The Mortgage Report

FHA Single Unit Condo Approval

Kevin Whatley, Professional Mortgage Lender — Fri, 11 Sep 2020 10:56:10 -0700

FHA condominiums that are "approved" by the Federal Housing Administration (FHA) are eligible for an FHA Home Loan. The FHA provides an easy to use condo lookup tool that lists the FHA approved condos. If the condo development is not on the approved list or the approval has expired, then the project will need to be approved or re-certified before an FHA loan can be obtained, or the buyer can seek a Single-unit approval.Single-unit approval (previously named spot-loan approval)On 10/15/2019 HUD officially implemented the Single Unit Approval process. It is now possible for borrowers to obtain FHA approval for single units within condominium complexes that are not FHA approved. To be eligible for Single-Unit Approval, the unit must be located in a project that is not FHA-approved, that is complete and available for occupancy, has at least five dwelling units and it is not a manufactured home. The project must also meet a subset of the requirements set forth for project approval, including FHA insurance concentration, owner-occupancy percentage, and financial condition of the project. Single-unit approval requirements: The condominium project is not currently “Approved” or been previously rejected for an adverse determination. The condo must have a minimum of 50% owner-occupied units For condominium projects with 10 or more units, no more than 10% of individual condo units can be FHA-insured. Projects with fewer than 10 units may have no more than two FHA-insured units. Commercial space is limited to a maximum of 35% The condominium project must contain a minimum of five units Condominium project must meet all FHA Property Standards Manufactured homes are not eligible. The Single-unit approval process must be handled by a lender that employs Direct Endorsement Underwriters. Realtors, Condominium Associations, and Lenders without DE Underwriters are NOT allowed to apply directly for a SUA. The Condominium Association MUST still meet ALL eligibility requirements set forth for Full Project Approval.The Condominium Association must complete the Condominium Questionnaire The single-unit approval requirements are very similar to the Full Project approval. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Today's Mortgage Rates in Texas

Kevin Whatley, Professional Mortgage Lender — Thu, 20 Aug 2020 13:55:30 -0700

Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Today's Mortgage Interest Rates

Kevin Whatley, Professional Mortgage Lender — Wed, 05 Aug 2020 12:53:23 -0700

I'll be posting my mortgage interest rates in Texas for comparison purposes. With that stated, here are today's rates:30 Year Fixed Conv. Loan 2.500% | 2.626% APR Low monthly payments that never change. 15 Year Fixed Conv. Loan 2.250% | 2.377% APR Stable monthly payments on a shorter term saving thousands of $$$ in interest. 30 Year FHA Loan 2.250% | 2.381% APR Low downpayment requirement to go along with low monthly payments. Great for first-time homebuyers. 30 Year VA Loan 2.250% | 2.390% APR Low fixed rate benefit for members of the military. Rates current as of 08/05/2020 at 9:20 AM Restrictions apply. Contact me for details. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Today's Mortgage Rates

Kevin Whatley, Professional Mortgage Lender — Tue, 21 Jul 2020 10:42:08 -0700

I'll be posting my mortgage interest rates in Texas for comparison purposes. With that stated, here are today's rates: 30 Year Fixed Conv. Loan 2.625% | 2.766% APR Low monthly payments that never change. 15 Year Fixed Conv. Loan 2.250% | 2.377% APR Stable monthly payments on a shorter term saving thousands of $$$ in interest. 30 Year FHA Loan 2.250% | 2.381% APR Low downpayment requirement to go along with low monthly payments. Great for first-time homebuyers. 30 Year VA Loan 2.250% | 2.390% APR Low fixed rate benefit for members of the military. Rates current as of 07/21/2020 at 10:33 AM Restrictions apply. Contact me for details. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

How much can lenders hold in escrow?

Kevin Whatley, Professional Mortgage Lender — Wed, 03 Jun 2020 15:08:09 -0700

I have often been asked the question of how much a Texas mortgage lender can hold when a client establishes an escrow account for taxes and insurance. Here's the answer: Lenders can hold no more in escrow than the annual cost for such expenses as property taxes and insurance, plus a reserve equal to 1/6th of the required amount, plus $50.If property taxes are $6,000 and property insurance is $1,800 the maximum escrow amount will look like this:Property taxes = $6,000Property insurance = $1,800Subtotal = $7,8001/6th of $7,800 = $1,300$7,800 + $1,300 = $9,100$9,100 + $50 = $9,150In this example, the most that can be kept in the escrow account is $9,150.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Down Payment Fund for a Wedding Gift

