The Mortgage Porter

Mortgage Interest Rates: 30 Year Under 6%!

Mortgage interest rates are all reading hedging on a rate cut by the Fed on December 11th based on comments Ben Bernanke made yesterday.  If the Fed does not deliver what traders are anticipating (dropping rates too much or not all), rates will dramatically react.   All eyes will be on the Jobs Report next Friday which historically has a huge impact on mortgage rates.   As always, I recommend locking your mortgage interest rates.  Especially considering the rally we have currently in the stock markets.  Why not take advantage of the current low rates instead of gambling your mortgage payment?

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  Conforming rate quote below based on owner occupied, "full doc" with minimum credit scores of 680 with an 80% loan to value or lower and a loan amount of $400,000.   Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed: 5.625% (APR 5.761%).  Payment per $1000 = $5.76.

30 Year Fixed with 10 Year Interest Only:  6.000% (APR 6.137%).  Payment per $1000 = $5.00. 

40 Year Fixed:  6.125% (APR 6.263%).  Payment per $1000 = $5.59.

5/1 ARM (2/2/6 caps):  5.625% (APR 7.065%).  Payment per $1000 = $5.76.

5/1 ARM 10 Year Interest Only Payments:  5.750% (APR 7.148%).  Payment per $1000 = $4.79. 

FHA/VA 30 Year Fixed:  6.000% (APR 6.654%).  Payment per $1000 = $6.00. (not including MI for FHA).

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).

30 Year Fixed: 6.750% (APR 6.901%).  Payment per $1000 = $6.49.

30 Year Fixed with 10 Year Interest Only Payments: 6.875% (APR 7.026%).  Payment per $1000 = $5.73.

5/1 ARM:  6.250% (APR 7.306%).  Payment per $1000 = $6.16.

5/1 ARM Interest Only:  6.250% (APR 7.327%).  Payment per $1000 = $5.21.

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.    This is just a small sample available of rates and products.  Rates are as of Friday, November 29, 2007 at 9:00 a.m. and may change at any time.  Available programs may change at anytime as well.   This is not a guarantee nor is it a commitment of interest rate.  For your personal rate quote or for loan amounts over $650,000, please contact me.

Happy 1st Birthday to Mortgage Porter

I cannot believe that it was one year ago today that I decided to delve into the blogging world. I'm really not sure how I'm suppose to celebrate this!  I am proud of how Mortgage Porter is developing and have enjoyed all of my blogging experiences, including writing for Rain City Guide.  This past year has been nothing short of amazing. 

Mortgage Porter's first year has included:

• Over 370 articles (aka posts) written straight from my heart.
• Nationally recognized as one of the real estate best blogs written by a woman (the only mortgage blog that was included in the Sellsius Top 12 Women Real Estate Bloggers for 2007).
• Local recognition for outstanding consumer content by Larry Cragun's Magnificent 7.
• Interviews from Inman News, KOMO-4 and from fellow RE bloggers for whom I have the utmost respect.
• Making many new friends and clients from around the world.  The furthest away is a real estate agent who is currently in Ethiopia and who happens to live (most of the time) in Washington!

Maybe on my next blog-birthday or blogoversary I'll have something more profound to say...for now, I'll leave you with this video to celebrate today and many more years of Mortgage Porter to come!  Thank you for reading Mortgage Porter. 

A (Very Middle of the Road) Message from Senator Cantwell on HR 3915

Dear Mrs. Porter

Thank you for contacting me regarding the Mortgage Reform and Anti-Predatory Lending Act of 2007. I appreciate hearing from you on this important issue.

The Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915) was introduced on October 22, 2007 by Congressman Brad Miller. If enacted, this legislation would amend the Truth in Lending Act, setting forth standards and requirements to monitor the residential mortgage industry. These changes range from requiring counseling for loan applicants, to laying out requirements that mortgage originators be licensed and registered. The bill was reported from the House Financial Services Committee on November 9, 2007 and is currently awaiting action on the House floor.

While no companion bill has been introduced in the Senate at this time, please be assured that I will continue to work with my colleagues in Congress to respond to the state of our economy in a fair, responsible, and effective manner. Should legislation similar to H.R. 3915 come to a vote in the Senate, I will keep your thoughts in mind.

