Mortgage Mirror

The mortgage industry recently made a change to their minimum down payment for conventional loans from 5 percent to 3 percent. This would allow a borrower with good credit to buy a $200,000 home with a down payment of $6,000 instead of $10,000. Currently FHA offers a minimum down payment of 3.5 percent, but their closing costs and monthly mortgage insurance is a lot higher than what they would be for a conventional loan with 3 percent down. FHA allows for lower credit scores where conventional loans usually do not. What the industry has discovered is that borrowers with good …

At the time of his writing in Mid-November, Interest rates are a lot lower than where I had expected them to be for the end of 2014. The Federal Reserve has now completed the third and final round of quantitative easing, or QE, ending its longstanding policy of buying bonds to artificially push rates down. The government’s bond-buying binge was aimed at lifting the economy out of the worst recession in years. With the Fed now absent from the bond-buying arena, one would think that rates would be a lot higher because now only market forces are dictating where interest …

The Good Faith Estimate (or GFE in my world) offers an estimated cost for the mortgage, as well as the mortgage terms. It’s the document I always send to customers when I quote them a rate. It’s also the one document I recommend they get from other companies if they want to compare rates and costs with my company. The GFE consists of three pages. Page 1 consists of: Date a borrower has to respond by How long the rate is locked for The loan amount The interest rate The term of the mortgage Whether the payment can go up …

At the time of this writing, mid-June rates are holding at a level that is lower than what I expected. The 30-year rate is currently at 4.125%-4.250%, the 20-year is at 3.875%-4.000%, the 15 year is 3.250%-3.375%, and the 10 year is at 3.000%-3.125%. That is lower than when we started the year, when rates were.25%-.375% higher across the board. That’s surprising because the Federal Reserve has been tapering their bond purchases by $10 billion per month since the beginning of the year, that move was expected to drive rates higher. Why do we think the opposite is taking place? …

So far 2014 has been an interesting year for the mortgage business. We are seeing approximately 60 percent less in refinancing originations. And while purchase mortgages (those originated when someone buys a home) have been steady, they are not taking place at the same blazing hot pace that we were seeing last year. It is for these reasons that we are hearing a lot of talk that Fannie Mae, Freddie Mac, and FHA may be lowering some of their credit standards to improve mortgage originations. Some lenders have already started lowering their credit score requirement for loans. The criteria for …

As a mortgage professional, I work with many real estate agents who refer clients to me. I also have many past clients who are now looking to buy a bigger home, or they have someone in their family who they have referred me who is looking to buy a home for the very first time. Everyone’s telling me the same thing: Properties that are priced right are selling very quickly, sometimes even within hours. My real estate partners are telling me that there is a lack of inventory right now, which can lead to bidding wars on properties, leaving many …

At press time, recently appoints Fed Chairwoman Janet Yellen is being presented with a challenge right out of the gate. Do we taper the taper? The Federal Reserve is currently buying $65 billion in bonds per month (down from the high of $85 billion) in an effort to keep mortgage and treasury rates down. The Fed seems to be on course to reduce their bond purchases by $10 billion per Fed meeting, which occurs approximately every six weeks. The Fed has already decided to taper for a second time since the tapering started in December. The Fed has stated that …

If anyone is thinking of buying property this year, they should consider doing it sooner rather than later. The Fed is beginning to take the foot off the bond pedal by buying fewer and fewer mortgage bonds, allowing for mortgage rates to rise. They started in December when they reduced their purchases from $85 billion to $75 billion in mortgage and treasury bonds per month,” he writes, “and they’re telling us that they are going to continue to ‘taper’ their purchases every six weeks until they are buying $0 in bonds. What does this mean to a consumer? You will …

At the time of this article was written, the unemployment rate had just dropped to 7 percent and the economy’s three-month average of job creation was approximately 180,000 per month. While this number was far from being great, at least it was moving in the right direction. On Feb. 1, Janet Yellen will become the first female Federal Reverse board chairperson. While she is known for being less concerned about inflation and willing to keep rates down longer, other economists are convinced that the Fed will have to start reducing its bond purchases, which will undoubtedly increase interest and mortgage …

Starting this year, there will be two new rules in effect for “qualified mortgages” or QMs, one that affects the amount that lenders can charge and one that affects the amount the buyer can borrow. The change mandates that lenders cannot charge fees of more than 3 percent of the loan amount. This limit such mortgage charges as underwriting fees and origination fees, but excludes title and attorney fees. This has most of the mortgage industry in an uproar because it limits what a mortgage company or bank can charge a consumer. Personally, I believe that this is a good …