Kevin Whatley, Professional Mortgage Lender — Sat, 25 Aug 2018 17:07:56 -0700

Many couples are asking their wedding guests to contribute to their “Down Payment Fund” for a wedding gift rather than fulfilling a traditional registry. This is fueled by the fact that many couples live together prior to marriage and already have the necessary items to make a house a home…they just need the house!The average wedding in the United States has 120 guests who give wedding gifts valued, on average, at $186. This means that couples could walk away from their nuptials with over $22,000 towards their down payment!Services like HomeFundMe allow friends, family members, and almost anyone else in a buyer’s network to contribute funds toward the buyer’s down payment. Contributors can determine, at the time of their donation, if their gifts are ‘conditional’ or ‘non-conditional’ on the beneficiary buying a home.According to a recent Wall Street Journal article, “about 400 borrowers have used HomeFundMe to help buy homes since the program launched in October and on average, they raise about $2,500.” The article went on to explain that most borrowers use these funds in combination with their personal savings to shorten the time needed to achieve their goal of homeownership.There are more and more programs surfacing from lenders that allow buyers to put down as little as 3% to buy their dream home. Fannie Mae and Freddie Mac loan programs require 3% down payments, while FHA programs require as little as 3.5%, and VA Loans are often approved with 0% down!Bottom LineGone are the days of 20% down or no loan! If your dreams include buying a home of your own in the next year, you can get creative with your down payment savings to make it happen!Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Buying Is Now 26.3% Cheaper Than Renting in the US

Kevin Whatley, Professional Mortgage Lender — Wed, 01 Aug 2018 22:30:25 -0700

The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage, in 98 of the 100 largest metro areas in the United States. In the six years that Trulia has conducted this study, this is the first time that it was cheaper to rent than buy in any of the metropolitan areas. It’s no surprise, however, that those two metros are San Jose and San Francisco, CA, where median home prices have jumped to over $1 million dollars this year. Home values in San Jose have risen 29% in the last year, while rents have remained relatively unchanged. For the 98 metros where homeownership wins out, 97 of them show a double-digit advantage when buying. The range is an average of 2.0% less expensive in Honolulu (HI), all the way up to 48.9% in Detroit (MI), and 26.3% nationwide! Below is a map of the 100 metros that were studied. The darker the blue dot on the metro, the cheaper it is to buy there. In order to calculate the true cost of renting vs. buying, Trulia includes all assumed renting costs, including one-time costs (like security deposits), and compares them to the monthly costs of owning a home (insurance, mortgage payments, taxes, and maintenance) including one-time costs (down payments, closing costs, sale proceeds). They also assume that households stay in their home for seven years, put down a 20% down payment, and take out a 30-year fixed rate mortgage. The full methodology is included with the study results here. Below is a chart created with the data from the last six years of the study, showing the impact of the median home price, rental price, and 30-year fixed rate interest rate used to calculate the ‘cheaper to buy’ metric. In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale. Cheryl Young, Trulia’s Chief Economist, had this to say, “One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.” Bottom Line Homeownership provides many benefits beyond the financial ones. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Whether You Rent or Buy, Either Way You’re Paying a Mortgage!

Kevin Whatley, Professional Mortgage Lender — Fri, 27 Jul 2018 08:39:29 -0700

There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that mortgage rates in Louisiana were still very low last week.Bottom LineWhether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

How to Calculate Escrows/Reserves Required at Closing

Kevin Whatley, Professional Mortgage Lender — Thu, 19 Jul 2018 16:05:03 -0700

When most mortgage lenders calculate escrows/reserves required at closing they look for 14 months of reserves. The key in figuring how many months will be collected at closing will depend on when the first mortgage payment will be due, the renewal dates of their insurance policy, and when the taxes, if any, are due. Example: The closing date is January 31st with a first payment due March 1st. Taxes are due December 31st. Homeowners insurance premiums are due July 11th. Taxes: How many payments would they make before the taxes would be due? They would pay into their escrow account March, April, Many, June, July, August, September, October, November, December for a total of 9 months. Remember, we are looking for a total of 14 months so you would subtract the 9 months that they paid into the escrow account from the desired 14 months and that would leave 5 months being collected at closing.Homeowners Insurance: How many payments would they make before the premium would be due? They would pay into their escrow account March, April, May, June, July for a total of 5 months. Subtract the 5 months that they paid into the escrow account from the desired 14 months and that would leave 9 months being collected at closing.You can figure the aggregate adjustment once you have the annual insurance premiums, taxes, etc. and have figured how many months will be collected at closing. Once you have the initial escrow account disclose statement, take the initial deposit and subtract that figure from the amount of reserves that will be collected at closing and the difference will be your aggregate adjustment.Example: You have determined that at closing we will collect 3 months of taxes for a total of $112.86 and 3 months of hazard for a total of $153 which equals $265.86 and the initial deposit on the initial escrow account disclose is $177.24, you would take the $265.86 minus $177.24 and that equals $88.62. So your aggregate would be -$88.62.Keep in mind this may not be exactly how all lenders handle this, but it will help you get a good idea of how to calculate your reserves and the aggregate that will be required at closing. Hopefully, this will help you figure your expenses where last-minute surprises will not come up at closing due to inaccurate escrow calculations.I find escrow calculations on good faith estimates to be one of the biggest problems that result in "at closing shockers". I have heard many stories from closing attorneys and real estate agents regarding this issue. We need to take a few seconds extra to make certain that the figures we give our clients are truly as accurate as possible. If there are issues that arise during the lending process that would cause those figures to become invalid, re-disclosure of terms is necessary. This truly can be the difference between a smooth transaction and a nightmare. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