Thank you again for contacting me to share your thoughts on this matter.  Finally, you may be interested in signing up for my weekly update for Washington state residents. Every Monday, I provide a brief outline about my work in the Senate and issues of importance to Washington State; If you are interested in subscribing to this update, please visit my website at http://cantwell.senate.gov .  Please do not hesitate to contact me in the future if I can be of further assistance.

Sincerely,
Maria Cantwell
United States Senator

For future correspondence with my office, please visit my website at
http://cantwell.senate.gov/contact/index.html

NOW may be the time to refi if you have an ARM or Fixed over 6.5%

Last night I posted that the 30 year fixed rate was at 5.625%...this morning, rates have been moving upwards (I'm all ready receiving new rate sheets from this morning for the worse).  Now may be the time to consider taking advantage of rates being below 6%.   

Just to recap...you should consider refinancing if:

• You have an Adjustable Rate Mortgage with the fixed period ending in 24 months or less.
• You have a 30 year fixed rate mortgage over 6.5%.
• You have a piggy back (second) mortgage and enough equity to restructure the debt.
• You are paying private mortgage insurance.
• If you are concerned about the value of your home declining now or in the future (there are loan to value limits on refinances).   

If you're concerned about your credit scores, FHA may be a great alternative for you as long as your credit history is fine.

If you have a prepayment penalty, it may or may not be worth refinancing at this time.  The penalty is considered prepaid interest so it does qualify as deductible mortgage interest (a small consolation).   

Questions?  Ask!  Don't wait.   Mortgage rates change constantly and these days, mortgage programs do, too.    I'm here to help!   If you are unsure of your scenario, please contact your trusted Mortgage Professional right away.   It may be that you're doing fine just where you're at with your current mortgage and you need to do nothing...if so, at the very least, that 10 minute conversation with your CMPS provided you with a little piece of mind during these turbulent times in the mortgage industry.

PS:  NOW may also be a great time to buy and take advantage of 30 year fixed rates under 6.00%!

When Does it Make Sense to Refi?

I just had a very astute reader contact me wanting to know if he should refinance his 30 year fixed rate mortgage.  He was watching mortgage backed securities and noticed that the 10 year is at the lowest level in two years and the 30 year bond seeing a 3 year low!     His current rate is 6.125% and he plans on staying in his home for 5-10 years.   

It didn't take long for me to reply "not yet" based on him wanting a "no cost refi".   If the rates continue to trail lower...perhaps.

"No cost refi", a catch phrase you hear thrown around on radio and television ads, means that the actual hard costs are financed into the mortgage rate.  Nothing is free. A "no cost" refi may make sense if you're not planning on retaining the mortgage for a long period of time and your payment has improved enough to justify it.

As of tonight, a 30 year fixed rate-term refinance with an 80% loan to value would look like this (prepaids/reserves are factored separate):

• Note Rate 5.625% (APR 5.770) priced with 1% origination and closing costs (including title, escrow and reconveyance fees) of $2400 for a total amount of $6400.  P&I = $2,302.63: a savings of $127.81 per month over the 6.125% scenario below which would take just over 4 years to break even on the cost to refinance.
• Note Rate 5.875% (APR 5.929) priced with zero origination/discount points and total closing costs of $2400.  P&I = $2,366.15: a savings of $64.29 per month which would take just over 3 years to break even on the cost of refinancing.
• Note Rate 6.125% (APR 6.181%) priced with zero origination and a rebate of $2400 to pay for closing costs.  Total closing costs due to borrower equals zero.  P&I = $2,430.44.

If this home owner had any of the following, it would make more sense to take action now:

• an adjustable rate mortgage (ARM)
• private mortgage insurance
• piggy back second mortgage (fixed or home equity line of credit)
• reason or need to withdrawal equity

Should you refinance?  It depends on what your motivations are and how long you plan on keeping your home and/or mortgage.   Today's low rates are a great reason to contact a Mortgage Planner near you for a review of your current mortgage scenario.

By the way, if some of our elected officials in Congress have their way, you, Mr. and Ms. Homeowner, may not have the option of deciding whether or not you want to refinance unless the refinance has a clear "net tangible benefit"...HR 3915 has passed the House and will now take it's turn in the Senate.   If you don't want Congress deciding whether or not you can refinance, please contact your elected officials ASAP!

Why you should make sure your condo is on the FHA approved list

Editors Update: Loan limts are different than what's refected below from when this article was orignally written.  Check with your local FHA approved Mortgage Originator to see what your loan limts are (or click on the link in the second paragraph).  

