Posts Tagged ‘lender’
Real Estate Conditions 4 – Mortgage & First Time Home Buyer Dec08 FHA Financing with low Rates
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 4 (Excerpt)
80% of homes can be purchased with FHA Financing
You also talked about this graph you put together, it talks about the month of November was a 25% increase over the previous year. Obviously prices have gone down and it looks like it then has gone back up, and so once we finish selling off this inventory there is a good chance that were going to be finding or hitting the bottom.
I think just in that region of $150,000 to $200,000 region that prices have really stabilized at this point, they may go down a little bit more, but I think for the most part, because that is where the financing is right now, with the FHA and the conforming loan limits, anybody in that price range can still get a loan. If youre looking to buy something over $400,000 youre going to have a lot more trouble just because the financing is not available.
Well the financing is a lot more difficult over the $417.000 loan amount number. Luckily Velocity Financial still has some of the interim small jumbo financing available, still with decent rates and the larger jumbos there is still financing available but nothing like this median home price of $275,000 and below. Well and I think what that goes back to, specifically with the FHAs, because, what percentage of the closing costs can be contributed by a seller on an FHA loan? Its pretty high right?
FHA financing, the Federal Housing Administration has had a standing rule for quite some time that the seller can contribute up to 6% of the sales price towards the closing costs. Realistically on a $250,000 purchase price youre not going to need 6% towards closing costs, so you would want to use that money to lower the price or buy down the interest rate, or any number of different things. So in a situation like that you could have the seller come in, pay all of your closing costs for you, you can keep that money in the bank, you could use it to fix up the house, you can do whatever, and all you would be responsible for is a small down payment.
Thats correct, 3% of the sale price down, you can have the seller pay the property taxes up to a year in advance, the home owners insurance, the home owners association fees, they are called prepaid or escrows. They can pay all of that. What is the loan limit right now for FHA? Currently the FHA loan limit is $346,250, its kind of an odd number, that does go away at the end of this month, December. However if youre lucky enough to have a home picked out in that price range, you want to try to get it done by the end of the year, so long as were able to get it underwritten in house, our firm will still be able to close on that with a higher loan limit after the first of the year.
The new limits probably going to be your next question, so as of January 1 in Maricopa County its $271,000. Even at 271, with the scenario I was talking about before, in Maricopa County, 70-80% of the home sales still would have fit within that 271 limit. Yes, one thing that I do want to point out is that when the Housing and Recovery Act of 2008 expires that huge loan limit of 346 expires, that was the deal, they are going to try to get it extended but we cant plan on that necessarily, but only 10% of the properties in Maricopa County fit into that 271 to 346 range.
Now I know the answer to this but you dont happen to be qualified to do FHA loans are you? Yes Velocity Financial is FHA approved, were one of less than 15% of the lending institutions in Arizona that can do FHA financing, not only for purchases but for refinancing as well. Which I think is some of the stuff we want to talk about as well because some of the old rules for refinancing simply dont apply anymore.
Brett did you have anything to add? Yes, two things stood out to me in that discussion and one of the things was the bigger picture concept in my mind thats the way it works. Its how I am wired, I start with that then I narrow my way down to the specific scenario given a clients circumstance.
What that big picture represented to me and one of the things that you pointed out with your charting Dan and the work that you have done, is the year over year home sales is shrinking the inventory that exists in Maricopa County, and when that inventory shrinks, we all know that new homes and building had pretty much dried up, so allowing that inventory to shrink is a very positive thing in terms of stabilizing, or placing a bottom, or putting the housing market back on a path of growth long-term, and so that was one of the things that stood out to me.
Duration : 0:6:32
Real Estate Conditions 7 – Mortgage & First Time Home Buyer Dec08 Refinance & Interest Rates
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 7 (Excerpt)
The old rules no longer apply and Suze Ormond should know that.
We have Dan Havey the author of Real Estates Future in the studio today.
Michael, I was just curious, back when I got into the industry many, many years ago there used to be a rule of thumb that if you were going to refinance you had to lower your interest rate by at least two percent and I know as time went along and products changed that really became unnecessary, but I am just curious in todays mortgage market its a lot different than we were dealing with even two years ago. Is that still true that there is a 2% rule? Whats going on now?
