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HARP 2.0 Provides Unlimited Loan to Value for Borrowers as well as Access to Fantastic Rates

The government’s new, revamped HARP 2.0 program is 6 weeks from release. Homeowners in Florida and nationwide are gearing up to refinance.

What is HARP 2.0?

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the government’s loan product for “underwater homeowners”. HARP makes current mortgage rates available to households which would otherwise be unable to refinance because the home lacks equity.

This is a big deal — especially today. Florida mortgage rates are at an all-time low and millions of U.S. homeowners have been unable to take advantage. HARP aims to change that.

HARP originally launched in 2009. Its first iteration failed to reach a meaningful percentage of U.S. homeowners, however, because costs were high and loans were high-risk. With its re-release, the government has removed the hurdles to HARP, putting refinancing within reach for millions of U.S. households.

How to Qualify for HARP 2.0

To qualify for HARP 2.0, homeowners must first meet 3 qualifying criteria.

First, their current mortgage must be backed Fannie Mae or Freddie Mac. FHA- and VA-backed loans are HARP-ineligible, as are jumbo loans and loans backed by portfolio lenders.

• To check if your loan if Fannie Mae-backed, click here.
• To check if your loan if Freddie Mac-backed, click here.

Second, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior on, or before, May 31, 2009. If you bought your home or refinanced it after that date, you are HARP 2.0 ineligible.

There are no exceptions to this rule.

And, third, the existing mortgage must be accompanied by a strong repayment history. Mortgage payment must have been paid on-time for the last 6 months, at least, and there may not be more than one 30-day late payment in the last 12 months.

If these 3 qualifiers are met, HARP 2.0 applicants should find the approval process straight-forward :

• Fixed rate mortgages allow unlimited loan-to-value
• The standard 7-year “waiting period” after a foreclosure is waived in full
• Except in rare cases, home appraisals aren’t required

Furthermore, HARP 2.0 mortgage rates are expected to be on par with non-HARP rates, meaning that HARP 2.0 homeowners in Florida will get the same rates and pay the same fees as everyone else. There’s no “penalty” for using HARP 2.0.

The revamped HARP 2.0 program  is expected to be generally available beginning Monday, March 19, 2012.

To get a head-start on HARP 2.0, please call me for a complete list of HARP 2.0 eligibility requirements.

Technorati Tags: Florida Mortgage, Florida mortgages, HARP, Harp 2.0, Home Affordable Refinance Program, Making Home Affordable, Revamped Harp Loans

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Boost Your Credit Score to Get That Loan Approved

Why It’s Important to Boost Your Credit Score

Credit scores play a huge role in today’s Florida mortgage market — larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.  So if you want a low Florida mortgage rate, you need to boost your credit score.

Mortgage rates are at an all-time low in Florida. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine.  When you boost your credit score, you enter into a situation where you get “the best rates” from your lender, rather than getting something worse.

The first thing to work on when you want to boost your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics :

• Why you shouldn’t close a credit card after you pay off a large debt
• What is the maximize balance to leave on your credit cards, relative to your credit limit
• What types of credit checks harm your credit scores, and which ones don’t

You’ll also learn how to shop for a Florida mortgage with multiple lenders without having your credit score “dinged”, as well as several proven methods to raise your credit score quickly.

In the end, you need to boost your credit score at all times by paying bills on time and staying with your means. Those with the best scores, get the best rates.

Technorati Tags: Boost Your Credit Score, FICO, Florida Mortgage, Florida Mortgage Rates, NBC, The Today Show

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Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.

It’s a money-saving time to buy a home in Orlando — or to refinance one. Mortgage rates have never been this low in history.

According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed.

This represents an incredible value as compared to February of last year.

It was exactly one year ago that mortgage rates begin their long slide lower. On February 11, 2011, the 30-year fixed rate mortgage reached its peak for the year, reading 5.05% in Freddie Mac’s nationwide survey. If you are among the many U.S. households that bought or refinanced a home around that time, you could choose to replace your current home loan with a new one and save close to 13% on your monthly mortgage payment.

13 percent saved on your mortgage is a noteworthy statistic.

