The Mortgage Porter

Meet Me and My Fellow Rain City Guide Contributers

Ardell, Jillayne and yours truly will at Crossroads in Bellevue at 6:30 pm on February 4, 2009.   I'm bummed that Dustin can't make it (maybe he'll suprise us).  And so far, fellow authors, Craig and Robbie, say they'll be there too!

 

It's a causal meet-up that Ardell is organizing.  We'd love to meet our readers, commenters and fellow contributors.  For more information or to give us a heads up that you're stopping by, please click here. 

By the way, if you visit Rain City Guide's About RCG page, you'll see what the four of us are twittering--just like the photo above which was taken at Inman Connect in San Francinsco last summer.  Sadly, RCG contributors rarely have the opportunity to pile on a bean bag chair together.

Mortgage Rates for the Seattle, Bellevue, Tacoma, Everett and beyond

For a brief moment (an hour or so), I was able to quote and lock rates in the mid-4 range earlier this week...rates once again quickly bumped upwards.  This week, 4 rate changes a day was not uncommon.  

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000.  Rates are priced based on a low-mid credit score from 720-739.    This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 30 day lock with no prepayment penalties.  For your personal rate quote with or without points, please contact me.

30 Year Fixed Priced w/1 Pt:  5.000% (APR 5.138%) ~ priced with 0 points: 5.750% (APR 5.803%).

30 Year Fixed Priced w/1 Pt with mid-credit scores of 740 or higher: 4.875% (APR 5.011%).  

15 Year Fixed Priced w/1 Pt:  4.625% (APR 4.858%).

Conforming High Balance. Pricing is based on the same criteria above (including zero points) except where the loan amount is $417,001 - $506,000 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 5.625% (APR 5.764%).

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $506,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000. 

30 Year Fixed @ 1 Pt:  7.25% (APR 7.406)

FHA.  Pricing based on credit score of 620 or better and loan amount of $417,000 for FHA in King, Snohomish and Pierce Counties.

30 Year Fixed @ 1 Pt:  5.500% (APR 6.179%).

FHA-High Balance. Pricing based on 1 discount/origination point and loan amounts from $417,001 - $506,000 for King, Snohomish and Pierce Counties.  NOTE: 2009 FHA loan limits are posted here for Washington state.   

30 Year Fixed @ 1 Pt: 5.500% (APR 6.173%).

VA. Pricing based on credit scores of 620 or better based on loan amount of $417,000.   For VA loan amounts over $417,000, please contact me.

30 Year Fixed @ 1 Pt:  5.500% (APR 5.612%).

Prime Rate(what HELOCs are based on):  3.250%.   

12 Month LIBOR (what a majority of ARMS are based on): 1.92250% as posted in the Wall Street Journal.

Rates are as of Friday, January 30, 2009 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. 

Stay tuned with what's going on in the market by subscribing to Mortgage Porter (upper left corner) and Mortgage Porter Twitter for live rate updates (click Follow).

Reviewing an ARM Note for a Neighbor in West Seattle

I've been working with a home owner in West Seattle who has an adjustable rate mortgage that she obtained almost five years ago from a big "local" bank.   She contacted me to obtain rate quotes for refinance because her ARM is set to adjust soon.   Here's what a review of her Note reveals:

The Note rate is 4.125% for five years with the first adjustment coming up on May 1, 2009.   The index is based on the 1 Year Treasury (CMT) and her margin is 2.75%. 

If her ARM were set to adjust today, her new rate would be based on adding the margin of 2.75% to the 1 Year Treasury rate of 0.49% rounded to the nearest 0.125% = 3.25%.  (Indices are changing dramatically in our current climate--it's hard to say where the CMT will be on May 2009).

This rate is amortized based on the remaining term of 25 years and every May her ARM will continue to adjust based on where the current index is (1 year Treasury - CMT) plus the margin of 2.75%.   This is also limited to specific caps that her Note features of 2% annually and a lifetime ceiling of 10.125%. 

Let's assume her rate adjust to 3.25% in May 2009.  The highest her rate could be on May 2010 is 5.25% and the lowest is 2.75% (the lowest the rate may ever be is limited to the margin of 2.75%).  If rates continuing rising, the worse case scenario would look like this:  May 2011 = 7.25%; May 2012 = 9.25%; May 2013 = 10.125% (because of the lifetime cap of 10.125%).

If worse case scenario, the CMT climbs dramatically over the next few months, the highest her rate could be is 6.125% based on her 2% rate caps.