I happened to catch Suze Orman on television and she was talking about mortgages, the caller who called in to the program, the question became I believe similar to what Dan just asked, her comment was that basically if you’re in 6% interest rate or above now is the time to re-fi. That is what she said, a blanket recommendation. I know a lot of people put a lot of credence into what she says, maybe you could speak to that, the lowest interest rates you’ve seen in your career, you have been doing this for a while.
I have, and they are. You know there was a lot of speak the last couple weeks about the Fed, the Fed funds rate by the way is the lowest it’s ever been in history. As of this week the discount rate is to the point that banks are lending money to each other at nothing, the Fed funds rate for intrabank lending is at zero, the problem is the banks don’t have any money.
To be serious about the refinancing, because its a serious topic, I think people are starting to see their mail boxes filled with lots of advertising crap about refinance. I believe that doing the refinance is no different from doing a loan modification or buying a house, you need to sit down with the human being that’s local, that you can know is a legitimate source. You’re going to give all this personal information about you, your family, your kids, your Social Security number, you want to make sure you have somebody there that you know whos legit.
In regard to the old rule of thumb 2%, nothing could be further from the truth, and I will expand, but to the point of Ms Ormond that if youre at 6% or higher, that is a blanket statement and blanket statements never work. We just did a refinance for a guy who was at 5 1/2%, and it makes sense. Every situation is different, as far as how much do I have to lower my interest rate to make it work? It depends on the type of mortgage that you get.
The only type of loan to get today in December of 2008 is a 30 year fixed. I know that one of the things that was really interesting to me, and that you and I have referred clients to one another for several years, so we share a number of clients, were familiar with those families and those households, and this is Wednesday, on Monday and Tuesday of this week I’ve had seven phone calls from clients who you’ve already done loans for, refinances for, asking if this is the time to refinance a loan that is only a couple years old.
And I know in several of those cases the answer is yes you’re actually helping families right now with that process. I am and we do. To answer the question, you need to determine what the payback term is, in other words when your refinance is done it’s a new loan, there’s the title insurance, appraisals, lots of different things may need to be done, not in every case, but in most cases there are costs associated with that. The cost has to be offset by the amount of savings. Its a breakeven analysis
Absolutely it is, the shorter the breakeven the better the loan. I am working on a case right now which is going to be done in the next couple of days where the guy lowered his interest rate by an1/8 of a percent and it made sense for him. It’s not for everybody, 2 percent or lower, 2% is significant, now you’re talking about really significant savings in terms of cash flow…
Duration : 0:6:31
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Duration : 0:10:40
Mortgage Foreclosure Rescue Scams – Documentary Video
Mortgage Foreclosure Rescue Scams – Documentary Video
We Stop Foreclosure Rescue Scams (2008) by Kyra Olds
This is a documentary about mortgage foreclosure rescue scams that are occurring across the country in light of the growing foreclosures. The movie describes common scam tactics and how distressed homeowners fall for these scams. The movie concludes with what lawyers can do to challenge these scams in court and the Washington State Legislature’s response to try to to stop these scams by passing House Bill 2791 and Senate Bill 6381. It is intended to educate advocates so they can better assist homeowners facing foreclosure.
Director: Kyra Olds
Producer: Northwest Justice Project
Sponsor: Eric Dunn
Keywords: foreclosure rescue scam; washington; mortgage; foreclosure; 2791; northwest justice project; njp
Contact Information: Northwest Justice Project 401 2nd Ave S Seattle, WA 98104 www.nwjustice.org
Creative Commons license: Attribution-Noncommercial-Share Alike 3.0 United States
Credits:
We Stop Foreclosure Rescue Scams
by Northwest Justice Project;
Featuring:
Eva, Client of NJP; Eric Dunn, Attorney at NJP; Melissa Huelsman, Private; Attorney in Seattle; Judy Poston, Housing Counselor at Solid Ground; Julia Kellison, Attorney at NJPl; Fred Corbit, Attorney at NJP
Produced by: Kyra Olds, Intern at NJP
Foreclosures are increasing nationwide, and so are scams that promise to rescue homeowners from foreclosure. What these scams do is take your money, ruin your credit record, and wipe out any equity you have in your home. Foreclosure con artists take advantage of people who have fallen behind on their mortgages and face foreclosure. Con artists know that people in these situations are vulnerable and likely to be desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. After reading such notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They advertise their services on Web sites or publications. They often refer to themselves with titles that sound official, such as foreclosure consultant or mortgage consultant, and market themselves as a foreclosure service or foreclosure rescue agency. Your mortgage lender or any legitimate financial counselor can help you find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations contained in this Consumer Advisory.