How is Housing Affected by the Predicted Economic Slowdown?

Kevin Whatley, Professional Mortgage Lender — Thu, 19 Jul 2018 13:06:50 -0700

Some experts are calling for a slowdown in the economy later this year and most economists have predicted that the next recession could only be eighteen months away. The question is, what impact will a recession have on the housing market?Here are the opinions of several experts on the subject:Ivy Zelman in her latest “Z Report”: “While economic activity appears to have accelerated so far in 2018, some prominent economic forecasters have become more cautious about growth prospects for 2019 and 2020… All told, while solid long-term demographic underpinnings support our positive fundamental outlook for housing, in the event micro-economic headwinds surface, we would expect housing transaction volumes and home prices to weather the storm.” Aaron Terrazas, Zillow’s Senior Economist:“While much remains unknown about the precise path of the U.S. economy in the years ahead, another housing market crisis is unlikely to be a central protagonist in the next nationwide downturn.”Mark Fleming, First American’s Chief Economist:“If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to come out of the recession.”Mark J. Hulbert, Financial Analyst and Journalist:“Real estate may be one of your best investments during the next bear market for stocks. And by real estate, I mean your home or other residential properties.” U.S. News and World Report: “Fortunately – and hopefully – the history of recessions and current issues that could harm the economy don’t lead many to believe the housing market crash will repeat itself in an upcoming decline.”Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

First-Time Homebuyers in Louisiana Have Low Down Payments

Kevin Whatley, Professional Mortgage Lender — Wed, 18 Jul 2018 09:52:22 -0700

According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased their homes with down payments below 6% in 2017. Many potential homebuyers in Louisiana believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying, but in March, 71% of first-time buyers and 54% of all buyers put less than 20% down.Ralph McLaughlin, Chief Economist and Founder of Veritas Urbis Economics, recently shed light on why buyer demand has remained strong, “The fact that we now have four consecutive quarters where owner households increased while renters households fell is a strong sign households are making the switch from renting to buying. Households under 35 – which represent the largest potential pool of new homeowners in the U.S. – have shown some of the largest gains. While they only make up a third of all homebuyers, the steady uptick in their homeownership rate over the past year suggests their enormous purchasing power may be finally coming to [the] housing market.” It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.Bottom LineIf you are one of the many first-time buyers unsure of whether or not they would qualify for a low-down payment mortgage, let’s get together and set you on your path to homeownership!Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