As of 2011, the loan limit for FHA loans is $567,500 for King, Pierce and Snohomish Counties.  Also the loan to value for cash-out refinances has been reduced from 95% to 85%.

If your condominium is in a price range that would support FHA financing, you should contact your Home Owners Association to verify that your condominium is indeed on the FHA approved list.  Even if you're not planning on selling or refinancing anytime soon, if your condo is not on FHA's list, it can impact the value of your condo. 

As of today, the FHA loan limit for the tri-county (King, Pierce and Snohomish) areas for a single unit dwelling is $567,500 $362,790.    If your condo is valued at approximately $650,000 $380,000 or less, it may be attractive to home buyers are utilizing FHA financing.  With fewer programs for first time home buyers, FHA insured mortgages are a popular selection.   If your condo is not approved for FHA financing, you may be limiting qualified buyers.   Fewer home buyers means that the condo that's for sale in your complex, may not sale for as much as it could have.  This may translate to lower values for all in your condo complex.

Another reason why you should make sure your condo is on the FHA approved list is because you or one of your neighbors may need to use FHA financing to refinance.  As a result of our current mortgage landscape, fewer mortgage programs are available for people who may not have the highest credit scores or who need a mortgage with a higher loan amount.   FHA insured mortgages are not credit score sensitive and will allow up to an 85% 95% loan-to-value for a cash-out refinance at a competitive interest rate.  Not having FHA insured mortgages as an option to you and your neighbors who need to refinance may have damaging long term results such as a short sale or foreclosure if they are heading for financial troubles.  Foreclosed properties also bring down the values of neighboring homes.

Ask your Home Owners Association if your condo is FHA approved.   If your condo has phases; each specific phase is considered and may or may not be approved.   You can also check HUD's site and contact your local Mortgage Professional to verify whether or not your condo is on the FHA approved list (FHA's approved condo site can be confusing and easy to assume your condo is approved).

Here are a some of the requirements for condominiums to meet FHA's guidelines:

• At least 51% of the total units in the project must be owner occupied.
• At least 90% of the total units in the project have been sold.
• No single entity owns more than 10% of the total units in the project.
• The project, including common areas, is complete with no special assessments and no legal actions pending.
• The owners association has a reserve plan and a reserve fund , separate from the operating account that is adequate to prevent deferred maintenance.

I recently had a hard working single mom contact me who needed to restructure her debts and wanted to use her mortgage to do so.   Her credit scores were average and a few months ago, I would have been able to provide her several mortgage options.   In today's market, the only mortgage available for her (excluding hard money) was FHA.   

Unfortunately, her condo phase was removed from the approved list due to the reserve account dipping below the amount that was considered "adequate".  We discovered at the time of the refinance, the reserve account were back to an acceptable amount.   The HOA just needed to have an audit completed in order to be considered back into FHA's good graces.   FHA does allow "spot" approvals, however, if your condo has been removed from the list, a spot approval is not an option.  Apparently the cost of the audit was approximately $2,000 and the manager of the HOA was in no hurry to accommodate my client or us.

Since the Phase her condo is located is not FHA approved, she cannot proceed with FHA financing which would have saved her $450 per month and would have switched her from an adjustable rate mortgage to a 30 year fixed FHA insured mortgage.

It truly is in your best interest and your neighbors, if your condo is near the FHA loan limits, to make sure your condo phase is on the FHA approved list.   As the process may take weeks to complete, I strongly encourage you to take action now.   Don't let your HOA be lazy...you may need to rally the support of your neighbors of your condo phase.  It's well worth it to protect the value of one of your largest investments.   

Getting ready for Christmas

Probably the only one in our house who is more excited than me to drag out the boxes of decorations and ornaments is my old cat, Louise.    I just spied her on my dining room table, which is a "no-no".   You'd never guess this snoopy cat is over 10 years old. 

A Little Weekend Housekeeping

I don't know if it's because Mortgage Porter has a birthday coming up in a few days...or if it's just overdue.   I did a little "house keeping" on my blog this morning.  Now that she's a year old, it's time to reorganize and unclutter.

My intent with Mortgage Porter is to have it very consumer focused.  And I hope it appeals to real estate professionals, too.   When I write for Mortgage Porter, I picture my clients, the questions they've asked and experiences they've had.   I want to help them understand the process.    I also like to throw in some personal stories and local events...just for fun!

Here are a few of the changes I've made...

