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4 Types Of PMI: Which One Is Right For You?

2016-07-13T08:25:00.001-07:00

4 Types Of PMI: Which One Is Right For You?

Thanks to PMI, You Don’t Need 20% Down

For many home buyers, one of the biggest challenges to enjoying homeownership is the downpayment.
Thanks to private mortgage insurance, or PMI, U.S. home buyers have a number of low, or even no downpayment options available to them.
Home buyers often try to avoid PMI because they think it's "bad." But consider this: PMI allows buyers to own a home much sooner, capitalize on home appreciation, and avoid rising rents.
Sure, home buyers can wait to save up 20%, or exhaust their savings, but PMI could be a much better alternative.
Private mortgage insurance is nothing to be afraid of. It's simply an insurance policy issued by a private company that lowers risk for the lender.
In turn, lenders can approve a mortgage at well below the 20% down mark. Thanks to PMI, buyers can own a home sooner.
Click to see today's rates (Jul 13th, 2016)

Choosing Between 4 Types Of PMI

Mortgage insurance typically reduces the upfront cost of the home and spreads it out via slightly higher monthly payments. The type of mortgage insurance will determine the length of time for which the homeowner will make the higher payment.
The four types of mortgage insurance does not include those offered with government-backed loans such as FHA MIP, or "mortgage insurance premium." Rather, these are private mortgage insurance types which are issued with conventional loans, and they come in four varieties:

Borrower-paid (BPMI)
Lender-paid (LPMI)
Single premium
Split premium

Each type comes with its own advantages that suit various situations. Choosing the right one can put you in an ideal home buying position.

1. Borrower-paid monthly PMI

Borrower-paid monthly mortgage insurance (BPMI) is the most common type and is often known simply as "PMI." It is the “default” type of PMI, and the payment is tacked onto the regular mortgage payment.
BPMI can be canceled. You pay it until your loan principal drops to 78% of the home’s value. In other words, it drops off when you reach 22% equity in your home.
This percentage is based on the lesser of the original purchase price or current appraised value.
BPMI might be the right choice for a buyer who is unsure how long they will stay in the home or keep the mortgage. There is no upfront cost to this type of PMI, and no waiting period to cancel it via a refinance or lump-sum payment to your principal loan balance.
Click to see today's rates (Jul 13th, 2016)

2. Lender-paid PMI (LPMI)

With LPMI, the lender “pays” your mortgage insurance for you. But they don’t do it for free. Instead, they raise your mortgage rate. A higher rate enables the lender to cover the cost of a lump-sum buyout of your mortgage insurance.
Home buyers who choose lender-paid mortgage insurance might have a lower mortgage payment than if they paid PMI monthly. Having a lower monthly mortgage payment could mean qualifying for more home.
It’s important to note however, that LPMI cannot be canceled. The mortgage insurance is built into the interest rate, and the rate does not go down when the homeowner reaches 22% equity.
So, LPMI might be a good solution for a home buyer planning to stay in the home or keeping the mortgage for five to ten years. It typically takes 11 years to build enough equity to cancel a borrower-paid mortgage insurance policy.

3. Single premium PMI

Single premium PMI allows the homeowner pay the mortgage insurance premium upfront in one lump sum, eliminating the need for a monthly PMI payment.
It’s somewhat like lender-paid mortgage insurance in that there’s a buyout of PMI in the beginning. But instead of receiving the higher rate like with LPMI, the home buyer pays for the buyout in cash, or by financing it into the loan amount.
Single premium PMI results in a lower monthly payment compared to paying PMI monthly, which helps the buyer qualify for more home.
The risk, however, is that you will only keep the mortgage or home for a few years. The single premium is non-refundable.
If rates drop and you refinance in a few years, for instance, you lose that upfront payment, or have a higher loan amount because of it.
Click to see today's rates (Jul 13th, 2016)

4. Split premium PMI

Probably the least common type of private mortgage insurance is split premium mortgage insurance. While uncommon, it is a good option, allowing the homeowner to pay a portion of the insurance in a lump sum at closing.
The remaining amount is then paid in monthly installments. The home buyer gets a sharp discount on their monthly PMI since a portion was paid upfront.
For instance, a home buyer purchases a home for $250,000. He pays 1.0% upfront ($2,500) to the mortgage insurance company. His monthly mortgage insurance drops to $83 per month, from $123. In this case, it would take five years to make back the upfront payment. Split premium PMI might prove useful to someone who has extra cash, but is above the typical 43 percent debt-to-income ratio maximum.
Making a partial upfront payment could help them bring down their monthly payment enough to qualify.
Click to see today's rates (Jul 13th, 2016)

How Much Does PMI Cost?

The costs of PMI can vary from one lender to the next, but is typically based on the costs passed along from the actual insurance companies.
The amount paid for mortgage insurance premiums are based on the following:

Loan amount
Terms of the loan
Loan-to-value ratio
Type of loan
Credit score

PMI premiums can range from 0.2% to over 1% of the loan amount per year, paid in monthly installments.
As an example, a $200,000 loan amount at an annual premium of 0.5% would cost $83 per month.
PMI payments are heavily based on credit score. For instance, a buyer with a 640 score will pay more than $300 per month with a 5% down loan at an average home price. The same borrower with a 740 score would pay just over $100 per month.
Home buyers with lower credit scores should consider an FHA loan. Mortgage insurance for FHA loans does not rise due to credit score.

Which Kind Of PMI Is Best?

Because there are substantial benefits to each type of mortgage insurance, home buyers should consider the different options and how they relate to their current situation and long-term goals.
Generally, home buyers who plan to stay in the home and don’t plan to refinance might consider buying out their mortgage insurance via LPMI or a borrower-paid single premium.
However, it’s very difficult to predict the future. The PMI policy that comes with the lowest risk is the standard borrower-paid variety in which you pay a premium each month with your payment.
Most home buyers keep their mortgages less than 7 years, at which point they sell or refinance. And, as home values rise, many buyers refinance out of PMI after just a few years.
Think long-term when considering your mortgage insurance options.

What Are Today’s Rates?

Current mortgage rates are low and it’s an ideal time to buy a home, no matter which type of PMI you choose.
Get a quote for your home mortgage. Quotes are easy to get, take just minutes, and don’t require a social security number to start.
Show Me Today's Rates (Jul 13th, 2016)

Contact The Mortgage Mark with any Questions!

8 Behaviors That Will Kill Your Mortgage Approval — After You’ve Already Been Approved

2015-04-23T06:16:00.000-07:00

8 Behaviors That Will Kill Your Mortgage Approval — After You’ve Already Been Approved

67% OF ALL PURCHASE LOANS "APPROVED"

Current mortgage rates are down nearly 100 basis points (1.00%) since September 2013 and have approached their lowest levels of all-time.

The drop in rates has contributed to a rise in U.S. home sales and has sparked a home refinance boomlet, led by homeowners jumping on new, lower interest rates.

Even better -- it's getting easier to get approved for a mortgage.

In February, mortgage lenders approved 67% of all purchase loans applications, which is four percentage points higher as compared to last year's average. More than half of all refinances applications went to closing, too.

For many applicants, though, it's not the mortgage approval that's the hard part -- it'skeeping it.

There are plenty of land mines in the mortgage approval process. You'll want to stay clear of them.

Click to see today's rates.

WHEN THINGS GO WRONG WITH YOUR MORTGAGE

Mortgage approvals take time. In a typical home loan market, 45 days is normal time frame.

The time to get an approval, though, can change based on the market environment or how "complicated" a loan might be. For example, when mortgage rates are low and there's a refi boom on-going, closing on a loan take as long as two months. Loans for the 5-10 Properties Program, which require additional paperwork, may delay the process further.

Sometimes, banks just can't work that fast.

Closing times can also be delayed for buyers of short sales and foreclosures. Loans for distressed sales and REO can take 6 months or longer to get to settlement.

Thing is, during that "extra time" it takes to close -- whether it's 3 weeks, 3 months or longer -- your life is subject to unexpected change. When your life changes, your loan can change, too.

For example, if lose your job, become ill, or have your home damaged by storms, your lender can rightfully revoke your mortgage approval -- even if your loan was previously cleared-to-close.

Some life events are beyond your control. You can't control sickness any more than you can control Mother Nature. But some events are within your control.

In the world of mortgages, good behavior does matter.

Click to see today's rates.

SPOTTING YOUR OWN "BAD MORTGAGE BEHAVIORS"

Keeping "good behavior" in mind, here are 8 things you should absolutely not do between your date of application and your date of funding. Any one of them could force a revocation of your mortgage approval.

Ignore these rules at your own peril.

Don't buy a new car or trade-up to a bigger lease
Don't quit your job to change industries or start a new company
Don't switch from a salaried job to a heavily-commissioned job
Don't transfer large sums of money between bank accounts
Don't forget to pay your bills -- even the ones in dispute
Don't open new credit cards -- even if you're getting 20% off
Don't accept a cash gift without filing the proper "gift" paperwork
Don't make random, undocumented deposits into your bank account

And that's it.

Now, you may find it 100% impractical to have follow these rules to the letter. I know that.

For example, if your car lease is expiring, you have to do what you have to do. Renew the lease. Before doing it, though, check with your loan officer -- spreading your lease over 60 or 72 months may be better for your debt-to-income (DTI) ratio.

The same goes for accepting cash gifts from parents.

There's a right way and a wrong way to accept a cash gift for a purchase and if you do it the "wrong way", your lender may disallow the gift and deny the loan.

These are just 8 of the behaviors which could sabotage your loan. There are more, of course, and your lender will help you identify them.

GET A COMPLIMENTARY MORTGAGE RATE QUOTE

Today's mortgage rates are low. Demand from home buyers and refinancing households is strong. As a result, the number of days required to close a loan is increasing. This leaves more opportunity for "things to go wrong".

Don't get your mortgage get un-approved. Take steps to protect your approval. Avoid the bad behaviors which can cost you time and money and that great, low rate.

Get a complimentary mortgage rate quote now. Rates are available at no cost and with no obligation to proceed. Your social security number is not required to get started.

Show Me Today's Rates.

Contact The Mortgage Mark with any Questions!!!

www.themortgagemark.com mark@themortgagemark.com

Downpayment Gifts: How To Give And Receive A Cash Downpayment Gift For A Home

2015-02-17T13:12:00.000-08:00

Downpayment Gifts: How To Give And Receive A Cash Downpayment Gift For A Home

MORTGAGE STRATEGY

GIFTS OF DOWNPAYMENT FOR HOME BUYERS

Receiving a cash downpayment gift for the purchase of your next home? You're not alone. Many U.S. home buyers do it.

Gifts for downpayment sometimes come from parents, grandparents, siblings, or children. They sometimes come from spouses, too.

Mortgage lenders allow cash gifts for downpayment on a huge array of loan programs including FHA loans, VA loans, USDA loans, conventional loans, and jumbo loans, too.

However, if you're getting a cash gift for downpayment, you'll want to make sure that you "receive" your cash gift properly.

There's a specific way to receive money for a downpayment. Should you receive your gift improperly, your lender is likely to reject your home loan application.

It's imperative that you follow the rules of cash-gifting for a home.

Click to see today's rates.

"DOWNPAYMENT GIFTS" ARE COMMON

It's common for today's U.S. buyers to receive cash downpayment gifts. First-time home buyers are most likely to receive a cash gift among all buyer types, but repeat- and move-up buyers receive them, too.

The largest driver for today's gifts of equity is the want of U.S. buyers to make a 20% downpayment.

With a 20% downpayment, home buyers can often qualify for the lowest mortgage rates offered by their bank; and with 20% down, there is no accompanying private mortgage insurance (PMI).

Furthermore, with 20% down, buyers can seek loans backed by Fannie Mae and Freddie Mac which, over thirty years, may offer lower costs than a comparable FHA-backed mortgage.

2015 conforming loan limits cap at $417,000 nationwide except within designated "high-cost areas" where home prices exceed the national average by some multiple.

High-cost areas are determined by the government and include such cities as San Francisco and Los Angeles, California; Washington, D.C. and its surrounding counties (Montgomery, Fairfax and Loudoun); as well as New York City and San Diego.

In high-cost areas, conventional loans are capped at $625,500 for single-family homes, and multi-unit homes (i.e. 2-unit, 3-unit, 4-unit) can range to $1,202,925.

Not everyone receiving a cash gifts want to make a 20% downpayment, though.

Cash gifts are also allowed for low-downpayment mortgages including the FHA purchase mortgage, which requires a 3.5% downpayment; and the Conventional 97 mortgage from Fannie Mae and Freddie Mac which requires just 3% down.

Excess gift monies can be used for furnishing a home; making repairs; or the establishment of an emergency fund.

STEP 1 : DOWNLOAD YOUR "DOWNPAYMENT GIFT LETTER"

When you accept a downpayment gift, remember that there's a right way and a wrong way to do it. For example, you cannot randomly deposit your cash gift into a bank account. Doing so will get your loan denied.

There's a 3-step process when accepting a cash downpayment gift and no matter what your loan type -- Conventional, FHA, VA, or other -- the 3-step process is the same. Follow the rules to the letter.

First, write a gift letter that follows the includes the following information :

The amount of the gift
The subject property address
The relationship of the gifter to the giftee
A note that the gift is actually a gift and not a loan and will not be repaid

The gift letter should be only as long as needed and should not contain "extra" information. Have all parties sign and date the letter. Set the letter aside -- you'll come back to it in the section below.

STEP 2 : WHAT THE GIVER OF THE GIFT NEEDS TO DO

With your mortgage downpayment gift letter written, you'll want to make sure you don't violate the rules of "taking a gift". In order to do that, make sure to keep an extra-strong paper trail for the money being gifted.

If you are the person who is gifting funds to the buyer, for example, and you sell your personal stock holding as part of the downpayment gift process, you will want to make sure that you document the sale of your stock as well as the transfer of funds from your brokerage account into the account from which you're making the gift.

Do not make the transfer without a proper paper trail.

Next, you'll want to write a check to the home buyer for the exact dollar amountspecified in the gift letter you've written. Photocopy the check. Keep one copy for your records and give one copy to the buyer -- the lender will want to see it as part of the process.

Note that writing a check is will require more steps and will require more effort than simply wiring funds to the buyer. Be okay with these extra steps. It's simpler for a lender to document and track a personal check than it is to track a wire; and it's good to make things simple for the bank.

STEP 3 : WHAT THE RECEIVER OF THE GIFT NEEDS TO DO

Now that the gifter has handed, in the form of a check, a downpayment gift to the buyer, the following steps are required.

First, with the gift check in hand, the buyer should physically walk into a preferred depository bank (e.g.; Wells Fargo, Bank of America, Chase, Huntington) to make the deposit in-person. Do not deposit the check online using an iPhone or Android app; or at an ATM machine.

In addition, into whichever bank account you deposit your gift money, make sure it's the same bank account from which all of your money at closing will be drawn. You do not want to bring money to closing from multiple savings accounts. This, too, can make things difficult on a bank and the goal is to keep things simple.

When you get to your branch, do the following :

Deposit the gift funds into a bank account
End your transaction
Collect a receipt for your deposit

Under no circumstances whatsoever should you "co-mingle" your gift deposit with other monies, nor with other gifts. The amount specified on your teller receipt should matchexactly the dollar amount on the certified downpayment gift letter.

If the amount is off by even a penny, the lender will likely reject your letter and the funds that came with it.

Note that if you are receiving multiple cash gifts for downpayment, you should follow this process for each gift independently. Again, do not co-mingle your gifts. Be guided by your gift letter.

TAX NOTES ON CASH DOWNPAYMENT GIFTS

It should be noted that there may be tax implications for givers of a cash gifts for downpayment, and receivers of them. These are discussion points with your accountant.

And, remember that your lender will not report cash gifts to the IRS; it's not the lenders responsibility to report such things. Your lender will use your gift letter(s) for underwriting only, in an attempt to approve your loan.

Everybody's tax situation is different and personal circumstances are rarely addressed in-full by websites or web resources. Speak to your tax professional prior to making or receiving a cash gift for downpayment.

GET A COMPLIMENTARY MORTGAGE RATE QUOTE

Mortgage rates are near their lowest point in history. Homes are affordable and lenders have simplified the process of getting approved for a low- and no-downpayment mortgages.

Get a complimentary mortgage rate quote today. Rates are available online at no cost, with no obligation to proceed, and with no social security number required to get started.

Click to open today's rates.

Contact The Mortgage Mark with Any Questions!! www.themortgagemark.com mark@themortgagemark.com

VA Streamline Refinance: About The VA IRRRL Mortgage Program & VA Mortgage Rates

2015-02-12T11:49:00.003-08:00

VA Streamline Refinance: About The VA IRRRL Mortgage Program & VA Mortgage Rates (Updated For 2015)

VA MORTGAGES

Update (February 12, 2015) : This VA Streamline Refinance information has been revised to include new information. Loan guidelines change constantly. If you get your VA Streamline Refinance information somewhere else on the internet, make sure it's current and accurate.

WHAT IS A VA STREAMLINE REFINANCE/VA LOAN?

VA loans are a special loan program designed specifically for veterans, issued by approved lenders and guaranteed by the federal government.

The VA Streamline Refinance is the most common loan type within the VA loan umbrella, and is officially known as an Interest Rate Reduction Refinance Loan (IRRRL) by the government.

The program is also known as a VA-to-VA Loan.

The VA loan’s definitive characteristic is that veterans with qualifying credit and income can purchase a home with no money down, which makes buying a home extremely attractive for those who have served in the military. In addition, VA loans also offer feature flexible requirements, no private mortgage insurance (PMI), and extremely competitive mortgage rates.

In order to qualify for a VA Loan, a veteran must have served 181 days during peacetime, 90 days during war time, or 6 years in the Reserves or National Guard. You may also qualify as the spouse of a service member who was killed in the line of duty.