All About Locking in Your Interest Rate

Kevin Whatley, Professional Mortgage Lender — Fri, 13 Jul 2018 15:21:58 -0700

At some point during the mortgage process, the contract interest rate (the one that ends up on the Promissory Note–the most official document stipulating the terms of repayment) must be “locked.” This means that there is an agreement between the borrower and the lender regarding what the contract rate will be. The rate-lock will also specify a date by which the mortgage must be closed and funded.Lock Time FramesRate lock time frames can vary. Historically, the most common time frame had been 30 days. The regulatory changes of the post-meltdown era caused slightly longer turn-times for the various steps in the mortgage process, resulting in an increased prevalence of 45 and 60-day lock times. There continue to be shorter and longer lock time frames as well, depending on the lender. These include, but are not limited to 10, 15, 21, and 90 days.In some scenarios, or among certain lenders, the borrower doesn’t have any input as to when and for how long the rate will be locked. The borrower may either agree to the lender’s lock policy or take their business elsewhere. In most cases, however, there is a certain degree of liberty when it comes to choosing “when” and “for how long” to lock. In these cases, mortgage originators will help manage expectations as to how quickly the process can be completed, with the generally understood goal being to set a lock window that leaves plenty of time for the loan to fund, but that also isn’t unnecessarily long.Cost ConsiderationsWhy wouldn’t we want a lock time-frame that’s unnecessarily long? Bottom line: the longer the lock window, the higher the cost. When it comes to the mortgage process, costs associated with your rate can take the form of changes to the rate itself or changes to the upfront cost (discount or rebate) associated with that rate. Locking the same rate for longer means that the discount cost will be higher or the rebate will be lower. The relationship between days of lock time and cost isn’t always exactly linear, so it can make sense to weigh the risk and reward of various time frames.When to lockThere’s no universally correct answer to the question: “should I lock or float.” It’s one of the most thought-provoking and complex topics in the world of mortgage origination. There are too many variables for one methodology to be applicable to every scenario. It goes without saying that locking as early in the process as possible will always be the safest option for the borrower. It’s also unequivocally true that it’s historically the least profitable option on the average day from 1980 on. That said, this is only the case because interest rates have generally been moving lower since 1980! Not only that, but there have also been many times since 1980 where rates have risen brutally, in spite of the longer-term trend. In many of those cases, borrowers that failed to lock early enough in the process were either forced to accept a higher rate or simply never completed the process.Purchase and Refi Lock ConsiderationsWhen we talk about “never completing the process,” this could naturally be a very big problem in some cases. For example, rates can rise quickly enough that many borrowers can no longer qualify for the monthly payment. If they’re not locked, they simply cannot complete the mortgage. In the case of purchases, that could mean they just lost their earnest money deposit–not to mention the opportunity to buy the house they wanted or needed. Even in the case of refinances, failing to complete the mortgage can mean the loss of significant monthly savings or in more dire cases, much-needed cash for any number of purposes.‘Because of these potential pitfalls, it’s almost universally wise to heavily consider locking as soon as the monthly payment and lock time frame make sense for your scenario, and to only forego locking if you’re prepared for the increased costs associated with an unforeseen rise in rates. If such a rate rise would jeopardize your qualification for the mortgage or even your willingness to complete it, locking is the only option.Lock Extensions and ExpirationsDespite the best intentions and diligent participation among all parties, some mortgage are destined to run past their initial lock time frame. While there is no universal policy, most lenders are able to extend the lock time frame based on certain conditions. Most of the time, this will involve a predetermined cost, and in many cases, this is simply the difference in cost between your original lock time frame and the next tier. For example, if there was a 0.125% change in the discount points in order to lock for 60 days instead of 45, and assuming you locked for 45 days only to find it wasn’t going to be long enough near the end of the process, extending to the 60 day lock could be as simple as adding the 0.125% to your upfront costs in order to extend the lock for 15 days.In other cases and depending on the lender, the situation can be far more severe–especially if rates have moved significantly higher since you first locked. It can absolutely be the case that going over the originally-agreed-upon lock time frame means that your loan will now have “worst-case” pricing. This means that you have to pay whichever is higher between the original cost of the lock time frame needed to complete the loan or the current market rate. If we’re only talking about something like the 0.125% from the previous example, that’s not a big deal, but if rates had moved significantly higher, that cost increase could easily be over 1.0%–enough to make anyone wish they’d chosen the longer lock window upfront.Anyone looking to lock in an interest rate in Louisiana can contact me at 318-675-1010 for even more details.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

The VA Home Loan- A Great Loan Option for Heroes

Kevin Whatley, Professional Mortgage Lender — Fri, 06 Jul 2018 16:26:08 -0700

Since the creation of the Veterans Affairs (VA) Home Loans Program, over 22 million veterans have achieved the American Dream of homeownership with a VA home loan. Many veterans in Louisiana looking into buying a home do not know the details of the program and therefore do not take advantage of the benefits available to them.If you are a veteran or you know someone who is, here is a breakdown of the VA Home Loan benefits that can be used to achieve the American Dream!Top 5 Benefits of a VA Home Loan The greatest benefit of a VA Loan is that borrowers can buy a home with a 0% down payment. In 2016, 82% of all VA Loans put down 0%!Private Mortgage Insurance (PMI) is not required! (Most other loans with down payments under 20% require PMI, which adds additional costs to your monthly housing expense!) Credit Score requirements are also lower for VA Home Loans. The average FICO® score of a borrower for an approved VA Loan is 620, compared to 676 (FHA) or 753 (Conventional).There is also a limitation on a veteran buyer’s closing costs. Sellers can pay all of a buyer’s loan-related closing costs and up to 4% in concessions in some cases. Even with interest rates rising, VA Loans continue to have the lowest average interest rates of all loan types.Who Qualifies for a VA Home Loan?One of the most important first steps when applying for a VA Home Loan is obtaining your Certificate of Eligibility (COE). “The COE verifies to the lender that you are eligible for a VA-backed loan.”You Can Apply for a VA Loan if You: Serve 90 consecutive days during wartime Serve 181 consecutive days during peacetime Have more than 6 years in the National Guard or Reserves Are the spouse of a service member who has died in the line of duty or as the result of a service-related disability You Can Use a VA Loan To: Purchase a Home Purchase a Condo Build a Home Refinance an existing home loan Make improvements to a home by installing energy-related features or making energy-efficient improvements Bottom LineFor more information or to find out if you or a loved one would qualify to use the VA Home Loan Benefit, let’s get together! Find out more at the website https://www.universalhomemtg.com, or call me, Kevin Whatley, at (318) 675-1010. I’d be glad to answer any questions you may have. Thank you for your service!Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Number of VA Loans Up 50%

