Rates are trending higher. Don’t miss the train. If you have not refinanced yet, this may be a great opportunity to do so. We are offering a $350 discount for closing costs in February whether you are purchasing or refinancing!
Call me at 520-275-2536 or email David Wolsky @david@davidwolsky.com for details on how PHH Home Loans can save you money every month on your next mortgage! Licensed in Arizona. NMLS#182108.
Happy New Year! Looking back at last year and a look forward to 2011.
For years, there was a fees on our settlement sheets with a small charge of $4.95 to MERS. Here’s a fascinating article by Yasha Levine on how this little known entity named MERS that is causing havoc in the mortgage industry.
I was in Miami recently visiting relatives and read an article in the Miami Herald about creative ways to buy a home. They recommended a FHA loan as the best way to buy. It is a great loan program for buyers with a minimal down payment of only 3.5%. The source of funds can even be a gift. With a 620 minimum credit score and maximum loan amount of $316,250 in Pima County, Arizona, a FHA loan is the right choice for the majority of home buyers. FHA did make recent changes pertaining to underwriting guidelines including, the minimum credit scores and mortgage insurance premiums.
Another suggestion is a private loan. Now that institutional loans have such strict underwriting guidelines, private lenders typically can make up the rules to match your needs. In most cases, you can expect higher interest rates, higher closing costs and greater down payments. Most mortgage brokers have private investors willing to make these deals happen. Another funding resource could be a family member. Hopefully, you have a rich uncle!
Another creative approach is a seller carry back. Some institutional lenders allow a second position mortgage behind a new first mortgage a borrower obtains to buy a home. For example, the seller owns their house free and clear or they have ample equity in their house. The buyer obtains a loan for 80% of the sales price and the seller is the second position lender with a 10% loan for a combined loan-to-value ratio of 90%. Or, the seller can also be a private lender by accepting a down payment and financing the difference. If the buyer defaults, the seller keeps the down payment and gets the house back to sell it again!
The two zero down options still being offered are VA loans for active military or vets and USDA loans for rural housing. You might be surprised to learn that rural area near Tucson includes Vail, Marana and Sahuarita. USDA loans require borrowers to have an income no higher than 115% of the median income in the area. In Pima County, you can earn up to $73,000 for the household to qualify.
This seems to be a great time to get back in the housing market thanks to the lowest rates since the Eisenhower administration and affordable housing prices. I’m David Wolsky and I can be reached for advice at 520-275-2536. I am fully licensed in Arizona at PHH Home Loans (also known as Coldwell Banker Home Loans). Email me at david@davidwolsky.com.
The Fed has rolled out QE2 (Quantitative Easing 2) to keep rates low and the bonds and mortgages yields (and rates) have gone higher! That is exactly opposite of the Fed’s intentions! Since November 3rd, the 10 year treasury bonds have risen to 2.94% from 2.57%. According to Freddie Mac’s weekly survey of mortgage rates, the average 30 year fixed rate rose to 4.39% from 4.17% in the past week. Mortgage rates and bonds typically move in the same direction.
For up to date rate information, email david@davidwolsky.com or call me at 520-275-2536.
Tucson is a great place to live! I visited “The Old Pueblo” for the first time in 1978 and immediately fell in love with the desert as I went through Gates Pass on my way to the Arizona Sonoran Desert Museum. I came back year after year. In 1994, my family and I moved here and I joined the mortgage industry which connected me to home buyers relocating here from all over the world. I have been sharing my zeal for Tucson with anyone in earshot for these last 16 years and counting!
CNNmoney.com recognized Tucson as one of the top locations to buy a retirement home in their recent article, Best Places to Retire.
You probably know that Tucson has 350 days of sunshine, more than two dozen golf courses designed by the likes of Tom Fazio and Jack Nicklaus, and some of the best Southwest cuisine this side of the border.
What you might not know is that Tucson is surrounded by four different mountain ranges, and there’s even skiing at nearby Mount Lemmon. The city has a wealth of historic places to explore, from the 19th century St. Augustine Cathedral to the old homes and store fronts in El Presidio. Just outside of Tucson, you can visit old mining towns, missions and archaeological sites, including the petroglyphs at Signal Hill and the reconstructed dwelling as Dankworth Village. When temperatures get too brutal for outdoor pursuits, such as hiking the 150 miles of trails in the Santa Catalina Mountains, you can always hop in a summer class with the University of Arizona at Tucson’s lifelong learning program. There’s even a course on pirates!
Tucson was also featured in the article “Where to Buy a Retirement Home for Under $600 a Month” provided to Yahoo by U. S. News and World Report.
With 350 days of sunshine a year, Tucson residents don’t have any excuses for staying indoors. Retirees can hike through the five surrounding mountain ranges, explore a nearby cave, visit a Native American archaeological dig, or check out the Center for Creative Photography. The median home price in Tucson declined 14 percent, to $150,000, from the second quarter of 2009 to the same period of 2010. Buyers that put 20 percent–or $30,000–down on a median-priced Tucson home will pay roughly $599 a month in mortgage principal and interest payments.
If you would like to know more about Tucson, call me, David Wolsky at 520-275-2535 or email me at david@davidwolsky.com. It would love to talk to you about Arizona and to help you buy your next home.