Generally speaking, almost all active duty and/or honorably discharged service members are eligible for a VA purchase or streamline refinance loan.

Click to see today's rates

THE VA STREAMLINE REFINANCE (IRRRL) LOAN

The VA Streamline Refinance is also known as the Interest Rate Reduction Refinance Loan (IRRRL). The IRRRL allows you to refinance your current mortgage interest rate to a lower rate than you are currently paying.

The Streamline loan is extremely popular because of its ease of use: once you have already been approved for your initial VA purchase loan, it is relatively simple to lower your interest rate and experience considerable savings. In most cases, a loan officer or lender with expertise in VA loans should be able to complete the loan within a month’s time in most cases.

Click to see today's rates.

VA loan closing costs can be rolled into the cost of the loan, allowing veterans to refinance with no out-of-pocket expenses. Sometimes it is also possible for the lender to take the brunt of the cost in exchange for a higher interest rate on your loan.

In order to qualify for a VA Streamline, you must meet the following requirements:

Be current on your mortgage with no more than one 30-day late payment within the past year.
Your new monthly payment for the IRRRL must also be lower than the previous loan’s monthly payment. (The only time this condition does not apply is if you refinance an ARM to a fixed rate mortgage.)
You must not receive any cash from the IRRRL.
You must certify that you previously occupied the property.
You must have previously used your VA Loan eligibility on the property you intend to refinance. (You may see this referred to as a VA to VA refinance.)

Click to see today's rates

THE VA CASH-OUT REFINANCE LOAN

A secondary VA refinance loan type is the VA Cash-Out refinance loan. The Cash-Out refinance allows borrowers to refinance their conventional or VA loan into a lower rate while also taking cash from the home’s value.

Functionally, the VA Cash-Out refinance loan replaces your existing mortgage instead of functioning like a home equity loan, which it is often confused for. A qualified borrower can refinance up to 100 percent of their home’s value in some cases.

The Cash-Out refinance loan is a loan type available in any form – whether USDA, FHA, or conventional. Veterans generally choose to use the VA Cash-Out over other loan types because the period to pay off the loan is extended, and also, generally comes with a lower interest rate.

Just like the VA Streamline Refinance loan, the home must be used as a principal dwelling by the owner. There is no set period of time that you must have owned your home, however, you must have sufficient equity to qualify for the loan.

Click to see today's rates

VA STREAMLINE REFINANCE FREQUENTLY ASKED QUESTIONS

Do I need my Certificate of Eligibility (COE) for a Streamline Refinance?

Since you used your Certificate of Eligibility to get your first VA loan, it isn’t needed to qualify for a streamline refinance of your existing VA mortgage.

Does the VA control mortgage interest rates for VA loan types?

No, they do not. Although the VA offers an easy, straightforward process for veterans, VA mortgage rates are set by the banks who buy and sell mortgages. Click to see today's rates

Do I have to use my current lender to refinance my VA loan?

No, you do not. In fact, it is encouraged that you shop around between various lenders, as each will offer various interest rates for you VA loan. All that matters is that the lender is VA-approved. Because so many lenders out there finance VA loans, it makes sense to shop around. You can use this form to Click to see today's rates.

Do I have to go through the credit check and appraisal process again when refinancing?

There is no requirement from the VA for another credit check or appraisal process, because you have already been approved for a loan. However, many lenders require a credit check and appraisal to guarantee that you are still financially stable enough to pay for your mortgage and also, that the house’s market value is still higher than their maximum loan amount.

Do I have to be eligible for a better interest rate to qualify for a Streamline Refinance?

Not if you meet certain conditions. If you are going from a fixed mortgage to another fixed mortgage, the VA requires that your IRRRL be of a lower interest rate, but if you are moving from an adjustable rate mortgage (ARM) to a fixed rate mortgage, the VA will allow you to refinance to a higher interest rate. Click to see today's rates

Can I receive cash-in-hand at my VA Streamline Refinance closing?

Yes, you may receive up to $6,000 cash-in-hand at your IRRRL closing. The cash, however, must be used for energy-efficiency improvements, and must be a reimbursement for improvements made within 90 days prior to closing. Some VA borrowers will receive a cash disbursement of "old" escrow funds, too.

What is the maximum allowable VA IRRRL loan size?

There is no maximum loan size limit for a VA loan. However, a VA Streamline Refinance will be limited to the existing loan balance plus any accrued late fees and late charges, plus typical loan costs and the cost of any energy efficiency improvements.

Can I change the borrower-of-record with a VA Streamline Refinance?

In general, the borrower(s) obligated on the original VA loan must be the same as borrower(s) obligated on the refinance. However, this is not always possible. As an example, assume that a veteran and spouse are obligated on an existing VA loan. An IRRRL is possible in all of the following scenarios: Divorced veteran alone; Veteran and different spouse; and, spouse alone because the veteran died. An IRRRL is not possible for a divorced spouse alone, or a different spouse alone because the veteran died.

Can I use the VA Streamline Refinance for an investment property?

Yes, you can use the VA Streamline Refinance for an investment property. You must only certify that you previously occupied the property as your home. The property does not have to be your primary residence.

Can I use the VA IRRRL if my loan is behind or delinquent?

Yes, you can VA Streamline Refinance a loan which is behind in payments or delinquent. Your lender will want to know that the cause of the delinquency has been resolved; and you must be willing and able to make the payments on the new VA loan. Lastly, you will be asked to provide a letter to explain the delinquency along with additional supporting documentation. The Department of Veterans Affairs will make a final determination whether the IRRRL should be approved.

Do VA loans qualify for the HARP 2.0 program?

No, the HARP 2.0 mortgage is separate from a VA loan, and HARP 2 loans must be currently backed by Fannie Mae or Freddie Mac.

Can I use VA loans for a no money down mortgage?

Yes. The VA loan allows for 100% financing with no downpayment.

Contact The Mortgage Mark with any Questions! www.themortgagemark.com mark@themortgagemark.com

5 Ways To Raise Your FICO Credit Score Today

2015-02-06T10:50:00.000-08:00

5 Ways To Raise Your FICO Credit Score Today

CREDIT SCORING FOR MORTGAGES

RAISE YOUR CREDIT SCORE TODAY

It's always a good time to set new goals and every consumer should consider making time to improve their FICO credit score.

Not only can improving your FICO credit score improve your chances of obtaining a mortgage, but it could improve your auto insurance premiums and, possibly, make you a more attractive employment candidate.

FICO scores range from 300 to 850. Mortgage applicants get the best mortgage rates and terms when their FICO scores are 720 or higher.

For borrowers of all FICO scores, the best way to improve your credit rating is to understand the factors that make up your FICO score, and to take specific actions that can make a positive impact on your score.

Click to see today's rates.

WHAT'S INCLUDED IN YOUR FICO SCORE

The FICO credit score takes into account a combination of all of the information found in your credit report.

Your FICO score is made up of the following:

Payment History : 35% of your overall FICO
Total Amounts Owed : 30%of your overall FICO
Length of Credit History : 15% of your overall FICO
New Credit : 10% of your overall FICO
Type of Credit in Use : 10% of your overall FICO

To find out what is impacting your FICO score you will want to review your credit reports.

You can obtain a free copy of your credit report from each of the three main credit reporting agencies -- Equifax, TransUnion, and Experian -- at www.annualcreditreport.com.

It is important that you order and review the reports from each of the bureaus because different reports may contain different sets of information or errors which could affect your FICO credit score negatively. For example, a settled medical collection may appear on your Experian report, but may be shown as "in collection" with TransUnion and Experian.

FICO scores are generated based on a snapshot of the information on your credit reportas of the particular moment that the report is pulled. Correcting errors is crucial, therefore, to ensure the highest possible FICO score.

5 STEPS TO IMPROVE YOUR FICO SCORE

Verify your accounts are current

"Payment History" makes the largest impact on your FICO score at 35% of your overall score. It is vital, therefore, that you keep current on all of the accounts reporting to your credit report.

When reviewing your credit report, should you find any accounts that are past due, catch them up as soon as possible and pay at least the minimum payment required by the due date.

With 12 months of clean pay history and no late payments, you can dramatically improve your FICO score. And, with 24 months of clean pay history, the improvements can be even bigger.

FICO considers the number of accounts paid as agreed as compared to the number of accounts with late payments, along with the severity of those delinquencies.

90-day late payments make a more negative impact than 60-day late payments; and 60-day late payments make a mortgage negative impact than 30-day late payments.

Dispute your inaccuracies

Should you detect any errors on your credit report, you will want to request a correction as quickly as possible.

In order to make a correction, use the information on your report to contact the credit bureaus, and also the creditors which provided the erroneous data to the bureaus.

By law, the credit bureaus are usually required to investigate the item in question within 30 days, unless they consider your dispute to be frivolous. You may need to submit documentation that supports your position. Send copies only -- never originals.

Then, within 45 days, the credit bureaus will notify you with the results of your investigation. Getting even one late payment removed from your credit report can improve your FICO score dramatically.

Ask for a little grace

Sometimes, a creditor may be willing to "help you out".

In cases where you make a relatively small slip-up, with a creditor you've never been late with, you can sometimes get a late-payment "waived". It's always a good idea to make a phone call and to ask for a little grace.

There are many examples of creditors removing a late payment from your credit report if there's a legitimate story behind what happened, and if you can explain what steps you've taken to avoid a repeat occurrence.

This works best if you catch the delinquency early and bring the account current right away.

Settle up collections, charge-offs, judgments and liens

Old collection items, credit card charge-offs, and judgments and liens can hurt your FICO score, too. If you've got any of these on your credit report, it's time to contact your creditors and collection agencies and to settle up one-at-a-time.

First, settle the accounts which went delinquent within the last 24 months because these more recent accounts create the biggest drag on your FICO credit scores. Then, in looking at your collection items over 24 months old, proceed with care. This is because FICO puts the most weight on your recent credit history, which encompasses the last two years only.

This is why your FICO score may drop when you pay off a collection account over 24 months old. Once the account is paid, it becomes "recent", causing damage to your score.

In many cases, you can negotiate with your creditors to remove a trade line completely in exchange for settling an account for its full balance. You need to call your credits first, however, to find out.

Improve your debt utilization ratio

Another way to improve your FICO is to improve your "amounts owed", or debt utilization ratio. Debt utilization makes up 30% of your FICO credit score.

Debt utilization is a measure of how much you money you owe to creditors as compared to how much credit is available to you.

The FICO scoring model takes into account the utilization of each individual credit account; and the utilization of all of your credit accounts combined.

For example, if you have five credit cards, each with a $2,000 limit, you have a total $10,000 available credit over all five accounts. If you carry a $1,000 balance on one of the five accounts, you would have a 50% utilization on one card and a 10% utilization over all of your credit.

In general, debt utilization of 30% of less is good for FICO scores. Utilization over 30% is often bad.

The best way to improve your debt utilization ratio is to pay off debt. Pay revolving accounts down first, followed by your installment debt.

GET YOUR FICO-DRIVEN MORTGAGE RATE

Mortgage rates are FICO score-dependent. In general, the higher your credit score, the lower rate for which you'll be eligible. This is among the reasons why it's good to improve your FICO score to its highest level possible.

See for what mortgage rate you'd qualify today. Rates are available at no cost, with no social security number required to get started, and with no obligation to proceed whatsoever.

Click to see today's rates.

Contact The Mortgage Mark with any questions!! www.themortgagemark.com mark@themortgagemark.com

FHA TO REDUCE ANNUAL INSURANCE PREMIUMS

2015-01-09T07:46:00.000-08:00

HUD No. 15-001
Cameron French
(202) 708-0685

FOR RELEASE
Thursday
January 8, 2015

FHA TO REDUCE ANNUAL INSURANCE PREMIUMS
Reduction to increase credit affordability and reflects improved economic health of FHA

WASHINGTON – As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years.

Today’s action also reflects the improved economic health of FHA’s Mutual Mortgage Insurance Fund (MMIF). FHA’s recent annual report to Congress demonstrates the economic condition of the agency’s single-family insurance fund continues to improve, adding $21 billion in value over the past two years.

“This action will make homeownership more affordable for over two million Americans in the next three years,” said U.S. Department of Housing and Urban Development Secretary Julián Castro. “Since 2009, the Obama Administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

In the wake of the nation’s housing crisis, FHA increased its premium prices to stabilize the health of its MMI Fund. In addition, the Obama Administration took dramatic steps to safeguard consumers in the mortgage market to ensure responsible borrowers continued to have access to mortgage capital as many private lending sources tightened their lending standards.

Today’s reduction will significantly expand access to mortgage credit for these families and is expected to lower the cost of housing for the approximately 800,000 households who use FHA annually.

FHA’s new annual premium prices are expected to take effect towards the end of the month. FHA will publish a mortgagee letter detailing its new pricing structure shortly.

###

HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the
need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build
inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
More information about HUD and its programs is available on the Internet at www.hud.gov and
http://espanol.hud.gov. You can also follow HUD on twitter @HUDGov, on facebook at
www.facebook.com/HUD, or sign up for news alerts on HUD's Email List.

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Fannie Mae’s New 97% LTV Mortgage Loan Requires Just 3% Down

2014-12-12T09:40:00.000-08:00

Fannie Mae’s New 97% LTV Mortgage Loan Requires Just 3% Down

MORTGAGE PRODUCTS

3% DOWN: A NEW MORTGAGE PROGRAM FOR 2015

There's a new low-downpayment mortgage option available to today's home buyers; and a lower-equity refinance available to refinancing households.

The program, which is available via Fannie Mae today, is not formally named. It's an extension of the existing MyCommunityMortgage (MCM) program; and, in official Fannie Mae documents, is referred to as the "expanded LTV" program.

The 97% loan-to-value program is meant to help home buyers who might other qualify for a loan but lack the resources to make a five percent downpayment or more.

It's also geared at homeowners whose homes have lost value since purchase but who are otherwise ineligible for the Home Affordable Refinance Program (HARP) because their loan start date is after May 31, 2009; or for some other reason.

The 97% LTV program is available beginning December 13, 2014. The program has no set end date.

Click to get an instant rate quote.

THE 97% LTV MORTGAGE AND OTHER LOW-DOWNPAYMENT AND NO-DOWNPAYMENT MORTGAGE OPTIONS

Mortgage lenders are making it easier get approved for a mortgage.

Fannie Mae and Freddie Mac have announced a new low-downpayment mortgage program which requires just 3% down at closing, joining other government agencies in offering loans which require little or no money down.

The 97% mortgage program marks Fannie Mae and Freddie Mac's second foray into low-downpayment lending. It's previous program -- the Conventional 97 -- was discontinued in late-2013 despite popularity among first-time and repeat buyers.

The new, retooled 97% LTV program is more forgiving toward first-time buyers than was the Conventional 97; and the new program can be used for home refinances, as well, with few restrictions.

In offering a 3 percent down-payment program, Fannie Mae and Freddie Mac bring yet another financing option to today's home buyers wanting to minimize their downpayment.

Among the most popular low-downpayment options in today's market is the FHA loan.

FHA loans require downpayments of 3.5% and provide for flexible underwriting standards. Home buyers with less-than-perfect credit may find FHA loans to be more cost-effective than loans via Fannie Mae or Freddie Mac; and simpler for which to get approved, too.

FHA mortgage rates are typically 25 basis points (0.25%) below rates for a comparable conventional loan.

VA loans are another popular option. Available to veterans and active members of the military, VA loans allow for 100% financing and never require mortgage insurance to be paid.

VA mortgage rates are typically 37.5 basis points (0.375%) below rates for a comparable conventional loan. VA loans are backed by the Department of Veterans Affairs.

Lastly, there's the USDA loan.

USDA loans are guaranteed by the U.S. Department of Agriculture and, although they're sometimes called "Rural Housing Loans", USDA loans can be used in many suburban locations, too.

USDA loans offer very low rates and allow for 100% financing. They also require just a small mortgage insurance premium as compared to other low- and no-downpayment loans.

Today's home buyer has plenty of financing options.

Click to get today's live rates.

3% DOWN MORTGAGE ELIGIBILITY Q&A

Is the 97% LTV loan the same program as the now-retired Conventional 97?

No, the 97% LTV is different from the Conventional 97 program, which was retired in 2013. The newer version of the 97% loan is more forgiving toward home buyers and allows homeowners to refinance to today's mortgage rates.

Can first-time buyers use the 97% LTV program to purchase a home?

Yes. The 97 percent program can be used by first-time buyers. It can also be used by repeat buyers.

What is the definition of a "first-time home buyer"?

A first-time home buyer is defined as a person who has not owned a home in the last three years. If you previously owned a home, but have not owned a home since three years ago, you are considered to be a "first-time home buyer".

Is the 97% program the same as the MyCommunityMortgage® program?

No, MyCommunityMortgage® is a different program. That program is aimed at certain members of the community including teachers and firefighters; and which may offer more flexible underwriting standards than a traditional mortgage program.

Are downpayments larger than 3% allowed with the 97% LTV program?

Yes, there is no limit to the size of your downpayment with the 97% LTV program. With a downpayment of five percent or more, though, you will no longer be using the 97% program.

Is the low-downpayment mortgage program via Fannie Mae and Freddie Mac better than a FHA loan?

There is no "best" low-downpayment mortgage program. What's best for one home buyer may not be what's best for another. Each program has its benefits.

What mortgage products are available via the 97% mortgage program?

The 97% mortgage program allows mortgage applicants to use the 30-year fixed rate mortgage only. 15-year and 20-year fixed rate mortgages are not available; nor are fixed-rate loans of other terms and ARMs.

Can I use an adjustable-rate mortgage (ARM) with the 97% program?

No, the 97% program allows mortgage applicants to use 30-year fixed rate mortgages only.

What is the loan limit on the 3% down program through Fannie Mae and Freddie Mac?

The 3% downpayment program is limited to loan sizes of $417,000 or less. Loans in high-cost areas are permitted, but loan sizes remain capped at local conforming loan limits.

