All About Closing Costs
Closing costs are fees paid in order to obtain a mortgage loan.
These costs are in addition to the down payment on the home, the
principal, and the interest related to the mortgage.
Traditionally, the homebuyer is expected to pay all closing costs.
However, this can be negotiated with the seller as part of an agreement
for your purchasing the home that needs upgrades for them covering some
of these costs.
Costs can range from approximately 2-5% of the price of the home you are buying. The fees cover necessities such as:
· Running your credit report
· Loan origination process
· Property inspections
· Property appraisals
· Title insurance
· Escrow deposit
· Pest inspection
· Title recording with the county
· Underwriting process
Closing costs are necessary in order to secure
your mortgage loan and pay the professionals for their time and
expertise in making homeownership possible. Be sure to talk to your Loan
Officer to learn more about the fees and what you will be expected to
pay.
Should I Buy Now or Wait?
Should I Buy Now or Wait?
5 Reasons Why You Should Buy Now!
Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:
Supply Is Shrinking
With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.Price Increases Are on the Horizon
Prices are projected to appreciate by over 12-25% + from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.Owning a Home Helps Create Family Wealth
Whether you are rent or you own the home you are leaving in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.Interest Rates Are Projected to Rise
The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by first quarter of 2016. That is an increase of almost one full point over current rates.Buy Low, Sell High
We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.
HUD Issues Mortgagee Letter 2015-01 Revising the MIP
Effective with case numbers assigned on or after January 26, 2015, the FHA Annual MIP premium factor for all Title II forward mortgages has been reduced by 50 bps (0.5%).
Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 130 bps 80 bps
≤ $625,500 > 95.00% 135 bps 85 bps
> $625,500 ≤ 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps
Term ≤ 15 Years (REMAINS THE SAME)
To allow current mortgages in progress to obtain the reduced pricing, HUD will temporarily allow for the cancellation of current case numbers in order to secure new case numbers associated with the cheaper pricing.
Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 130 bps 80 bps
≤ $625,500 > 95.00% 135 bps 85 bps
> $625,500 ≤ 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps
Term ≤ 15 Years (REMAINS THE SAME)
To allow current mortgages in progress to obtain the reduced pricing, HUD will temporarily allow for the cancellation of current case numbers in order to secure new case numbers associated with the cheaper pricing.
| For more information, you may access HUD Mortgagee Letter 2015-01 HERE! |
The BIG DON'T DO'S AFTER you Apply for a Mortgage
The BIG DON'T DO'S AFTER you Apply for a Mortgage
- Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Small, explainable deposits are fine, but getting $10,000 from your parents as a gift in cash is not. Discuss the proper way to track your assets with your loan officer.
- Don’t make any large purchases like a new car or a bunch of new furniture. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher ratios…higher ratios make for riskier loans…and sometimes qualified borrowers are no longer qualifying.
- Don’t co-sign other loans for anyone. When you co-sign, you are obligated. With that obligation comes higher ratios, as well. Even if you swear you won’t be making the payments, the lender will be counting the payment against you.
- Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is a consistency of accounts. Frankly, before you even transfer money between accounts, talk to your loan officer.
- Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car, when you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
- Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more approvable. Wrong. A major component of your score is your length and depth credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.
Contact Kessler Real Estate Financial Services if you have any questions!
Mortgage Rates Fall for 5th Consecutive Week
Fixed rate mortgages have fallen once again, making this the fourth
consecutive week rates have dropped. According to Freddie Mac, the
average national 30-year fixed-rate mortgage fell from 4.14% last week
to 4.12% this week, while the average national 15-year fixed-rate
mortgage decreased from 3.25% last week to 3.21% this week.
Additionally, the number of Americans signing contracts to buy new homes
has increased.
More here
Source: USA TODAY
www.KesslerHomeLoans.com
More here
Source: USA TODAY
www.KesslerHomeLoans.com
11 Markets Where Cash Deals Make Up 50% of Sales
CASH IS KING - Florida is in the top 5 !!
According to RealtyTrac’s report, the following metros saw the most cash sales in the first quarter, amounting to more than half of all of their sales.
1. Cape Coral-Fort Myers, Fla.: 73.6%
2. Miami: 67.1%
3. Sarasota, Fla.: 65.1%
4. Palm Bay, Fla.: 64.1%
5. Lakeland, Fla.: 61.8%
6. New York: 57%
7. Columbia, S.C.: 56.1%
8. Memphis, Tenn.: 54.9%
9. Detroit: 53.5%
10. Atlanta: 53.2%
11. Las Vegas: 52.2%
*First time home buyers will be competing against cash buyers so this is More reason to get your Buyer's financing pre-approval at www.KesslerHomeLoans.com
Source: RealtyTrac
Watching the bond markets and interest rates are lower today.....
The FNMA 30-YR 4.0% coupon is +21 BP for the day (Currently 105.094)
good and favorable re-pricing (lower interest rates)
 |
| Lower Interest Rates |
GET YOUR FREE HOME LOAN REPORT-
Find out what Loan Options
are right for you and your family!
www.MyMortgageGuyTOM.com
What is PMI and I should I Pay It?
