By Don | September 30, 2011
Being in the business, we get this question from time to time – and it’s impossible to answer in a sound bite! The short answer is that there are too many variables for a quick number like 4%.
What kind of loan? Conventional, FHA? What’s the loan to value (LTV)? What’s your credit score? Do you want an interest rate lock? For how long? How much is the loan? Over the $417k conforming limit? What’s your back end ratio (debt to income ratio)?
Let’s take a look at a recent matrix to see how, with conventional financing, variations in FICO scores and loan to value (LTV) amounts affect interest rates…
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Filed under article topic:
Mortgages/Interest rates
By Don | September 30, 2011
Starting tomorrow, the loan limit will drop from $729k to $598,000 ($625k in other markets) as Fannie and Freddie attempt to reduce their financial risks in the shaky housing market. Taxpayers have kept the 2 giant organizations afloat with billions of $$, and policy makers are trying to wean the wobbly real estate industry away from further subsidies.
But with billions having already gone to bankroll the banking and other industries (GM), a lot of us in the real estate industry think now’s not the time to reduce the loan limits in the expensive east and west coast markets.
By Don | April 16, 2011
When a homeowner misses one payment, they are technically in default on that loan. Does the lender immediately start a foreclosure (as they are legally entitled to do)? Of course not – they try to work it out with the homeowner, have the homeowner pay some late fees and get a ding on their credit record. But what happens when several payments are missed? Now what?
In today’s world, this is the common starting point for the homeowner who starts trying to get a loan mod. There seems to be a pervasive sense that once I’ve start to apply for a loan mod, the lender won’t foreclosure on me. WRONG! Read the rest of this article »
By Don | January 13, 2011
A battle is raging over arcane regulatory rules that may have significant impact on how much down payment a lender will require in the future. Wells Fargo has just suggested to regulators that home buyers come in with a 30% down payment. What’s this all about?
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By Leslie | July 22, 2010
Lenders are looking for ways to way to minimize risk and fraud and ordering that pizza might make the difference in getting that loan!
Data mining companies are used by lenders to gather different types of information on the borrower. One type of data collected is address verification to compare where you have your pizza delivered to see that it matches the address on your loan application!
These companies gather the available information from different sources and avenues to glean snap shots of a borrowers credit-worthiness. A lender once told me that he looks for 2 things when considering lending to a borrower – not only their ability to pay, but their willingness to pay.
Read more detail in the LA Times…
By Leslie | July 13, 2010
Interest rates are at an all time low of 4.57% for a 30 year, fixed rate loan according to a recent survey by Freddie Mac.
But now there is much speculation if this fabulous interest rate will keep the housing market at the fever pitch it was prior to the April 30th deadline for first time homebuyers to enter into escrow to receive the $8,000 federal tax credit.
Check out for yourself the chart that Don Nelson Team compiled for the number of homes sold in the past 12 months for Ventura, Oxnard and Camarillo. Which city do you think hiccuped but has now rebounded to fever pitch?
By Don | April 2, 2010
If you’re not actively looking to buy, you won’t notice that interest rates appear to be creeping up. But if you’re in the market (or thinking about it) it’s good to understand what drives interest rates. This past Wednesday was a very important milestone for mortgage rates. Why? Read the rest of this article »
By Leslie | January 23, 2010
Because the FHA is losing money on record foreclosures (their minimum reserves should be above 2% but were at 0.53% in November), they announced this week that they’re increasing the upfront premium from 1.75% to 2.25%. There has also been political pressure to increase the down payment (currently at 3.5%) to 5%, but as of now it’s still at the 3.5% level. FICO credit score minimums have been raised to 580 (lower FICOs will require a higher down payment). For complete details, here’s the HUD Mortgagee letter.
By Don | September 24, 2009
Yesterday the Fed made 2 decisions that fundamentally affect the real estate industry. First, they kept the federal funds rate (what banks charge each other for overnight loans) unchanged. Secondly, and more directly, they decided to extend their purchase of mortgage backed securities, which has kept interest rates low. How do these decisions made so far away affect Joe and Mary Mainstreet thinking about buying a home? Read the rest of this article »
By Leslie | July 2, 2009
HUD yesterday announced that homes can now be “underwater” up to 125% (compared to the previous 105% limit) of value and still qualify for the Home Affordable Refinance program established earlier this year by the Obama administration. This applies to borrowers current on their payments who have loans currently owned or guaranteed by Fannie Mae or Freddie Mac. Read HUD’s press release for more details.