Kevin Whatley, Professional Mortgage Lender — Mon, 22 Oct 2012 04:39:04 -0700

Loans guaranteed by the Department of Veterans Affairs surged by 50% in the fiscal year ended September 30. According to one report, the department guaranteed almost 540,000 loans in fiscal year 2012, the most since 1994. Compared with five years ago, VA volume is up some 300 percent. About 338,000 of them were for the purpose of refinancing. For borrowers who were/are in the service and already have a VA-backed mortgage, they can obtain an interest-rate reduction "relatively easily" per the VA. "The department's streamlined refinance program doesn't require these borrowers to 're-prove' that they qualify - and no down payment helps on the buy side as does not paying for mortgage insurance.

Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Recent Case-Shiller Index Shows More Gains in Home Prices

Kevin Whatley, Professional Mortgage Lender — Mon, 17 Sep 2012 03:40:38 -0700

Home prices continue to rise nationwide. According to the Standard & Poor’s Case-Shiller Index, home prices rose 6.9% between the first and second quarter of 2012, the largest quarter-to-quarter gain since the home-value tracker’s 1987 inception and another signal that the housing market is in recovery. The private-sector metric’s results are similar to what the government’s Home Price Index showed for June, too — values rising quickly. In addition, for the second straight month, each of the Case-Shiller Index’s 20 tracked markets showed month-to-month improvement. June would have marked three straight months if not for Detroit’s value-setback in April. The top performing markets in June, as tracked by the Case-Shiller Index were : Detroit, Michigan : 6.0 percent gain Minneapolis, Minnesota : 4.8 percent gain Chicago, Illinois : 4.6 percent gain However, it should be noted that the Case-Shiller Index pulls from a limited sample set. It does not include condominiums or multi-unit homes in its findings, nor does it account for new construction. These exclusions make a material impact on the results of both Minneapolis and Chicago, as examples. Both cities feature a large concentration of condos. Overall, though, the June data looks sound. Said a spokesman for the Case-Shiller Index, “The market may have finally turned around.” Furthermore, home buyers nationwide can corroborate what the Case-Shiller Index has uncovered. Falling home inventory and rising home demand have helped to move home prices higher in many U.S. markets. Low mortgage rates make new homes affordable and rising rents are turning the Rent vs Buy equation on its head. In July, according to the National Association of REALTORS®, first-time home buyers accounted for 34% of all home resales. This trend is expected to continue into 2013. As compared to one year ago, today’s home buyers have 8% more purchasing power and, with rising home prices, they’re going to need it.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Five States Account for 50% of Foreclosures

Kevin Whatley, Professional Mortgage Lender — Wed, 29 Aug 2012 00:48:16 -0700

Foreclosure pipelines are re-filling nationwide. According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 192,000 in July 2012, a 3 percent decrease from the month prior. RealtyTrac defines a “foreclosure filing” as any foreclosure-related action, including a Notice of Default, a Scheduled Auction, or a Bank Repossession. July marks the 22nd straight month during which foreclosure filings fell on a year-over-year basis. At some point soon, however, that streak may end. This is because, for the third straight month, on an annual basis, foreclosures starts are on the rise. More than 98,000 homes started the foreclosure process in July, a 6 percent increase from July of last year. Connecticut, New Jersey and Pennsylvania experienced the biggest increases, rising 201%, 164% and 139%, respectively. Each is a judicial foreclosure state, which means that foreclosures must go through the state court system prior to auction. Nationwide, just a few states accounted for the majority of July’s total foreclosure activity. 5 states were home to more than half of all tracked activity, according to RealtyTrac. California : 21.9 percent Florida : 13.3 percent Illinois : 7.2 percent Georgia : 5.7 percent Texas : 5.2 percent Collectively, these 5 states represent just 33 percent of the nation’s population. In contrast to the five states above, the bottom 14 states accounted for just 1 percent of the nation’s foreclosure activity, led by North Dakota. In North Dakota, just 3 foreclosure filings were made in July. Other “fewest foreclosure” states in July included District of Columbia (7 filings), Vermont (31 filings), and South Dakota (63 filings). For home buyers in Shreveport , with more foreclosed properties expected to go for sale this year and next, there will be some excellent “deals” and discounts — foreclosed homes typically sell at discounts of 20% or more as compared to comparable, non-distressed homes. However, foreclosed homes are often sold as-is, which means they may have defects. Before placing a bid on a foreclosed home, therefore, make sure to have an experienced real estate agent on your side. Buying a foreclosed home may save you money at your closing, but may cost you money longer-term.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Which States Have the Highest and Lowest Closing Costs?

