Rate lock recommendation and increases in home value benefits

Investors should not be too quick to write off an interest rate hike by the Federal Reserve in December, despite market expectations increasingly looking to early next year as more likely, the former executive vice president at the New York Fed said today.



Rates continue to hover at a 28 week low and best execution for 30 year fixed rates at 3.75%-3.875% for borrowers with top tier scenarios.  I am recommending locking at these current rates for purchase and refinance as the market weighs in on China and other world economies to predict the direction the Federal Reserve will take in timing of the anticipated rate hike.

Home values continue their steady upward climb and my experience with multiple offers on correctly priced homes in the purchase market continues.  The highest success of offer acceptance in a competitive home sale market which we currently have is for clients who have a FULL credit approval letter, backed by a 3 bureau merged credit report, an Automated Underwriting System approval and supported with my underwriting teams review of income and asset documentation.

Mortgage rates and home values are also helping borrowers drop Private Mortgage Insurance on their conventional loans with a refinance to a new loan at lower 15 year rates and FHA borrowers convert their FHA loans to a new conventional loan with lower rate and no monthly mortgage insurance.

Call me at 801-540-5108 and we can review your purchase or refinance options!

Rents are going through the roof!

Rent costs are rising quickly!

Single family rentals account for 13% of the overall housing stock (up from 9% in 2005) and rents are heating up!  Rents are higher than they should be given the underlying real estate values. 

As a result of the higher cost of rent relative to overall household income, first time home buyer's who have now entered the market (first time home buyer home purchases are the highest this year since 2009) are discovering the value of purchasing rather than renting. 

With appreciation in home values ticking along at 4% per year nationally (and regionally 6-8% and higher in some hot selling neighborhoods), coupled with historically low interest rates, and home financing is once again available to home buyer's with good credit, reasonable debt obligations and little or no down payment. 

Purchase a home today because all the stars are lining up!

With after tax rates for home financing in the 3% range, home buyer's today are using their home purchase as a financial leveraging tool and will payoff debt that has a higher interest rate, like credit cards, student loans, department store cards and car loans, and paying off their mortgage LAST.


If a home purchase can again be viewed as an investment (steady appreciation) and as a financial leverage tool (payoff higher interest rate debt first and your mortgage last), the only thing we need to add to the equation is a beautiful house to buy for fun and financial success to begin!

Call Marty Qualls at 801-540-5108 for help with any of your mortgage questions.   

What's FHA financing all about?

FHA loans in 1991:
When I became a mortgage loan originator in 1991, I couldn't believe that there was a loan product which allowed all of the down payment to be gifted!  "Are you sure this is true?", I asked my mortgage lender buddy who had come over to the mortgage department at the bank we were with just 6 months before.  "It's true!  Can you believe how great of a program it is?"  That was my first impression of how great the FHA loan was because it lowered the barriers to home ownership for first time buyers.

FHA loans today: 
The FHA loan is a great fit for first time home buyer's and others with specific lending needs.  Since 1991 I have learned much about lending and about FHA.  I now know that FHA is a loan insurer not a lender, and that the loan is available to both first time home buyer's needing 100% financing (Utah Housing Loans/State Bond Programs), and it's a great alternative for buyer's who have less than perfect credit (my company, Primary Residential Mortgage, has a 580 credit score FHA loan program!).  FHA offers streamline loans to allow homeowners to lower their interest rate with NO COST (ZERO will be added to their existing loan balance, no appraisal required).

With FHA rates at their lowest in 17 months ( June, 2013), this is a great time for buyer's and current FHA loan holders to utilize purchase and refinance options!  Call me today for a more thorough analysis and discussion about what program's fit your needs the best.

Now that rates have fallen, HOW should I refinance my home loan?

Refinance today before rates go up!

It's an interesting study just completed and the findings released.  The average age of a refinanced loan is now 7.3 years, up two years from what it was last year and 3 times as long as the latest 10 year average.  In other words, there are over $800 million in mortgage loans today which have a higher than 5% interest rate!  Yours may be one of them.

