Do You Know About VA Loans?

Do You Know About VA Loans?

The Perfect Loan File

So, let’s begin with the pre-approval call. Mortgage pre-approval is typically accomplished with a telephone interview. A prospective borrower calls a mortgage rep (filter), and the questions begin. There will be lots of questions as this critical phase of the process is akin to the discovery period in a trial – you’ll need to disclose everything. Expect to answer queries on what you do for a living, how long you’ve been employed in your current field, and what your salary is. If there is a co-borrower, they will have to answer the same questions. Every dollar in checking, savings, investments and retirement accounts, also known as assets to close, as well as gifts from relatives and non-profit grants, has to be accounted for. Essentially everything appearing on a borrower’s asset-radar-screen has to be documented and explained. If you were previously a homeowner and sold your home in a short sale, or if you own a home now and plan to keep it as an investment or rental property, there are new and specific underwriting guidelines created just for you. In these cases, full disclosure of your credit and homeownership past can potentially eliminate unforeseen mortgage approval woes. For instance, FannieMae has a new underwriting guideline called “Buy-and-Bail,” for current homeowners’ planning on keeping their existing home as an investment/rental property. Properties not meeting the 30% equity test for “Buy-and-Bail” result in additional asset requirements to purchase a new home. Buyers with a short sale history may have to wait two to three years before they are eligible for mortgage financing again. Full vetting of your previous mortgage life will save you the dreaded we-have-a-problem call from your mortgage lender. It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be. This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary. If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this. The reason the mortgage approval process is now so rigorous is simple. Avoiding defaults and loan buybacks has become the primary goal of mortgage lenders. Higher standards are reducing loan defaults, which should mean fewer foreclosures in the future. Government data shows that less than 2% of loans originated in 2009, that were resold to Freddie Mac and Fannie Mae went into default after 18 months, down from more than 22% default rates for 2007 loans. So when your lender requests specific documents from you, give it them just “because they said so.” You can thank my dad for that.

30 Year Rate Chart

Thirty-Year Rate Holds Fast to Its Record Low

The average weekly rate for a 30-year fixed-rate mortgage in Freddie Mac’s primary market survey held steady at its record low of 3.78% during the week ending May 24. The average rate for a 15-year FRM, at 3.04%, also remained unchanged week to week. Similarly, the five-year Treasury-indexed hybrid stayed put at 2.83%. The average rate for a one-year Treasury adjustable-rate mortgage slid three basis points to 2.78% and carried an average of just 0.4 of a point. The 30-year, in contrast, came with an average of 0.8 of a point in the most recent week, while the 15-year carried an average of 0.7 of a point and the five-year Treasury hybrid included on average 0.6 of a point. The plateau in most rates came during a week when there were several indicators suggesting relative improvement in the housing market, said Freddie Mac chief economist Frank Nothaft in his weekly report. He said rate-driven affordability contributed to this. Nothaft also noted in his monthly economic and housing outlook issued Wednesday that there have been some encouraging signals, although residential fixed investment is still weak. A Mortgage Bankers Association report adjusting the group’s origination estimates upward Thursday did so on the strength of higher-than-expected refinancing that government programs as well as rates have contributed to.

NAR Declares Start to Housing Comeback

The housing recovery is underway according to the National Association of Realtors® (NAR) which released numbers on Tuesday to back up that claim. Existing home sales rose from March to April and are well above sales one year ago. Prices are on the rise as well and the improvements were felt across all regions of the country.

Upside Down Refinance Options

HOW TO REFINANCE IF YOU ARE UPSIDE DOWN It is no secret home values across the Country have decreased in recent years. Traditional mortgage guidelines prohibit a homeowner from refinancing if they do not have a specific amount of equity in their home. Jeremy and PrimeLending have access to special government backed mortgage programs that allow qualified and eligible homeowners that may not have equity in their homes to refinance and take advantage of today’s historically low mortgage interest rates. Not every homeowner will be eligible and not every homeowner will qualify for these programs. Here are a few of the programs Jeremy can utilize to help you lower your rate and your payment: HARP/HARP 2: This program is for homeowners that have a Conventional loan but do not have 20% equity in their homes. Here are a few key guidelines: • Homeowner’s current loan must be serviced by either Fannie Mae OR Freddie Mac   Does Fannie Mae service your loan? Click here to find out: http://www.fanniemae.com/loanlookup/   Does Freddie Mac service your loan? Click here to find out: https://www.freddiemac.com/corporate/ • Loan must have been sold to Fannie Mae OR Freddie Mac prior to May 31, 2009 FHA STREAMLINE: This program is for homeowners that have an FHA Mortgage. Key guidelines for loan approval include: • Homeowner must have been in their FHA mortgage for at least 6 months • Homeowner must lower their mortgage payment by at least 5% to qualify • Homeowner must have a credit score of at least 640 • Homeowner must not have any 30 day (or greater) late mortgage payments in the past 12 months • No appraisal required • No income verification required VA INTEREST RATE REDUCTION (IRRL) AKA - STREAMLINE: This program is for homeowners that have an VA Mortgage. Key guidelines for loan approval include: • Homeowner must have been in their VA mortgage for at least 3 to 6 months (depending on who   their current mortgage is with) • Homeowner must have a credit score of at least 620 if they are currently with Wells Fargo and a 660   if they are with Chase • Homeowner must not have any 30 day (or greater) late mortgage payments in the past 12 months • If we sell the new refinanced VA loan to the same company that the homeowner is currently with   after we close it no appraisal is required (we sell to Wells Fargo and Chase) • No income verification required There are more guidelines for each of the options listed. Contact Graham Parham today for more information on how he can help you refinance today even if you do not have equity in your home. There are options available and Graham has access to the tools that can help you – 469-737-5528

