Opening Doors for Homebuyers!

Opening Doors for Homebuyers!

The Federal Deposit Insurance Corporation is the first of six financial regulators to release the final version of the long-awaited qualified residential mortgage (QRM) rule. The National Association of Realtors applauds this action because it will make possible to incorporate rules that include a broad definition for Qualified Mortgage standards implemented earlier this year.

Got your House?

Got your House?

Under the QRM rule, loans are generally considered qualified if the borrower’s debt-to-income ratio is 43 percent, among other things and there is not onerous down payment requirement, as regulators had originally proposed.

The NAR strongly opposed earlier versions of the rule that included 20 and 30 percent down payment requirements, which would have denied millions of Americans access to the lowest-cost and safest mortgages

For lenders, having these two rules in alignment provides the clarity they’ve long been asking for, widening and deepening loan eligibility and availability, which has been one of the main stumbling blocks to increased home sales.

Homebuyers will have now more credit availability reflecting an increase in home purchases, and refis. Way to go!

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Mortgage Rates and Terms Beware!

Mortgage Rates and Terms Beware!

Mortgage rates haven’t moved much this year, and the good news is they’ve been stuck at historically low levels. However, mortgage rates are expected to move higher as we head through the fall. While various groups report national mortgage rate averages each week, the rates you get can vary dramatically from that average, depending on what product you choose and how you shop.

One of the biggest mistakes home buyers make is to take a 30 year, fixed-rate mortgage when they don’t really need it. The 30-year fixed is the most expensive of all mortgage products because the rate is the highest and you’re paying for the longest time.imprevistos

It is better to consider a product that matches how long you expect to be in your home, and make some changes later. Points are an upfront payment of interest in exchange for a lower rate. This boosts your closing costs and makes the rate appear to be artificially low.

Also, a great rate can turn into a bad one if your rate lock expires and you have to pay for an extension. Get your financials ready and provide them when asked, the sooner the better so it won’t interfere with the possibility of losing your rate lock. Documentation requirements can be arduous these days, and financial institutions are not going to waive them.

Beware of hidden fees and loan level pricing adjustments. Be sure to review a full breakdown of closing costs before committing to a lender. You can shop by rate or shop by fees, but you can’t shop for both at the same time.

Be aware about the Zero-closing cost mortgages that are sometimes available for as little as 12.5 basis points (0.125 percent) added to your mortgage rate. Your payment might raise $30-50 per month, but you’ll eliminate $4,000 in closing costs or more.

And finally, don’t let multiple lenders run your credit score. This can actually damage your score.

 

 

Don’t Get Left Out!

Don’t Get Left Out!

Don’t Get Left Out!

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Refinance Your Home Before Rates Rise

There has never been a better time to refinance your home.  HARP under the Home Affordable Refinance Plan allows homeowners to refinance their homes at shockingly low rates, and reduce their payments by an average of $3,000 a year.

 If your mortgage is $625,500 or less (unless you live in a high-cost area then the loan limits may be higher), you most likely qualify.  Basically, the Government wants banks to cut your rates, which puts more money in your pocket, great isn’t it.

It is a no-brainer to jump on this now. You need to act fast in order to refinance your house at these current low refinance rates.   The average monthly savings for most eligible Americans is $300. Many homeowners not only save every month, but depending on their current rates, they can also shorten the life of their loan.

Currently the  HARP program is set to expire on December 31, 2015. But the good news is, once you’re in, you’re in.  If the thought of a lower payment or fewer years on your mortgage sounds appealing, the time to act is right now. You have nothing to lose, but you do have to act now before rates rise.