Should this home owner refinance with her adjustment date looming near?  It really depends on what her personal financial plans are and if she can tolerate having her rate change annually.  Her main risk is where rates may be in the future.   The choice is hers.

What would you do?

Are you a Seattle area home owner with an ARM?  I'm happy to review your Note for you--no refinance required.

 

The Seattle Boat Show

Yesterday, my husband and I went to The Seattle Boat Show which is taking place right now at Qwest Field Event Center.  I'm not a boater.  In fact, I don't even swim.  I had fun checking out the sea of boats from yachts to motorized kayaks and the Junk Raft...it's pretty amazing.  

Booth after booth of gadgets and classic tradeshow salespeople offering you an "almost free cookie" if you'll just stop by to hear their pitch (no thanks).  I can't help but wonder how our economy is impacting this market...especially compared to real estate? 

The Seattle Boat Show runs through Sunday, February 1, 2009.  In addition to the indoor event, South Lake Union has a "floating" show. 

Click here to see my photos.

Mortgage Rates for Friday Morning

1:00 pm update:  Rates have slightly improved this afternoon and are posted at Rain City Guide.

Mortgage rates continue to trend higher putting the media hyped 4.5% further out of reach for consumers.  With that said, mortgage rates are incredibly low and if you're waiting for a specific rate--you risk losing out on what you could have today.  Here is my recommendation for if you are considering refinancing and are after a specific rate.

The spread between paying a point and zero points remains large.  Banks simply don't want you to be able to price your mortgages at zero points or with no-cost (both are done using rebate pricing).  They want consumers to have more "skin" in the game so that you'll be less likely to refinance should rates improve.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000.  Rates are priced based on a low-mid credit score from 720-739. Credit scores of 740 or higher can most likely improve rates quoted by 0.125%.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 30 day lock with no prepayment penalties.  For your personal rate quote with or without points, please contact me.

30 Year Fixed Priced w/1 Pt:  5.125% (APR 5.264%) ~ priced with 0 points: 5.750% (APR 5.803%).

15 Year Fixed Priced w/1 Pt:  4.500% (APR 4.729%).

Conforming High Balance. Pricing is based on the same criteria above (including zero points) except where the loan amount is $417,001 - $506,000 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 5.500% (APR 5.637%).

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $506,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000. 

30 Year Fixed @ 1 Pt:  6.875% (APR 7.026)

FHA.  Pricing based on credit score of 620 or better and loan amount of $417,000 for FHA in King, Snohomish and Pierce Counties.

30 Year Fixed @ 1 Pt:  5.500% (APR 6.179%).

FHA-High Balance. Pricing based on 1 discount/origination point and loan amounts from $417,001 - $506,000 for King, Snohomish and Pierce Counties.  NOTE: 2009 FHA loan limits are posted here for Washington state.   

30 Year Fixed @ 1 Pt: 5.500% (APR 6.173%).

VA. Pricing based on credit scores of 620 or better based on loan amount of $417,000.   For VA loan amounts over $417,000, please contact me.

30 Year Fixed @ 1 Pt:  5.500% (APR 5.612%).

Prime Rate(what HELOCs are based on):  3.250%.   

12 Month LIBOR (what a majority of ARMS are based on): 1.92125% as posted in the Wall Street Journal.

Rates are as of Friday, January 23, 2009 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. 

Stay tuned with what's going on in the market by subscribing to Mortgage Porter (upper left corner) and Mortgage Porter Twitter for live rate updates (click Follow).

What to do if you missed out on refinancing with last week's rates

Tuesday, following the holiday, rates popped up about a half point to rate.   Last week, the very same people I was quoting mid-to-high-4's to who opted not to lock yet, now are receiving updates with rates in the low 5's...much to their surprise.  Why didn't they lock?  Because some want just 0.125% better in rate and some want the rate priced with zero points (which is a much taller order than 0.125% improvement in rate these days with rebate pricing almost non-existent).

So what can you do if you missed out on a rate you have your heart set on?  I'm advising my clients (home owners in the beautiful State of Washington) to proceed with their loan application.  We will review their credit report and obtain a preliminary underwriting response.  The client can then gather the documents that will be required to proceed with the loan approval. 

My clients inform me of what their desired rate/point and provide me with permission to lock in at that their target rate if it is reached.  This is referred to as a "forward lock".  Title, escrow and appraisal will not be ordered until that rate is locked.  Having a complete file upfront will help avoid lock extensions during a "refi boom".  

