How To Get Mortgage Interest Rate Quotes To Buy A Home In Mesa

February 23, 2010 By Leave a Comment

Mortgage rates are expired before they hit the papers

You can’t get your mortgage rates from the national news headlines. How you get the latest most up to date mortgage interest rates is to talk to a loan officer. Last week proved it.  Again.

Friday morning, headlines in Arizona and around the country read that mortgage rates were down 0.04 percent, on average, since the week prior.

A sampling of said headlines includes:

  • US Mortgage Rates Drop For 2nd Straight Week (Reuters)
  • Mortgage Rates On 30-year US Loans Fall To 4.93% (Business Week)
  • 30-Year Fixed Mortgage Rate Falls Farther Below 5% (Marketwatch)

The story behind the headline was sourced from the Freddie Mac Primary Mortgage Market Survey, an industry-wide mortgage rate poll of more than 100 lenders.  The PMMS has reported mortgage rate data to markets since 1971 and is the largest of its kind.

Unfortunately, Mesa rate shoppers can’t rely on it.

See, unlike governments and private-sector firms, when consumers are in need mortgage rate information, they need the information delivered in real-time; for making decisions on-the-spot.  Consumers need to know what rates are doing right now.

The Freddie Mac survey can’t offer that.

According to Freddie Mac, the survey’s methodology is to collect mortgage rates from lenders between Monday and Wednesday and to publish that data Thursday morning.  The survey results are an average of all reported mortgage rates. The problem is that mortgage rates change all day, every day.  The PMMS results are skewed, therefore, by methodology.

And, meanwhile, the issue was compounded last week because mortgage rates shot higher Wednesday afternoon — after the survey had “closed”.  The market deterioration ran into Thursday, too — again, unable to be captured by Freddie Mac’s PMMS.

Although the newspapers reported mortgage rates down last week, they weren’t.  Conforming mortgage rates were higher by at least 1/8 percent, or roughly $11 per $100,000 borrowed per month.  In some cases, rates were up by even more.

Newspapers and websites can give a lot of good information, but pricing is far too sketchy to rely on a reporter. When you need to know what mortgage rates are doing in real-time, make sure you’re talking to a loan officer.  Otherwise, you may just be getting yesterday’s news.

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Get Better Mortgage Rates with Better Credit Scores

February 5, 2010 By Leave a Comment

It seems like the importance of a better credit score getting stronger as mortgage lenders tighten mortgage loan approval requirements for home buyers that I work with in Mesa and around the southeast valley.  Credit scores not only make the difference between a mortgage approval and mortgage turn-down, but they also play a large role in determining your actual mortgage interest rate and discount points that you may have to pay to get the rate you want.

In the 3-minute piece, the NBC Today Show talked about 7 ways that homebuyers ruin their credit — often by accident.  Some of the highlighted mistakes include:

  • Closing open credit cards
  • Buying appliances during the mortgage application process and just prior to closing
  • Asking creditors to lower credit balances prior to closing

In general, if you have a 740 FICO or above, you will most likely qualify for the best interest rates and programs with the lowest fees.  Below 740, though, every 20 points adds to the damage.  Watch the video and apply what you can to your own situation.  The more you know, the more you can save.

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Short Sale Definition – What Does Short Sale Your Home Mean?

February 2, 2010 By Leave a Comment

Short Sale DefinitionWhat does short sale your home mean? Is a common question that I still get from homeowners I come across when I speak to them about listing their home for sale with me.

Let’s see, the short sale definition that I commonly give is that a short sale is when a home seller gets their mortgage company to agree to let the home seller sell their home for a sales price that is for less than what is owed on the mortgage. Said in another way, a short sale is where you sell your home for less than what you owe on it and the mortgage company takes a loss on the money they originally loaned you.

Let me explain, a Short Sale may be appropriate for a Mesa home seller whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000.  Rather than pay the $30,000 difference to the lender at the time of sale (this is because the home seller doesn’t have the money to pay the lender the extra money), the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

What Are The Effects Of Short Sale?

In most cases, short sales are a preferable alternative to foreclosure but the process still impacts both the homeowner and the mortgage lender.

  • The homeowner is penalized with a derogatory major tradeline on their credit for not fulfilling a mortgage obligation which leads to a drop in credit score.
  • The lender is forced to take a loss on a mortgage loan.

Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

About The Short Sale Process

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start.  And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

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Revisions to FHA Home Loans – Impact on Mesa Real Estate

December 14, 2009 By

As you may know, FHA has played a major role in the past few years to our recovering Mesa real estate market.  Historically, FHA has accounted for just 3-5% of all home loans in our country but currently they account for almost 30% of purchases and 20% of all refinances!  Because of this huge swing in market share, HUD Secretary Shaun Donovan has been very busy discussing ways to protect FHA from future potential losses from delinquent mortgages.  HUD has began outlining and implementing changes that could impact potential home buyers and first time home buyers – like you – in your ability to get an FHA mortgage to purchase a home in Mesa or anywhere in the Southeast Valley.  Below are a few of the changes to pay attention to:

  1. Reduce the maximum permissible seller contributions towards closing costs and pre-paids from 6% to 3%.
  2. Raise the minimum FICO score required to obtain an FHA loan; currently this sits at 620.  There has been no specific FICO score mentioned at this point, just be aware that it could be raised soon.
  3. Raise the down payment.  Currently the minimum down payment still sits at 3.5% and there has been no mention of a specific down payment in the proposal but it is something FHA is considering.
  4. Raise MIP – The up-front mortgage insurance premium is currently at 1.75% of the loan amount (in most cases) and they are considering an increase to up to 3.0%.  The annual premium (monthly mortgage insurance) is also under fire and may be increased as well.

If you have any questions about this, you can always call or e-mail me.  You can also visit HUD’s website at HUD.gov for the latest and greatest.

Filed Under: Financing Information
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