What is the maximum number of units for a home under the 3% downpayment program?

The 3 percent down-payment program is for single-unit homes only. This includes single-family detached homes and single-family attached homes such as condominiums and town homes. 2-unit homes, 3-unit homes, and 4-unit homes cannot be financed via the program.

Are vacation homes eligible under the 3% downpayment program?

No, the 3% downpayment program is for primary residences only. Vacation and second homes are not allowed.

Can the 3% downpayment program be used for investment properties?

No, the 3 percent down-payment program is for primary homes only. Investment properties are not allowed.

Does the 97% LTV mortgage program require home buyers to attend home-buyer counseling?

No, there is no home-buyer counseling requirement with the 97% LTV mortgage program.

Is private mortgage insurance required with the 97% mortgage program?

Yes, mortgage applicants are required to pay private mortgage insurance (PMI) as part of the 97% mortgage program. Your mortgage lender will arrange for your mortgage insurance policy at the time of application.

Can I refinance a non-Fannie Mae loan with Fannie Mae under the 97% LTV program?

No, Fannie Mae requires loans refinanced under the 97% program to be Fannie Mae-backed.

How do I determine whether my loan is a Fannie Mae-backed loan?

To determine whether your loan is backed by Fannie Mae, you can ask your lender or use Fannie Mae's loan lookup tool.

Are cash-out refinances allowed with the 97% mortgage program?

No, the 97% mortgage program does not allow cash-out refinances. Borrowers may do a cash-in refinance or a "limited cash-out" refinance only.

GET TODAY'S MORTGAGE RATES NOW

The new 97% mortgage program from Fannie Mae and Freddie Mac is another low-downpayment option for today's home buyer; and a simplified way for existing homeowners to get a refinance.

Get started with today's mortgage rates now. Quotes are available online with no cost and no obligation to proceed. Your social security number is not required to get started.

Contact The Mortgage Mark with Any questions!! www.themortgagemark.com

mark@themortgagemark.com

VA Mortgage Rates Lower Than Conventional Mortgage Rates By 0.375 Percentage Points

2014-11-08T04:42:00.001-08:00

VA Mortgage Rates Lower Than Conventional Mortgage Rates By 0.375 Percentage Points

MORTGAGE RATES

Mortgage interest rates are dropping.

Since the start of the year, 30-year and 15-year mortgage rates have moved lower steadily, bestowing cheap financing opportunities upon active home buyers and existing homeowners in search of a refinance.

However, mortgage rates don't fall equally.

Applicants in search of the today's mortgage rates will find VA mortgage rates and FHA mortgage rates markedly lower than the rates available for a comparable loan via Fannie Mae or Freddie Mac.

According to Ellie Mae, current VA mortgage rates are the lowest mortgage rates today -- by far

Click to compare mortgage rates.

VA MORTGAGE RATES 0.375% BELOW CONVENTIONAL RATE

For mortgage applicants in search of the today's lowest mortgage rates, mortgage software provider Ellie Mae reports that VA mortgage rates are the lowest.

The data comes from the company's Origination Insight Report, a report is culled from some of the 3.5 million mortgage loan application which pass through Ellie Mae's servers annually.

According to the September report, the average mortgage rate on a closed VA loan is a little more than 37.5 basis points (0.375%) lower than the average mortgage rate for all closed conventional loans. VA mortgage rates averaged 4.12% in August.

The next-lowest mortgage rate was the average rate for an FHA loan.

In September, FHA mortgage rates averaged 4.27% nationwide. This, too, is below the average rate for a conventional loan.

FHA mortgage rates beat conventional mortgage interest rates by about a quarter-percent. However, because FHA-insured homeowners are required to pay annual mortgage insurance premiums (MIP), the true cost of using an FHA loan is much higher than that.

Of all tracked loan types, mortgage rates for conventional loans was the highest. Conventional mortgage rates averaged 4.51% in September, according to Ellie Mae -- one-eighth percentage point above the average rate of all loans closed.

Note, though, that Ellie Mae's reported rates print higher than the average weekly and monthly mortgage rates as reported by government-backed Freddie Mac. There are two valid reasons for this.

The first reason is that Freddie Mac's rates are discounted to account for discount points. Paying discount points give borrowers access to lower rates overall.

The second reason why Ellie Mae mortgage rates are higher is because Freddie Mac's rates are meant for prime mortgage borrowers only. Ellie Mae's published rates account for all borrowers of all types.

Many mortgage banks now quote rates in the 3s.

Click to compare today's mortgage rates.

BENEFITS OF THE VA LOAN GUARANTY PROGRAM

VA mortgage rates are available to eligible military borrowers as part of the VA Loan Guaranty Program.

The VA Loan Guaranty Program is 70 years old. It's backed by the Department of Veterans Affairs and can be used for a purchase or a refinance. The Department of Veterans Affairs guarantees VA loans against loss, which helps mortgage lenders to make available lower mortgage rates to applicants.

Aside from low mortgage rates, there are other VA loan benefits, too.

As one example, VA loans allow for 100% financing. There is no downpayment requirement with a VA loan, and mortgage insurance is never required.

Another VA loan benefit is that VA loans are assumable. This means that a home can be sold with VA financing "attached" to it.

This can be a selling point given today's low mortgage rates. If you lock a VA mortgage rate near 4%, regardless of future mortgage rates, the eventual buyer of your home can get your same four percent mortgage interest rate.

There are other VA loan benefits, too, including loose underwriting standards and access to the VA Streamline Refinance, one of the fastest and simplest mortgage refinance programs available in today's market.

Click to get today's rate quotes.

ALL MORTGAGE RATES DROPPING

It's not just VA mortgage rates which are low. Rates are low for all loan types.

Since the start of the year, mortgage rates have been on steady decline and, according to Freddie Mac's weekly Primary Mortgage Market Survey, rates are down more than 62.5 basis points (0.625%) from January.

Low mortgage rates have boosted home affordability and put millions of existing U.S. homeowners "in the money" to refinance.

This wasn't supposed to happen.

At the end of last year, the Federal Reserve announced that it would wind down its third round of quantitative easing (QE3) though 2014.

Wall Street expected this move to lead mortgage rates higher. After all, the Fed had been buying $40 billion in mortgage-backed securities (MBS) monthly and, without the Fed to purchase excess MBS monthly, rates would rise to meet supply.

Yet, rates have been dropping.

A series of worse-than-expected economic data have combined with new geopolitical risk to stoke safe haven buying, a trading pattern in which investors seek safety of principal during a period of uncertainty.

Furthermore, there has been less mortgage bond issuance this year because mortgage origination volume is down.

Despite the Fed's exit, demand for U.S. mortgage bonds continues to outpace supply, which is leading 30-year mortgage interest rates lower.

Going forward, mortgage markets will remain data-dependent. Rates may rise or rates may fall. Today, though, mortgage rates at 17-month lows. The average 30-year conventional fixed rate mortgage is firmly beneath 4 percent, and VA and FHA mortgage rates are approaching the low-3s.

GET TODAY'S MORTGAGE RATES

VA mortgage rates are low, and so are mortgage rates for all other loan types. It's an excellent time to shop for a loan and compare your mortgage options -- either for a purchase or a refinance.

Get a live rate quote now. Mortgage rates are available online with no social security number required to get started, and with no obligation proceed.

Click to get today's rates now.

Contact The Mortgage Mark with any questions!

www.themortgagemark.com mark@themortgagemark.com

It’s Very Unlikely That You’ll Pay FHA Mortgage Insurance For The Rest Of Your Life

2014-08-12T07:56:00.000-07:00

It’s Very Unlikely That You’ll Pay FHA Mortgage Insurance For The Rest Of Your Life

FHA MORTGAGES

In mid-2013, the FHA changed its mortgage insurance premium (MIP) policies.

Formerly, FHA MIP typically canceled after 5 years assuming a 78% loan-to-value. Today, however, FHA mortgage insurance can last for a loan's full 30 years. The policy can be confusing -- especially because the amount of time you'll pay FHA MIP varies by your loan type.

When you use an FHA mortgage, you'll want to know for how long MIP is required.

Click here for today's mortgage rates.

THE FEDERAL HOUSING ADMINISTRATION (FHA)

For nearly 80 years, the Federal Housing Administration (FHA) has been assisting U.S. home buyers, providing flexible mortgage guidelines and low mortgage rates to help promote homeownership.

FHA loans allows for down payments of as low as 3.5 percent and backs mortgages for borrowers with credit scores as low as 500. It also offers the FHA 203k construction loan, which helps home buyers to finance structural repairs into a home's purchase price.

The FHA is the world's larger insurer of mortgages and its programs are typically used by first-time home buyers and repeat buyers whose credit scores are less-than-perfect.

However, as the FHA's MIP policies have changed, so has the program's economic appeal.

FHA mortgage insurance premiums, which are split into two separate payments, are markedly more expensive as compared to 6 years ago.

Except for first-time home buyers using the FHA HAWK program, today's FHA borrowers pay a 1.75% upfront MIP fee to the agency at the time of closing, along with an annual MIP fee which is spread evenly over 12 annual mortgage payments.

Click to get today's live mortgage rates.

WHEN IS AN FHA LOAN A GOOD IDEA?

There are five government agencies which insure low- and no-downpayment mortgages.

The Department of Veterans Affairs backs a 100% mortgage for members of the military and most veterans; the U.S. Department of Agriculture backs a no-money-down mortgage which is available in most suburban and rural neighborhoods; and, Fannie Mae and Freddie Mac offer a 95% LTV loan for anyone who qualifies.

However, it's the FHA which is the largest insurer of low-downpayment home loans.

In addition to serving first-time buyers, the FHA loan can be a terrific fit for buyer-types such as the move-up buyer who has lost home equity and has little downpayment to carry ahead to a new home; and, for a buyer of a 2-unit, 3-unit or 4-unit home because FHA mortgage rates can be lower by as much as 100 basis points as compared to a comparable conventional loan via Fannie Mae or Freddie Mac for such loan types.

The FHA loan has some unique characteristics as compared to other loan types.

Minimum credit score requirement of 580
Downpayment requirement of just 3.5 percent
Non-occupant co-borrowers are allowed
Sellers can contribute up to 6 percent toward closing costs
FHA loans can be "assumed" by a subsequent buyer at the same interest rate

In addition, financing via the Federal Housing Administration gets homeowners access to the FHA Streamline Refinance which is among the simplest, fastest refinance programs available to homeowners today.

The FHA Streamline Refinance guidelines waive verification of income, credit and employment; and require no home appraisal.

Click here for today's live mortgage rates.

PAYING "FHA MORTGAGE INSURANCE FOR LIFE"

Prior to 2013, FHA mortgage insurance canceled automatically for homeowners whose mortgages were FHA-backed. Then, a change in FHA policy decreed that, for certain 30-year loans, mortgage insurance must be paid for as long as the loan is in effect.

Consumers have misconstrued this policy to mean "FHA MIP for life", which is a falsehood.

Paying MIP for life suggests that you'll make mortgage insurance premium payments to the FHA from today until the day you die. The truth is something different.

The FHA's official policy states that loans with an LTV over 90% must maintain MIP for as long as the loan is active. All other loans must pay FHA MIP for a period of 11 years.

The current FHA mortgage insurance premium is shown below :

LOAN TERM	INITIAL LTV (%)	FHA MIP TERM
≤ 15 yrs	≤ 78	11 years
≤ 15 yrs	> 78 – 90.00	11 years
≤ 15 yrs	> 90.00	Life of Loan
> 15 yrs	≤ 78	11 years
> 15 yrs	> 78 – 90.00	11 years
> 15 yrs	> 90.00	Life of Loan

For some FHA loans only, you will pay mortgage insurance premiums until the loan is paid-off in full. This can be as long as 30 years or as few as 1-2 years, such as would be the case if you refinanced your FHA mortgage.

Or, considering that the average household moves once every 7 years, it's possible that you ultimately pay FHA MIP for not very long at all.

GET TODAY'S FHA MORTGAGE RATES

The FHA-backed mortgage remains an important part of today's U.S. housing market. Along with its low downpayment guidelines, mortgage rates for an FHA loan are often low, too.

Compare today's FHA mortgage rates and see for how much home you qualify. Rates are available online with no cost, with no obligation to proceed, and with no social security number required to get started.

Click to get today's live rates.

wContact The Mortgage Mark with any Questions!! www.themortgagemark.com mark@themortgagemark.com

5 reasons to buy a house in the next 5 months

2014-07-30T06:24:00.001-07:00

By Hal M. BundrickJuly 21, 2014 3:23 PM

Photo: Thinkstock

A combination of market factors may make you think you're getting priced out of the home market. But one observer believes first-time homebuyers might want to consider making a move.

"I know it's hard to face rising interest rates and rising home prices at the same time," says Ilyce Glink, real estate expert and managing editor of the Equifax finance blog. "The good news is there's still plenty of runway if you want to buy a house this year."

Glink believes first-time homebuyers should consider these five good reasons to buy a house before the end of the year:

Home prices are still off their highs

Yes, home prices are rising from the lows seen during the housing crash of 2008, but they're still nearly 20% off their mid-2006 peak. According to the S&P/Case-Shiller Home Price Index, average U.S. home prices are currently at summer 2004 levels. In markets that are still recovering, first-time homebuyers could see significant appreciation over the next few years, if they buy now.

[Ready to buy a home? Click to compare mortgage interest rates from lenders now.]

Interest rates are expected to keep rising

Interest rates are slowly climbing, and as the Federal Reserve concludes its economic stimulus plan, rates are expected to continue to rise. Some experts believe mortgage interest rates could hit 5% by the end of 2014 or the first quarter of 2015, according to Glink. And even a small bump in interest rates can mean a significant jump in your monthly note.

"If you're offered a 4.2% interest rate on a $400,000 mortgage, for example, your monthly payment will be $1,961, and you'll pay more than $300,000 in interest over the loan's 30-year term," Glink says. "If your interest rate were 4.9%, your monthly payment would jump to $2,115, and the total interest paid over the life of the loan would exceed $360,000."

Rental rates are rising

There is always an argument to be made regarding whether to buy or rent. It's all a matter of your particular situation – as well as the status of your local housing market. If you need to be mobile -- prepared for job transfers or out-of-state promotions -- or are continuing to search for "the perfect place," renting is probably right for you.

However, if you would like to put down some roots, and rents are high in your hometown – it might be cheaper to buy.

"Divide the list price of the home you're interested in by the annual rental rate of a comparable property to determine the price-rent ratio," Glink advises. "If it's below 20, chances are it's a good time to buy."

Of course, buying a home means more than a mortgage. Remember to consider the other built-in expenses: maintenance, insurance, taxes and utilities.

[Shopping for a home loan? Click to compare mortgage interest rates from lenders now.]

Consider your buying power

Americans have been steadily reducing their debt load. Maybe you have, too. The lower your debt, the higher your buying power. Creditors will consider your debt-to-income ratio – how much debt you have, compared to your gross (before-tax) income.

"Experts generally agree that you can spend between 28% and 36% of your gross income in total debt service -- that's your housing expenses plus your other debt payments," says Glink.

With lower debt comes a higher score

As you pay off student loans, credit cards and consumer debt, your credit scorewill improve. And that's one of the biggest factors mortgage lenders consider when determining the interest rate and terms of your loan.

"You should definitely consider buying this year, because it's unlikely the housing market will look much rosier next year, when interest rates and home prices could be even higher," Glink says.

Contact The Mortgage Mark with any Questions!!

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6 Untrue Things People Say About FHA Mortgages; FHA Mortgage Rates

2014-07-28T08:17:00.000-07:00

6 Untrue Things People Say About FHA Mortgages; FHA Mortgage Rates

FHA MORTGAGES

The FHA loan is one of the misunderstood products in the market. For years, the FHA advertised its products as loans for people "on the margins". FHA loans remain among the most flexible and rewarding products available to today's U.S. home buyers.

There are 6 common misconceptions about the FHA mortgage, though, and these falsehoods could be standing between you and a bona fide FHA loan approval. Read more below.

Click to get today's live FHA mortgage rates now.

MYTH 1 : THE FHA IS A MORTGAGE LENDER

Fact : The FHA is not a mortgage lender. It's a mortgage insurer.

The acronym "FHA" stands for Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development. The FHA doesn't make mortgage loans to home buyers or refinancing households. Rather, the FHA provide mortgage insurance to banks, credit unions, and other lenders which make loans meeting FHA insurance standards.

The FHA reimburses lenders for a portion of incurred losses in the event that their FHA-insured loans default, or go to short sale or foreclosure.

MYTH 2 : FHA LOANS ARE FOR FIRST-TIME BUYERS ONLY

Fact : FHA loans are not for first-time buyers only. FHA loans can be used by first-time buyers and repeat buyers alike.

The FHA loan is often marketed as a product for "first-time buyers" because of its low downpayment requirements. However, last decade, many U.S. homeowners have lost home equity in the housing market downturn. These repeat buyers may have little money for downpayment -- even after the sale of their former home.

The FHA will insure mortgages for any primary residence. You don't need to be a first-time buyer.

However, if you are a first-time buyer, the FHA may reduce your mortgage insurance premiums for you. Agree to attend homeownership education classes and make your payments on-time and, via the FHA HAWK, program the agency will reduce your upfront and annual MIP.

Click for today's live FHA mortgage rates now.

MYTH 3 : FHA LOANS REQUIRE 20 PERCENT DOWNPAYMENT

Fact : FHA loans do not require a 20 percent downpayment.

For home buyers, FHA mortgages require a 3.5 percent downpayment with the fewest "strings" attached. This makes the FHA mortgage one of the most lenient mortgage types available nationwide.

There are very few credit restrictions with the FHA loan and the agency allows your 3.5% downpayment to comes as a gift from a family member, employer, charitable organization or government home-buyer program.

Other low-downpayment mortgage programs have eligibility requirements. The VA loan, for example, allows for 100% financing but you must be an eligible military borrower to use it.

