required that the tax credit be repaid over 15 years, making it more of a no-interest loan. Not surprisingly, the measure had little impact on the market. The stimulus bill now under consideration would make that tax credit a true credit that doesn't need to be repaid.

Many in the housing industry believe this credit could do a lot to jump start the moribund housing market.

"Our economists have studied the effect [of the credit] and they say there could be a 10% increase in home sales if it's implemented," said Mary Trupo, a spokeswoman for the National Association of Realtors. "It gives people who are sitting on the fence or who have inadequate funds for closing costs an incentive to act now."

A 10% increase would yield an extra half million sales this year.

Who qualifies

To be eligible, buyers cannot have owned a home for the past three years, and the new home has to be used as a primary residence. The credit phases out as income rises above $75,000 for singles and $150,000 for couples, and disappears entirely at $95,000 and $170,000, respectively.

Applying for it is easy, or at least as easy as doing your income taxes. Just claim it on your return. That's it. No other forms or papers have to be filed.

Both the Senate and the House versions of the new act remove the requirement that buyers repay the credit. The Senate bill applies retroactively to any purchase completed between January 1, 2009 and the end of August. The House version is also retroactive to the start of the year, and expires at the end of June. As long as buyers don't sell for at least 36 months, they keep the money.

And the credit is refundable, meaning that it can be claimed even if the amount of the credit earned exceeds the buyer's tax liability. So even if your total tax bill comes to just $5,000, you can still qualify for a full $7,500 refund.

The housing industry has been pushing this idea for many months, arguing that first-time homebuyers are the key to boosting home sales. First time buyers who purchase from existing homeowners free those sellers to trade up to bigger, better houses.

Right now is a great time to buy. Mortgage rates are still at historic lows while housing prices have dropped dramatically. With an inventory level as high as it is, the buyers market becomes stronger every day. Purchasing with little or no money down with rates in 5% range and a $7500 tax credit just for purchasing, why wait? For more information on how you can qualify for a low/no money down mortgage and get your $7500 tax credit, contact The Tampa Bay Mortgage Pro at www.thetbmortgagepro.com today.

It's the return of DPA's!!! Or is it?

Sun, 18 Jan 2009 21:38:22 -0600

We can only hold our breaths as DPAGroundSwell2 was launched January 16th to coincide with the introduction of H.R. 600, FHA Seller-Financed Dowpayment Reform Act of 2009, by Rep. Al Green (D-TX). H.R. 600 is the 2009 version of last year's bill (H.R. 6694) that would restore seller-funded downpayment assistance (DPA).

Reformed DPA will help stimulate the housing market by providing working-class Americans with a path to homeownership and generate $150 billion in home sales this year. Purchains a home now puts homebuyers in a position to build equity as markets recover.

The greatest part about DPA's is that it broadens the opportunities for sustainable homeownership without the government or taxpayer dollars.

The following statement was issued by Scott Syphax, president and CEO of the Nehemiah Corporation of America in response to H.R. 600, a bill introduced in Congress that would reinstate seller-funded downpayment assistance (DPA). Prior to the October 1, 2008 ban on DPA, Nehemiah was the oldest and largest provider of downpayment assistance.

"There is an overlooked solution to today's housing crisis and fortunately several members of Congress recognize the role DPA plays in getting us there. We commend Congressman Al Green [and additional members of Congress] for working tirelessly to support a bill (H.R. 600) that creates opportunities for sustainable homeownership, which serves as the cornerstone to strengthening a crumbling housing market and breathing life back into the economy. With foreclosures on the rise and banks maintaining their stranglehold on credit, DPA offers a simple solution without spending a single government or taxpayer dime according to the Congressional Budget Office. Further, it enables worthy families to take advantage of depressed home prices, therefore reducing the glut of homes on the market. We urge Congress to reach across the aisle and prioritize broadening opportunities for responsible homeownership in America by reinstating DPA."

Stay tuned for, hopefully, more fantastic information as the government may possibly get something right.

The Real Deal With Rates! (What the News Doesn't Know)

Fri, 16 Jan 2009 10:44:41 -0600

While the news reports all time low interest rates because of market indicators and market conditions, rates continue to rise...why is this?

Well the Bottom line is, lenders and wholesalers alike are swamped. Over the past 24 months, operations staffs have been cut tremendously. Two wholesale lenders alone have generated $750MM and $458MM of locked loans in less than 24 hours.

A lot of these locks were registered for 30 days. Let's face it, there is only so many loans that can be originated, processed and funded in a given time with a limited number of bodies.

As some lenders have already initiated HVCC guides, turn times have only gotten worse and risk falls on the investor for locked loans that do not close.