Duration : 1:34:41
Los Angeles Mortgage Broker Explains FHA Financing
http://www.MortgageHelpLosAngeles.com. Before sub-prime mortgages, where consumers interested in getting reasonable interest rates on loans with small down payments, marginal credit scores, and/or high payment to income ratios were able to get funding, there was the FHA. The FHA was set up to help those with more difficult loans get insurance for the payments, so that lenders would be willing to fund the loans. Bill Rayman is a very successful Los Angeles Based Mortgage Broker who can help you find the perfect approach to maximizing your goals in home purchases, refinances, or investments in property. This video explains the details of FHA financing. To reach Bill Rayman, call him at 310-295-2900 ext 113. Visit his blog at http://www.mortgagelosangeles.blogspot.com
Duration : 0:9:43
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Duration : 0:6:18
Real Estate Conditions 8 – Mortgage & First Time Home Buyer Dec08 30 year Fixed FHA Financing
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 8 (Excerpt)
30 year fixed FHA mortgage is the best financing available for first time home buyers today.
So now the only question that I would have, Michael is you only lowered the guys interest rate by 1/8th of a percent, weren’t there a whole lot of closing costs associated with that? Good question, in this particular case no. There were no closing costs.
Well then it definitely makes sense to lower your interest rate if it’s not going to cost you anything and you can lower your monthly payment by 100 bucks a month you would be crazy not to do it.
His breakeven was one day, in that particular case.
It goes back to this Velocity of Money concept. If you’re not sure if it makes sense or not, it’s kind of a no-brainer, give the team at velocity financial a call. You will do the analysis for them to determine if it makes sense or not based, on their unique circumstance, and from there youll advise them on the appropriate type of loan.
You know it’s funny that people over the years they get so hyper-focused on the interest rate of the loan. Interestingly enough I had a recent client whos focus was not on the interest rate, it was on the closing costs. The problem is there is a correlation between the cost of the money and rate, you have to pay it isn’t free for anyone. No cost loans are not really no cost, youre paying a higher rate to get it, so where does it make the most sense for you and your family, how long are you going to use this mortgage? There are so many factors, there’s an incredible amount of discovery that needs to be done.
If you walk into your local financial institution it doesn’t necessarily have to be a bank and you ask what is the rate today? It’s vanilla, it’s not 31 flavors, its vanilla, this is what we have. Well we have a couple of other options, but that’s not how it works at the bank.
One thing I wanted to point out Michael was it was back in 2003, we saw interest rates that were close to what they are now and a lot of people got into the same kind of loan that I got into at that, I got into a three year adjustable loan. And I’m really kicking myself because I wish I’d gotten into a 30 year fixed, and I would say with anyone, especially with as low as interest rates are, they definitely have to get into this market. jump in and get themselves into a 30 year fixed and just be happy with it forever.
That’s a really good point, and it’s safe. If you have a 3 year ARM or two year adjustable, or a 5 year adjustable and youre 1, 2, 3, 4 years into it, the 30 year is the safe way to go, more than likely the interest rate is going to be lower than what you have. In the case of the adjustable ARMs, adjustable-rate mortgages just dont make sense today. If you have a 30 year fixed, its the safe bet.
Dan if you and I are wrong and real estate values continue to tumble, you know what, you have a nice safe loan and you dont have to worry about it for a long time. On the other hand if you want to live there for 20 years, you dont have to mess with it. I think its the right thing to do for most people
Well I think that anyone who is out shopping for a home over this weekend, and what they’re looking for is to not only ask the seller to pay as much of the closing costs as possible but first to get pre-qualified by calling you at velocity financial. They want to make sure that they get themselves a 30 year fixed, FHA is probably the best product out there right now because its such a low down payment, and if youre a first time home buyer and youre in the $60,000 a year range, you can go out there and buy up to that $250,000 house and have a place for your family to be in after the first of the year, and never have to you live in an apartment and have Christmas in an apartment again, you can have Christmas in your own home next year.
Absolutely, that is a really, really good point. We dont want to forget about the $7500 tax credit that goes along with having a home, if you havent owned real estate in the last three years.