Look at this 30-year fixed rate mortgage payment comparison over the last 12 months :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• February 2012 : $469.95 principal + interest per $100,000 borrowed

Because of falling mortgage rates, a homeowner with a $250,000 30-year fixed rate mortgage would save at least $175 per month just by refinancing into a new loan at today’s mortgage rates. That’s $2,100 in savings per year.

Even after accounting for discount points and closing costs, the “break-even point” on a mortgage like that can come relatively quickly.

We can’t predict mortgage rates so there’s no promise rates will stay like this forever. If you’re planning to buy a home or refinance one, the best way to keep your monthly payments down is to lock your rate while rates are still low.

The market looks ripe for that now.

Technorati Tags: 30-Year Fixed Rate Mortgage, Freddie Mac, Refinance

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Florida Mortgage Rates Rise as Economy Shows Improvement

Florida mortgage markets worsened last week as domestic job growth surprised Wall Street and the Eurozone moved yet one more step closer to reaching a lasting Greece sovereign debt solution.

Conforming mortgage rates in Florida rose on the news, although you wouldn’t know it from looking at Freddie Mac’s weekly mortgage rate survey.

Florida Mortgage Rates Bounce Up Post Freddie Mac Announcement

According to Freddie Mac, the average 30-year fixed rate mortgage rate fell to 3.87% last week with 0.8 discount points due at closing, plus closing costs. 1 discount point is a fee equal to one percent of your loan size.

3.87% for a 30-year fixed rate mortgage is the official, all-time low for the weekly Freddie Mac survey, conducted since the 1970s. However, because Freddie Mac gathers its results on Monday and Tuesday only, by the time the survey results were released Thursday morning, Florida mortgage rates were already rising off their lows.

Then, Friday morning, after January’s Non-Farm Payrolls data was released, Florida mortgage rates surged.

The January jobs report exceeded expectations in nearly every fashion possible :

• Economists expected to see 135,000 jobs created in January. The actual number was 243,000.
• Economists expected to see the Unemployment Rate at 8.5% in January. The actual number was 8.3%.
• Revisions added an additional 180,000 net new jobs to the original 2011 tally.

Florida Mortgage Rates Move Higher as Economic Figures Improve

As compared to one year ago, there are 2.1 million more people employed in the U.S. workforce. Figures like this hint at a stronger national economy, and that tends to drive Florida mortgage rates up.

This week, with little economic data due for release, mortgage rates are expected to move on momentum. Right now, that momentum is causing Florida mortgage rates to rise.

If you’re shopping for a mortgage rate in Florida and want to know if the time is right to lock, consider that it’s impossible to time a market bottom, but simple to spot a “good deal”.

Florida mortgage rates remain near historical lows — it’s a good time to lock one in.  Call me today so that we can lock you in before they begin their upward move!

Technorati Tags: Eurozone, Florida Mortgage, Florida Mortgage Rates, Non-Farm Payrolls, Unemployment Rate

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Five Year Florida Mortgage Loan Strangle Hold May Be Loosening

Florida mortgage loans may now be a bit easier to get, thanks to banks loosening some of their underwriting guidelines.

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

So, What’s a Florida Mortgage Prime Borrower?

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed’s survey and none said that mortgage guidelines “tightened considerably” or “tightened somewhat” between September and December 2011; 50 said that guidelines remained “basicaly unchanged”; 3 said that guidelines “eased somewhat”.

Florida mortgage applicants often relay that they have a heck of a hard time getting loans through the underwriting process.

Not since before the recession have banks lowered mortgage approval standards like this, and it bodes well for this year’s Florida housing market. Real estate agents report that 1 in 3 home sale contracts fail with “declined mortgage applications” as a leading cause.

Looser Florida mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. “Looser standards” should not be confused with ”irresponsible standards.” It’s still more harder to meet bank standards as compared to 5 years ago. Today’s underwriters are more conservative with respect to household income, overall assets and credit scores.

Florida Mortgage Requirements Compared to One Year Ago

Even as compared to one year ago:

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in Florida continue to fall, helping home affordability reach new highs.

If you’re in the market to buy a new home or refinance one, your timing is excellent.

Technorati Tags: Federal Reserve, FICO, Florida Mortgage, Florida Mortgage Rates, Florida mortgages, Senior Loan Officer

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All Time Low Florida Mortgage Rates May Increase with Improved Jobs Rate Numbers

This week, once more, we find Florida mortgage rates are on a downward trajectory. Conforming mortgage rates have returned to near all-time lows. After Friday morning’s Non-Farm Payrolls report, however, those low rates may come to an end.

