Anyway, my advice is to work something out with your bank so you pay NO fees or go to another bank. In all fairness to the banks (and I know the banks are villains these days – but the Government is an even BIGGER villain) they have lost a boatload of revenues and now they want to get it out of YOUR hide.   It is possible that by a) keeping some kind of minimum amount of cash on hand you can avoid a fee or b) by setting up a direct deposit you may be able to avoid a fee.

For me, I refuse to pay Bank fees and always seem to find a way around doing so – but it gets more challenging all of the time!

This was a contentious meeting, with three of the ten Governors of the Fed voting “no” and seven voting “yes” for the specific language of the announcement. But the good news in all of this saw an immediate drop in the benchmark 10 year bond – which mortgages tend to track. The 10 year bond went from around 2.40 all of the way down to 2.18. Wow! Just a month or so ago the 10 year bond was 100 basis points (1%) higher.

This move by the Fed will help more Americans refinance to still lower interest rates and payments and will also help more buyers qualify for home loans. The money saved each month due to refinancings will put large sums of money back into the pockets of our people – and that is a good thing. This money will be either saved, invested, or spent – and all three are good for the economy -the last two being more important at this time as we need to spur economic activity.

So, in conclusion we are definitely back into refinancing territory once again. Hang on to your hat as I am sure there are more exciting days ahead!

With a Reverse Mortgage one can pay off an existing home loan, obtain up-front cash and also establish an interest-bearing line of credit all at once! Is life good, or what?

There are two basic types of Reverse Mortgages: Fixed and Adjustable. The fixed-rate option provides the most cash and you must take all of the cash at the time your loan closes. With the Adjustable option you can pretty much write your own ticket in that you can take up-front cash, monthly income or you can park your money within an interest-bearing line-of-credit – or any combination of the above.

Your specific needs will dictate which option is best for you.

The FHA (Federal Housing Administration) has recently introduced a “Saver” version of both basic types of Reverse Mortgages. The objective of the “Saver” option is to save you money up-front by reducing the mandatory FHA insurance premium from 2% to .01% of the loan amount. Your closing costs go down by almost 2%. The only drawback to the “Saver” program is that you receive less cash.

Let me show an example: if you own a home valued at $450,000 and owe $100,000 on a mortgage and you are 70 years old you would recieve almost $180,000 (with today’s interest rates) in cash after paying your mortgage. With the “Saver” option you would recieve $138,000 after the paying off of your mortgage. Similarly, with the Adjustable you also receive less money with the “Saver” program.

To wind up – if you need to maximize your cash out you would select the “Standard Fixed Rate” Reverse Mortgage. If you do not need much money at the present time – but anticipate needed funds down the line you should choose either the “Standard” or “Saver” Adjustable option. With each of these programs you “park” your funds within an interest-bearing line of credit and watch your funds grow over time.

I have had the pleasure of helping seniors with Reverse Mortgages for many years. I love the product and enjoy working with seniors. Indeed I am a senior myself! The Reverse Mortgage loan is not right for everyone, but for many people it is a lifeline to a better quality of life.

Please call or e-mail me at any time with questions. I would be delighted to help you obtain a Reverse Mortgage.

All the Best,

Bert Morrison

Today the 10 year “benchmark” fixed rate loan is going for under 3.5%; the 20 and 30 year fixed rate conforming loans are trading in the low 4′s. Now is a terrific time to refinance.

And this brings me to another thought: many people have refinanced over and over and are always “starting the clock over at 30 years”. Depending upon your situation you might want to consider refinancing into a loan term that matches the remaining time period on your present loan. For example, if you have 18 years left on your loan maybe you refinance in to an 18 year fixed rate loan with a lower interest rate. Or, perhaps you have 26 years left on your term – rather than go to a 30 year term you can refinance into a lower interest rate and keep your 26 year term. We have the capacity to handle this type of financing for you.

Meanwhile back to the economy – I would not stay up late at night worrying about the effects of any possible “downgrading of US securities -at least not for now, as our debt will still be viewed as virtually “zero risk” debt for a while into the future. If we don’t, however, get our government finances under control a day of reckoning will be upon us.

The new “conforming jumbo” loan amount will drop from $697,500 to $546,250. This will also be the revised FHA loan amount.

The government implemented temporary loan limits back in 2008 as one way to support the home lending market, as most high-balance lenders disappeared from the lending scene for a period of time due to the financial crisis.

There is an outside chance that a deal will occur in Congress to extend the higher loan limits, but it is unlikelygiven the current focus on deficit issues. In any event true “jumbo loans”, loans that are not backed by Fannie Mae or Freddie Mac, carry an interest rate about .50% higher than the “conforming jumbo” Fannie Mae rate in today’s mortgage marketplace. Back in 2008, at the height of the financial crisis, the spread was almost 2%.

This is always an important topic and I talk and blog about this often – because it is important. If you are going to obtain the best home loan rate, or if want the best auto loan or credit card rate you need to closely manage your credit score – and aim for the fence! Strive to get your score up above 780 – it is doable if you follow my ideas.

Before I start there is something near and dear to my heart: When you apply for a home loan you need to know that the Lender will check your credit score TWICE – once at the outset and once right before “loan closing.” If you take out additional credit, or if you somehow miss some type of credit payment during the escrow period, your score will go down and it can threaten you ability to complete the transaction. This is a relatively new rule and some people are unable to close their home loans because they had some type of credit event during the escrow period – so be careful!