Rates Hold Steady

Mortgages Rates took a beating yesterday, with the recently prevalent 3.875% Best-Execution rate for 30-Year Fixed, Conventional Loans falling completely off the table, leaving 4.0% in control. In some cases, lenders were better priced at 4.125%! These were the biggest single day jumps we've seen in rates in months, but thankfully, they went no higher today.

Mortgage Rates Sharply Higher After Volatile Day For Markets

Despite the uneventful start to the week yesterday, Mortgages Rates are sharply higher today, rapidly re-introducing 4.0% as the more prevalent Best-Execution rate. Yesterday, 3.875% was the clear choice for Best-Ex. Movement between the two has been seen more frequently as rates in general have spent more time hovering in a narrow range between 3.875 and 4.0% on average so far in 2012.

Important HARP Loan Program Update

HARP 2.0 Could Help as More than 1.5 Million Borrowers Refinance at Today’s Low Mortgage Rates: Freddie Mac Chief Economist Frank Nothaft recently stated that the new Home Affordable Refinance Program could possibly help as many as 1.6 million borrowers to refinance their home loans at today’s record low mortgage rates. Nothaft commented in Freddie Mac’s November 2011 Economic Outlook: “HARP is available for certain borrowers with current loan-to-value ratios above 80 percent and whose loan is owned by Freddie Mac or Fannie Mae. From inception (April 2009) through September 2011, more than 900,000 borrowers have obtained a refinance loan through HARP. In addition to an extension of HARP through the end of 2013, the recent announcement included the following enhancements: waiving certain loan seller/servicer reps and warranties for eligible borrowers, reduction or elimination of some fees that had been previously assessed, removal of the maximum current loan-to-value limit, and eliminating the need for a new property appraisal in some cases. Estimates of the number of additional HARP refinances vary, with the Federal Housing Finance Agency stating that “HARP refinances may roughly double or more from their current amount”, Keefe Bruyette & Woods’ analysts estimating about “1 million incremental loans”, and Moody’s Analytics projecting as much as 1.6 million additional loans above what would have occurred under the original HARP terms, bringing the total number of HARP refinances to as much as 2.85 million loans by the end of 2013.” In addition to helping more than a million underwater homeowners refinance their mortgages, HARP 2.0 could cause an increase in mortgage originations of between $200-300 billion in 2012-2013. On average, somebody refinancing with HARP 2.0 could save more than $2,000 in interest payments on their home loan in the first twelve months after refinancing. It is also notable that Fannie Mae has made some key changes to their underwriting guidelines pertaining to HARP 2.0 that could encourage more lenders to jump on board with the program. Fannie eliminated an underwriting requirement that forces the lender to determine is the borrower has a “reasonable ability to repay” the loan based upon debt-to-income ratio, income, and other factors. It appears that the lender is now able to qualify borrowers through a streamlined process that could only take into account credit score and the number of recent payments made. This could make it significantly easier to qualify borrowers for new loans.

Mortgage Rates Hold Steady

Mortgages Rates were essentially unchanged today. Several lenders showed small improvements and at least as many, moderate deterioration, with one lender in particular weighing on the day-over-day averages. All told, it wasn't nearly enough to sway Best-Execution Rates for 30yr Fixed Conventional loans which have regained a fair bit of the 3.875% territory

FHA MIP Increase

FHA's New Single-Family Premium Structure As required by the Temporary Payroll Tax Cut Continuation Act of 2011, FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for single-family loans under $625,500 and by 0.35 percent for loans above that amount.  Additionally, upfront mortgage insurance premiums (UFMIP) will also increase by 0.75 percent.  Currently the UFMIP is one percent.  The effective date for the 0.10 percent annual MIP increase and the 0.75 percent UFMIP is April 1, 2012.  The effective date for the additional 0.25 percent MIP increase on loans with mortgages exceeding $625,500 is June 1, 2012.  Both dates are based on case numbers assigned. Please click here to review the press release announcing the new changes to the Federal Housing Administration's (FHA) premium structure.

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