Mortgage Data Archives

Refinance My Adjustable Mortgage Loan – Is It Too Late?

The federal reserve recently raised interest rates, and if you have an Adjustable Rate Mortgage (ARM), it may be a good time to consider refinancing your home. While you may think everyone has refinanced by now, that is not so. I met a lady this week while door knocking and she has two investment properties both with a first and second mortgage and all are adjustable mortgages.

There’s no one-size-fits-all answer to whether your should refinance, so here are a few of the main considerations.

How long does your introductory rate last?
Most ARMs have a fixed rate for the beginning of the mortgage. This is an introductory period (usually 3-10 years) when your rate will remain constant before it can be adjusted. If you have several years left in your introductory period, you can monitor interest rates for a while before making a decision. But if the intro rate is ending soon, it’s a great time to explore refinancing at a fixed rate.

How long are you staying?
If you plan to sell your home soon-especially if you’re still on a fixed introductory rate-there’s not much motivation to refinance. But if you’ll be at your home indefinitely, you should consider your refinancing options. You could eliminate the stress of not knowing what your future mortgage rate and payments will be.

What’s your loan balance?
The change in your mortgage payment will of course be determined in part by your remaining balance. If you owe $100,000-$200,000, a new interest rate may not greatly affect your monthly payment. On the other hand, if you owe $500,000, a change in interest rate could lead to a much higher payment.

Other factors
The previous items are just a few of the factors that should go into a decision about refinancing. Changes in income and your current credit score should also be considered, so be sure to weigh your options and make an educated decision.

 


5% Down – New FannieMae Guidelines December 2015

Effective immediately, exciting news for home buyers in Contra Costa County. For home loans up to $629,000 you now have the choice between a conventional mortgage loan or an FHA mortgage loan both with low down payment requirements. Previously FannieMae required a minimum of 10% down on mortgage loans under $629,000 so the only option for home buyers with limited funds was FHA.

To understand the difference, FHA loans are 3.5% down. FannieMae 5% down. Generally the mortgage insurance premiums are higher on FHA loans than conventional loans, yet the biggest difference is with an FHA loan the mortgage insurance never goes away. With conventional loans, once the mortgage has reached the 80% loan to value, a borrower can request the elimination of the mortgage insurance.

Along with easing down payment requirements Fannie Mae is now requiring only one year of tax returns for self-employed borrowers. Formerly a borrower was required to have two years of self-employment tax returns.

With these changes we are hoping that more people will be in a position to buy a home.

Get A Mortgage – 15% Down – 680 Credit Score

Considering that most of the homes in the San Ramon Valley area are over the jumbo loan classification, this is good news for anyone purchasing a home priced over $625,000. Chase Mortgage is making it easier for more people to qualify for a jumbo loan (a mortgage over $625,000). With the average price of homes in San Ramon  at $900,000 and up, meeting the 20% down payment requirements is out of reach for many would be home buyers. And while many buyers coming back into the market may not have reached the 740 credit score requirement, they do have the down payment.

Here is an excerpt of the article in Realtor Mag dated August 6, 2015
“Recently announced the bank is lowering its minimum credit score and down payment requirements for mortgages up to $3 million. J.P. Morgan plans to lower its minimum FICO credit scores for jumbo mortgages from 740 to 680 for loans on primary single-family purchases, second homes, and some refinances. The bank is also allowing a 15 percent down payment for loans up to $3 million. That is less than other banks such as Bank of America and PNC Financial Services Group Inc. which allow a 15 percent down payment for jumbo loans up to $1 million and $1.5 million, respectively.

The housing recovery has been strong in the higher-priced tier. Existing single-family home sales priced between $750,000 and $1 million rose 21 percent in June from a year prior, according to the National Association of REALTORS®. Meanwhile, sales of homes priced between $100,000 and $250,000 rose 12.5 percent. Homes priced lower saw sales fall 3 percent.”

First Time Buyer 3% Down Payment Program 2014

Fannie Mae and Freddie Mac are stepping up to the plate and bringing back their 3% down payment program to help first time buyers with their down payment requirements. The maximum loans available for this type of program will vary based on the County/City of where the home is located. A 3% down payment will make it much more feasible for buyers to attain their goal of buying a home.

According to a post in the American Press (December 11, 2014)……

“The new loans announced by Fannie Mae and Freddie Mac will be fixed-rate mortgages for up to 30 years, available only on a primary residence. Fannie plans to begin issuing the 3 percent loans before the end of the year. Mortgage insurance payments will be required, and qualified buyers will need to complete a financial counseling program.

Freddie Mac plans to start issuing its 3 percent loans to low- and moderate-income borrowers in March 2015. Eligible borrowers will be required to earn less than an area’s median income and will also have to pay mortgage insurance and undergo financial counseling to participate. Monthly payments also will have to fall under 43 percent of the borrower’s income.”

To find out if you qualify for this type of loan, check with a mortgage lender.

Who Are Boomerrang Buyers?

Boomerrang buyers is a term recenlty introduced as buyers who are now back in the market to purchase a home after losing their home either to a short sale or foreclosure.

Many of these people are in a much stronger financial position that will allow them to buy a home. Even though they had a financial crisis, they still believe owning a home is a wise financial decision.

FHA financing is available within one year after the loss, conventional financing requires a two year wait period, and there is a funding program no waiting period.

 

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