It’s a risky time for Florida mortgage rate shoppers and potential home buyers and would-be refinancers to be without a locked rate.

Why Florida Mortgage Rates May Move Up

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for the month prior. More commonly called the “jobs report”, Non-Farm Payrolls provides a sector-by-sector employment breakdown, and the nation’s Unemployment Rate.

In December 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

The connection between jobs and Florida mortgage rates is fairly direct.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has added jobs over 15 straight months, a streak that’s added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow’s Non-Farm Payrolls shows more jobs created than the estimated 135,000, Florida mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

Technorati Tags: Florida Mortgage, Florida Mortgage Rates, Jobs Report, Non-Farm Payrolls, Unemployment Rate

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Low Florida Mortgage Rates and Affordable Home Prices Boost Housing Market

After 3 consecutive months of growth, the housing market appears to have eased a bit in December.  This, of course, is spurred on by low Florida mortgage rates and excellent deals on homes here in our state.

According to the National Association of REALTORS®, December’s Pending Home Sales Index slipped 4 percent from the month prior. The index measures the number of homes under contract to sell nationwide, but not yet sold.

Despite falling below its benchmark “100 value”, December’s Pending Home Sales Index is the reading’s second-highest value since April 2010 — the last month of last year’s home buyer tax credit program.

Affordable Florida Mortgage Payments Help Spur Home Sales

In other words, the housing market continues to show signs of improvement, propelled by low home prices and the cheapest mortgage rates of all-time.

Freddie Mac’s mortgage rate survey put the 30-year fixed rate mortgage at an average of 3.96% in December — a 75-basis point improvement from December 2010. When Florida mortgage rates drop, it helps to make homes more affordable nationwide.

On a regional basis, December’s Pending Home Sales Index varied :

• Northeast Region: -3.1 percent from November 2011
• Midwest Region : +4.0 percent from November 2011
• South Region : -2.6 percent from November 2011
• West Region : -11.0 percent from November 2011

But even regional data is only so helpful. Like everything in real estate, data must be local to be relevant.

Throughout the West Region, for example, the U.S. region in which pending home sales fell the most, several states must have performed better than the regional average. And, undoubtedly, there were cities, towns, and neighborhoods that experienced marked market growth.

Unfortunately, the Pending Home Sales Index can’t capture that data. Nor can it identify the markets in which home sales suffered.

For today’s Florida mortgage borrowers, home buyers and sellers, therefore, it’s important to understand your local market and the drivers of local activity. Reports like the Pending Home Sales Index can paint a broad picture U.S. housing but for data that matters to you, you’ll want to look local.

For local real estate data, talk to an experienced real estate professional.  And of course, for your Florida mortgage rate quote, go ahead and complete the Live Rate Quote form on our sidebar. I’ll be sure to get back to you with information on how we can help you with your Florida mortgage.

Technorati Tags: Florida Mortgage, Florida Mortgage Rates, NAR, Pending Home Sales Index, PHSI

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Florida Mortgage Rates Fall with FOMC Statement

Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.  This means things should remain flat or even cause Florida mortgage rates to drop.

The Fed Funds Rate has been near zero percent since December 2008.

For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.

Florida Mortgage Rates Flat Due to Slowing Global Growth

In its press release, the Federal Reserve noted that the the U.S. economy has “expanded moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.

The Federal Reserve expects moderate economic expansion through the next few quarters but is wary of “strains” from global financial markets, and these three threats to the U.S. economy :

1. The housing sector remains “depressed”
2. The unemployment rate remains “elevated”
3. Fixed business investment has “slowed”

On the positive side, the FOMC said that household spending is rising and inflation remains in-check. The group also believes that employment will gradually improve nationwide going forward.

The Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs.

FOMC’s Statement Means Falling Florida Mortgage Rates

Immediately following the FOMC’s statement, mortgage markets rallied, pressuring mortgage rates to fall in and around Orlando.

Florida mortgage rates remain near all-time lows and, for homeowners willing to pay points plus closing costs, conventional, 30-year fixed rate mortgages can be locked at below 4 percent. If you’re in the process of buying or refinancing a home in Florida , it’s a good time to lock a mortgage rate with your lender.