With current 30 year rates hovering near 4% and 15 year at 3.5%, there can be substantial savings associated with refinancing.

But what about the cost associated with refinancing?
Does a homeowner REALLY need to save 1% on their mortgage to justify doing a refinance?
Why is 1% savings the "magic" number?

There are two ways to look at doing a refinance; 1) the rule of thumb 1% savings in interest rate, and 2) ZERO closing cost refinance-PURE savings because all you are doing is lowering your interest rate.

FHA Streamline Refinance-Great way to improve your rate or lower your payment

With mortgage rates at the best they have been for 15 months and the impending exit of the Federal Reserve from purchasing bonds (October, 2014 is the proposed date for tapering the bond purchase program), now may be the best time to consider an FHA streamline refinance.

The Streamline refinance program couldn't be simpler!  There is no appraisal required and the savings in monthly payments can be substantial especially if the current loan has been in existence for 5 years or more.

Information needed to begin to look at FHA streamline refinance options:

• Origination date of current loan
• Payment coupon or online payment information readily available-escrow payment, monthly mortgage insurance amount, balance of loan is on the payment coupon or online screen

Taking advantage of a lower interest rate or monthly payment savings can be something to take a look at to benefit person financial wealth with analysis of mortgage payment and payoff of higher credit card or installment loan debt.  

Also to be considered would be an increase in personal savings rate (into 401k, 403b, growth stock mutual funds, etc) with a decrease in the size of mortgage payments.  

5 Resolutions for First Time Home Buyer's

I love helping first time home buyer's!  The excitement they are experiencing brings back fond memories of my wife's and my first home purchase.  I cherish the opportunity to answer their questions and give them guidance so that their experience can be as pleasant as mine was.

Over the years, I have found that there are 5 resolutions or goals that first time home buyer's can focus on which will help them successfully negotiate their purchase and close on the loan that they want and deserve.

Every borrower has their own set of circumstances which makes their situation unique and I love working out a plan to help them get to the point of loan qualification and they can then move on to their home search.

Because so many first time home buyer's fall into similar circumstances, I have come up with
"The 5 Resolutions for First Time Home Buyer's".

The mortgage world is now rewarding borrower's with better interest rates and more favorable loan programs if they have higher credit scores, so my first advice is to Boost Credit Scores!  I developed a credit monitoring system which has been used by hundreds of my clients to help them fix their credit and to monitor their credit scores.  Here is the link to my Blog Article and at the bottom of the article is the link that takes you out to the credit monitoring companies offering a monthly service:  Credit Monitoring Program

Down payment can open loan program opportunities that will save huge amounts of interest savings over time.  And without a down payment, fortunately, we have great programs available for ZERO down mortgages-Utah Housing Finance Agency, but for the best loan programs, lower cost to originate, and lower interest cost over time,  Save Up to Put Down!

Find The Best Real Estate Agent is the secret sauce to a smooth enjoyable home buying experience! Because my Realtor Business Partners each approach the home buying process the same way as I do and will provide low pressure, educated guidance and assistance through the home buying process (and are experts with first time home buyer's and their questions and needs), I can provide you with a name and phone number of a trusted professional of mine who will amaze you with their abilities.

Beginning a home search usually begins with online searches and a visit to the mortgage calculator also provided online.  Unfortunately, the online mortgage calculators forget (or have no way of providing) information about monthly mortgage insurance (FHA) or private mortgage insurance (Conventional financing) and many assumed mortgage payments are just plain not correct.  The safest way to make sure that you are getting the correct information is to Get Pre-Approved!    My Credit Approval letters are backed up by an Automated Underwriting Decision (Fannie Mae or Freddie Mac) AND I underwrite income and assets.  What this means is that when a client of mine gets an accepted offer, their loan WILL close!  They also KNOW what their future payment is going to be rather than trusting the online calculator.  Pre-Qualify Today!