If you are a lender and are faced with the decision to accept more locked loans that cost you anywhere from 0.25-0.50% if they are not funded, you simply ramp up rates to thwart off increased volume.

Taking a look at the MMG Bond Quotes page shows that the FNMA 30 Yr 60 day yield is 4.24% today. Under normal conditions, this would bring rates around 4.625%. However, in the St. Petersburg area today, rates are around 5.125% without paying points.

At the very least it is frustrating for all of us in the markets because we can not offer the rates that should be available until the volume of loans slows to the point that investors want to increase their loan intake again.

I read elsewhere that Chase retail is charging borrowers .50% to lock and that they will not accept less than 70 day locks on refi's. At least this is what someone stated. Perhaps a Chase LO could comment here to either validate or dispute.

Alternative HVCC Compliance Strategies

Sat, 10 Jan 2009 17:17:58 -0600

As laws and rules emerge on a state-by-state basis with regard to the revised Home Valuation Code of Conduct (HVCC), loan originators and appraisal companies are evaluating possible best practices to protect themselves from stiff penalties that have been tied to these new rules.

While one option is to work with actual appraisal clearinghouse companies, it may involve extra fees...and there are other alternatives available. One is simply the establishing of a "firewalled" department within your company, with staff (who are not a part of the lending chain, or a part of the production staff and process) ordering the appraisals.

As a best practice, loan originators in states where HVCC has become effective should immediately begin exercising due diligence by talking with their lenders and trusted appraisal sources to ensure compliance with the revised code – and learn what method could and should be used.

Additional Resources:
Federal Housing Finance Agency's News Release
Federal Housing Finance Agency's Home Valuation Code of Conduct

Fannie Mae and Freddie Mac Change the Appraisal Process

Sat, 10 Jan 2009 17:14:32 -0600

Freddie Mac and Fannie Mae will implement a revised Home Valuation Code of Conduct beginning May 1, 2009. In an attempt to increase the reliability of appraisals, the revised code builds on existing seller-servicer guidelines and will apply to lenders that sell single-family mortgage loans to Fannie Mae and Freddie Mac.

One major difference in the code is that lenders will be required to order appraisals from one central clearing house, which will in turn select an appraiser. The down side of such a process is that lenders will have little to no communication with the appraiser, which means there won't be an opportunity to have a discussion or touch base with appraisers before they go out to appraise the house. The new code is intended to help assure that borrowers, home buyers and secondary mortgage market investors receive fair and independent property valuations.

In some areas, lenders have already implemented these changes, and in the next few weeks and months, more will have to begin the process.

Additional Resourses:

Federal Housing Finance Agency's News Release

Federal Housing Finance Agency's Home Valuation Code of Conduct

Mortgage Rate Lock Advisory

Tue, 06 Jan 2009 11:45:14 -0600

The Fed was back in the markets this morning aggressively buying Mortgage Backed Securities pushing prices higher as it tries to lower home loan rates. The Fed will be buying $500B of Mortgage Bonds - that equals approximately $4B in buying power each trading day...that is pretty good buying support, which could help mortgage rates move steadily sideways to lower over the first two quarters of 2009.

At 2pm ET the Fed will release the Minutes from the December 16 Meeting which may shed some light on the Fed's view of the economy and the reasoning behind the aggressive cut. The Fed lowered the Fed Funds Rate by .75% to a range of 0 to .25% at that meeting.

With the Fed providing underlying buying support to Mortgage Bonds, I am recommending to float longer-term, but on short-term transactions we should be ready to lock at a moments notice to protect pricing. We will likely see the lowest rates in our lifetime during the first two quarters of 2009. This will be a once in a lifetime opportunity.

For more information about mortgage rates in Pinellas County and surrounding Tampa Bay, contact The Tampa Bay Mortgage Pro.

Update to 2009 FHA Refinance Guidelines

Mon, 05 Jan 2009 09:55:05 -0600

Mortgagee Letter 08-40 communicates changes to FHA refinance transactions and are effective January 1st, 2009. Although this update includes guidelines that have not changed, I have listed the unchanged ones anyway as a review for those of you already familiar with FHA guides.