Kevin Whatley, Professional Mortgage Lender — Wed, 29 Aug 2012 00:45:10 -0700

Mortgage rates have been on steady decline in Louisiana since the start of 2012 as uncertainty for the future of the Eurozone and questions about the soundness of the U.S. economy have led investors into mortgage bonds in droves, lowering the 30-year fixed rate mortgage to its lowest point in history. But it’s not just mortgage rates that are down. Closing costs are, too. According to Bankrate.com’s annual Mortgage Closing Cost Survey, the average mortgage applicant paid seven percent fewer closing costs in 2012 as compared to 2011, on average. The year prior, costs had increased thirty-seven percent, on average. A “closing cost” is any fee paid in conjunction with a mortgage settlement that would not be payable if the home was financed with cash. Closing costs for purposes of the Bankrate.com survey include such items as underwriting fees and appraisal costs. County transfer stamps, where required, however, were not included. Like everything in real estate, closing costs vary by locale. There are some states in which closing costs tend to be high, and other states in which closing costs tend to be low. The five states with the lowest closing costs for 2012, on average, are : Missouri : $3,006 Kansas : $3,193 Colorado : $3,199 Iowa : $3,257 Arkansas : $3,325 By contrast, the two most expensive states in which to close a mortgage this year are New York ($5,435) and Texas ($4,619). All figures assume a $200,000 loan size with 20 percent equity and excellent credit. The good news is that, as a home buyer or refinancing household, you’re often not required to pay the closing costs which are itemized by your bank. When asked, many lenders will offer a low-closing cost or zero-closing cost option. With low- and zero-closing cost programs, qualifying mortgage rates are raised by a small amount, which increases your monthly mortgage payment. Up-front settlement costs, however, are reduced or eliminated. Opting for a low- or zero-closing cost mortgage is a trade-off between upfront costs and ongoing costs. Talk to your loan officer about your options to see which path is best for you. View average closing costs for all 50 states at Bankrate.com.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

New Home Sales Highest in Years

Kevin Whatley, Professional Mortgage Lender — Wed, 29 Aug 2012 00:41:40 -0700

The market for newly-built homes remains strong. As reported by the U.S. Department of Commerce, 372,000 new homes were sold in July on a seasonally-adjusted, annualized basis. A “new home” is a home that can be considered new construction. July’s New Home Sales report highlights what today’s buyers of new construction and the nation’s home builders have witnessed for themselves already — that the market for newly-built homes is improving in Bossier City and nationwide. The number of new homes sold in July on a seasonally-adjusted, annualized basis matches the tally from May 2012, and is the highest reading since April 2010, the last month of that year’s federal home buyer tax credit. The South Region continues to account for the majority of new construction sales, posting a 48% market share in July. South Region sales were up 9.1 percent as compared to one year ago. The other 3 regions posted higher sales volume as well : South Region : +9.1% from July 2011 Northeast Region : +30.4% from July 2011 Midwest Region : +21.7% from July 2011 West Region : +63.8% from July 2011 Also noteworthy is that the increase in new home sales is coming at a time when new home supplies are slipping. At the end of July 2012, there were just 142,000 new homes for sale nationwide. This is the smallest new home housing stock in at least 7 years, and a signal that buyers are buying homes faster than builders can build them. At the current pace of sales, the national supply of new homes would sell out in 4.6 months. Because economists believe that a 6.0-month supply represents a market in balance, the current new home market is decidedly a “sellers market”. Buyers throughout Louisiana should expect higher new home prices ahead. Dating back to October 2011, the housing market has shown slow, steady growth. Home prices have moved higher and so has builder confidence. If you’re in the market for new construction consider going into contract soon. The longer you wait to buy, the more you may be asked to pay.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Mortgage Rates This Week