After meeting with clients, helping them with questions, taking their application (over the phone or in person), getting a credit approval, providing the credit approval letter to their Realtor, they then get to
Find Your Dream Home!  This is the most fun part of the process (still stressful, but fun) and with all 5 Resolutions for First Time Home Buyer's completed, this is a natural final process to a successful journey to home ownership.

More Homebuyer's Expected

Fannie Mae reports that potential home buyers may enter the purchase market sooner rather than later as more Americans expect mortgage rates and home prices to climb, according to results from Fannie Mae's June National Housing Survey, June, 2013

Only 5% of homebuyer's expect rates to drop over the next 12 months

Among the questions asked in the May 2013 Fannie Mae Housing Survey was, "Do you expect mortgage rates to go up, go down, or stay the same in the next 12 months?".

Just 5% of those surveyed expect mortgage rates to drop.

This may be another reason why such a large percentage of respondents said "now is a good time to buy a home". When mortgage rates rise, buyers know, purchasing power wanes.
From today's levels, for every 1 percentage point higher which mortgage rates go, a buyer's maximum purchase price declines 11%.. Rising rates, therefore, can mean the difference between buying a home with 4 bedrooms or three; with 3 bathrooms or two; and with a three-car garage or two.

Rising rates can also mean the difference between buying or renting for another 12 months.
Homeownership is attractive to renters because U.S. homes remain affordable and mortgage rates are still quite low.  Plus, with the high-availability of low-downpayment loans including the Fannie Mae Conventional 97 program and various FHA program, choosing the best mortgage program for your needs is easier than ever.

FHA Mortgage Insurance Changes: As of June 3, 2013

FHA Mortgage Insurance is changing again and for the 2nd time this year.  FHA has tried to find the magic insurance rate to allow FHA loans to be available, FHA to be solvent (too many losses and not enough insurance will take the FHA option away) and this INCREASE will enable FHA loans to be available into the future. 

Lock into the current FHA mortgage insurance by calling me and I can get an FHA case number for you

I must have your full FHA loan application for a refinance or a purchase-with property identified-before I can get an FHA case number.   

All FHA case numbers obtained after May 31, 2013 will fall under the NEW insurance rates which require monthly mortgage insurance for the life of the loan (MMIP currently drops off after 5 years or 78% of the original value or appraisal, whichever the lower amount) if the Loan to Value (LTV) is above 90%.

For LTV's below 90%, monthly mortgage insurance will drop off after 11 years. 

Here are the future Monthly Mortgage Insurance rates after June 4, 2013:

• 15-year loan terms with loan-to-value over 90% : 0.70 percent annual MIP
• 15-year loan terms with loan-to-value under 90% : 0.45 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.35 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.30 percent annual MIP

Beginning in June, though, the FHA moves away from an LTV-based system. The new cancellation policy will be as follows :

• Loans beginning at 90% LTV or less will pay annual MIP for 11 years.
• Loans beginning at 90% LTV or more will pay annual MIP for the complete loan term.

This means that home buyers using the Federal Housing Administration's 3.5 percent downpayment program will pay annual mortgage insurance for the loan's full 30 years, regardless of whether the home appreciates to the point of having 22 percent equity or more.

With the new FHA rules, Monthyly Mortgage Insurance Premium is forever. 

Strategy: Get a LOW rate FHA loan so you can let someone assume it AFTER rates go up!

Mark and Sharon Fowler of Charlotte, N.C. are simultaneously planning a home purchase and resale strategy.
Mark Fowler, chief revenue officer and vice president of production for Residential Finance Corp. in Charlotte, says he and his wife will use FHA financing to purchase their home even though they are making a down payment of more than 20 percent and could easily qualify for conventional financing.

Why? The Fowlers are using the "assumable" status of FHA mortgages as a future marketing tool to lure potential homebuyers when they decide to sell sometime down the line.