Improving your credit score can take some time but here are practical steps you can take:

1. Reduce your debts – this sounds easy and practical but too many people live on credit these days -and the amount that you owe compared with your available credit represents 30% of your total score. So the fastest way to drive up your score is to pay down on your debt. If your credit card has a $10,000 cap – make sure you owe less than $3000 – in fact pay the card off if you can. The credit scoring formula LOVES available unused credit! Conversely it HATES a high borrowed amount against the credit limit.

2. Zero out smaller balances – don’t have a bunch of cards (so to speak) with piddly balances – zero them out and keep them that way. Pay cash instead of using these cards.

3. Pay on time – this seems obvious – but if you miss ONE payment resulting in a 30 day late your score can plummet 50 or more points – set up methods to make sure your accounts are paid on time -and better yet pay off all but your mortgage and auto loans – and even have a plan in place to accelerate the paying off of your auto and home loans.

4. Don’t close credit card accounts – leave them open with zero balances – the credit scoring model, as mentioned, LOVES unused credit.

5. Stay clear of credit repair scams – you cannot erase legitmate credit problems like a bankruptcy.

Be Happy! Pay with cash or a credit card that you pay off every month!

PMI stands for “Private Mortgage Insurance”. When you buy a home with less than a 20% down payment you will need PMI insurance (unless you are using FHA or VA or USDA financing). This PMI insures the lender against loss in the event of your default under the loan agreement.

Here are some helpful hints on how to effectively use PMI:

1. The cost of PMI insurance is as low as .49% for a 90% loan and .67% for a 95% loan. For a $300,000 purchase with 10% down the payment is just $110 per month. This comparable FHA insurance premium with 10% down would be $247 per month -PMI saves $137 per month compared with FHA financing); For a 5% down loan the monthly PMI cost would be just $159 per month.

2. With PMI you can choose the “single-premium” plan and pre-pay for your PMI insurance and never have to pay a dime for PMI again! Is life good or what? For a 90% loan the up-front cost is 1.25 points and for a 95% loan the up-front premium cost is 1.95 points. Before you get too concerned with the cost consider this: The property seller, or even the lender can help pay for this premium. You can ask the seller to help pay for closing costs in your purchase offer; or, if you select an interest rate, say, .125% higher than the market you can have the lender, through “rebate pricing” help cover the cost of your PMI – either way you come out the winner! Better to pay and extra .125% on your mortgage than to pay an extra .67% for PMI insurance.

3. More good news – the PMI cost is tax deductible. However know this: Your home purchase (or refinance) must close by December 31, 2011 under present legislation. And there are some qualifiers: your household income must be at $100,000 annually or lower for a full deduction of the premiums; if you earn more than this a portion of your PMI may be deducted. Please consult your CPA as I am not a tax advisor.

Keep this in mind- if you are seeking to use PMI insurance you will need to have a good credit score. You may contact me at any time and I can pre-qualify you for a home purchase loan.

Happy house hunting!

If you are considering refinancing now is a very good time to lock a rate. We have been advising clients for some time that when rates hit these levels to take action to improve their mortgage positioning.

By the way, if you are looking to save or invest and are seeking financial help I can recommend a expert Financial Planner to help you develop your financial plan. I am a Gold Resource Partner with the Financial Planning Association of San Diego and have relationships with many financial planning experts. Let me know if you have this need.

In the meantime, stay in touch and let me know if I can help you with a home loan.

As a result of the fiannical crisis the government took action to increase loan amounts to prop up and sustain the important housing sector. As of October 1st of this year, as previously posted, the FHA and Fannie Mae loan amounts are going down while the Reverse Mortgage loan amount remains at its new, higher loan level of $625,500.

With this higher loan amount more seniors will have access to Reverse Mortgage financing – for both purchases and refinances.

There are two basic types of Reverse Mortgages: Fixed and Adjustable. These loans differ in just how the loan dollars are disbursed. With a fixed-rate loan the senior obtains use of all of the cash up-front. With the ARM product the senior can take part or all (or none) of the funds at closing and can choose to let money accumulate and accumulate interest until the funds are needed – or the senior can choose to receive regular monthly payments or can just take money whenever it is needed.

In any event, this boost to the Reverse Mortgage loan amount will benefit seniors across the country who reside in high-cost markets.

As of October 1st of 2011 these so-called “Jumbo Conforming” loans will go away (barring a last minute reprieve and we have heard no such discussion to date). This means that conventional home loan amounts between $417,000 and $697,500 will most likely carry a higher interest rate since private “jumbo” lenders will need to fill the void as these Fannie Mae (and Freddie Mac) loans go away.

In February of 2008 the Economic Stimulus Act temporarily raised the “conforming” and Federal Housing Administration (FHA) loan limits in San Diego County to $697,500 from $417,000. This established a two tiered system with “conforming” loan amounts topping out at $417,000 and “jumbo conforming” loans topping out at $697,500. In February of 2009 these loan amounts were extended by Congressional action.

If you or someone that you know has a loan amount between $417,000 and $697,500 it might be prudent to finalize a home purchase or refinance now, rather than waiting until after October 1st, as there is a real possiblility that loan amounts within this range will carry a higher interest rate after October 1st.