A while back, I removed the monthly list of Achieves and created one link.   My goal was to list out every post however as far as I can tell with my Typepad platform, this has to be done manually and it's been a chore!   You can still find Archives listed by month after you click the Archive link on the left right side of the blog.

I've also slimmed down my blog roll and separated the local blogs into their own list.  After I did that, I evaluated the remaining blog links and (this was hard) tried to really narrow it down to the (non-local) blogs I read the most and that are consumer focused.  I also created a link for all the other blogs that I enjoy that might be geared more real estate or mortgage professionals.

Plus, I've added a couple of badges that I'm proud of.   From top to bottom on the left:

• CMPS Certified
• Mortgage Market Guide
• Top 12 Women RE Bloggers
• Larry Cragun's Magnificent 7 Consumer Articles.   

You can click on any of these badges for more information.

I'm learning that a blog is an evolving process full of tweaks and hopefully improvements.   Nothing is permanent or stagnant.   I'm sure I'll be continuing to adjust and change Mortgage Porter...it's kind of like moving around your furniture or cleaning out your closets at home!

ChaToe LaFeet's First Wine Review

Just in time for a Friday funny...at least it's cracking me up!  My brother-in-law, Mike, just published a review of the wine that my husband and I made and bottled earlier this year:  ChaToe LaFeet.   Here is our first official review:

This week I'll review a new wine, ChaToe LaFeet, a 2007 Amarone from the upstart West Seattle Winery called Two Dogs Wine. First tasted at a small gathering in Burien we pared the wine with a superb turkey. Once shaken (not stirred) the wine spilled beautifully over a green table cloth. The red over green made for a festive backdrop. Although no tears were shed, eyes did water and noses crinkled while lips were puckered into a deep red foam.

After the first taste and subsequent falling onto our knees, hence the Two Dog all fours position, most of us recovered fully. My doctor advised me that my vision will soon return. Stumbling in the dark I spilled the wine on some olive oil and lettuce and discovered a tasty tart salad dressing. I'll save that for a future article.

When my doctor came back with the chemical analysis he suggested that the wine may be better pared with a Volkswagon as either biofuel or E-85. However, as I pointed out to the doctor, this is a first tasting of this vintage and having no comparison the Porter family tasters bestowed a Bronze medal and expect great things from this new winery.

Be sure to pick up next weeks review-Spilled Milk/Thanksgiving Tears: 
A new Whine Territory?

Yours truely,
Vashon Vinters and Arsenic Tasters

Look out Gary Vanderchuk!

Friday's Mortgage Interest Rates

I know I said I was not going to post rates today...I thought I was going to be able to avoid my computer and the blog for a day or two.  However, one of my long time clients has made an offer on a home and since I'm researching rates for their family, I might as well share them with you!   If you are in need of a mortgage this holiday weekend, send me an email; I'm available to help.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  Conforming rate quote below based on owner occupied, "full doc" with minimum credit scores of 680 with an 80% loan to value or lower and a loan amount of $400,000.   Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed: 5.875% (APR 6.011%).  Payment per $1000 = $5.92.

30 Year Fixed with 10 Year Interest Only:  6.250% (APR 6.386%).  Payment per $1000 = $5.10. 

40 Year Fixed:  6.375% (APR 6.517%).  Payment per $1000 = $5.77.

5/1 ARM (2/2/6 caps):  5.625% (APR 7.605%).  Payment per $1000 = $5.76.

5/1 ARM 10 Year Interest Only Payments:  5.750% (APR 7.148%).  Payment per $1000 = $4.79. 

FHA/VA 30 Year Fixed:  6.125% (APR 6.779%).  Payment per $1000 = $6.08. (not including MI for FHA).

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).

30 Year Fixed: 6.750% (APR 6.901%).  Payment per $1000 = $6.49.

30 Year Fixed with 10 Year Interest Only Payments: 6.875% (APR 7.026%).  Payment per $1000 = $5.73.

5/1 ARM:  6.250% (APR 7.306%).  Payment per $1000 = $6.16.

5/1 ARM Interest Only:  6.250% (APR 7.327%).  Payment per $1000 = $5.21.

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.    This is just a small sample available of rates and products.  Rates are as of Friday, November 23, 2007 at 9:00 a.m. and may change at any time.  Available programs may change at anytime as well.   This is not a guarantee nor is it a commitment of interest rate.  For your personal rate quote or for loan amounts over $650,000, please contact me.