The FOMC’s next scheduled meeting is a one-day event slated for March 13, 2012.

Technorati Tags: Ben Bernanke, fed funds rate, Florida Mortgage, Florida Mortgage Rates, FOMC

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Florida Mortgage Rate Increase May Be Ahead

The Federal Open Market Committee adjourns from a scheduled 2-day meeting today, its first of 8 scheduled meetings this year.  Depending on how things read, Florida mortgage rates could rise.

FOMC Votes Influence Wall Street. Wall Street Influences Florida Mortgage Rates

The FOMC is a designated, rotating, 12-person committee within the Federal Reserve, led by Federal Reserve Chairman Ben Bernanke. Members of the FOMC sub-committee are the voting members of the Federal Reserve; the ones that ultimately determine U.S. monetary policy.

The most well-known Federal Reserve monetary policy tool is the central bank’s Fed Funds Rate. The Fed Funds Rate is the prescribed interest rate at which banks borrow money from each other for a period of one night.

The Fed Funds Rate can only be changed by FOMC vote.

For home buyers and would-be refinancing households in Orlando , it’s important to recognize that the Fed Funds Rate is an interest rate separate and distinct from “mortgage rates”. Mortgage rates are not voted upon by the Federal Reserve. Rather, mortgage rates are based on the price of mortgage-backed bonds, a security bought and sold among investors.

Historically, there is little correlation between the Fed Funds Rates and 30-year fixed rate mortgage rates throughout Florida. Going back 20 years, the benchmark rates have been separated by as much as 5.29% and have been as near as 0.52%.

The spread has even gone negative, most recently in 1979 and 1981 — a period marked by high inflation.

Today, the separation between the Fed Funds Rate and the average, 30-year fixed rate mortgage rate is roughly 3.60%. Beginning at 12:30 PM ET, however, that spread is expected to change. The FOMC will make its statement to the press at that time, and will release its quarterly forecast to the markets.

As Wall Street reacts to the Fed’s press release and projections, mortgage rates will move.

Investors expect the Fed to vote the Fed Funds Rate unchanged from its current range near 0.000 percent, but are unsure of how the Fed will characterize the U.S. economy. If the Fed speaks optimistically on the economy, stock markets should rise and mortgage bonds should fall, driving mortgage rates higher.

Conversely, if the Fed shows concern for future economic growth, mortgage rates should drop. Either way, today figures to be volatile one for mortgage markets.

When mortgage markets get volatile, the safe play as a rate shopper is to lock your mortgage rate immediately. There too much risk in floating.

Technorati Tags: 30- Year Fixed, fed funds rate, Florida Mortgage, Florida Mortgage Rates, FOMC

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The housing market finished 2011 with strength, and is carrying measurable momentum into 2012.  Let’s take a look at Florida existing home sales and sales across the nation.

According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December’s Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.

An “existing home” is a home that’s been previously occupied; that cannot be considered new construction.

After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.

At today’s sales pace, the complete, national home inventory would be exhausted in 6.2 months — the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance.

The December Existing Home Sales report contained noteworthy foreclosure and short sale statistics, too :

• Foreclosures sold at an average discount of 22% to market value
• Short sales sold at an average discount of 13% to market value
• Together, foreclosures and short sales accounted for 32% of all home sales

Clearly, “distressed homes” remain a large part of the U.S. housing market.

Furthermore, in its report, the real estate trade group also noted that one-third of homes under contract to sell nationwide succumbed to contract failure last month. That’s up from 9% one year ago.

Contract failure occurs for a multitude of reasons, most notably homes appraising for less than the purchase price; the buyer’s failure to achieve a mortgage approval; and, insurmountable home inspection issues. December’s high failure rate underscores the importance of getting pre-approved as a buyer, and of buying homes in “good condition”.

For today’s home buyer in Florida, December’s Existing Home Sales figures may be construed as a “buy signal”. Home supplies are dropping and buyer demand is rising. This is the basic recipe for higher home prices ahead.

If your 2012 plans call for buying a home, consider that home values throughout Florida are expected to rise as the year progresses. The best values of the year may be the ones secured this winter.

Technorati Tags: existing home sales, Existing Home Supply, NAR

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