Apr 22, 2013 | Mortgage Guidelines, Mortgage Lenders
By David Bremer – Shamrock Financial Corp.
Breaking News! The HARP Loan is extended another 2 years until December 31, 2015.
That’s fabulous, but what’s HARP again?
HARP is the Home Affordable Refinance Program created for homeowners that either don’t have sufficient equity for a traditional refinance or are simply under-water and owe more than their home is currently worth. Without this program, most of these homeowners couldn’t take advantage of today’s fantastically low interest rates.
So far over 2 million homeowners have refinanced through HARP. The program was due to expire at the end of 2013 but it was determined that so many more homeowners are still eligible and in need of assistance so the FHFA (Federal Housing Finance Agency) decided to go ahead and extend the program until the end of 2015. Other than extending the end date, they have made no other changes at this time.
To qualify you must meet all of the following guidelines:
- Your loan must be owned by Fannie Mae or Freddie Mac. Note that that Fannie and Freddie don’t service the loans. Most conventional loans being serviced by lenders all across the country are actually owned or guaranteed by Fannie or Freddie so there is a good chance that if you have a conventional loan, it is too.
- Your current first mortgage must have been closed and sold to Fannie or Freddie on or before May 31, 2009. Some lenders took longer than others to deliver their loans to Fannie or Freddie but if you closed before this date you could be eligible.
- If you owe less than 80% of what your home is worth then you would qualify for traditional refinancing so you aren’t eligible for HARP but if you owe more than 80% of the value and even if you owe more than your home is worth, you may be eligible for HARP refinancing.
- You must be current on your mortgage with no late payments in the last 6 months and no more than one 30 day late payment in the last 12 months.
In addition:
- You can have a second mortgage or equity line and still be eligible. The new loan will not be able to refinance out of the second mortgage but you could still refinance the first mortgage for a lower rate.
- HARP is available for owner occupied properties, second homes and even investment properties.
- If you already refinanced under HARP then you aren’t eligible to do so again.
Don’t guess whether you are eligible or not! Check with a professional mortgage loan officer. They can quickly determine if you would qualify for this program or if you may qualify for another program. There are streamlined programs for FHA, VA, USDA and other mortgage loans. Even more importantly, if you checked in the past-check again!
When HARP was first announced, many people asked about refinancing and were told they didn’t qualify. The guidelines changed some at the beginning to allow more people to qualify. Also, even after the guidelines were expanded, it took many lenders a long time to be ready to handle the loans. As a result, many individuals who checked early on in the process were told they did not qualify and haven’t checked again. It is worth a phone call to find out for sure. Check with us at Shamrock and download our FREE HARP 2.0 Toolkit, which is filled with more information on qualifying for this program.
David Bremer – With over 8 years as a loan originator, David has always served the purchase market first because that is where you EARN a customer for life. Going above and beyond to ensure his clients are comfortable with the process and have a full understanding of their options are David’s strengths. David spends his time away from work with his wife, 3 children and their extended family and friends. David may be reached at david.bremer@shamrockfinancial.com.
Cell: 978-302-0475
Sep 13, 2011 | Buying Real Estate, Mortgage Lenders, Mortgage Rates, News
For the first time in a year, homeowners with adjusting mortgages are facing rising mortgage rates. The interest rate by which many adjustable-rate mortgages adjust has climbed to its highest level since September 2010, and looks poised to reach higher.
This is because of the formula by which adjustable-rate mortgage adjust.
Each year, when due for a reset, an adjustable-rate mortgage’s rate changes to the sum of fixed number known as a “margin”, and a variable figure known as an “index”. For conforming mortgages, the margin is typically set to 2.250 percent; the index is often equal to the 12-month LIBOR.
LIBOR stands for the London Interbank Offered Rate. It’s a rate at which banks lend to each other overnight.
Expressed as a math formula, the adjusting ARM formula reads : (more…)
Sep 8, 2011 | Buying Real Estate, Mortgage Guidelines, Mortgage Lenders, Mortgage Rates
Mortgage guidelines appear to be tightening with the nation’s largest banks.
In its quarterly survey to senior loan officers nationwide, the Federal Reserve uncovered that a small, but growing, portion of its member banks is making mortgage approvals more scarce for “prime” borrowers.
A prime borrower is described as one with a well-documented payment history, high credit scores, and a low monthly debt-to-income ratio.
Of the 53 responding “big banks”, 3 reported that mortgage guidelines “tightened somewhat” last quarter. This is a tick higher as compared to prior quarters in which only 2 banks did.
46 banks reported guidelines unchanged from Q1 2011.
When mortgage guidelines tighten, it adds new hurdles for would-be home buyers in Fitchburg. Tighter lending standards means fewer approvals, and that can retard home sales across a region.
Just don’t confuse “tighter standards” with “oppressive standards”. (more…)
Sep 7, 2011 | Buying Real Estate, Mortgage Lenders, Mortgage Rates, The Economy
The U.S. economy is no longer adding new jobs.
Last Friday, in its monthly Non-Farm Payrolls report, the Bureau of Labor Statistics reported that the U.S. economy added exactly zero new jobs in August as the national Unemployment Rate held steady at 9.1 percent.
Despite the “zero” reading, the jobs figures were in the red. This is because the BLS issued revisions to its June and July figures that adjusted the two months of data down by 58,000 jobs.
Economists had expected a monthly reading of +75,000. Their estimates missed.
The weaker-than-expected jobs data fueled a stock market sell-off that pushed stocks down 2.5% and spurred a bond market rally. (more…)
Sep 2, 2011 | Buying Real Estate, Housing Analysis, Mortgage Lenders, Mortgage Rates, News
Has housing turned the corner for good?
The June 2011 Case-Shiller Index reading posted strong numbers across the board, with each of the index’s 20 tracked markets showing home price improvement from May.
Some markets — Chicago and Minneapolis — rose as much as 3.2 percent.
The rise in values is nothing about which to get overly excited, however. The Case-Shiller Index is just re-reporting what multiple data sets have already shown about the summer housing market; that it was stronger than the spring market, and that a recovery is underway, but occurring locally, at different rates.
For example, the June 2011 Case-Shiller Index shows the following :
- Denver, Dallas, Washington D.C., and the “California Cities” bottomed in 2009. Each has shown steady improvement since.
- None of the Case-Shiller cities showed negative growth between May and June 2011.
- 12 of Case-Shiller’s tracked cities have improved over 3 consecutive months.
In isolation, these statistics appear promising, but it’s important to remember that the Case-Shiller Index is a backward-looking data set, focusing on just a portion of the national housing economy. (more…)
Aug 19, 2011 | Buying Real Estate, Mortgage Lenders, Mortgage Rates, News
Last week, at its 5th scheduled meeting of the year, the Federal Open Market Committee voted to leave the Fed Funds Rate in its target range near zero percent.
The Fed Funds Rate has been near zero percent since December 2008 and, in its official statement, the FOMC pledged to leave the Fed Funds Rate untouched for at least another 2 years.
This doesn’t mean mortgage rates will be untouched for 2 years, though.
Mortgage rates and the Fed Funds Rate are two different interest rates; completely disconnected. If mortgage rates and the Fed Funds Rate moved in tandem, the chart at right would be a straight line.
Instead, it’s jagged.
To make the point more strongly, let’s use real-life examples from the past decade.
- June 2004, 529 basis points separated the Fed Funds Rate and the 30-year fixed mortgage rate
- June 2006, 168 basis points separated the Fed Funds Rate and the 30-year fixed mortgage rate
Today, the separation between the two benchmark rates is 407 basis points.
1 basis point is equal to 0.01%. (more…)