Here are the 10 things you need to know about these changes:

1. The max LTV for rate & term refinances (including streamlines WITH an appraisal) is 97.75%*

2. The max LTV for cash-out refinances is 95%* for loan amounts less than the conforming limit and 85%* for loan amounts at or above the conforming limit. (Must have 12 months seasoning and no 30 day late payments)

3. Two appraisals will be required for all cash-out refinances with an LTV above 85%.

4. The mortgage must be current for the month due.

5. New or current 2nd mortgages are eligible with no maximum CLTV.

6. Loan amount for streamline refinances WITHOUT an appraisal cannot exceed the original loan amount.

7. UFMIP rates: 1.75% for all rate & term and cash-out refinances AND 1.5% for all streamline refinances.

8. The FHA Secure refinance will be terminated.

9. Loan amount CAN include: Closing costs, discount points, current interest, prepayment penalties, prepaids, late charges, and escrow shortages.

10. Cash back on rate & term and streamline refinances CANNOT exceed $500.

*All LTVs are before adding the UFMIP

Many will profit from Fannie Freddie failure - Will you?

Thu, 11 Sep 2008 07:44:49 -0500

Mortgages are in the news again today...but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels seen since April.

You've probably heard that Fannie Mae and Freddie Mac were taken over or "bailed out" by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations. These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated. As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.

With the Treasury stepping in to provide a "backstop" for the mortgage giants, investors now have confidence to purchase Mortgage Bonds. And the greater interest has helped lower interest rates today.

Call me today, so we can discuss what the news means to you and how you can benefit.

The Wild West ~ Trigger Happy

Mon, 11 Aug 2008 07:59:38 -0500

While it's an illegal breach of privacy for real estate agents or mortgage originators to sell your credit information, it is perfectly legal for credit companies to do so. For a price ranging anywhere from $25 to $100, your name and certain specifics about your credit report - including your address, phone number, mortgage history, and even your FICO score range - are sold by the credit bureaus to mortgage companies. The result is an onslaught of unsolicited phone calls and junk mail as soon as you apply for a home loan.

Unfortunately, no legislation exists to prevent credit bureaus from profiting at your expense. As a "trigger lead", you are simply at the mercy of any number of marketing campaigns designed specifically to discredit the mortgage professional you've come to know and trust.

That's why, prior to applying for any loan program, I suggest that you visit www.optoutprescreen.com to opt-out of future credit bureau solicitations and avoid this problem altogether. Not only will you avoid the hassle of telemarketers, but by opting out you could potentially add 10 to 15 points to your credit score!

In addition, if you do happen to receive phone calls from solicitors, ask them to place your name and number on their Do Not Call list. All telemarketing companies have their own internal Do Not Call list that they must abide by. Be sure to take down the name of both the company and the individual who made the call, and to let the solicitor know that you're doing so. This way, you will have grounds to seek action against them, should they call again.

As you embark on what is likely the largest financial transaction of your life, you should place yourself in the hands of a professional - not some transactional loan officer who purchased your information from the credit bureaus. Remember, only a limited number of sources exist for lenders to obtain mortgage money, so it's extremely unlikely that a borrower will find an unbelievably low rate without an unbelievably high cost.

If, however, you are curious about the programs these mortgage companies have to offer, then listen to what they have to say. Once they've offered you a rate that seems too good to be true, ask them a question or two from the following list.

1.		Where did you get my information? Who gave you permission to call me, and how much did you pay for my information?

		By asking this series of straightforward questions, you demonstrate that you're not an uninformed or unsuspecting mortgage applicant who can be easily victimized.

2.		Why should I be willing to speak with you when you weren't referred to me by someone I trust?

		This question demonstrates that you're interested in a long-term relationship with a trusted advisor.

3.		How are mortgage interest rates determined, and what impacts the rates that you are offering me today?

		Many unprofessional and uninformed individuals believe that home loan rates are based on the 10-Year Treasury Note. This, however, is not true. Mortgage interest rates are actually based on mortgage-backed securities or mortgage bonds. In fact, many times these securities trade in opposite directions, and anyone who's looking at Treasury Notes to determine the lock on your loan will provide you with inaccurate information.

		Asking this question will demonstrate that you're aware of the fact that mortgage rates can change frequently, even hourly, depending on economic news and market volatility. If they can’t share this information with you, what else might they be leaving out?

4.		What impact does the Federal Reserve have on the rate I will be paying for my first mortgage with you?

		The answer here is that it does not. The interest rate that you pay is impacted by the bonds and securities markets. When the Fed changes short term rates, the "Fed Funds Rate" or the "Discount Rate", only rates for items such as Home Equity Lines of Credit (HELOCs), credit cards, and other similar loans are directly impacted.

5.		What are the specific closing costs associated with the rate and program you're offering me today?

		Many times, interest rates will be quoted with origination fees or discount points included in order to deliver the attractive interest rate being offered. While in some cases your situation may warrant paying these fees to get a better rate, you should always be made aware of these fees and options up front. Also, be aware of any fees disguised as a "Funding Fee." In some cases, these fees have been hidden in order to deliver what seems like an exceptionally low rate with "no points or fees."