It's also real important to stress that borrowers must be committed to their lender well before locking.  I'm hearing of a lot of "double applications" and "double locks".  This impacts a lender or brokers ability to lend.  Lenders track lock-fallout ratios and will penalize the originating company for loans not delivered (worse case, they'll stop working with them.  One less lender for a broker to select from). 

Bottom line: make sure you're not chasing after a rate that may or may not happen.  Be realistic.  Nobody knows for certain where rates will be in the future.  But if you have the time and you don't mind waiting...go for it!  

By the way, you can always see actual rates I'm quoting by visiting www.twitter.com/mortgageporter.  Click "follow" and you'll receive constant updates on mortgage rates (and some misc. stuff too).  You can "un-follow" at any time...but why would you ever do that?

Martin Luther King Day

In 1986, King County, where I reside, was renamed after Martin Luther King Jr.  Originally our county was named after William Rufus Devane King, a slaveowner and  once Vice President under Franklin Pierce, back in 1852.   The renaming of King County was official in 2005 and the new county logo, featuring Martin Luther King Jr replacing a "crown" followed in 2006.

Personally, I'm pleased to have our county to be named after Martin Luther King Jr. 

In observance of Martin Luther King Day, Mortgage Master will be closed.  We will reopen for business as usuals on Tuesday, January 20, 2009.

Mortgage Interest Rates for the Seattle Area

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000.  Rates are priced based on a low-mid credit score from 720-739. This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 30 day lock with no prepayment penalties.  For your personal rate quote with or without points, please contact me.

30 Year Fixed Priced w/1 Pt:  4.875% (APR 5.010%) ~ priced with 0 points: 5.250% (APR 5.300%).

15 Year Fixed Priced w/1 Pt:  4.500% (APR 4.729%).

Conforming High Balance. Pricing is based on the same criteria above (including zero points) except where the loan amount is $417,001 - $506,000 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 5.375% (APR 5.511%).

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $506,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000. 

30 Year Fixed @ 1 Pt:  6.875% (APR 7.026)

FHA.  Pricing based on credit score of 620 or better and loan amount of $417,000 for FHA in King, Snohomish and Pierce Counties.

30 Year Fixed @ 1 Pt:  5.375% (APR 6.050%).

FHA-High Balance. Pricing based on 1 discount/origination point and loan amounts from $417,001 - $506,000 for King, Snohomish and Pierce Counties.  NOTE: 2009 FHA loan limits are posted here for Washington state.   

30 Year Fixed @ 1 Pt: 5.500% (APR 6.173%).

VA. Pricing based on credit scores of 620 or better based on loan amount of $417,000.   For VA loan amounts over $417,000, please contact me.

30 Year Fixed @ 1 Pt:  5.375% (APR 5.107%).

Prime Rate(what HELOCs are based on):  3.250%.   

12 Month LIBOR (what a majority of ARMS are based on): 1.77125% as posted in the Wall Street Journal.

Rates are as of Friday, January 16, 2009 at 8:00 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. 

Stay tuned with what's going on in the market by subscribing to Mortgage Porter (upper left corner) and Mortgage Porter Twitter for live rate updates (click Follow).

2009 County Recorders Schedule

Here is the holiday schedule for King, Pierce and Snohomish counties recorder's office.  If the recorder's office is closed, your transaction will not be recording on that date. 

 

A tip of the hat to The Talon Group, your title and escrow partners.   You can click on the links above to have a pdf of the specific closures by county.

Condo's Getting Spanked by Fannie

Fannie Mae's latest hits to rate will be implemented by lenders any day.  Condominiums are really getting spanked with a 0.75% add to fee if there is less than 25% home equity in the property.  This will apply to both purchases and refinances for any mortgage except those amortized 15 years or less.

Here's an example of a rate I just quoted based on a value of $330,000 and a loan amount of $264,000 (80% LTV) for a rate term refi 30 year fixed:

Current:  4.875% priced with 1 point (apr 5.013)

Here's what the 0.75% fee would look like if implemented right now (based on current pricing):

• 4.875% priced with 1 point plus 0.75% fee.  $1980 more in fee for a loan amount of $264,000.
• 5.250% priced with 1 point (0.75% fee priced into the rate).  $60 higher in mortgage payment for a loan amount of $264,000.

If you are considering refinancing your condo, contact your local mortgage professional right away (I can help you if you're located in Washington state)...if you're in the process of buying a condo and are "floating" your interest rate, I highly recommend considering locking.

PS:  Cash-out refinances are also getting whammo'd by Fannie.  Don't wait!