Kevin Whatley, Professional Mortgage Lender — Tue, 31 Jul 2012 01:28:51 -0700

Mortgage markets booked major losses last week after European leaders spoke of their determination to preserve the European Union. Mortgage rates jumped Thursday and Friday as investors sold positions of relative safety, including bonds, and moved their money into stock markets. Mortgage rates closed the week at a 14-day high and, if not for last week’s GDP figures, conforming mortgage rates in Louisiana would likely have closed even higher. The Commerce Department said GDP slipped to +1.5% last quarter, down from +2.0% from January-March. The slowdown suggests that the U.S. economy may not meet analyst’s 2012 projections, and gives the market hope that the Federal Reserve will add new stimulus at its scheduled, 2-day meeting this week. The Fed meeting is just one of the story lines affecting mortgage rates this week. For rate shoppers in Bossier City and nationwide, it will be a risky week to float a rate. For a brief run-down of the events of the week : Wednesday afternoon, the Federal Open Market Committee adjourns. Wall Street believes that the economy has slowed enough to justify new market stimulus. It’s unclear whether the Federal Reserve agrees. If new stimulus is added, and if the package is sufficiently large, mortgage rates should drop. Otherwise, mortgage rates should rise. Thursday, the European Central Bank meets, after which the ECB is expected to announce an aid package for Spain, and a general plan to hold the European Union together. If the plan is well-received by markets, mortgage rates will rise. If the plan is panned, mortgage rates will fall. Friday, the Bureau of Labor Statistics releases its July Non-Farm Payrolls report. Economists expect 100,000 jobs created in July. If the actual figure falls short, mortgage rates should fall. It’s important to understand that each of these three events represents major risk to rate shoppers. Mortgage rates will be volatile this week, and that volatility is expected to continue until mid-September, at minimum. If you’re shopping for a mortgage, therefore, the longer you wait to lock, the bigger your mortgage rate risk. Especially with rates at all-time lows; rates have been falling for so many weeks, there’s a lot of ground to cover on the way back up. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

The Fed Meeting and Interest Rates

Kevin Whatley, Professional Mortgage Lender — Tue, 31 Jul 2012 01:26:49 -0700

In Washington, D.C. today, the Federal Open Market Committee (FOMC) begins a 2-day meeting, its fifth of 8 scheduled meetings this year. Mortgage rates are expected to change upon the FOMC’s adjournment. Rate shoppers and home buyers of Shreveport and Bossier City would do well to be alert. The Federal Open Market Committee is a rotating 12-person subcommittee within the Federal Reserve. It’s the group which makes U.S. monetary policy. “Making monetary policy” has many meanings but the action for which the FOMC is most well-known is its setting of the Fed Funds Funds. The Fed Funds Rate is the prescribed interest rate at which banks borrow money from each other overnight. Since late-2008, the Fed Funds Rate has been near zero percent. The Fed Funds Rate and Freddie Mac’s 30-year fixed rate mortgage rate move along different paths. Sometimes, the two converge. Other times, they diverge. They’ve been separated by as much as 529 basis points in the past 12 years, and they’ve have been as near to each other as 52 basis points. Clearly, there’s no correlation between the Fed’s Fed Funds Rate and the common 30-year mortgage. However, with its words, the Federal Reserve can influence the direction in which mortgage rates move — on occasion, by a lot. We’ll be witness to this Wednesday. When the FOMC adjourns, it is expected to announce no change in the Fed Funds Rate. Yet, based on the verbiage of the post-meeting statement, mortgage rates will rise or fall accordingly. If the Fed notes that the economy is sagging and that new stimulus is planned, mortgage rates are expected to drop throughout Louisiana. This is because new, Fed-led stimulus would be a boon for mortgage markets which would, in turn, drive mortgage rates down. Conversely, if the Fed acknowledges growth in the U.S. economy and/or little need for new stimulus, mortgage rates are expected to rise. Either way, expect rates to change — we just can’t know in what direction. The FOMC adjourns at 2:15 PM Wednesday.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Interest Rate Comparison- July 2011 vs. July 2012

Kevin Whatley, Professional Mortgage Lender — Fri, 06 Jul 2012 03:48:20 -0700

Today’s low rates are terrific for both home buyers throughout Louisiana and existing homeowners looking to refinance. As compared last year at this time, mortgage rates are down by 98 basis points — nearly one full percentage point. Mortgage payments are much lower today as compared to July 2011 : July 2011 : $512.64 principal + interest per $100,000 borrowed July 2012 : $455.77 principal + interest per $100,000 borrowed Today’s rates yield an 11 percent payment discount as compared to last year. Mortgage rates are unpredictable so there’s no guarantee that low rates will last forever, much less through the summer. If today’s rates meet your household budget, consider locking something in.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Our Uneven Housing Market Recovery