The USDA Rural Development loan also allows 100% financing but the USDA program requires that your home be in a less-developed census tract; and that your household income is within certain limits.

Fannie Mae's former 3% downpayment program -- the Conventional 97 -- required higher credit scores than an FHA loan, and loan sizes were limited to $417,000. In 2014, FHA loans are available for loans of up to $729,750 for streamlined refinance.

In 2014, FHA loan limits drop.

MYTH 4 : FHA LOANS REQUIRE HIGH CREDIT SCORES

Fact : Lenders can approve FHA loans with no credit score whatsoever.

FHA loans feature some of the flexible and forgiving credit standards of any available loan type. With an FHA-backed loan, perfect credit is not required, and mortgage lenders are expressly instructed to consider a borrower's complete credit history -- not just isolated instances of late payments here and there.

You can get an FHA loan if you've recently experienced a short sale, foreclosure or bankruptcy via the FHA Back to Work program. Sometimes, a waiting period is required, but not always. Depending on your personal circumstances, you may be eligible to purchase another home using FHA financing right away.

Since 2011, FHA mortgage rates have been lower than comparable conventional products.

Note that not everyone will qualify for an FHA home loan. Borrowers with a "banged-up" history, though, have a much better chance of getting loan approval via the FHA than other government agencies.

Even if you've been turned down for other types of credit, such as an auto loan, credit card or other home loan programs, an FHA-backed loan may open the door to homeownership for you.

Click to get pre-approved for an FHA loan.

MYTH 5 : FHA LOANS ARE EXPENSIVE

Fact : FHA loans can be more expensive, or less expensive, than other loan types. The long-term cost of an FHA loan depends on your loan size, your downpayment, and your location.

The biggest cost of an FHA home loan is usually not its mortgage rate -- FHA mortgage rates are often less than comparable conventional mortgage rates via Fannie Mae and Freddie Mac. The biggest cost is FHA mortgage insurance.

FHA mortgage insurance premiums (MIP) are payments made to the FHA to insure your loan against default. MIP is how the FHA collects "dues" to keep its program available to U.S homeowners at no cost to taxpayers.

MIP is paid in two parts. The first part is paid at closing and is known as Upfront MIP. Upfront MIP is automatically added to your loan balance by the FHA so no payment is required at settlement. Upfront MIP ranges from 0.35% of your loan size to 1.5% of your loan size. Your loan traits determine your MIP cost.

The same is true for annual mortgage insurance premiums, which are paid in monthly installments along with your mortgage payment.

Annual MIP can range as high as 1.55% in high-cost areas such as Orange County, California; Potomac, Maryland; and, New York City, New York. For most borrowers, MIP is between 0.45% and 1.35% annually.

As compared to conventional loans with less than 20% downpayment, FHA MIP is sometimes more costly and sometimes less so. Your loan officer can help you compare choices.

MYTH 6 : ALL FHA LOANS ARE THE SAME

Fact : All FHA loans are not the same. There are many "types" of FHA loans, and mortgage rates vary by lender.

As an agency, the FHA publishes and maintains minimum eligibility requirements all of the loans it insures. However, FHA lenders enforce additional requirements on FHA loans, known as "investor overlays."

A sample of investor overlays includes raising the minimum FHA mortgage score requirement; or, requiring additional time since a bankruptcy, short sale, or foreclosure; or requiring employment verification for an FHA Streamline Refinance transaction.

Because of overlays, when you've been turned down for an FHA mortgage by Lender A, you should always try to apply with Lender B which may approve your FHA loan request. Plus, mortgage rates can be very different from bank-to-bank.

In addition, the FHA offers special refinance loans, home construction loans, and various benefits to eligible applicants.

CHECK YOUR FHA ELIGIBILITY TODAY

The FHA insures home loans in all 50 states, in the District of Columbia, and in many U.S. territories including Puerto Rico, Guam and the U.S. Virgin Islands. Whether you're a first-time buyer or an experienced one, an FHA-insured mortgage may be your best home financing option.

See today's FHA mortgage rates to see how FHA loans can help you. Getting rates online is fast and free and no social security number is required.

Click to get today's live FHA mortgage rates now.

Contact The Mortgage Mark with any questions!!

www.themortgagemark.com mark@themortgagemark.com

7 Things You Still Don’t Know About HARP 2.0, Plus How To Apply For The Mortgage

2014-06-16T08:12:00.003-07:00

7 Things You Still Don’t Know About HARP 2.0, Plus How To Apply For The Mortgage

HARP MORTGAGES

The Home Affordable Refinance Program (HARP) has reached more than 3 million households in its first 4 years. However, the program has not reached as many U.S. homeowners as it should.

The limited reach of HARP has two potential causes. The first is that the program may be too restrictive; too few people qualify. The second is that too few people choose to apply.

There are millions of HARP-eligible households nationwide which have yet to refinance.

See today's live HARP mortgage rates.

THE BASICS OF HARP 2.0

In 2009, the government launched its Home Affordable Refinance Program (HARP) as part of that year's economic stimulus program. HARP was meant to give homeowners access to a refinance despite having little or no home equity.

The eligibility test for HARP was basic.

In order to qualify for HARP, homeowners had to show their current mortgage was backed by Fannie Mae or Freddie Mac on, or prior to May 31, 2009; that their mortgage payment history was strong; and that their home's loan-to-value was 125% or lower.

Between 2009-2011, HARP reached close to one million households. It would have reached more than one million households, it was determined, if not for the 125% loan-to-value restriction, and for a specific HARP clause which increased a mortgage lender's typical mortgage liabilities.

So, to reach more households, HARP 2.0 was released.

HARP 20 was an improvement upon HARP 1.0. It removed the 125% loan-to-value restriction which helped homeowners in hard-hit states such as Florida, Nevada and California get access to the HARP program. It also removed the lender liability clause which had slowed HARP's adoption.

Program changes were a hit. HARP 2.0 closed as many loans in its first 12 months as the original HARP 1.0 closed in its first three years.

However, even today, HARP is closing fewer loans than it should. HARP misconceptions are limiting the program's reach.

Click here to get HARP mortgage rates.

WHAT YOU DON'T KNOW ABOUT HARP 2.0

The government is going on the offensive.

Fannie Mae and Freddie Mac recently launched a HARP public relations campaign meant to educate U.S. homeowner about the HARP program's benefits. The agencies believe that the majority of HARP-eligible homeowners are either unaware that the program exists, don't know about the program benefits, or both.

This website receives a lot of emails from homeowners wondering about HARP and whether they're eligible to refinance. Here are some of the common HARP misconceptions.

I can't refinance with HARP if I have a second mortgage.

Yes, you can refinance with HARP if you have a second mortgage. However, in accordance with HARP guidelines, you cannot combine your two mortgages in a cash-out refinance.

To refinance your first mortgage via HARP, but leave your second mortgage unchanged, your second mortgage lender will agree to subordinate its mortgage, which is a fancy way of saying that second mortgage lender will give permission for you to replace the existing first lien on title.

I have no equity in my home so I can't refinance with HARP.

Yes, you can refinance your home via HARP if you have no equity. That's exactly the premise of the program! Via HARP 2.0, homeowners can refinance no matter how far underwater they are with their mortgage. This is among the reasons why the HARP refinance has been so popular in Las Vegas, Nevada; Phoenix, Arizona; and other hard-hit areas. HARP is the "underwater mortgage program" -- of course you can use it when you have no home equity.

I was already turned down for HARP. I won't get approved if I apply for HARP again.

Even if you've been turned down for HARP in the past, it can make sense to apply for HARP again. This is because HARP-approved lenders often use in-house variations of the official, government-issued HARP guidelines. These variations differ from bank-to-bank. If you were turned down by Wells Fargo, for example, you may be able to get approved by Quicken. If at first you don't succeed, apply, apply again.

I can't refinance my home via HARP because it's not my primary residence.

HARP 2.0 can be used to refinance homes of any occupancy type. Investment properties can be refinanced via HARP, and so can second homes and vacation properties. HARP can be used in all 50 states, the District of Columbia, and all U.S. territories.

I can't use HARP because my lender doesn't offer it.

Not all lenders offer The Home Affordable Refinance Program; this is true. However, U.S. homeowners are free to refinance with any HARP-approved lender. This freedom was among the improvements of HARP 2.0. There are thousands of lenders making HARP 2.0 mortgages. You can get mortgage rates for a HARP loan here.

I can't use HARP because I am not behind on my mortgage payments.

The HARP refinance program is not meant for homeowners who are behind or delinquent with their mortgage payments. HARP can only be used for homeowners who are current. The HARP program is not meant to save a person's home from foreclosure. Homeowners facing difficulty with payment should contact their loan servicer immediately.

I can't use HARP because my loan has mortgage insurance.

You can use HARP 2.0 for loans with existing private mortgage insurance (PMI). This is a change from HARP 1.0 and applies to loans with both borrower-paid mortgage insurance (BPMI) and lender-paid mortgage insurance (LPMI). However, it can be difficult to find banks to offer a PMI program. If you try to refinance your loan with PMI and you are turned down by a lender, apply again somewhere else. You may get a better outcome.

ARE YOU HARP 2.0-ELIGIBLE BUT DON'T KNOW IT?

There are an estimated remaining 4-plus million households nationwide who could refinance via HARP, but haven't. Some of these 4 million households are unaware that HARP 2.0 exists. Others are unaware that they'd qualify.

Check whether you'd qualify for HARP 2.0 and see today's mortgages. Get started online. It's fast, and free, and there's no obligation.

Click here to get started with HARP.

Contact The Mortgage Mark with any questions!!! www.themortgagemark.com

2014-06-13T12:13:00.002-07:00

10 Bona Fide Benefits Of Taking A VA Loan, Plus Today’s VA Mortgage Rates

VA MORTGAGES

Multiple loan "programs" exist for today's home buyers. Some programs are backed by the U.S. government and some are backed by individual lenders.

And, although each can you meet your specific mortgage loan needs, one loan type stands apart for its combination of low rates, aggressive underwriting and secondary benefits.

That program is the VA loan from the Department of Veterans Affairs. VA loans are a key part of the 2014 housing market.

Click here for VA mortgage rates.

VA LOAN : BETTER THAN FHA AND CONVENTIONAL?

Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost. The VA loan asks for no down payment, requires no mortgage insurance, allows flexible guidelines for qualification among its many other advantages.

Here's an overview of the 10 biggest benefits of a VA home loan.

1. NO DOWNPAYMENT

Most home loan programs require you to make at least a small downpayment to buy a home. The VA home loan is an exception. Rather than paying 5, 10, 20 percent or more of the home's purchase price upfront in cash, with a VA loan you can finance up to 100 percent of the purchase price. The VA loan is a true no-money-down opportunity.

2. NO MORTGAGE INSURANCE

Typically, lenders require you to pay for mortgage insurance if you make a downpayment that's less than 20 percent. This insurance, referred to as private mortgage insurance (PMI) for a conventional loan or a mortgage insurance premium (MIP) for an FHA loan, protects the lender in the event that you default on your loan. But a VA loan neither a no down payment nor mortgage insurance. That makes this a VA-backed mortgage very affordable upfront and over time.

3. U.S. GOVERNMENT GUARANTEE

There's a reason why the VA loan comes with such favorable terms. The federal government guarantees that a portion of the loan will be repaid to the lender even if you're unable to make monthly payments for whatever reason. This guarantee encourages and enables lenders to offer VA loans with exceptionally attractive terms to borrowers that want them.

4. ABILITY TO SHOP AND COMPARE

VA loans are neither originated nor funded by the VA. Furthermore, mortgage rates for VA loans aren't set by the VA itself. Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions and mortgage lenders -- each of which sets its own VA loan rates and fees. This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.

5. NO PREPAYMENT PENALTY

A VA loan won't restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home. Furthermore, there are no restrictions regarding a refinance of your VA loan. You can refinance your existing VA loan into another VA loan via the agency's Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time.

6. LOAN OPTIONS

A VA loan can have a fixed rate or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties. Or it can be used to refinance your existing mortgage, make repairs or improvement to your home or even make your home more energy efficient. The choices are yours. A VA-approved lender can help you decide.

7. EASY TO QUALIFY

Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty. The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance.

8. LOWER CLOSING COSTS

The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else.

9. FUNDING FEE FLEXIBILITY

VA loans require a "funding fee", an upfront cost based on your loan amount, your type of eligible service, your down payment size plus other factors. Funding fees don't need to be paid as cash, though. The VA allows it to be financed with the loan, so nothing is due at closing. And not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.

10. ASSUMABLE FINANCING

Most VA loans are "assumable," which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible. Assumable loans can be a huge benefit when you sell your home -- especially in a rising mortgage rate environment. If your home loan has today's low rate and market rates rise in the future, the assumption features of your VA become even more valuable.

Click here for VA mortgage rates.

COMPARE VA MORTGAGE RATES

The eligibility list for a VA loan is long. Classes and classes of servicepersons and their families are eligible.

Whether you're an active-duty serviceperson, a veteran, a member of the National Guard, a Reservist or surviving spouse of a veteran; or if you're a cadet at the U.S. Military, Air Force or Coast Guard Academy, midshipman at the U.S. Naval Academy or officer at the National Oceanic & Atmospheric Administration, you may be eligible for a VA loan -- plus all the benefits that come with it.

See today's VA mortgage rates and compare your VA offers.

Contact The Mortgage Mark with any questions!!

mark@themortgagemark.com www.themortgagemark.com

How To Reduce Your Remaining Mortgage Years Via Refinance To Lower Mortgage Rates

2014-05-29T08:16:00.003-07:00

How To Reduce Your Remaining Mortgage Years Via Refinance To Lower Mortgage Rates

Mortgage rates are at a 12-month low. It's a terrific time to refinance. But what if you don't want to reset your loan to 30 years?

The good news is that you don't have to. With a little bit of savvy, you can take advantage of today's mortgage rates and shorten the number of years remaining on your loan. It all comes down to a financial term known as amortization (ah-mor-ti-ZAY-shun).

Amortization (ah-mor-ti-ZAY-shun) is the schedule by which your loan balance goes to $0 over time; and it can be manipulated for your benefit. You're the homeowner, and you're in control.

Click here to skip to today's mortgage rates.

A 30-Year Mortgage Schedule Favors Your Bank

When a bank sets your monthly principal + interest mortgage payment, it's based on the principles of amortization. With a mortgage, amortization tends to favor the bank -- the early years of a home loan are very heavy on interest payments and very low on principal.

If you've ever looked at your mortgage statement after a few years and thought, "I haven't paid this thing down a bit!", it's because of amortization. This is true for all fixed loan types, too, including the 15-year fixed-rate mortgage; a 20-year fixed-rate mortgage; and, the 30-year fixed-rate mortgage.

For example, look at these numbers on a fixed-rate amortization schedule.

If you were to borrow $300,000 from the bank at a mortgage rate of 4%, after 10 years, here is how much you would still owe given various mortgage products :

A 15-year mortgage has $123,000 remaining of the original loan balance
A 20-year mortgage has $180,000 remaining of the original loan balance
A 30-year mortgage has $237,000 remaining of the original loan balance

With the 15-year home loan, you would have made a significant dent in the original loan balance. With the 30-year mortgage, by contrast, you've barely paid down anything at all.

At 4 percent, it takes 19 years, 4 months to pay a 30-year mortgage to pay down by half. This is decidedly bank-friendly.

It's also one reason why 15-year mortgages are so popular -- homeowners with 15-year loan pay much less mortgage interest over time as compared to homeowners with 30-year loans or 20-year loans.

Click to compare today's live mortgage rates.

You're Not Stuck With A 30-Year Fixed Rate Mortgage

The good news is that you're not "stuck" with a 30-year mortgage and its high costs of interest -- especially with current mortgage rates are as low as they are today.

Your first option to save on mortgage interest is to refinance into a new, shorter loan term.

If your initial mortgage was a 30-year fixed rate mortgage, for example, you can choose to lower your term to, say, 20 years or 15 years. Reducing the number of years in your mortgage "accelerates" your amortization and the loan pays off quicker.

When you switch to a shorter loan term, you also get avoid "starting your mortgage over" for another 30 years. You get a new loan, with a shorter term. You'll save big on your long-term interest costs.

At today's mortgage rates, homeowners using a 15-year mortgage will pay 65% less interest than homeowners using a thirty.

However, payments on a 15-year mortgage can be substantially higher as compared to longer-lengthed loans. This is because you're compressing the repayment period into a lesser number of years.

With a 15-year mortgage, your monthly mortgage obligation may jump as much as forty percent. For many U.S. households, that kind of increase can be too much to stomach. This is why some homeowners skip the refinance and opt to "prepay" their mortgage instead.

To prepay your mortgage means to send "extra" payments to your lender each month, chipping away at the amount you owe faster than your amortization schedule prescribes.

For example, if your mortgage payment is $1,750 per month, and you send $2,000 to your lender, you've reduced your amount owed by $250.

Prepaying a mortgage shorten your loan term because the loan's balance will get to zero more quickly. The more you prepay, the more money you'll save.

Also, you can prepay nearly all mortgages with penalty. Government-backed mortgages -- which includes all FHA loans, VA loans, USDA loans and conventional loans -- come with no prepayment penalty ever.

Click for today's live mortgage rates.

"Refinance-To-Prepay" On Your Mortgage

There's a third way to reduce your mortgage interest paid. It's called "refinance-to-prepay".

Refinance-to-prepay is exactly what it sounds like -- you refinance to a lower rate and prepay on your loan. It's a plan that can give the best of both options -- access to today's low mortgage rates, plus a quicker amortization schedule.

Here's how to refinance-to-prepay, and save in interest costs :

Refinance to a lower rate on your same mortgage program (e.g. 30-year fixed)
Take your monthly savings and apply it to your new loan monthly as "extra payment"
Stay on plan until your loan is paid in full

The refinance-to-prepay system works because, although your mortgage rate is lower, you're making the same payment to the bank each month. There's less interest being paid at the same time that you're "accelerating" your loan payback.

