Blog Archives

FHA lowers mortgage insurance

Awesome news from a mortgage lender I use a lot about FHA costs…

“YAHOO, great news! Most people who are currently in an FHA loan have not been able to take advantage of the low rates because FHA had a such a high monthly mortgage insurance premium that it took the value away. FHA finally got it together and is lowering the upfront mortgage insurance AND the monthly mortgage insurance! If I you’ve been told you that it just didn’t make sense before, well it probably does now. To get the process rolling quickly you can apply online to www.firstcal.net/eusea. The new amounts will start AFTER April 9th, but let’s get it ready!!”

Catherine Eusea
Area Sales Manager
ceusea@firstcal.net

Office: 970-372-6939
Cell:
 720.300.6777
Fax: 855.502.6873
NMLS#: 237244

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Refinancing Borrowers Pick Shorter Term Loans

Freddie Mac

Image via Wikipedia

Refinancing Borrowers Overwhelming Pick Shorter Term Loans
Feb 15 2012, 10:34AM

More borrowers chose shorter term loans in Quarter Four.  Forty-three percent of borrowers who refinanced a 30-year FRM chose a 15 or 20 year variety, the highest percentage on record, and 77 percent with a 20-year traded it in for a 15 year.  Only about 19 percent of fixed-rate borrowers picked longer-term loans when refinancing.

Fourth Quarter Refinance Transition Figures

Old Loan

1-Year ARM

Hybrid ARM

Balloon

15-Year FRM

20-Year FRM

30-Year FRM

1-Year ARM

0%

36%

0%

43%

14%

7%

Hybrid ARM

0%

42%

0%

11%

3%

44%

Balloon

0%

5%

0%

28%

13%

55%

15-Year FRM

0%

1%

0%

91%

1%

6%

20-Year FRM

0%

1%

0%

77%

11%

12%

30-Year FRM

0%

1%

0%

27%

16%

56%

Frank Nothaft, Freddie Mac vice president and chief economist said “For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. Compared to a 30-year fixed-rate mortgage, the interest rate on 15-year fixed was about 0.7 percentage points lower during the fourth quarter.  And for borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings. The initial interest rate on a 5/1 hybrid ARM was about 1.1 percentage points lower than on a 30-year fixed-rate loan.”

Read the Full article here:

http://www.mortgagenewsdaily.com/02152012_refinancing.asp

Max Mortgage Calculator

Maximum Mortgage

What is your maximum mortgage? That largely depends on your income and current monthly debt payments. This calculator collects these important variables and determines your maximum monthly housing payment and the resulting mortgage amount.

Visit our maximum mortgage calculator to enter in your own variables and see your own personal situation.

http://www.legacyrealtor.net/MaxMortgageCalc

Garry Callis

303-257-4725

Selling One Home, Buying Another?

English: Moving Company employees load a movin...

Image via Wikipedia

Selling One Home, Buying Another

In a perfect world, you sell your old home and buy the new one on the same day. Given that things rarely turn out perfectly, here are some things to keep in mind as you negotiate the sale of one house with the purchase of another.

Time it right

Fall and spring are the best times for homes to move and you want to consider the season of the year when buying and selling. And if the closing dates aren’t going to coincide, a gap – rather than two mortgages – is the better. It’s easier and usually cheaper to find temporary housing than juggle two mortgages.

Selling First

  • Selling your home before buying a new one minimizes financial hazards. Even if you have to find temporary housing, it’s generally cheaper than two mortgages.
  • Get an appraisal first thing off the bat. That way you’ll have a good idea how the sale of your home will effect your purchasing power on the new one.  This will help keep you from over extending your mortgage abilities.
  • Get pre-approved on a loan for the new home.
  • Until most of your contingencies have been met, wait to put an offer on a new house. You don’t want to be left holding the bag, or in this case, the house.
  • If you’re ready to accept an offer on your home, but haven’t found the right new home, negotiate a long escrow or a sale/lease back. This will give you more time to look for the new home. Otherwise, look for temporary housing.

Buying First
It happens. You’re only thinking of buying, and suddenly the right home shows up. Now you have to sell your old home quickly. Here are some tips on making things work in your favor:

  • Negotiating a long escrow on this side of the sale works, too. You can also make the purchase contingent on your house selling. This will work better in a slow market, but it’s worth a try in any market. You never know what may also work best for the seller of your new home.
  • Try and schedule the closing date of your current home prior to the closing on your new home. Temporary housing is generally a better situation than two mortgages.
  • Take a close look at what price you’re going to ask for your home. Make sure it’s realistic in the current market.
  • When you get an acceptable offer, check the buyer’s credit history. You don’t want any surprises that are going to delay things. If you’ve closed on the new home, but haven’t sold the old one, consider renting it out, or taking it off the market until the next season (or until the market improves).

Same Market or Across Country

Generally, if you’re buying and selling in the same market, you can negotiate closing dates to work for you. But when you’re dealing with a cross country move, it’s a lot harder. A real estate professional really comes in handy at this point. Legal documents can be faxed or sent via overnight courier and your focus won’t be stretched to the limit. You may end up renting one home or the other, or have to consider a bridge loan. But with someone local in the market on your side, it will hopefully be less stressful.

Show Me the Money

Make sure you have a tight hold on, and a clear understanding of, your financial situation. Cash reserves are always helpful, but never more so than during the purchase of a home. Two to three months is the recommended reserve, but if you don’t have it, this is where the bridge loan comes in handy. Some lenders are more inclined to make a loan if it’s for the purchase of a home. If you’re a smart shopper/seller, you’ll accept an offer from someone who’s flexible about move-in dates. It can save you money in the long run. Too many moves with storage costs can quickly eat up any profit you may have made in the transaction.

Before You Look at Your First House

Before You Look at Your First House

Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home – including how we write the offer, which mortgage programsyou will qualify for, shopping for the best mortgage loan and which homes are truly in your price range.

Here are the questions that each home buyer should ask:

  • How much cash is available for a down payment?The amount you have available for a down payment will affect what types of loans for which you can qualify. Learn more.
  • Am I ready to write a check for the earnest money? Earnest money is a cash deposit made to a home seller to secure an offer to buy the property. This amount can be forfeited if the buyer decides to withdraw his offer.
  • How much additional cash will be available to pay for closing costs? There are certain standard costs associated with closing the sale of a house. Some fees are split between the buyer and the seller, as spelled out in the sales contract. Learn more.
  • What is the maximum monthly mortgage payment that I can afford? Most lenders will use the 28/36 rule to determine the maximum mortgage payment you can afford.

The 28/36 Rule
No more than 28% of your gross income can be applied to your mortgage, real estate taxes and insurance. And no more than 36% of your gross income can be applied to your mortgage expenses plus your regular debt expenses (car payments, credit cards, other loans, etc.).

Any Questions? I am always available to talk…

Garry Callis 

303-257-4725