Home Buyer Education: Online

As we enter into the busier spring time home buying season, I begin to get calls from clients and Realtors who ask about Home Buyer Education.  Community, County and State Grant programs vary in amount of money offered, but many require home buyer education BEFORE the Grant can be offered to the home buyer. 

Marty, you were really great at explaining things! Testimonial at closing: November 5, 2012

"Thanks for the great job you did of explaining things to us!"

Marty, we appreciated that you were always available, even when it was late in the night you took our phone calls! When I needed help and you were there to answer my questions whenever I needed you! 

As first time home buyer's you answered our many questions and you were really good at explaining things to us on a level that we could understand because this was our first time doing this. You never talked over our heads and you helped us to be comfortable with the whole mortgage process, even as stressful as some of it becomes.  :)

Our waiting time for our offer acceptance was a LONG time (because it was a short sale offer) and you kept in really good contact with us during the past 5 months.  We felt we couldn't have had a better team to help us with you and Jon DeYoung!

We will refer you to our friends and family when ever we can, you can be sure of that!  Thank you!!!!

Adam and Amber Garrison, November 5, 2012

Helpful personable guidance! Loan closing October 24, 2012

Brandon and Marty celebrating a great interest rate! 

Marty, your help when we bought our home 3 years ago was awesome and the help you have given us on this refinance was awesome as well!

When we call you we know we will get the most helpful guidance and this time was no exception!  The new FHA streamline refinance program with the special rates were perfect for us!  Thanks for the analysis, we are going to save a ton of interest!  :)

We appreciate how personable you are!  We will recommend you to our friends and family whenever we can!  Thanks, Brandon

I would also like to add how much we appreciate the time you take to keep us updated throughout the loan process. Thanks again for helping us with this refinance and getting us into this house to begin with!  We loved working with you both times. 

Thanks again,

Crystal



Brandon and Crystal Malby  Closing October 24, 2012

Why FHA Streamline Refinances are so great

The FHA Streamline Refinance has perks!

The FHA Streamline Refinance is a unique mortgage product, available to homeowners with existing FHA home loans. The program was built to be the fastest, simplest way for an FHA-insured homeowners to refinance their respective mortgages.

The FHA Streamline Refinance's big draw is its leniency.
For homeowners using the FHA Streamline Refinance program  -- according to the FHA rulebook--  income is not verified; employment is not verified; and, credit scores are not verified.

So long as an FHA-backed homeowners makes his mortgage on-time payments for a period of at least 12 months, a mortgage approval is all but guaranteed.  Call or e-mail me if you have an FHA loan that you would like to refinance and I can review your benefits. 


The FHA Streamline Refinance is an excellent program with lots of success stories. It remains the fastest, easiest mortgage refinance program in the country.

 

For portions of my Blog Post I would like to thank Dan Green (NMLS #227607) who is an active loan officer with Waterstone Mortgage and writes excellent daily Blog posts about the Mortgage Industry.  

Don't Procrastinate.

If you have a home loan call me for refinance analysis!

A post card hit my clients mailboxes today to remind them that rates are at near historic lows and if they have a home loan, they can probably see a significant savings each and every month by refinancing!

I'm encouraging my clients to call now to see how much they can save!

Gas Prices are UP.  Airline Travel is UP. 
Home Mortgage Refinance Rates are DOWN! 

Thank you again for the wonderful experience! - October 16, 2012 closing testimonial

The dream of buying my own home has come true!! 
Amy Livernois

Marty, I wanted to thank you again for the wonderful experience I had in purchasing my first home!

As you know, I went to 3 lenders before I met you and they couldn't figure out how to get the loan done.  YOU FIGURED IT OUT! 

You suggested options, kept working with my situation and were creative enough to enable me to move forward and close my loan!

You were helpful and kept communicating with me from the very first time that Bill Anderson recommended and introduced me to you until closing!  VERY impressive!