If you’re getting ready to buy a home, then you’ve likely heard of private mortgage insurance (PMI). You might also have a basic idea of what it is, but do you understand why lenders charge PMI or how it’s derived? Here is a review of some details about PMI, as well as some options for paying less monthly PMI or in certain cases, avoiding it entirely.
What is PMI?
PMI is a type of insurance paid to mitigate a lender’s potential loss if you default on the mortgage loan. In other words, if you stop paying your mortgage, the lender will be would be able to recover their losses from the PMI company.
Why do I have to pay PMI?
Private mortgage insurance is required when you put less than 20 percent down when purchasing a home, or have less than 77 percent equity when refinancing your home. Basically, the lender wants a safeguard in the event you stop paying your mortgage (a.k.a. defaulting on the loan) so they can re-sell the property to recoup their investment.
PMI Payment Choices
There are many choices available when paying PMI and each will vary based on your individual financial situation:
Borrower Paid Mortgage Insurance (Monthly Premium): This type of mortgage insurance is a monthly payment included as part of a monthly mortgage payment. This is the most common type of mortgage insurance.
Borrower Paid Mortgage Insurance (Single Premium): This option allows you to eliminate the monthly mortgage insurance payment by paying the full cost of the mortgage insurance at closing or including it in the total cost of the loan amount.
Lender Paid Mortgage Insurance (Single Premium): This type allows a one-time upfront fee that is paid by the lender and eliminates the monthly PMI obligation. The lender typically covers the one-time upfront fee by by slightly increasing the interest rate over the duration of the loan.
Split 50/100 Mortgage Insurance: This option reduces your monthly PMI obligation by paying a percentage of the loan amount upfront – you can pay up to 1.25 percent. The greater the upfront portion paid, the lower the monthly payment.
Conforming vs. Jumbo Mortgage Loans - FLORIDA HOME LOANS
Determining whether or not your loan is jumbo or conforming may seem confusing; which is why, we have crated this blog post as an educational resource.
It simply boils down to: the type of loan (FHA or Conventional), your county's limit and the type of property you are purchasing or currently own. For example, a non-FHA loan limit for a single family home, or condo, in Collier County, FL is $448,500 and in Monroe County, FL is $529,000 yet, all other counties in Florida the limit is $417,000. The reason for this difference is some, more affluent, counties have higher limits as a consequence of average home prices and land value being more costly.
Conforming or Jumbo. Which one are you?
You’ll need to first determine the type of financing (FHA or Fannie Mae/Freddie Mac. FHA and Fannie Mae/Freddie Mac have set different loan limits so you’ll need to use the proper resources when checking local loan limits.
FHA loan limits. Simply enter your state, county and hit send at the bottom of the screen. You’ll be given the loan limits for your county along with the loan limits for each property type within your county.
Fannie Mae/Freddie Mac loan limits. While this is Fannie Mae’s site, both Fannie Mae and Freddie Mac rarely move independently of one another. The charts will offer the loan limits for each property type; however, does not provide detailed information regarding high-cost counties.
Conforming and Jumbo Loan Underwriting Differences
Conforming lending rules are more flexible than jumbo – from the required credit score to the down payment. With regard to jumbo lending, guidelines are more stringent, and with good reason, lenders are taking more risk. Additionally, you’ll find jumbo loans will require higher credit scores and larger down payments.
Conforming
Conforming Programs and Rates. Conforming loans offer more competitive rates and offers both ARMs and Fixed rate programs.
Conforming Credit. You will need to have a minimum credit score of 620.
Conforming Income. All types of income can be used when qualifying for a conforming loan. Speak with your mortgage professional should you have questions about your earned income.Conforming Assets. The lender will want to see two to three months savings (reserves). One month’s reserve is the equivalent to one full month’s mortgage payment (principle, interest, taxes and insurance).
Conforming Debt. The lenders use debt-to-income ratios to qualify you. Conforming guidelines (rules) are more flexible and you can be approved above the suggested debt-to-income ratio. Just keep in mind, your gross income is used when determining whether or not you qualify so be sure you are comfortable with your monthly payment.
Conforming Property Appraisal. Only one appraisal is required.
Jumbo
Jumbo Programs and Rates. The rates for jumbo loans are less competitive than conforming loans. Additionally, adjustable rate mortgages are most commonly used in the jumbo arena. While fixed rates are offered, the rates are about half-percent higher than that of a conforming loan.
Jumbo Credit. The minimum credit score for a jumbo loan is 700.
Jumbo Income. Just as with conforming loans, All types of income can be used when qualifying for a conforming loan. Speak with your mortgage professional should you have questions about your earned income.
Jumbo Assets. In addition to the down payment and closing costs, a jumbo lender will want to see a minimum of twelve months reserves (remember, one month reserve = one mortgage payment).
Jumbo Debt. As with conforming loans, jumbo lenders use debt-to-income ratios for qualification purposes. Jumbo guidelines (rules) are not as flexible. For example, a conforming lender may approve your loan at forty-five percent; however, some jumbo lenders will limit you to forty percent.
Jumbo Property Appraisal. Depending on your loan amount, you may be required to pay for two appraisals.
When researching your financing options be sure and talk with your mortgage professional regarding all of your available options.
Subscribe to:
Posts (Atom)