With refinance-to-prepay, you can "restart" your loan to 30 years but then pay it off faster than if you had never refinanced at all. It's a trick of math that plays on bank amortization schedules.

Here's a real life example of how refinance-to-prepay can work.

Say your current loan balance is $400,000 and you're refinancing from the 4.75% mortgage rate you took two years ago to a zero-closing cost 4.00% mortgage rate available today. With the refinance, your payment drops $246 per month so you take that $246 and send it to your lender along with your "regular" payment.

By prepaying your mortgage principal in this way, your "new" 30-year loan will pay off in full in just 24 years -- four years faster than if you hadn't refinanced at all. Those four years of "no payments" save $90,000.

Now, this example assumed a zero-closing cost mortgage at 4.00 percent. Even with closing costs, the maths works out. You're spending a little, and saving a lot.

Refinance Without "Losing Years"

With mortgage rates at 12-month lows, it's a good time to refinance. There are hundreds of billions of outstanding U.S. mortgages with rates over 5%. Opportunities are big today -- and you can refinance without "losing years" on your mortgage.

Compare today's low rates to your existing mortgage. See how many years -- and how much interest -- you can save off your mortgage. Rates are available online at no cost, with no obligation to proceed, and with no social security number required to get started.

Click to get today's live rates.

Contact The Mortgage Mark with any questions!! www.themortgagemark.com

mark@themortgagemark.com

2014-05-02T06:40:00.002-07:00

THE 10 COMMANDMENTS WHEN APPLYING FOR A MORTGAGE LOAN

Many individuals do not realize that even the slightest change in your financial situation after you apply for a mortgage can delay or ultimately jeopardize the approval of your loan.

In my experience as a loan officer, I have seen each and every one of these commandments broken. Unfortunately, some of those had the judge (I mean the underwriter) come down upon them, resulting in their loan being denied.

If you’re going through (or about to start) the mortgage application process, please take each of these ten commandments to heart.

Thou shalt not change jobs, becoming self-employed, or quit your job.This probably goes without saying, but any change in employment can cause a major issue in the approval of your loan. This can even mean a change in your job position or type of pay at the same employer (i.e. from hourly pay to commission pay). While it may be an ‘upward’ move with more potential income, it may just derail your loan.
Hint: Just stay put ’til you’ve completed your closing.
Thou shalt not buy a car, truck, van, motorcycle, ATV, or any other vehicle.In most cases, buying a new vehicle involves numerous credit inquiries, a new loan that must have the new terms verified, and if it’s a trade in, sometimes it takes weeks for the old loan to be paid off. And unless you qualify with both of these payments, then this may just delay your loan closing.
Hint: Don’t buy a new vehicle, or you may be living in it.
Thou shalt not use your credit cards excessively or let ANY of your payments fall behind.
Current regulations require lenders to not just check your credit at the initial application, but also at closing. This is done to confirm there have been no major changes in you debts. If you had a $100 balance with a $10 minimum payment on that Wal-Mart credit card, but now you’ve went out and purchased new patio furniture, some area rugs, and that new 70″ flat screen TV and now you owe $1500 with a $100 minimum payment, that could be enough to cause your file to have to go back to an underwriter for approval, or worse, your file could be denied.
Hint: Don’t make any changes in the normal use of your credit cards and do NOT forget to make the minimum required payments.
Thou shalt not spend the money you have set aside for downpayment or closing costs.I mean, does this really need to be said? Unfortunately, yes. I’ve seen it happen.
Hint: Your assets required for closing will be verified and scrutinized during the approval process. Be prepared to explain and document large deposits that are not normal paycheck deposits.
Thou shalt not buy furniture, appliances, or household items before you buyer your new home.This goes a lot back to #3 and #4. Sometimes even the slightest change in your assets or debt load could delay or derail your closing.
Hint: You can do without that new bedroom suit or refrigerator for just a few more days…you’ve made it this long, right?
Thou shalt not originate or allow new inquiries on your credit report.As I explained on #3, your lender will likely re-check your credit the day of your closing. Any and all new inquiries will have to be explained and sometimes even verified by the creditor themselves to prove in fact no new accounts were opened. Sometimes you’ll need an inquiry to obtain homeowners insurance or possibly set up accounts with a local utility company or satellite provider, but these types are easily explained. However, any inquiries associated with credit cards, automobiles, and especially mortgage inquires, must be explained.
Hint: Be very cautious with any inquiries or be very prepared to delay your closing a few days.
Thou shalt not make any large OR ‘cash only’ deposits into your bank accounts or transfer money between accounts.I’ll continue that statement by adding “without first consulting your loan officer.” Honestly, every lender has a different way of handling these types of non-payroll deposits. Ours rule, for example, is anything over $500 that is not a direct deposit or payroll related must be explained, sourced, and documented. And depositing cash is a NO-NO! We will review at least the past 60 days of account history on your bank statements. Let’s say you need $5000 to close. But a week before the application, you deposited $800 worth of cash you had stuffed under your mattress at home. It’s going to basically be impossible to source and verify where that money came from, so while you really have the money in your account, it will be deducted from the “available balance” that we use to approve your loan. So now, you have to have $5800 in your account to get to the actual amount of $5000 after the $800 is deducted. Coming up with even more additional money for closing may be tough.
Hint: Cash is NOT king.
Thou shalt not change bank accounts.This is using the “less is more” approach. Changing bank accounts require additional verification of not only the account the money is now in, but also the previous account the money may have been withdrawn from. If the amounts to match up exactly from one to the other, it may spell trouble for your approval.
Hint: This is getting redundant, I know…but just wait!
Thou shalt not co-sign for anyone, or allow authorized users to charge on your credit accounts.
The quickest thing that can delay or deny your loan approval will be changes in liabilities. Just imagine, your 16 year old son is fired up about his new truck. He has a local gas company credit card that he runs up $500 in gas in 2 weeks carting his friends around the city. This can change your balances, your FICO score, and your minimum payment.
Hint: Put everyone on notice that all credit cards are temporarily ‘canceled’ until you give them the ‘ok.’
Thou shalt not omit any debts or liabilities from your loan application.
This is a major issue and could be viewed as mortgage fraud. If convicted, you could face 30 years in prison and up to $1,000,000 in fines.
Hint: The truth shall set you free. Trust me, it’s not worth the alternative.

Breaking any one of these commandments could result in your loan being denied. A good rule of thumb is to always notify your loan officer immediately if any of these issues come up during your loan application. They can tell you how each broken commandment needs to be addressed.

Following these 10 Commandments will lead you to the promise land of LOAN APPROVAL!

If you have questions, please leave a comment below. You can also contact me with any personal questions.

Mark@themortgagemark.com www.themortgagemark.com

2014-04-15T07:53:00.001-07:00

How to Fight High Property Taxes

DATE:APRIL 9, 2014 | CATEGORY:TIPS & ADVICE | AUTHOR:MARY BOONE

Death and taxes. Benjamin Franklin espoused their certainty, but it’s doubtful even he knew how difficult it would be to avoid the latter – especially property taxes.

No matter where you live in the United States, if you own real estate, you must pay property taxes. According to a recent study by Zillow, a U.S. property owner pays an average of around $2,800, or approximately 1.4 percent of their home’s value each year in property taxes. Of course, that “average” figure indicates some homeowners pay more while others pay less. The counties with the highest averages are Westchester County, NY ($14,829 per year); Essex County, NY ($12,051 per year) and Bergen County, NJ ($11,172 per year).

Do you know how much you pay in property taxes? Look up your home on Zillow – the information is there on your home details page.

Deciphering how property tax rates are set is not easy. There is no single formula used by states and counties to calculate property taxes. In fact, more than 13,500 local governments have the authority to assess property taxes; all states allow local governments to set their own tax rates even though many states place limits on their rates.

Still, understanding the process is your first step toward knowing whether or not you’re paying too much in property taxes. Start by visiting your local assessor’s office to find out how they assess properties. Ask how you might go about appealing your assessment. Most municipalities require property owners to lodge their appeal within 60 days of when annual assessments are mailed; check with local authorities for details regarding your city or county and get copies of the forms you’ll need to complete. Homeowners cannot contest their property tax rates, but they may be able to lower the assessed value of their home by filing an appeal.

Once you have a basic understanding of the assessment process, you’ll want to do your due diligence to determine whether you’re being overtaxed:

Fact check

Get your property card from your local assessor’s office; in some municipalities, these documents can be accessed online. Your property card – also known as a property’s “working papers” or “worksheet” – includes factors used to determine your home’s assessed value: square footage, lot size, number of bedrooms and bathrooms, etc. If, for example, the assessor’s office believes your home includes a three-car garage but no such feature exists, it’s likely your assessment is incorrect.

Know your neighborhood

Most cities and counties assess homes on a one- to three-year cycle. It’s natural, then, that a home’s assessed value will fail to keep up with changes in local real estate prices. A local decline in home prices could leave you paying more than your fair share of property taxes.

When determining whether your home has been properly assessed, you’ll need to know the assessment of comparable homes – same size, same location, same amenities. Using information available from your assessor or on Zillow, search for at least five comparable homes that have sold in your neighborhood within the past year. If you discover that your home is valued at least 5 percent to 10 percent higher than comparable properties, you may be able to file a successful appeal.

Present your case

The National Taxpayers Union estimates that up to 60 percent of U.S. properties are overassessed. If you believe yours has been, gather documents that support your case and ask for an informal meeting with a representative from your local assessor’s office. If the assessor won’t agree to a meeting, or if your assessment isn’t adjusted as a result of the meeting, you may want to file a formal appeal.

The appeals process varies greatly, but most municipalities require appeals to be submitted in writing along with evidence that supports the request for a reassessment. Once a formal appeal has been filed, a decision generally is handed down within two to four weeks. If you aren’t successful, you may be able to take your appeal to a state review board. If you’re still not getting the answer you want, you may be able to take your case to court – at which time you need to consider whether court fees outweigh any potential reduction in property taxes.

2014-02-14T09:11:00.001-08:00

8 Customer Choices Which Will Get Your Mortgage Loan Approval “Revoked” By The Bank

For all the talk of how tough it is to be "mortgage approved", the basics of mortgages haven't changed. Getting a mortgage approval is still a combination of showing good income, equity, and credit.

For some mortgage applicants, though, it's not the mortgage approval that's the hard part -- it's keeping the mortgage approval.

There are plenty of land mines in the mortgage approval process. You'll want to stay clear of them.

Click here to see today's low mortgage rates.

When Things Go Wrong With Your Mortgage

Mortgage approvals take time. In a typical home loan market, 45 days is normal time frame.

Approvals can take longer, though, depending on the market environment. For example, if rates are low and there's a refi boom on-going, getting a refinance to close can take as much as two month -- especially for "complicated" loans which require additional paperwork such as the 5-10 Properties Program.

Banks just don't have capacity to work much faster.

Closing times can also be delayed for buyers of short sales and foreclosures. Loans for distressed sales and REO sometimes take 6 months or longer to get to settlement.

Thing is, during that "extra time" it takes to close -- whether it's 3 weeks, 3 months or longer -- your life is subject to unexpected change. When your life changes, your loan can change, too.

For example, if lose your job, become ill, or have your home damaged by storms, your lender can rightfully revoke your mortgage approval -- even if your loan was previously cleared-to-close.

Some life events are beyond your control. You can't control sickness any more than you can control Mother Nature. But some events are within your control.

In the world of mortgages, good behavior does matter.

Bad Mortgage Behavior, Defined

Ignore these rules at your own peril.

Don't buy a new car or trade-up to a bigger lease
Don't quit your job to change industries or start a new company
Don't switch from a salaried job to a heavily-commissioned job
Don't transfer large sums of money between bank accounts
Don't forget to pay your bills -- even the ones in dispute
Don't open new credit cards -- even if you're getting 20% off
Don't accept a cash gift without filing the proper "gift" paperwork
Don't make random, undocumented deposits into your bank account

And that's it.

Now, you may find it 100% impractical to have follow these rules to the letter. I know that.

The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept a cash gift for a purchase and if you do it the "wrong way", your lender may disallow the gift and deny the loan.

These are just 8 of the behaviors which could sabotage your loan. There are more, of course, and your lender will help you identify them.

Good Loan Approvals Start With Low Mortgage Rates

For today's U.S. home buyers and refinance household, mortgage approval times are running longer than typical. The extra time leaves more opportunity for "things to go wrong" -- especially as low mortgage rates lead to underwriting backlogs nationwide.

Don't let your mortgage get un-approved. Get today's low mortgage rates and follow steps to protect it. Personalized mortgage rates are available online for free, with no obligation whatsoever.

Click here to see today's low mortgage rates.

Contact The Mortgage Mark with any questions!!

www.themortgagemark.com mark@themortgagemark.com

The HARP 2.0 Rules : Complete HARP 2 Eligibility Requirements For U.S. Homeowners

2014-01-29T08:24:00.002-08:00

The HARP 2.0 Rules : Complete HARP 2 Eligibility Requirements For U.S. Homeowners (Plus Mortgage Rates)

This HARP 2.0 information is accurate and current as of today, January 29, 2014. This post has been updated since its original publish date to reflect changes to HARP 2.

If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.

Here are the details of the government's new HARP refinance program.

Give me today's HARP mortgage rate.

What Is HARP?

HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.

The program is also known as Making Home Affordable, the Obama Refi, A Better Bargain For U.S. Homeowners, DU Refi Plus, and Relief Refinance.

In order to be eligible for the HARP refinance program :

Your loan must be backed by Fannie Mae or Freddie Mac.
Your current mortgage must have a note date of no later than May 31, 2009

If you meet these two criteria, you may be HARP-eligible. If your mortgage is an FHA, USDA, VA or a jumbo mortgage, you are not HARP-eligible.

Underwater FHA mortgages can be refinanced via the FHA Streamline Refinance program. Underwater VA mortgages can be refinanced via the VA IRRRL mortgage program (VA Streamline Refinance).

Underwater USDA loans can be refinanced via the USDA Streamline Refinance program, which is available in most states.

HARP : Questions and Answers

Do these question-and-answers account for the "new" HARP mortgage program?

Yes, everything you are reading is accurate as of today, January 29, 2014. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011. HARP 2.0 was formally released by Fannie Mae and Freddie Mac March 17, 2012.

Is "HARP" the same thing as the government's "Making Home Affordable" program?

Yes, the names HARP and Making Home Affordable are interchangeable. The program is also known as DU Refi Plus and Relief Refinance, and many mortgage lenders call it "The Obama Refi".

Is HARP the same thing as the White House's "A Better Bargain For Responsible Homeowners"?

No, the HARP program is not the same as the White House's A Better Bargain for Responsible Homeowners program. HARP is a specific mortgage refinance product. The "A Better Bargain" program is the White House's recommended set of mortgage market reforms. The changes suggested by the White House may later manifest as HARP 3, but we don't know when HARP 3 will pass.

How do I know if Fannie Mae or Freddie Mac has my mortgage?

Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.

If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

My mortgage is held by Fannie/Freddie. Now what do I do?

Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance. Click here to verify your HARP eligibility.

My mortgage is backed by Wells Fargo. Am I eligible for HARP?

It's possible that your mortgage is backed by Wells Fargo, but the more likely answer is that Wells Fargo is just your mortgage servicer; the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie Mac. Double-check with Fannie Mae and Freddie Mac before assuming Wells Fargo backs your loan.

My mortgage is backed by Bank of America. Am I eligible for HARP?

Bank of America does back some of its own loans, but the more likely answer is that Bank of America is your mortgage servicer; the bank that collects your monthly mortgage payments. Bank of America backs very few of its own loans. For most loans for which payments are sent to Bank of America, Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae and Freddie Mac to make sure Bank of America doesn't hold your loan.

My mortgage is backed by Chase. Am I eligible for HARP?

There is a chance that Chase backs your loan, but what's more likely is that Chase is just your mortgage servicer; the bank that collects your payments each month. Chase backs very few of its own loans. For most loans for which payments are sent to Chase, you'll find that Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae's and Freddie Mac's websites to make sure your loan is not held by Chase.

My mortgage is backed by CitiMortgage. Am I eligible for HARP?

Your mortgage statement may have the CitiMortgage logo on it, but that doesn't necessarily mean that CitiMortgage back your loans. It's more likely that CitiMortgage is your mortgage servicer; the bank paid to process your payment each month. With most loans for which payments are sent to CitiMortgage, the actual loan-backer is Fannie Mae or Freddie Mac. Double-check with Fannie Mae's and Freddie Mac's websites to see if you can find your loan.

My lender won't do HARP. Can I use HARP with another lender?

Yes. You can do HARP with any participating mortgage lender. This is a major change from the original HARP. The government is trying to get as many people access to the program as possible. If you were once turned down for HARP by your original mortgage lender, re-apply somewhere else. You'll likely have better luck. Click here to get access to free HARP rates.

My mortgage servicer does not do new mortgages. How do I use HARP?

Not all mortgage servicers have loan officers on staff. However, that should no bearing on your ability to get a HARP refinance. As a U.S. homeowners, you can work with any participating lender in the country so reach out to your favorite bank and get started from there. Or, to just compare mortgage rates, use this form and you'll get your options.

What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?

If neither Fannie nor Freddie has record of your mortgage, your loan is not HARP-eligible. However, you may still be eligible for a "regular" refinance to lower rates. Use this form to get a rate quote to see your options. Or, if your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.

I have a jumbo mortgage. Can I use HARP 2.0?

No, HARP 2.0 is not meant for jumbo mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. There is talk of a HARP 3 program coming soon. HARP 3 may include loan types not covered by today's program guidelines. You can read more about HARP 3.

I have an Alt-A mortgage. Can I use HARP 2.0?