The other thing that I want to mention before the show gets wrapped up today, there is interest rate risk here just like there is in the bond market. Interest rate risk is you the buyer looking at what you can use to increase the velocity of money, increase the efficiency in your existing mortgage, or move to a new mortgage because money is cheaper today than it’s ever been…
Duration : 0:5:50
How to deal with subprime mortgage loans
http://www.howdini.com/howdini-video-6649643.html
How to deal with subprime mortgage loans
What to do if you have a subprime mortgage you can’t handle? Default, walk away, sell at a loss? Here’s everything you need to know from author and CNN personal finance editor Gerri Willis.
Keywords:
subprime loans
subprime mortgages
subprime mortgage loans
subprime home loans
Duration : 0:3:32
Real Estate Conditions 2 – Mortgage & First Time Home Buyer Dec08 Seller to pay Closing Costs
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 2 (Excerpt)
How having the Seller pay your closing costs can quadruple your money
On the other hand if you roll that into the loan it’s going to take you 160 months to break even on that. 160 months which is a little over 13 years, that is the antithesis of the Velocity of Money that we talk about on the show every week, so I am not convinced that its the right deal for the masses, but something that should be considered is what is the opportunity cost of taking the money out of Account X and the type of account you taking it out of has some impact too. If it’s from a brokerage account then you experience the market loss in that account and youre selling at these low price levels, I think the markets are going to turn and the opportunity costs over 160 months, youre talking about a substantial amount of money. And the additional mortgage payment is insignificant.
Obviously no one is going to allow you to pay more than the house is worth, that’s not what were suggesting. What were suggesting is merely to look at instead of simply making a lower offer than you would normally make, I’m suggesting that you consider the closing costs and what the real closing costs are in this example.
Assuming that the house is already attractively priced, one of the things that this buyer in this example should consider instead of making a lowball offer on a house that’s already priced rather attractively in this marketplace, it might make sense to consider exactly what you’re describing now. And that would be take that money or that difference and ask the seller to include those costs as part of the deal to sell the house, versus why lowball offer the house when you already know the house is the right price.
That’s exactly right and one of the other points here is in a lot of cases the closing costs dont need to be quite that high. So there is the opportunity for the home buyer to buy down, for instance, use 1% of the loan amount to buy the interest rate down. I did a calculation here today, the cost of funds changes all the time, in fact we had four price changes today. Four mortgage rate changes today, just in one day. This doesn’t apply in every scenario, but that’s why you use a certified mortgage planner, that’s why they use a FHA certified mortgage firm to do the loan to make sure that it’s the right thing to do but here’s the example of today. 1%, paying 1 point to buy the interest rate down will lower your mortgage payment, on this example of a $300,000 house, would lower your mortgage payment by $118 a month.
It’s not simple it’s not just like going to your local bank and having them give you a quote on the rate, there is so much more to it these days. I think that one of the things you’re pointing out right now is the fact that this type of negotiating exists and should be considered when making this purchase. And I know that you have already espoused that youre not a realtor in that sense, but your realtor should be talking to you about these options. If they are not, you may want to consider finding one who knows about that stuff.
They absolutely do and I’m not suggesting to anyone that they go out and find another realtor because yours is not working out for you. The reality of it is if your realtor doesn’t believe in the concept it may only be that they just don’t understand the concept. Have them give us a call, we can explain it to them. And I have simple illustrations we can share with them, how we would structure it financially, and they can, the realtor can set the price. That’s what their job is, but what our job is to make sure that you use every penny available to you to the best of your ability.
I have a question for you Brett, if you took $9000 and didnt take it out of your savings, 401K, or whatever, what will it turn into with today’s market? What would that be like?
Depending on the way the money is allocated, invested in a fixed income investment, or an interest-bearing account in a bank or whatever, what I can tell you is over the same amount of time, that $9000, over 160 months, youre probably talking about quadrupling the money. I would say that that is relatively easy and I’m not talking about taking on significant stock market risk. What I’m talking about is just compounding interest in some kind of interest-bearing account. I mean it could be a bank CD.
The other thing to do is we have this book called the Short Sale Playbook written by Ron Quinterro that we have available to anyone who is interested in it…
Duration : 0:6:12
The mortgage lender radio advert
A recent radio advert from The Mortgage Lender who help a very unlikely customer.
Duration : 0:1:2