If you have any questions about this, or any other part of the mortgage process, please call The Tampa Bay Mortgage Pro. I'll be happy to assist you in any way I can.

Fed Pauses - You Shouldn't

Sun, 10 Aug 2008 23:56:07 -0500

The Federal Reserve, taking a break from its aggressive rate-cutting policy, chose not to alter key interest rates Wednesday,
leaving the Fed Funds rate at 2.00% and everyone wondering where interest rates are headed next.

Since last September, the Fed has cut rates seven times for a total of 3.25%. However, many experts believe that the Fed's
decision this Wednesday, along with comments from the meeting itself, indicate an increased concern over inflation. This means
the Fed could start increasing rates as early as its next meeting, which takes place in August.

The Fed is in a quandary. The economy has slowed, led by a decline in home sales and rising inflation, stemming primarily from
increasing energy prices. The Fed's primary role in relation to the economy is to combat inflation and preserve economic growth.
To combat inflation, the Fed will ultimately have to increase interest rates in coming months.

What Does This Mean to You?

If you're looking to buy a house, consider these key points:

Home prices in some areas are at five-year lows, while personal incomes in that same period have increased. Homes are more affordable for many right now, particularly first-time home buyers.

Sellers are extremely motivated and many buyers in our area have benefited from the unbelievable deals that exist today.

Experts foresee a strong rebound in home prices when the economy begins to recover, according to a new report from the Joint Center for Housing Studies. That means buyers today will be sitting on valuable properties tomorrow. Remember, annualized appreciation for homes exceeded 6.35% from 1940 to 2000.

Housing booms follow housing busts – and the savvy buyers aren't afraid to jump into a tough market. But these savvy buyers
know that homeownership is a long-term investment. Call me to discuss these points and get your purchase strategy on track.
Ultimately, population growth and demographics point to a stronger housing market in coming years.

Even if you're not looking to purchase a home, opportunities still exist. With the Fed taking a breather, this doesn't mean you
should be taking a break. It's never been more important to create a financial plan that makes the most sense to you and your
family's long-term goals. Give The Tampa Bay Mortgage Pro a call today.

Help; How Do I Repair My Credit

Thu, 17 Jul 2008 05:28:48 -0500

Credit repair is a million dollar industry with a lot of scams. Finding a loan with poor credit isn't hard, getting a decent interest rate can be. When you clean up your credit report you end up saving hundreds, if not thousands, of dollars in interest charges.

We strongly recommend you learn what you need to do to repair your credit legally so you can qualify for low rate loans and credit cards.

Debt Settlement and Debt Consolidation can help you get your finances under control so you can get onto repairing your credit faster.

One of the first things you need to do, whether you filed bankruptcy or just need to rebuild your credit, is to set out a plan to rebuild your credit, as well as how you will use your borrowing abilities in the future. Without a good plan of attack on your financing and borrowing usage, you will run the risk of being in financial trouble again within a few years or so. Don't become a repeat statistic. Plan now, for protection later.

You have two options when it comes to repairing your credit ...

hire someone, preferably an attorney who knows the credit laws;
do-it-yourself using a good quality guide and your 3-in-1 credit report;

Whichever way you decide to go, here are just a few tips to keep you on track:

Don't fall for scams that tell you to create a new credit file ... that's credit fraud if you do it, and can make you subject to legal repercussions;
Do read the Fair Credit Reporting Act so you have an idea of your rights while you go through the credit repair process;
Get yourself organized and committed to the process, there is no overnight fix;
If you use an online service, you want to know what the fees will be, monthly or "as you go" is best, and you want to be able to cancel at anytime;
Always act in a cooperative and professional manner when dealing with creditors or collection agencies;
Don't make threats, however subtle, if you can't back them up.

Deciding whether to hire a credit repair firm, or doing it yourself, depends a lot on your willingness to work, as well as your ability to be organized and follow through on the process. If you really don't want to deal with it yourself, and would rather a professional, we recommend one who is well-versed in the use of the Fair Credit Reporting Act to protect your credit, and who will handle all the detail work for you.

Lexington Law Firm is a real law firm that offers real legal assistance in repairing your credit, with unlimited telephone and email support at no extra charge. There are no hidden fees for their services and you can cancel at anytime.

Many other credit repair firms charge by the number of disputes/deletions attempted regardless of whether they were successful, with Lexington you can dispute as many as you like at no additional cost. Stop living with bad credit, learn what thousands already know about how to legally repair your credit online, quickly and easily.