Kevin Whatley, Professional Mortgage Lender — Sat, 12 May 2012 02:07:01 -0700

The economic recovery continues nationwide, but the recovery’s an uneven one. Some metropolitan areas are faring very well this year, posting measurable gains in both employment and housing. Other metropolitan areas, by contrast, are struggling. To help identify those markets in which growth is occurring, the National Association of Homebuilders created the Improving Market Index, a metric analyzing three separate, independently-collected data series “indicative of improving economic health”. The IMI’s three collected data series are : Employment Growth (as published by the Bureau of Labor Statistics) Home Price Growth (as published by Freddie Mac) Single-Family Housing Growth (as published by the Census Bureau) A metropolitan area is considered to be “improving” if all three indicators show growth at least six months after the respective area’s most recent trough, or “bottoming out”. In May, there are exactly 100 U.S. markets that qualify for the NAHB’s Improving Market Index, down from 101 last month but higher by more than 800% from the reading in September 2011, the index’s inaugural release. 17 areas were added to the Improving Market Index list this month including Phoenix, Arizona; Ann Arbor, Michigan; and Bend, Oregon. 18 areas were removed from the May IMI. 83 metropolitan areas remained from April. There is little actionable information in the Improving Markets Index but the report does a good job of highlighting how “real estate markets” can’t be summarized on a national level and remain relevant to everyday home buyers and sellers across Louisiana and nationwide. For example, Fort Collins, Colorado is listed as an Improving Market. However, Greeley, Colorado — located just 30 miles away — was just downgraded from the same list. Home values and economies vary by region, by state, by city, by neighborhood, and even by street. The complete Improving Markets Index can be viewed at the NAHB website but for the best read of what’s happening in your neighborhood, talk to a local real estate agent.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Mortgage Rates Hit All-Time Lows

Kevin Whatley, Professional Mortgage Lender — Sat, 12 May 2012 02:02:04 -0700

Mortgage rates continue to drop. For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped 1 basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs. The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount plus closing costs. Falling mortgage rates are nothing new. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%. Low mortgage rates give today’s home buyers additional purchasing power, stretching home affordability to new heights. Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today’s 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments. A comparison : February 2011 : $539.88 principal + interest per $100,000 borrowed May 2012 : $467.67 principal + interest per $100,000 borrowed A homeowner with a $300,000 mortgage at February 2011 30-year fixed rate mortgage rates would save $2,600 annually with a refinance to this week’s low rates. Even accounting for discount points and closing costs, the “break-even point” on savings like that comes relatively quickly. Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

Some Tips if You're Planning to Close at the End of May

Kevin Whatley, Professional Mortgage Lender — Fri, 04 May 2012 00:34:53 -0700

Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing. Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries. Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don’t operate on a federal holiday; and, title agents are often away from the office because the former two groups aren’t working. But what’s supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the “work groove” on Tuesday can be a half-day affair. Therefore, if you’re under contract to buy a home in Shreveport , or to sell one; or if you have a refinance in progress that’s expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you’re going to lose 4-and-a-half days at the end of the month, you’ll want to try to make those days up while the month is still young. Here are 3 quick tips to speed up your closing and approval: First, get your homeowners insurance policy picked out. Do your comparison shopping and select an insurer. Next, if you’re using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don’t assume that your attorney’s Power of Attorney documents will be acceptable to a lender — many require specific verbiage. If the documents are rejected, make the requested fixes and resubmit. Most lenders do not compromise on Power of Attorney letters. Lastly, if you’re accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing. There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to “preparedness”. When you’re asked for paperwork, provide it quickly. When you’re asked to sign a document, sign it on the same day. When you’re needed to attend a home inspection or an appraisal, do it during your first available opening. Just leave as little as possible to the “last minute”, and everything should go well.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page

The Fed Speaks

Kevin Whatley, Professional Mortgage Lender — Wed, 25 Apr 2012 22:26:44 -0700

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday. For the fifth consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote. The Fed Funds Rate has been near zero percent since December 2008. It is expected to remain near-zero through 2014, at least. In its press release, the Federal Reserve noted that the U.S. economy has been “expanding moderately” since the FOMC’s last meeting in March. Beyond the next few quarters, the Fed expects growth to “pick up gradually”. This key phrase will likely be repeated by the press. It suggests that the economy is no longer contracting; instead moving along a path of slow, consistent expansion. In addition, the Fed acknowledged that “strains in global financial markets” continue to pose “significant downside risks” to long-term U.S. economic outlook. This is in reference to the sovereign debt concerns of Greece, Spain and Italy, and the potential for a broader European economic slowdown. The Fed’s statement included the following notes : The housing sector remains “depressed” Labor conditions have “improved in recent months” Household spending has “continued to advance” Also, with respect to inflation, the Fed said that the higher oil and gasoline prices from earlier this year will affect inflation “only temporarily”, and that inflation rates will return to stable levels soon. At its meeting, the Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs. The Fed re-affirmed its intentions to hold the Fed Funds Rate at “exceptionally low” levels through late-2014, and to buy mortgage-backed bonds in the open market. Immediately following the FOMC’s statement, mortgage markets improved slightly, pressuring mortgage rates lower in Shreveport, Bossier City, and nationwide. The FOMC’s next scheduled meeting is a two-day event slated for June 19-20, 2012.Kevin Whatley NMLS License #113781 Director of Mortgage Lending FirstTrust Home Loans- Texas Company NMLS #75271 Flower Mound, TX 817-930-2575 FirstTrust Texas Website FirstTrust Texas Facebook Page