No, HARP 2.0 is not meant for Alt-A mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. There is talk of a HARP 3 program, though, which may include loan types not covered by today's HARP program guidelines.

I have an interest only mortgage. Can I use HARP 2.0?

If your current mortgage is interest only, you may be able to use HARP. If your interest only mortgage is a conforming loan backed by Fannie Mae or Freddie Mac, you should be HARP-eligible. Otherwise, your loan may be an Alt-A or sub-prime mortgage in which case you will not be HARP 2-eligible. HARP 3 may allow for interest only loans and other loan types not covered by today's program guidelines.

I have a balloon mortgage. Can I use HARP 2.0?

If your current mortgage is a balloon mortgage, you may be able to use HARP. It depends on whether your loan is conforming, and whether it's backed by Fannie Mae or Freddie Mac. If you are not HARP 2-eligible, there is talk of a HARP 3 program and that may help you. HARP 3 may allow for the refinance of a balloon mortgage.

What is HARP 3?

HARP 3 is the next iteration of HARP. It's currently in talks in Congress, and sometimes referred to as "#MyRefi", or "A Better Bargain For Homeowners". There is no expectation for when, or if, it will be passed. HARP 3 is rumored to include all of the loan types and borrowers who are specifically excluded from HARP 2.

Does HARP work the same with Fannie Mae as with Freddie Mac?

Yes, for the most part, the program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For most people, though, the guidelines work the same.

My bank sent me a HARP rate quote by mail. It looks like a high interest rate. Should I shop it around?

Yes, you should always compare HARP mortgage rates because they can vary widely from bank-to-bank. You may save a lot of money just by getting a second opinion on your mortgage.

Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?

No. You must be current on your mortgage to refinance via HARP.

I've been told by my bank that I'm not eligible for HARP. I think my bank is wrong. Can I get a second opinion?

If you've been turned down for HARP but believe that you're eligible, you can apply with a different bank and see what happens. Different banks are using different variations of the program. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved.

My lender denied my HARP mortgage because my LTV is too high. What do I do?

Some banks are enforcing subtle variations of the official HARP program guidelines. The edits are small, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for HARP 2.0, just try with a different bank

My lender denied my HARP mortgage because credit scores are too low. What do I do?

Some banks are making variations on the official HARP program guidelines. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for HARP 2.0, just try with a different bank.

What is the mortgage rate for a HARP refinance?

Mortgage rates for the HARP mortgage program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program. Make sure you shop around, therefore -- just like you would with a non-HARP refinance.

Should I shop for the lowest HARP mortgage rates?

Yes, you should shop for the lowest HARP mortgage rates. HARP mortgage rates vary from bank-to-bank and so do closing costs. Talk to at least 2 banks so you can know you're getting a fair deal.

Will the Home Affordable Refinance Program help me avoid foreclosure?

No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.

What are the minimum requirements to be HARP-eligible?

First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have a note date of no later than May 31, 2009. And, third, you may not have used the program before -- only one HARP refinance per mortgage is allowed.

My home is not underwater. Can I still use HARP 2.0?

Yes, you can use HARP even if you're not "underwater".

Will HARP 2.0 "forgive" my mortgage balance?

No, HARP does not forgive your mortgage balance, nor does it reduce your principal owed. HARP refinances your current loan balance only. It is the same as any other refinance.

My mortgage note date is shortly after the HARP deadline of May 31, 2009. Can I get a waiver or exception?

No, there are no "date exceptions" for HARP. If your note date is not on, or before, May 31, 2009, you cannot use the program.

Why was the date May 31, 2009 chosen as the HARP deadline?

There's no official answer for this one but, in March 2012, a Fannie Mae representative said that May 31, 2009 was selected as the HARP cut-off date because that those who financed a home with a mortgage prior to May 31, 2009 may not have been aware of the rapidly changing mortgage market.

I missed the May 31, 2009 HARP cut-off date by several days. Can you make an exception?

If you've missed the program's cut-off date, there are no exceptions made. However, there is talk that a HARP 3.0 program will extend the program start date into 2010 or 2011.

If I refinanced with HARP a few years ago, can I "re-HARP" with HARP 2?

No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0.

I refinanced into a HARP loan a few years ago, but my bank never told me it was a HARP loan. I feel like I was lied to. Can I use the program again under the HARP II?

No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0. The government makes no exceptions on this policy.

Is there a loan-to-value restriction for HARP?

No. All homes -- regardless of how far underwater they are -- are eligible for HARP.

I am really far underwater on my mortgage. Can I use HARP?

Yes, you can use HARP even if you're really far underwater on your mortgage. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105%.

Maybe I wasn't clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?

Yes, I am sure. The new HARP mortgage program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can have 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.

You keep saying LTV doesn't matter, but my bank turned me down for HARP because my loan-to-value was too high.

That's normal, actually. Not every bank will underwrite HARP loans to the letter of the guidelines. Loans with high LTVs can be risky to a bank. Therefore, some banks will limit their business to loans under 125% loan-to-value, for example. Remember -- just because one bank turned you down doesn't mean that every bank will. Apply somewhere else to get a second option.

My home is gaining value as the housing market improves. Will this hurt my ability to use HARP to refinance my home?

In general, no. As your home increases in value, its loan to-value decreases. So long as your loan-to-value remains above 80 percent, you should remain HARP-eligible. In the event your home's loan-to-value falls below 80%, you may have difficulty finding lenders to refinance your home. As always, remember to shop around. If the first bank you ask says no, it doesn't mean that all banks will say no, too.

If I refinance with HARP using an ARM, do I still get "unlimited LTV"?

No, if you use an ARM for HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.

Why does my bank say I'm limited to 105% LTV with my HARP refinance? I want a fixed-rate loan.

Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank -- one that won't restrict your loan size.

Why does my bank say I'm limited to 125% LTV with my HARP refinance? I want a fixed-rate loan.

Will my home require an appraisal with the HARP mortgage program?

Sort of. Although your home's value doesn't matter for the HARP mortgage program, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway -- just to make sure your home is "standing".

Is HARP the same thing as an FHA Streamline Refinance?

No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.

I have an FHA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA, and your home is underwater, use the FHA Streamline Refinance program.

I have a USDA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a USDA loan. If your current mortgage is backed by the USDA, and your home is underwater, use the USDA Streamline Refinance program.

I have a VA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA, and your home is underwater, use the VA IRRRL program.

Does Ginnie Mae participate in the HARP Refinance program?

No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages -- not conventional ones. HARP 2 is for conventional mortgages only.

Do I have to HARP refinance with my current mortgage lender?

No, you can do a HARP refinance with any participating mortgage lender.

So, I can use any mortgage lender for my HARP Refinance?

Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender.

My current bank says that they're the only ones who can do my HARP Refinance. Is that true?

No, that's not true. Or, at least it shouldn't be. There are very few instances in which a HARP applicant will be precluded from shopping for the best rate. It's doubtful that your situation is one of them.

My current mortgage is with [YOUR BANK HERE] and I don't like them. Can I work with another bank?

Yes, with HARP, you can work with any participating lender in the country.

My bank says I can't get a HARP loan unless I work with them. Is that true?

Except in rare cases, no. With HARP, you can work with any participating lender in the country. And there are a lot of them.

Can I refinance my HARP mortgage into a shorter term? I want a 15-year fixed rate mortgage -- not a 30-year.

Yes, you can shorten your loan term via HARP. You must still qualify for the mortgage based on payments, though. If the "payment shock" of switching to a 15-year fixed rate mortgage is deemed to steep, your lender may not approve the loan. Be sure to ask.

I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?

No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.

I pay PMI now. Will my PMI payments go up with a new HARP refinance?

No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require an extra step. Remind your lender that you're paying PMI to help the refinance process move more smoothly.

My bank says I can't refinance with HARP 2.0 because I have PMI. Is that true?

No, it's not true. You can refinance via HARP 2.0 even if your current mortgage has private mortgage insurance.

Why does my loan officer tell me I can't refinance with HARP because my current mortgage has PMI?

HARP has many rules and guidelines and all loan officers are up-to-speed on what's going on. If you're hearing that you can't refinance your current mortgage because it has PMI on it, it may be a signal to shop around.

My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?

Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI). It's your loan officer's responsibility to make sure that your new mortgage carries, at minimum, the same amount of coverage.

You're saying I can refinance with LPMI but my bank says I can't. Who is right?

With respect to LPMI, different banks have different rules for HARP. There are banks closing HARP loans with lender-paid mortgage insurance attached. That's a fact. If your bank won't do loans with LPMI, find one that will.

How do I choose my PMI "coverage" when I refinance a HARP loan that has LPMI?

Your loan officer will know what to do. Just make sure you disclose that your mortgage has LPMI at the time of application so your loan officer knows what to do. Otherwise, your loan could be delayed in processing.

Click here for a HARP rate quote.

How do I know if my mortgage has Lender-Paid Mortgage Insurance (LPMI)?

To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.

I don't see an LPMI disclosure in my closing package but I think that I have it. How do I know if my mortgage has LPMI?

If there is no LPMI disclosure, first check if your first mortgage's loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you're likely carrying LPMI.

I was turned down for HARP because the bank says I have mortgage insurance. I think they're wrong.

There are different types of private mortgage insurance and not all kinds are paid monthly. One such example is lender-paid mortgage insurance for which your lender pays PMI on your behalf each month. You don't see the payments made, but you still have PMI. There are banks that will HARP-refinance loans with LPMI. If your bank says no, ask another bank and you may get a different answer.

What's the bottom line with HARP refinances and mortgage insurance?

With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The key is that the new loan has mortgage insurance coverage at least equal to the mortgage insurance coverage on your current mortgage.

What if my lender won't give me a HARP refinance because I have mortgage insurance?

If your lender tells you that you can't have a HARP 2.0 loan because you have mortgage insurance, find a new lender. There are plenty that of banks that can help you.

What's the biggest mortgage I can get with a HARP refinance?

HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.

Can I do a cash-out refinances with HARP?

No, the HARP mortgage program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.

Can I refinance a second/vacation home with HARP?

Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.

Can I refinance an investment/rental property with HARP?

Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you're an "accidental landlord". The loan must meet typical program eligibility standards.

I rent out my old home. Is it HARP-eligible even though it's an investment property now?

Yes, you can use the HARP Refinance program for your former residence -- even if there's a renter there now.

How long do I have to stay in my house if I use HARP on my primary residence?

There is no specific timeframe for which you're required to stay in your home if you use HARP 2.0. Just like any other mortgage, if you plan to stay in your home post-closing, it's your primary residence. If you plan to turn it into a rental, it's an investment property.

Click for an instant HARP rate quote.

These things I'm reading here... Why, when I call my bank, do they tell me it's not true?

It's possible that the call center representative to whom you're speaking is neither knowledgeable about HARP, nor the actual mortgage underwriting process. This post is researched and cross-referenced against Fannie Mae and Freddie Mac guidelines, and publicly-available reports from the FHFA.

Are condominiums eligible for HARP refinancing?

Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.

My bank says that condos can't be refinanced via HARP?

That's not true. Condominiums can be financed on the HARP refinance program. If your current lender is unable or unwilling to help, remember that you can take your HARP loan to any participating bank in the country. Other banks may know what to do with condos.

Can I consolidate mortgages with a HARP refinance?

No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.

Is there a HARP program for second mortgages? My second mortgage is at a high rate and I want to refinance it.

No, the Home Affordable Refinance Program is for first mortgages only. Second mortgages cannot be refinanced via HARP, nor can they be consolidated into a first mortgage.

What happens to my second mortgage when I refinance my first mortgage using HARP 2.0?

HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You'll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.

My second mortgage company won't let me refinance my first mortgage via HARP. Can they do that?

With the HARP refinance program, second liens are meant to subordinate. Second lien holders know this, however, not all second lien holders will agree to it. This is against the spirit of the program, but second lien holders are within their rights to deny the refinance.

My second mortgage isn't backed by Fannie Mae or Freddie Mac. Is that a problem?

No, it doesn't matter if your second mortgage isn't backed by Fannie Mae or Freddie Mac. Second mortgages are ignored as part of HARP. They can't be refinanced, and they can't be consolidated. Second mortgages are a non-factor in HARP 2.0.

I have an 80/10/10 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/10/10 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. Nor can you take cash out.

I have an 80/20 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/20 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. Nor can you take cash out.

My bank is not setup for HARP and I want to refinance. What do I do?

If your current bank is not setup for HARP, find a new lender. HARP is available through any participating bank (and there are a lot of them). Free, no-obligation HARP quotes are available online, too. Click here for live HARP mortgage rates.

Can I "roll up" my closing costs with a HARP refinance?

Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however. In most U.S. markets, this limit is $417,000. In certain high-cost areas, including Orange County, California and Fairfax, Virginia, for example, the limit ranges as high as $625,500.

I am unemployed and without income. Am I HARP-eligible?

Yes, you do not need to be employed to use the HARP mortgage program. Applicants do not need to be "requalified" unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.

My lender is asking for income verification. How do I prove income for a HARP loan?

HARP mortgages are underwritten like most other mortgages. When income verification is required, you'll often be asked to provide 2 years of W-2 statements, the two most recent years of federal tax returns, and a recent paystub.

I cannot verify income for my HARP loan. What are my options?

HARP does require verification of income, but some lenders may require it anyway. If you cannot (or will not) verify income with your lender, you may show 12 months of PITI in reserves as a substitute for actual verifiable income. PITI stands for Principal, Interest, Taxes, and Insurance. In short, if you can show that you have 12 months of housing payments "saved up", HARP will treat those reserves as "income".

What is the maximum income that a HARP applicant is allowed?

The HARP refinance program has no maximum income limits. You cannot "earn too much" to qualify.

So, I can't earn too much money to use HARP 2.0?

No, there are no income restrictions for the Home Affordable Refinance Program (HARP). A similar-sounding program, though -- Home Affordable Modification Program (HAMP)does have income limitations. Many people confuse the two.

Is HARP the same thing as HAMP?

No. HARP stands for Home Affordable Refinance Program. HAMP stands for Home Affordable Modification Program. Both programs are supported by the Making Home Affordable initiative, but that's about where the similarities end.

I used HAMP with my current lender. Can I use HARP now?

If you've used the HAMP program with your current lender to modify your mortgage, you may not be HARP-eligible. It depends on the terms of your modification. Ask your current servicer if you're HARP-eligible.

I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?

Yes. With HARP, a borrower on the mortgage can be removed via a refinance so long as that person is also removed from the deed; and has no ownership interest in the home.

Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?

Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely. For example, there are no LLPAs for fixed-rare HARP refinances with terms of 20 years or fewer. For all other loans, loan-level pricing adjustments are capped at 0.75 points.

Does a HARP Refinances require LLPAs for a 15-year fixed rate mortgage?

No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.

Is there a minimum credit score to use the HARP?

No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

Do I have to refinance my mortgage with my current lender?

No, you can do a HARP refinance with any participating lender you want.

Where can I get the lowest rates on HARP loans?

The HARP refinance is just like any other mortgage -- you'll want to shop around for the best rates and service. However, because HARP is a "specialty loan", you may want to limit your shopping with reputable lenders that know how to specifically handle HARP loans.

What are the costs to refinance via HARP?

Closing costs for HARP refinances should be no different than for any other mortgage. You may pay points, you may pay closing costs, you may pay neither. How your mortgage rate and loan fees are structured is between you and your loan officer. You can even opt for a zero-cost HARP refinance. Ask your loan officer about it.

What does the term "DU Refi Plus" mean?

"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP mortgage program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however.

What does the term "Relief Refinance" mean?

"Relief Refinance" is the Freddie Mac equivalent of DU Refi+.

I have a 40-year mortgage. Can I use HARP?

Yes, if you have a 40-year mortgage, you can use HARP. You must make sure that you mortgage is backed by Fannie Mae or Freddie Mac, though, and that you meet all other eligibility requirements.

My lender says its not set up for Freddie Mac. How do I do a HARP loan?

Not every bank is participating in the HARP 2.0 program. If you've been told that your bank can't or won't help you, just try with a different bank. There are many banks that are participating in the program.

When does HARP end?

If you are HARP-eligible, you must close on your mortgage prior to January 1, 2016 -- 701 days from now.

How do I apply for HARP?

Click here for a HARP rate quote. If the rate looks good, you can accept it. There is no fee for applying.

Want More HARP 2.0 Information?

When you're ready to see today's HARP mortgage rates, click here for mortgage rates.

Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI. If you need foreclosure help, call your current loan servicer immediately.

Contact The Mortgage Mark with any questions!!! www.themortgagemark.com Mark@themortgagemark.com

Can You Sell That? FHA Sets Minimum Property Standards For 2014.

2014-01-20T08:58:00.002-08:00

Can You Sell That? FHA Sets Minimum Property Standards For 2014.

What Is An FHA Mortgage?

The "FHA mortgage" is a bit of a misnomer. Technically, the loan should be called the FHA-insured mortgage. This is because the FHA is not a mortgage lender but, rather, an mortgage loan insurer.

FHA is an acronym for Federal Housing Administration. The agency was formed in 1934 to promote homeownership among Americans and to aid the formation of stable communities nationwide. In 1965, the FHA became part of the U.S. Department of Housing and Urban Development.

The FHA has insured more than 34 million properties since its formation, and currently insures more than $1 trillion in U.S. home loans.

The FHA is the largest insurer of home loans in the world.

There are many reasons why FHA loans are popular among U.S. home buyers and refinancing households.

One reason is that FHA loans allow for a smaller downpayment than comparable loans via Fannie Mae and Freddie Mac. The FHA will allow a 3.5% downpayment whereas most conventional loans require five percent, at minimum.

A second reason why FHA loans are popular is that mortgage rates can be lower than for a comparable conventional loan. The FHA does not assess risk-based pricing for credit scores below 740; or for condominiums; or for 2-unit homes.

FHA mortgage rates are sometimes 1/2 percentage point lower than rates for Fannie Mae loans.