If You Prefer Do-It-Yourself Credit Repair

The first thing you need is a copy of your credit report from all 3 major credit bureaus. Access your credit report from the big three major credit bureaus, Trans Union, Experian and Equifax all on one easy to read report. Start here

Then you need the one book that doesn't fool around or put you on the edge of risk with your credit, Credit Repair Made Simple offers tips, sample letters, and easy instructions you can follow to repair your credit yourself. Written by Brian Eichhorn, president of Cornerstone Credit Counseling, you get great insight into your credit report, and how to improve your rating.

U. S. Government information on the Fair Credit Reporting Act

For additional help and assistance on credit repair, contact The Tampa Bay Mortgage Pro.

5 Key questions to ask your mortgage broker before signing on the dotted line

Thu, 17 Jul 2008 05:26:05 -0500

Now more than ever, Americans are discovering the importance of having a handle on their finances. Budgeting projected monthly expenses and future investments helps consumers determine whether or not homeownership is financially feasible. By addressing the following key questions with The Tampa Bay Mortgage Pro you can gain a better understanding of the mortgage process and ensure you obtain the product that best fits your needs and circumstances.

What documents must I provide and what might delay the mortgage approval process?
Prepare to be inundated with personal, income, employer, asset and liability questions. Get a head start and avoid any potential delay in your mortgage approval by checking your own credit file and gathering the required documents a couple of months prior to shopping for your mortgage.

The following are just a few of the necessary documents you will need to supply in order to complete your mortgage application:

Earnings: W-2 forms, recent pay stubs and tax returns for the past two years.

Employment: Copy of a recent paycheck stub that displays your full name, Social Security number, your year-to-date earnings and the name and address of your employer.

Additional income: Documents to show you have other sources of income, which may include a second job, overtime, commissions and bonuses, interest and dividend income, Social Security payments, alimony, child support, VA and retirement benefits.

Debts: A full list of your outstanding debt and creditors, such as credit cards, car loans, student loans, child support, etc., along with the minimum monthly payment and balances.

Assets: Records of investments including real estate and auto titles, stock/bond certificates and mutual funds.

Get a full checklist of application requirements by contacting The Tampa Bay Mortgage Pro at 727-488-7355.

What are the qualifying guidelines for my loan?
Once you have completed the mortgage application, you will be presented with the products that best fit your financial situation. The loan programs offered will require that you meet several income, employment and credit guidelines. Work with The Tampa Bay Mortgage Pro to ensure you fully understand your loan options and qualifying guidelines.

Visit http://thetbmortgagepro.com for more mortgage product information.

How will my down payment affect the cost of the loan?
The more money you can afford to put down the better. A large down payment will either reduce your mortgage payments and/or enable you to purchase a bigger, more expensive home. Generally, lenders require a down payment anywhere between 2.25 percent and 25 percent of the homes sale price. Contact The Tampa Bay Mortgage Pro. at 727-488-7355 to discuss down payment options for your new loan program.

What is the annual percentage rate of the loan?
Use the annual percentage rate, or APR, as a general guideline when comparing your loan options. The APR is designed to represent the true cost of the loan, preventing lenders from concealing fees and upfront costs from the borrower. Though the APR is a good comparison tool, it does not always include all costs that you will pay. Ask The Tampa Bay Mortgage Pro to clarify what is and is not calculated into your loan''s APR so that you can determine which program best fits your financial needs.

Is there a prepayment penalty on the loan?
Prepayment penalties ensure that your lender is compensated for a certain amount of money when you, the borrower, decide to pay off your loan earlier than what was originally agreed. Not all loans enforce prepayment penalties, but those that do, have penalties that range anywhere from one to three percent of the loan amount. Work with The Tampa Bay Mortgage Pro to examine lender policies before committing to a loan.

By asking the right questions, you can gain a better understanding of the mortgage process and be confident that you are getting the product that best fits your financial situation.

Fed keep short-term key rates the same

Wed, 25 Jun 2008 14:11:03 -0500

Federal Chairman Ben Bernanke and Central Bank end a nine-month rate slashing and keep the current federal short-term key rate at 2%. With on going concerns of inflation the Fed's majority voted to keep the key rate the same with only Dallas Federal Reserve Bank president Richard Fisher voted for a rate hike at the meeting. Rising cost of oil and other goods still place a strain on our current economy, but oil dropped almost $3 this afternoon after an unexpected announcement of oil surplus. You can read more here. Reading this lead me to remember an article on CNNMoney in the Fortune section suggesting that oil prices will crash much like the housing market, read that article here.