The President signed legislation to extend loan limits for the 2011 fiscal year. As a result, FHA loans above $271,050 will continue in 2011. The FHA loan limit in Pima County is $316,250 for a single family dwelling. However, a few select counties will have a limitation on the maximum loan amount available.
As for conforming loans, the limit is still $417,000 for most of the country. In higher cost areas such as Califonia, there are Conforming Plus loans with higher loan limits up to $729,750.
FHA has some good news and bad news for borrowers. The good news is lower UFMIP – Up Front Mortgage Insurance Premium. The new rate is 1% down from 2.25%. The bad news is the MIP – mortgage insurance premiums are now .9% (per year) up from .55% for loans of 95% to 96.5% of the sales price. The MIP is .85% for loans with a down payment greater than 5%. This change represents about $30 more per month for a $150,000 loan amount. The hits just keep on coming!
Call David Wolsky at 520-275-2536 to help you through the mortgage maze!
I got a call the other day from a potential client interested in refinancing his home. He was trying to modify his loan and the lender suggested that he stopped making payments because the banks will not even talk to you about modifying a loan that is getting paid on a timely basis. Of course, their credit is shot now and they cannot qualify for a refinance despite the record low interest rates. I get calls like these every week. Why can’t everyone refinance their homes with record low interest rates?
1. Many homeowners have lost all of their equity or are underwater (owing more than the current value of their homes). Nationally, about 25% of homeowners fall into this category. In Tucson, over 30% of homeowners are underwater and in Phoenix, sources estimate over 50% fall into this category.
2. I am finding that some potential clients will pay for an appraisal, only to find out the appraiser has given the property a low value. Although there might be equity, it may not be enough to refinance.
3. Underwriting guidelines are very stringent. Many borrowers obtained their home loans with alternative document loans such as stated income loans, no document mortgages or no ratio mortgages. These products do not exist in the current mortgage marketplace. As a result, these same borrowers cannot refinance their loans because they cannot verify their income or assets.
4. Your credit is shot! About 25% of Americans have badly damaged credit. They have walked away from home loans and credit card debt. Bankruptcies are on the rise. Thousands of homes are foreclosed every day!!!
5. Another road block to refinancing is home equity lines in second position behind your current first mortgage. The combined loan-to-value ratio (CLTV) is very high in many cases. Lending guidelines cap CLTV especially in declining markets such as Arizona. Even if you have sufficient equity in your home, the second mortgage lenders are inundated with requests to subordinate their equity lines behind new first mortgages.
Despite these challenges, many borrowers are able to refinance their homes because they have the right combination of Good to excellent credit, income and asset qualifications and equity in their homes. Others may qualify for a program to help folks without enough equity if their home loans are owned by Fannie Mae or Freddie Mac.
If you are endeavoring to refinance, please be patient during the process as the system is at its capacity. I have heard that the three biggest banks in the country are taking over 90 days to process refinances. The residential mortgage industry has significantly consolidated over the past three and a half years as the economy was melting down. Of the top 25 lenders in 2008, only eight still exist! Also, lenders prioritize purchase transactions, so a refinance may have to go on the back burner. The best scenario for refinancing is to have your income and asset documentation available at the time of application. You will be required to submit your two most recent income tax returns with all schedules, your two most recent W2s, if applicable and your two most recent bank and investment statements. If you own more than one home, be prepared to provide the complete housing expense documentation of house payments, taxes, insurance and home owners association fees, if any. Appraisals can take a week or two to complete. They are ordered through the lender’s appraisal management service. Be truthful on your application and hang in there! Be extra patient if you have a second mortgage or equity line and you want to keep it subordinated to your new first mortgage because you will add several weeks onto the transaction. Work with professionals! I’m David Wolsky, fully licensed in Arizona with over sixteen years of experience. I can be reached at david@davidwolsky.com or by calling 520-275-2536.
I came across an amazing statistic this week. Prior to July 2010, there were 18,000 mortgage originators in the state of Arizona. There are only 3000 licensed mortgage originators as of this blog entry. What happened to all of those other originators? Well, some of them have not completed the requirements of 24 hours of classes plus National and State testing. Licensees also had to go through a background check. It can cost $1500 to become licensed and some originators do not have the money. Many originators did not pass the background check because they committed fraud or were convicted felons. Other originators went to the big banks like Wells Fargo, Bank of America and Chase as their mortgage originators are not required to be licensed, they only have to be registered with NMLS with a unique identifier number. By the way, those banks were also big recipients of TARP funds! Many of the unlicensed originators have left the business. Being an mortgage originator is a challenging line of work. It is a commission only position and very competitive.
The bottom line is choose to work with a licensed originator who can give you good advice and service. Someone with your best interest in mind! A house tends to be the largest purchase you will ever make in your lifetime. Make sure you are dealing with a person of integrity and someone who knows what they are talking about! Even though the mortgage industry has consolidated and tightened underwriting guidelines, it is important to understand the terms of your next home loan.
Please contact me if you have any questions or would like a second opinion for your mortgage terms. I’m David Wolsky. I have over sixteen years of experience and have helped thousands of customers with purchase or refinancing. You can reach me at david@davidwolsky.com or by calling 520-275-2536.