Lastly, FHA loans can be easier for which to qualify.

The FHA will insure all loans which meets its "guidelines", a compendium of rules covering all aspects of a mortgage and its approval. The FHA mortgage guidelines are considered "looser" than the guidelines for other loan types including conventional loans and VA loans for military borrowers.

The FHA is less strict with respect to credit, income and assets which is why first-time home buyers often consider the FHA as a financing option.

However, one area in which the FHA remains strict is with respect to property condition. The FHA will not insure a home which fails to meet basic safety and habitability requirements.

Home buyers wishing to use FHA-backed financing should keep this in mind. There are minimum standards to which all FHA homes are held. By ensuring the quality of each of these homes, the FHA can mitigate some of its long-term risks.

Click here to pre-approve your loan and property.

FHA Minimum Property Standards : Exterior

A "Marketable", Complete Home

FHA-insured homes must exist as a single, marketable piece of real estate. A loan, therefore, may not be secured by a bedroom or kitchen within a given home. It may only be secured by the entire home.

Public Access To The Home

An FHA-insured property must be accessible without trespass on an adjoining property. If the property is not directly accessible via public ways, an easement must be associated with the property to provide direct access.

Safe Access To The Home

FHA-insured homes must be accessible for a pedestrian or vehicle from a public or private street with an all-weather surface. If the access street is privately owned, it must be maintained by a homeowners association or via agreement with other homeowners.

Absence Of Hazards

The FHA requires that its insured homes be free of health and safety hazards. This may include excessive pollution, radioactive materials and mudflows, among other hazards. If these hazards exist, homeowners can provide evidence that their risks have been mitigated and re-submit to the FHA for approval.

Full Exterior Walls

FHA mortgage guidelines require that structures on a property, or at a property line, be separated from adjoining buildings by a full-height wall. If the full-height wall is an outer-most exterior wall, the FHA requires that there be enough space between buildings in order to perform wall maintenance, as needed.

Property Drainage

FHA-insured properties must be graded so that water drains away from building perimeter walls, and so that water does not pond on the property.

Sound Construction

The FHA requires that its insured homes be free of defective construction, poor workmanship, evidence of continuing building settlement, excessive dampness, leakage, decay, termites or any other condition that impairs its safety, sanitation or structural soundness.

Roofing

FHA-insured homes must have a roof which is water-tight and shows no evidence of missing tiles, shingles, or flashing; or signs of leakage.

FHA Minimum Property Standards : Interior

Room Counts

An FHA-insured property must have adequate space for living, sleeping, cooking and dining. It must also have sanitary facilities including, but not limited to, bathrooms with showers and/or bath tubs.

Sanitation

An FHA-insured property must have a continuing supply of safe drinking water, sanitary facilities, a safe method of sewage disposal, adequate heating, indoor hot water, and electricity for lights and equipment.

Utilities

Water, gas, electric and sewer services for an FHA-insured properties must be independent for the property, with no dependence on another property. In a multi-unit building of 2-, 3-, or 4-units where utilities are shared among owners, each unit must maintain a separate shut-off switch for its utilities. Common services including laundry facilities, storage space or heating, are allowed.

Attics And Crawl Spaces

The attics and crawl spaces of an FHA-insured home must have proper natural ventilation to reduce excess heat or moisture that can lead to structural decay or deterioration. Crawl spaces must be accessible and clear of debris.

Get Your FHA Mortgage Pre-Approved Now

FHA Minimum Property Standards are meant to protect both U.S. homeowners and the Federal Housing Administration. Homeowners know that their FHA-insured home is safe, habitable, and free of hazardous defects. And, for the FHA, the agency knows that its portfolio of homes -- at least at the time of funding -- are in tip-top shape.

There are additional FHA property standards beyond the broad categories listed above. For buyers of foreclosures, this becomes especially important. That's why it's important to pre-approve your mortgage and your property. Pre-approvals are available online, at no cost and with no obligation.

Click here to pre-approve your loan and property.

Contact The Mortgage Mark with any Questions!!! www.themortgagemark.com mark@themortgagemark.com

VA Streamline Refinance : The Updated VA IRRRL Mortgage Program (Plus Mortgage Rates)

2014-01-13T13:00:00.001-08:00

VA Streamline Refinance : The Updated VA IRRRL Mortgage Program (Plus Mortgage Rates)

Update (January 13, 2014) : This VA Streamline Refinance information has been revised to include new information. Loan guidelines change constantly. If you get your VA Streamline Refinance information somewhere else on the internet, make sure it's current and accurate.

What is a VA Streamline Refinance/VA Loan?

VA loans are a special loan program designed specifically for veterans, issued by approved lenders and guaranteed by the federal government. The VA Streamline Refinance is the most common loan type within the VA loan umbrella, and is officially known as an Interest Rate Reduction Refinance Loan (IRRRL) by the government.

The program is also known as a VA-to-VA Loan.

Generally speaking, almost all active duty and/or honorably discharged service members are eligible for a VA purchase or streamline refinance loan.

Click for today’s live VA streamline refinance rates.

The VA Streamline Refinance (IRRRL) Loan

Need a quick closing? Get rates now.

In order to qualify for a VA Streamline, you must meet the following requirements:

Be current on your mortgage with no more than one 30-day late payment within the past year.
Your new monthly payment for the IRRRL must also be lower than the previous loan’s monthly payment. (The only time this condition does not apply is if you refinance an ARM to a fixed rate mortgage.)
You must not receive any cash from the IRRRL.
You must certify that you previously occupied the property.
You must have previously used your VA Loan eligibility on the property you intend to refinance. (You may see this referred to as a VA to VA refinance.)

Click here for today’s VA Streamline Refinance rates.

The VA Cash-Out Refinance Loan

Click here for a free VA Cash-out refinance quote.

VA Streamline Refinance Frequently Asked Questions

Do I need my Certificate of Eligibility (COE) for a Streamline Refinance?

Since you used your Certificate of Eligibility to get your first VA loan, it isn’t needed to qualify for a streamline refinance of your existing VA mortgage.

Does the VA control national interest rates for VA loan types?

No, they do not. Although the VA offers an easy, straightforward process for veterans, the rates are set by the banks who buy and sell mortgages.

Do I have to use my current lender to refinance my VA loan?

Do I have to go through the credit check and appraisal process again when refinancing?

Do I have to be eligible for a better interest rate to qualify for a Streamline Refinance?

Do VA loans qualify for the HARP 2.0 program?

No, the HARP 2.0 mortgage is separate from a VA loan, and HARP 2 loans must be currently backed by Fannie Mae or Freddie Mac.

Do VA loans qualify for the HARP 3 program?

Maybe. The HARP 3 mortgage may allow non-Fannie Mae and non-Freddie Mac loans to be refinanced. However, in many cases, the VA Streamline Refinance is a better fit. There are fewer verifications required with the VA Streamline Refinance, and mortgage rates may be lower.

Can I use VA loans for a no money down mortgage?

Yes. The VA loan allows for 100% financing with no downpayment.

Review Today's Live VA Loan Mortgage Rates

The VA Streamline Refinance is one of the simplest and fastest mortgage products available for consumers today. If you have an existing VA loan, get started immediately with a VA Streamline Refinance rate quote. Mortgage rates are low, so it’s a great time to take advantage of your veteran benefits.

Click here to get a rate quote.

Contact The Mortgage Mark with any questions!!

mark@themortgagemark.com www.themortgagemark.com

10 Things That Make a Home a Good Home

2013-12-31T08:22:00.000-08:00

10 Things That Make a Home a Good Home

Buyers spend a lot of time looking at properties online, touring homes on the Sunday open house circuit, and talking to their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions.

As the home buying market starts to heat up again, here are ten things you should consider when choosing your next home.

1. Location, location, location

Perhaps nothing is more important than the three L’s, and there’s a reason why it’s said three times.

Location is extremely important when it comes time to sell. You can have the worst house in the world with the ugliest kitchen and bath. But put it on a great block or in a good school district, and your home will be coveted.

Location location location matters on so many different levels. At the highest level is the town where the house is located, then the school district, then the neighborhood and the block — right down to the location of the lot on the block. Keep all of this in mind when shopping. Also remember that while real estate markets rise and fall, no one can take a great location away from you.

2. The school district

The school district is right up there on the list of what’s most important to many buyers. It’s not uncommon for buyers to start their search based solely on the school district they want to be in. Parents want their kids to go to the best school, which can drive up prices of homes in those districts. Even though you might not have children, buying a home in a good school district is always smart. If the schools are desirable, homes tend to hold their value. As a homeowner, you should always be aware of how the schools are doing, not unlike being aware of your roof’s condition, the neighborhood development or city government.

3. The home’s position on the lot

Where the home sits on the lot in relation to the street or the overgrown oak are key elements in picking out a home. In the case of a condo, an end unit vs. an interior unit is a key consideration. You may have chosen the most beautifully renovated home in the best school district and figure all is good. But if the main living areas are shaded by a neighbor’s extension or the master bedroom looks into the neighbors’ family room, you may have a location problem. Light or privacy may not be a hot button for you, but chances are, they might be concerns for a future buyer.

4. Crime

It’s a good idea to check the latest crime figures for a neighborhood. It can give you a good snapshot about the number and severity of crimes over a time period. So much information is online nowadays that when you find your perfect home, a quick Internet search on the area should provide you with the much-needed information.

Most municipalities post their police blotters or crime statistics online these days. Don’t freak out if you notice more crime than what you’d have expected. Crime, especially petty crime, is everywhere. If you’re new to the area, consult with your real estate agent if you have concerns.

5. Walkability

More than ever, ‘walkability’ is becoming a key factor in the search process. There are entire websites, apps and algorithms that help people figure out how walkable their future home is. As a matter of fact, Zillow even has a Walk Score for most homes. As people get out of their cars and slip into their Keds, they want a home in a walkable neighborhood. People put high value on the ability to walk to a store, school, work or public transportation. The more we move away from cars and the more we see invested in public transportation over the coming decades, the more of a huge value-add walkability will become.

6. The neighborhood’s character

You may have found the absolute most perfect home, on the best block, in the best school district and on a great lot. But there could be circumstances outside your control that may give you pause — specifically, the character of the surrounding neighborhood.

Check out the area late at night, early morning and in the middle of the day. See if there are any odd weather or traffic patterns and try to observe some of the neighbors. You may even go so far as talking to some neighbors. It’s important to walk around, open your eyes and ears and make sure there isn’t anything you’re overlooking. That next-door neighbor practicing drums in the garage at 9 p.m. could be a source of immediate neighbor conflict. Go into it with eyes wide open.

7. Don’t buy the best house on the block

Simply put, avoid buying the best house on the block because there may not be any room for your investment to grow (unless you physically have the house moved to a better neighborhood). It’s better to buy the worst house on the best block, because you can improve the house to add value to an already great location.

8. Is it a fixer-upper?

If you’re buying a fixer-upper, make sure you understand what you’re getting into. Did you set out to buy a home that needed work? Or does the home just happen to be in the most desirable neighborhood, the block of your dreams?

Do your homework upfront. If you want to build an extension or add another story to the property, make sure it is within local zoning or building codes. Have the property inspected so that you know exactly what you’re getting yourself into. Sometimes, what appears to be a simple kitchen needing cosmetic work turns out to be a huge project. Ask yourself repeatedly if your life can support a home renovation. Not only does a renovation take money, it takes time, energy and emotional stress.

9. Will the home hold its value?

A good real estate agent who’s been working the neighborhood for some time can vouch for the long-term value or investment potential of the property. But be sure to find ways to add value, or at least be certain the home will hold its value.

The market may be strong when you purchase, but ask yourself, “Am I in a seller’s market?” “What would happen to this property if the market changed tomorrow”? Check out the median home value in the neighborhood as it compares to neighborhoods around it. The Zillow Home Value Index gives you one, five, and 10-year snapshots of how home values have gone up or down in neighborhoods and cities.

10. Taxes, dues and fees

Many people overlook the monthly fees associated with homeownership. Nearly every property will have taxes, and any sort of planned community or homeowners association (HOA) will have regular assessments.

Be sure that the amount of property tax and assessments are clear from the get-go. If in doubt, go to city hall or do research online. If you’d be buying into a condo complex, be sure to get your hands on the meeting minutes, financials of the HOA and the condo documents. Any mention of changes coming down the pike? Does the HOA seem well funded? It could take one quick $10K assessment to immediately affect property values if you need to turn around and sell your new home. And any uncertainty about the building, its integrity or the financials could scare off buyers when it’s time to sell.

Contact The Mortgage Mark with any questions!!! Mark@themortgagemark.com www.themortgagemark.com

The 6 Biggest Myths Of FHA Mortgages, And How To Get Approved For Low Rates

2013-12-13T08:19:00.001-08:00

The 6 Biggest Myths Of FHA Mortgages, And How To Get Approved For Low Rates

The FHA mortgage is one of the misunderstood products in the market. For years, the FHA advertised its products as loans for people "on the margins". For the last 10 years, however, that has not been the case.

FHA loans are among the most flexible and rewarding products available to today's U.S. home buyers.

There are 6 common misconceptions about the FHA mortgage, and these falsehoods could be standing between you and a bona fide loan approval. Read more below.

Click to get today's live FHA mortgage rates now.

Myth 1 : The FHA Is A Mortgage Lender

Fact : The FHA is not a mortgage lender. It's a mortgage insurer.

The FHA reimburses lenders for a portion of incurred losses in the event that their FHA-insured loans default, or go to short sale or foreclosure.

Myth 2 : FHA Loans Are For First-Time Buyers Only

Fact : FHA loans are not for first-time buyers only. FHA loans can be used by first-time buyers and repeat buyers alike.

The FHA will insure mortgages for any primary residence. You don't need to be a first-time buyer.

Click to get today's live FHA mortgage rates now.

Myth 3 : FHA Loans Require 20 Percent Downpayment

Fact : FHA loans do not require a 20 percent downpayment.

For home buyers, FHA mortgages require a 3.5 percent downpayment with the fewest "strings" attached. This makes the FHA mortgage one of the most lenient mortgage types available nationwide.

Other low-downpayment mortgage programs have eligibility requirements. The VA loan, for example, allows for 100% financing but you must be an eligible military borrower to use it.

The USDA Rural Development loan also allows 100% financing but the USDA program requires that your home be in a less-developed census tract; and that your household income is within certain limits.

Fannie Mae's former 3% downpayment program -- the Conventional 97 -- required higher credit scores than an FHA loan, and loan sizes were limited to $417,000. Through 2013, FHA loans are available for loans of up to $729,750.

In 2014, FHA loan limits drop.

Myth 4 : FHA Loans Require High Credit Scores

Fact : Lenders can approve FHA loans with no credit score whatsoever.

Since 2011, FHA mortgage rates have been lower than comparable conventional products.

Note that not everyone will qualify for an FHA home loan. Borrowers with a "banged-up" history, though, have a much better chance of getting loan approval via the FHA than other government agencies.

Even if you've been turned down for other types of credit, such as an auto loan, credit card or other home loan programs, an FHA-backed loan may open the door to homeownership for you.

Click to get pre-approved for an FHA loan.

Myth 5 : FHA Loans Are Expensive

Fact : FHA loans can be more expensive, or less expensive, than other loan types. The long-term cost of an FHA loan depends on your loan size, your downpayment, and your location.

The same is true for annual mortgage insurance premiums, which are paid in monthly installments along with your mortgage payment.

As compared to conventional loans with less than 20% downpayment, FHA MIP is sometimes more costly and sometimes less so. Your loan officer can help you compare choices.

Myth 6 : All FHA Loans Are The Same

Fact : All FHA loans are not the same. There are many "types" of FHA loans, and mortgage rates vary by lender.

In addition, the FHA offers special refinance loans, home construction loans, and various benefits to eligible applicants.

Check Your FHA Eligibility Today

See today's FHA mortgage rates to see how FHA loans can help you. Getting rates online is fast and free and no social security number is required.

Click to get today's live FHA mortgage rates now.

Contact The Mortgage Mark if you have any questions!! Mark@themortgagemark.com

www.themortgagemark.com

Downpayment Assistance : How To Give And Receive A Cash Downpayment Gift For A Home

2013-11-27T10:36:00.001-08:00

Downpayment Assistance : How To Give And Receive A Cash Downpayment Gift For A Home

Receiving a cash downpayment gift on the purchase of your next home? You're not alone.

The tight U.S. economy plus a proliferation of first-time buyers has anecdotally increased the number of mortgage applicants using cash gifts from family and friends for purposes of a home downpayment.

If you're among today's home buyers using a cash gift for downpayment, though, you'll want to make sure that you "accept your gift" properly. Do it improperly and your lender is likely to reject your loan in underwriting.

Be sure to follow the rules of cash gifting.

Click here for a gift letter template and mortgage rates.

"Downpayment Gifts" In Demand Among Home Buyers

There are several reasons why cash downpayment gifts are more common this year as compared to several years ago. First-time buyers may have less money in savings, for example, and move-up buyers may have less home equity to carry forward after last decade's housing downturn.

In addition, U.S. tax laws have changed the gifting landscape.

However, among the largest drivers for today's gifts of equity is the want of U.S. home buyers to make a 20% downpayment. With a 20% downpayment, home buyers often find themselves eligible for the best mortgage rates available from their bank; and with 20% down, there is no accompanying private mortgage insurance (PMI) charge.

With 20% down, a buyer can look at "conventional" mortgage financing, which means that the loan is backed by Fannie Mae or Freddie Mac.

Conventional loans are typically limited to $417,000 except in designated "high-cost areas". High-cost areas are determined by the government and include such places as San Francisco and Los Angeles, California, as well as their surrounding suburbs; Washington, D.C. and all of Montgomery, Fairfax and Loudoun Counties; and New York City, among others.

In high-cost areas, conventional loans are permitted up to $625,500 for single-family homes. Multi-unit homes (i.e. 2-unit, 3-unit, 4-unit) allow for larger loan sizes than $625,500.