FHA Guideline Change Expected

FHA : "Ignore" Foreclosures, Bankruptcy, Short Sales? 

Major derogatory events include foreclosure, short sale, and Chapter 7 bankruptcy. Current guidelines require a mandatory waiting period of each of the following events, assuming credit has been re-established by the borrower :

• Foreclosure : Waiting period of  3 years since sale date of foreclosure before eligible for FHA-insured financing
• Short Sale : Must wait 3 years from consummation of short sale closing before eligible for FHA-insured financing
• Chapter 7 Bankruptcy : Must wait 2 years from Bankruptcy discharge before eligible for FHA-insured financing

Under the FHA's expected new plan (anticipated within the next 90 days or sooner), these waiting periods will be waived in full.  Soon, FHA-insured loans may be available to home buyers who may have been recently foreclosed upon; for whom a short sale was necessary; or for whom a Chapter 7 bankruptcy was discharged yesterday.

The FHA's new waiver on foreclosures, short sales and bankruptcies would add to the national pool of home buyers, creating buy-side demand for housing and upward pressure for home values nationwide. 

9 in 10 homeowners unaware of HARP

With over 20% of mortgages underwater (owing more than their home is worth) it's surprising to think that 9 in 10 homeowners are unaware of either HARP 1.0 or the HARP 2.0 refinance programs.  Click here for details of the recent study: Most American's unaware of HARP

Those who subscribe to my Blog or Facebook Fan page (Mortgages with Marty Facebook Fan Page) are aware of the value of the upcoming HARP 2.0 program.  Click here for more details on HARP 2.0:  HARP 2.0

Additionally, with the FHA no cost streamline refinance available and now the VA Interest Rate Reduction Loan (IRRL) changes which did away with the need for a current appraisal (which is the same as the FHA streamline no cost loan refinance loan).

Whether a homeowner needs help with refinancing their underwater home with a:

• Conventional Loan (HARP 1.0 or HARP 2.0), 
• VA (IRRL), or a
• FHA (Streamline NO COST), I have 3 great refinance options available to help underwater homeowners!

Buy now (in March) and save $264/ year in payments!

Want to save more money by buying now rather than after April 1, 2012?

FHA mortgage insurance is increasing to a 1.75% up front mortgage insurance premium (currently 1%) and 1.25% for the monthly mortgage insurance premium (currently 1.15%) on April 1st, 2012.

I calculated the increase in payment on a $170,000 sales price home and it would be $22/month ($264/year, $3168 over 30 years).

Buy now (in March) and protect yourself from this increase.  :)

Warren Buffett says buy a house now!

In two recent interviews with Warren Buffett he again stated the obvious: Buy a house now!  Make sure you read the last paragraph of this post to hear another compelling reason to buy now!

Warren's reasoning comes from a unique idea he has of  "short-selling" your dollar with real estate investments.  With the value of the dollar depreciating 79% since 1990 (if you had a dollar in 1990, to buy the same stuff today, you need $1.79).  What does he mean when he says to short sell your dollar by investing in real estate? 

Here's why a real estate investment protects your dollar so well: Sure, values have dropped over the past 3 years, on average (nationally) by 42%, but they haven't dropped 79%!  That's a 37% return on your dollar IF it was invested in real estate in arguably the worst real estate market we have seen since the great depression.  He has a good point. 

With home values low, best mortgage rates in history, and the home affordability index the best since 1943, what better time to purchase a home than right now?? 

Want to save more money by buying now rather than after April 1, 2012?  Warren Buffett didn't even talk about another factor of investment savings to take advantage of in the month of March (possibly because he doesn't need an FHA loan? lol).  FHA mortgage insurance is increasing to 1.75% up front (currently 1%) and 1.25 monthly (currently 1.15%) on April 1st, 2012.  I calculated the increase in payment on a $170,000 sales price home would be $22/month ($264/year, $3168 over 30 years).  Buy now and protect yourself from this increase.  :)