Not everyone wants make a 20% downpayment, however. That's okay. Cash gifts are also allowed for certain low-downpayment mortgages including the FHA purchase mortgage, which requires a 3.5% downpayment; and the Fannie Mae Conventional 97 program which requires just 3% down.

Furthermore, some buyers don't need a downpayment at all.

Veterans of the U.S. military and home buyers in less-dense cities can be eligible for 100% financing via the VA mortgage and the USDA mortgage, respectively.

See today's rates and check your mortgage eligibility.

Step 1 : Download Your "Downpayment Gift Letter"

When you accept a downpayment gift, remember that there's a right way and a wrong way to do it. You cannot randomly deposit gift funds into a bank account, for example. That will get your loan denied.

There's a 3-step process when accepting a cash downpayment gift and no matter what your loan type -- Conventional, FHA, VA, or other -- the 3-step process is the same. Follow the rules to the letter.

First, write a gift letter that follows the includes the following information :

The amount of the gift
The subject property address
The relationship of the gifter to the giftee
A note that the gift is actually a gift and not a loan

The gift letter should be as long as needed and should not contain "extra" information. Have all parties sign and date the letter. Set the letter aside -- you'll come back to it in the section below.

Click here for a gift letter template and mortgage rates.

Step 2 : What The Giver Of The Gift Needs To Do

If you are the person who is gifting funds to the buyer, for example, and you sell personal stock holding as part of the downpayment gift process, you will want to make sure that you document the sale of your stock as well as the transfer of funds from your brokerage account into the account from which you're making the gift.

Do not make the transfer without a proper paper trail.

Next, you'll want to write a check to the home buyer for the exact dollar amount specified in the gift letter you've written. Photocopy the check. Keep one copy for your records and give one copy to the buyer -- the lender will want to see it as part of the process.

Note that writing a check is more effort than wiring funds between your account and the buyer's account. Be okay with that. It's simpler for a lender to document and track a personal check and it's good to make things simple for the bank.

Click here for a gift letter template and mortgage rates.

Step 3 : What The Receiver Of The Gift Needs To Do

Now that the gifter has handed, in the form of a check, a downpayment gift to the buyer, the following steps are required.

First, with the gift check in hand, the buyer should physically walk into a preferred depository bank (e.g.; Wells Fargo, Bank of America, Chase, Fifth Third) to make the deposit in-person. Do not deposit the check online using an iPhone or Android app, for example.

In addition, whichever bank into which you choose to deposit your gift money, make sure it's the bank account from which all of your money at closing will be drawn. You do not want to bring money to your closing from multiple savings accounts. This, too, can make things difficult on a bank and the goal is to keep things simple.

With your bank selected, then, do the following :

Deposit the gift funds into a bank account
End your transaction
Collect a receipt for your deposit

Under no circumstances should you "co-mingle" the gift deposit with other funds, or other gifts. The amount specified on your teller receipt should match exactly the dollar amount on the certified downpayment gift letter. If the amount is off by even a penny, the lender will likely reject your letter and the funds that came with it.

Note that if you are receiving multiple cash gifts for downpayment, you should follow this process for each gift independently. Again, do not co-mingle your gifts. Be guided by your gift letter.

Tax Notes On Cash Downpayment Gifts

It should be noted that there may be tax implications for givers of a cash gifts for downpayment, and receivers of them. These are items for your account.

Your lender will not report these cash gifts to the IRS; it's not the lenders responsibility to report such things. Your lender will use your gift letter(s) for underwriting only, ensuring that the mortgage meets its underwriting standards.

Click here for a gift letter template and mortgage rates.

Contact TheMortgageMark if you have any questions! www.themortgagemark.com mark@themortgagemark.com

IRS Tip : This Simple Trick Will Boost The Size Of Your 2013 Mortgage Interest Tax Deduction

2013-11-14T09:26:00.003-08:00

IRS Tip : This Simple Trick Will Boost The Size Of Your 2013 Mortgage Interest Tax Deduction

Looking for a way to reduce your federal tax liability? Consider making your January 2014 mortgage payment a few days early.

Homeowners who send their January 2014 mortgage payment before New Year's Day may benefit from a bigger mortgage interest tax deduction on their 2013 federal tax returns.

Click to skip to today's live mortgage rates.

Claim Your Mortgage Interest Tax Deduction

It's November and, within a few weeks, you'll receive your mortgage statement for January 2014. Study it, and you'll notice that the payment is split into as many as 4 separate parts :

Principal : A partial repayment on the original monies borrowed
Interest : Based on your mortgage rate, a payment for the right to borrow said monies
Tax : Partial payments of your annual tax
Insurance : Partial payment of your annual homeowners insurance bill

Together, these four parts are called "PITI" but it's the "interest" piece that's of most interest to homeowners. This is because U.S. federal tax code allows homeowners to claim mortgage interest as a tax-deduction in the year in which it was paid.

Today's homeowners can boost their 2013 mortgage interest tax deduction, therefore, by making their upcoming January 2014 mortgage payment before the calendar flips to January.

By making your payment in 2013, your lender will book interest paid to the tax year of 2013, and the extra interest paid will be added to your IRS Form 1098.

For homeowners paying mortgage insurance, the benefits are even bigger.

Mortgage insurance is a required part of all FHA and USDA mortgages; and is required for some conventional loans via Fannie Mae and Freddie Mac. Mortgage insurance insures the loan against default, and helps to keep low-downpayment loans available to U.S. homebuyers.

As part of the American Taxpayer Relief Act of 2012, mortgage insurance payments are tax-deductible for 2012 and 2013. Mortgage insurance is not tax-deductible in 2014, however.

If your current mortgage requires mortgage insurance, then, you can maximize your tax savings by paying the January 2014 mortgage early.

Before You Pay Your Mortgage Early, Know The Pitfalls

Making your January mortgage payment a few days early does not come without caveats.

First, not every mortgage is eligible for mortgage interest tax deductions. The IRS outlines mortgage interest tax deduction eligibility on its website. You'll want to make sure your loan qualifies for mortgage interest tax deduction.

Second, because of the Alternative Minimum Tax (AMT), some tax filers find their normal, allowable tax deductions pared by the IRS -- including those deductions related to mortgage interest paid. The AMT may reduce the benefits of making January's mortgage payment in December.

Furthermore, remember that the bonus deduction applies to January's payment only.

The IRS allows you to make (and claim) January's mortgage payment in December because the payment is imminently due. Attempts to make your February payment will be in vain. Your lender will not accept your payment, and the IRS will not apply your deduction.

Lastly, remember to consult a tax professional before making a personal tax decision. Everyone's tax situation is unique and the advice offered may not apply to all taxpayers equally.

Click to get today's live mortgage rates.

Deadline Dates For 2013 Mortgage Interest Tax Deduction

If you plan to pay your January 2014 mortgage statement in 2013 in order to increase your 2013 tax deductions, it's wise to "do it early".

As the end of the year approaches, mortgage lenders are notoriously short-staffed as operations teams use vacation days and otherwise take days off of work.

Lenders typically require extra time to receive and process payments during the holidays.

If you pay your mortgage electronically, or via auto-pay, have your check clear no later than Monday, December 23, 2013.

If you send your checks via mail, have your payment stamped and sent no later than Wednesday, December 18, 2013.

Take Extra Monthly Savings : See Refinance Rates

A larger tax deduction can save you money, and so can an outright refinance. Today's mortgage rates remain near historical lows and the government is currently sponsoring a bevy of "no appraisal" refinance programs.

These programs include HARP, the FHA Streamline Refinance program, the VA Streamline Refinance program, and the USDA Streamline Refinance, among others.

See what today's low rates can do for your home. Get started with a rate quote today. They're available online, with no cost, and with no obligation whatsoever.

Click to get today's live mortgage rates.

Contact The Mortgage Mark with any questions!! www.themortgagemark.com mark@themortgagemark.com

November 2013 Updates : FHA Streamline Refinance Mortgage Guidelines

2013-11-11T08:24:00.001-08:00

November 2013 Updates : FHA Streamline Refinance Mortgage Guidelines (Plus Mortgage Rates)

NOTE : FHA Streamline Refinance information is accurate as of today, November 11, 2013. If you get your FHA Streamline Refinance information elsewhere online, it may be inaccurate or out-of-date. FHA mortgage guidelines change often.

What Is An FHA Streamline Refinance?

The FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages. FHA Streamline Refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages.

The FHA Streamline Refinance program's defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your home's current value, regardless of what your home is actually worth today.

In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty.

The "appraisal waiver" has been a huge hit with U.S. homeowners, allowing unlimited loan-to-value (LTV) home loans via the FHA Streamline Refinance program. Homeowners in places like Florida, California, Arizona and Georgia have benefitted greatly, as have homeowners in other states and cities affected by last decade's housing market downturn.

Beyond this "no appraisal" feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It's available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there's no FHA prepayment penalty to worry about.

Another big plus is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a "regular" FHA loans. There's no penalty for being underwater, or for having very little equity.

Check your FHA Streamline Refinance eligibility.

FHA Streamline : No Verification Of Job, Income, Credit

Another big plus is that the FHA Streamline Refinance is fairly easy for which to qualify.

Earlier this decade, in an effort to help U.S. homeowners, the FHA abolished most of the typical verifications required to get a mortgage. So, today, as it's written in the FHA's official mortgage guidelines :

Employment verification is not required with an FHA Streamline Refinance
Income verification is not required with an FHA Streamline Refinance
Credit score verification is not required with an FHA Streamline Refinance

There's no need for a home appraisal, either, so when you put it all together, you can be (1) out-of-work, (2) without income, (3) carry a terrible credit rating and (4) have no home equity. Yet, you can still be approved for an FHA Streamline Refinance.

That's not as crazy as it sounds, by the way.

To understand why the FHA Streamline Refinance is a smart program for the FHA, we have to remember that the FHA's chief role is to insure mortgages -- not "make" them.

It's in the FHA's best interest to help as many people as possible qualify for today's low mortgage rates. Lower mortgage rates means lower monthly payments which, in theory, leads to fewer loan defaults.

This is good for homeowners that want lower mortgage rates and for the FHA -- but mostly for the FHA.

Check your FHA Streamline Refinance eligibility.

Are You FHA Streamline Refinance Eligible?

Although the FHA Streamline Refinance eschews the "traditional" mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official FHA Streamline Refinance guidelines are below. Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration.

Perfect, 3-Month Payment History Is Required

The FHA's main goal is to reduce its overall loan pool risk. Therefore, it's number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 3 months. 30-day, 60-day, and 90-day lates are not allowed. One mortgage late payment is allowed in the last 12 months. Loans must be current at the time of closing.

Click for your personalized FHA Streamline Refinance mortgage rates.

210-Day "Waiting Period" Between Refinances

The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

Employment And Income Are Not Verified

The FHA does not require verification of a borrower's employment or annual income as part of the FHA Streamline process. There is no Verification of Employment, nor are there paystubs, W-2s or tax returns required for approval. You can be unemployed and get approved for a FHA Streamline Refinance so long as you still meet the other program requirements.

Credit Scores Are Not Verified

The FHA does not verify credit scores as part of the FHA Streamline Refinance program. Instead, it uses payment history as a gauge for future loan performance. This means that FICO scores below 640, below 620, below 580, and below 500 are eligible for Streamline Refis.

The Refinance Must Have "Purpose"

Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking "cash out" to pay bills is not an allowable Net Tangible Benefit.

Loan Balances May Not Increase To Cover Loan Costs

The FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs -- origination charges, title charges, escrow population -- must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a "zero-cost FHA Streamline". Click here for zero-cost FHA Streamline Refinance mortgage rates.

Appraisals Not Required

The FHA isn't concerned about home value -- it's insuring your loan regardless. Therefore, the FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still FHA Streamline-eligible.

FHA Streamline Refinance Mortgage Insurance Requirements

The FHA Streamline Refinance is an FHA-insured mortgage, and FHA borrowers are required to make two types of mortgage insurance payments -- an upfront mortgage insurance payment paid at closing, plus an annual payment split into 12 installments, paid with your mortgage payment each month.

With respect to mortgage insurance premiums, homeowners using the FHA Streamline Refinance program are split into two classes :

Homeowners whose new loan replaces an FHA-backed mortgage endorsed prior to June 1, 2009
Homeowners whose new loan replaces an FHA-backed mortgage endorsed on/after June 1, 2009.

Homeowners in the first class -- those with "old" FHA mortgages -- pay markedly lower mortgage insurance than "new" FHA homeowners.

Check your FHA Streamline Refinance eligibility.

FHA Streamline Refinance MIP (For Loans Endorsed Before June 1, 2009)

If your existing FHA mortgage was endorsed prior to June 1, 2009, your mortgage insurance premiums have been "grandfathered". You can refinance via the FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and your annual mortgage insurance premium.

Upfront Mortgage Insurance Premiums (UFMIP)

For an FHA Streamline Refinance that replaces a loan endorsed prior to June 1, 2009, the new FHA mortgage's upfront mortgage insurance is equal to 0.01 percent of the loan size, or 1 basis point.

For example, if your new FHA Streamline Refinance is for $100,000 mortgage, the FHA will assess a $10 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically adds the $10 payment to your new loan balance.

Annual Mortgage Insurance Premiums (MIP)

Annual MIP is similarly cheap for "old" FHA loans. For an FHA Streamline Refinance replacing an FHA loan endorsed prior to June 1, 2009, the annual MIP is 0.55% annually, or 55 basis points.

The complete annual MIP schedule is as follows :

15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP
15-year loan terms with loan-to-value under 90% : 0.55 percent annual MIP
30-year loan terms with loan-to-value over 95% : 0.55 percent annual MIP
30-year loan terms with loan-to-value under 95% : 0.55 percent annual MIP

15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.

For an FHA Streamline Refinance which replaces a FHA loan endorsed prior to June 1, 2009 and for which the mortgage is a jumbo FHA mortgage (i.e. loan size exceeds $625,500), no additional mortgage insurance premiums are due.

Note : FHA jumbo loans over $625,500 are permitted in "high-cost" metropolitan areas only. This includes Montgomery County, Maryland; New York City, New York; and Fairfax County, Virginia.

Most of California, Hawaii and Alaska are FHA jumbo loan-eligible, too.

Click for today's FHA Streamline Refinance mortgage rates.

FHA Streamline MIP For Loans Endorsed On/After June 1, 2009

If you are refinancing an FHA mortgage via the FHA Streamline Refinance program and your existing FHA mortgage was endorsed on, or after, June 1, 2009, your mortgage insurance premium schedule on the new loan is as follows.

Upfront Mortgage Insurance Premiums (UFMIP)

For an FHA Streamline Refinance replacing a loan endorsed on, or after, June 1, 2009, the FHA upfront mortgage insurance premium is equal to 1.75 percent of your loan size, or 175 basis points.

This is $1,750 for every $100,000 borrowed. The FHA automatically adds the $1,750 premium to your loan balance for you -- it's not paid as cash. Furthermore, not all refinancing households will pay the full amount.

For FHA-backed homeowners refinancing within the 3 years of their existing loan's start date, the FHA provides a refund on previously-paid upfront MIP. The size of the refund diminishes as the 3-year window elapses.

For example, a homeowner who refinances an FHA mortgages after 11 months is granted a 60% refund on his initial FHA UFMIP. 30 days later, the refund drops to 58%. After another 30 days, it drops to 56%, and so on.

This is why is rarely a good idea to "wait to refinance" with the FHA. With the FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size. This lowers the monthly payment and preserves the home equity -- two huge positives.

You can review your own FHA mortgage insurance refund chart at top.

Check your FHA Streamline Refinance eligibility.

Annual Mortgage Insurance Premiums (MIP)

The annual MIP schedule for an FHA Streamline Refinance which replaces a loan from on, or after, June 1, 2009 is as follows :

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

Note, though, that jumbo FHA mortgages are subject to an additional MIP fee.

15-year fixed rate mortgages over $625,500 pay an additional 0.25 basis points annually. Loans with terms of 20 years or 30 years pay an additional 0.20 baiss points.

A Los Angeles, California homeowner, therefore, borrowing at the $729,750 local loan limit with a 30-year fixed rate mortgage will pay annual mortgage insurance premiums of 1.55% to the FHA, or $943 per month.

FHA MIP Cancelation Policy

For some FHA-backed homeowners, annual mortgage insurance premiums are temporary. The FHA makes this determination based on the amount of home equity at the time of closing.

For homeowners using the FHA Streamline Refinance to replaces a loan from on, or after, June 1, 2009, the FHA MIP cancelation schedule is as follows :

Loan-to-value of 90% or less at the time of closing : MIP required for 11 years
Loan-to-value greater than 90% at the time of closing : MIP required for life of loan

The FHA MIP cancelation policy is the same for 15-year loan terms as for 30-year loan terms.

Refinancing homeowners are welcome to reduce their loan balance at the time of closing to avoid paying MIP for the loan's life. In many cases, this will require an up-to-date appraisal of your home.

This FHA MIP cancelation policy applies to FHA loans beginning June 2013. Note that FHA MIP will also be canceled in the event of a refinance to a different loan program such as a conventional loan backed by Fannie Mae or Freddie Mac, or upon sale of the home.

Homeowners planning to move within 10 years may not be affected by the FHA's "Life Of The Loan" rule.

Apply For Your FHA Streamline Refinance Here

The FHA Streamline Refinance is among the easiest and best-valued mortgage products available.

If you have an existing FHA mortgage, get yourself a FHA Streamline Refinance rate quote. FHA mortgage rates are low and closings can occur in as few as 20 days. And, the faster you close, the bigger your FHA upfront mortgage insurance premium refund.

Click here to get a rate quote and start your FHA Streamline Refinance application today.

Contact The Mortgage Mark with Any Questions!! www.themortgagemark.com mark@themortgagemark.com