Mortgage Fees are Increasing for Closings After April 1, 2012

Another good reason to close on your new  home before April 1, 2012.

Congress voted in December of last year to increase the guarantee fee charged by Fannie Mae and Freddie Mac, and premiums for mortgage insurance that are charged by the FHA for new mortgage loans.

The amount of the increase that begins April 1, 2012 is equal to 0.1 of 1 percent, (10 basis points) and is approximately $10 per month for each $100,000 of the loan.

Lenders may choose to either raise rates slightly to cover this additional cost, or charge higher fees. Banks and mortgage lenders will need to implement these fees sooner for new loans, so that they are being  incorporated into loans closing on and after the deadline.

IMPORTANT: If you are in the midst of a mortgage application, go through the fine print. ASK your attorney to review it as well. This fee may be in your loan package even if you are closing prior to April 1, and NOW is the time to get it removed.

For example, if you are getting a loan of $350,000 that is amortized over  30 years, this new fee translates to $12,600 that you should not have to pay.

And a note From Judy: If you have a question about buying or selling a home in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Connecticut Financing Update and Mortgage Rates December 30, 2011

Nearly eighty percent of American households believe that NOW is a good time to buy a home, according to the MBA and the Research Institute for Housing America (RIHA), which just  released their new exclusive report: "The Great Recession and Attitudes Toward Home Buying." "The report finds that almost 80 percent of American households believe that now is a good time to buy a home, despite high unemployment, slow economic growth and problems plaguing the economy.
 
This positive attitude is attributable to low house prices and low mortgage interest rates. The data shows that the pattern of home-buying sentiment during the current recession looks similar to that of past recessions and is consistent with the long-run average level." This is good to know, and it is good to know that it is free at and available for download at www.housingamerica.org.

People in the mortgage banking industry are beginning to talk about the "new normal." After years of unusually robust economic growth, we've fallen into a period of weak demand and it requires a complete reassessment of priorities and future expectations.

Origination volume has dropped from a peak of $3 trillion in 2005 to a volume of less than $1 trillion in 2012 - a level not seen since 1997. With faint hope of near-term recovery, mortgage lenders need to think strategically about a future that demands a leaner, more efficient business model.

Lender profitability is measured by the amount of gain earned off loans sold to investors. This gain is simply the difference between the price sold to originators (the buy-side position) versus the price sold to investors (the sell-side position). As long as the originator’s price is accurate and the investor is providing the best possible price at delivery, lenders optimize their revenue efficiency and ensure themselves a high margin per loan.

One-eighth of a point on a $200,000 loan might only be $250, but when the Mortgage Bankers Association reports that average profit per loan in the second quarter of this year was only $575, you’re talking about losing practically half of your profit. This leaves little room for other potential losses.

In this age of uncertainty, mortgage lenders are forced to evaluate their business model from all sides. By providing originators and secondary marketing with technology that enables them to make more reliable decisions, lenders can protect their profitability and lay the foundation for success in the "new normal" world of mortgage lending.

Today's Mortgage Rates

30 year fixed - 3.850% + 0% cost points for rate
20 year fixed - 3.750% + 0 % points for rate
15 year fixed - 3.250% +  0% points for rate
10 year fixed - 2.875%  + 0%  points for rate
5/1 ARM - 2.375%  +0 points for rate
7/1 ARM - 2.750 %  + 0 points for rate
10/1 ARM 3.250% + 0 points for rate

FHA/VA
30 year fixed - 3.750% with +0 % points for rate
5/1 ARM - 2.750%  with + 0 points for rate
7/1 ARM - 3.25 with +  .625 % CREDIT  point for rate

Jumbo - over to 2,000,000
30 year fixed - 4.625  % with 0 points  for rate
15 year fixed - 4.125% with 0  points for rate
5/1 ARM - 3.375% - 0 points for rate
7/1 ARM - 3.750 % - 0 points for rate
10/1 ARM - 4.375% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

A note from Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

The Twelve Most Common Connecticut Homebuyer FAQS

Are you ready to buy a home, and have a few questions? It doesn't mean that you are naive if you have questions about the home buying  process and experience, and it doesn't matter if you have bought a home before or not. Conditions change, parameters change and the economy changes. There are many questions about the home buying process that are very common  for first time buyers to ask,  as well as anyone who has ever bought a home before.

How long does it take to buy a home?

You can expect the process to take anywhere from 45-60 days on average from the day you negotiate your home purchase. The time involved has mostly to due with fulfilling various contingencies and obtaining a mortgage.

How much should I spend for a house? How much can I afford?

The answer to this question is directly correlated to your income, your debt, and your liquid assets. You may have heard a few rules of thumb, such as purchasing a home between 1.5 and 2.5 times your annual income,  Other "rules of thumb"  say that you should spend roughly one quarter of your monthly income on a mortgage.

In general, your monthly prinicpal interest, taxes and insurance payment should not exceed 28 to 29 percent of your monthly gross income. Your total debt payments (car payments, credit card payments, etc. plus the monthly mortgage amount) cannot exceed approximately 36%-41% of your gross monthly income. The calculations can differ depending on your credit score, and the amount of time the current debt has to be satisfied  It's best to get initially pre-qualified from your real estate agent and ultimately through a lender.

What's the minimum downpayment that I need to buy a house?

Government backed loans are  available with as little as a three and one half percent deposit.  As a note, there are income and price parameters that must be adhered to within your area.

Should I buy a foreclosed home?

You can certainly save a lot of money on purchasing a repossessed home,  just be ready for the length of time it takes to come to an agreement with the bank, the additional paperwork necessary, and the deferred maintenance that will most likely need to be addressed at that particular property

How many houses should I look at before I buy?

 You can look at one, you can look at one hundred. The best thing for you to do is to have a good idea as to what your wants and needs are. When you see a home that "speaks" to you, whether it's the first home, or the tenth home, listen to what your heart tells you. Further, if your agent asks you enough questions, you may only need to see less than a dozen or so homes before you very comfortably find "the one".

How much should I offer for a house?

There is no simple answer to that question, since each property truly stands on its own, and  has its own unique set of circumstances.  Just as a seller obtains a market  analysis on a home, you should also receive one for the home that you want to buy. The analysis will help you decide what to offer, based upon list price to sales price ratios and comparable sales.

How do I know if I am spending too much for the house that I want to buy?

A market analysis  completed by your agent will tell you how much the home is worth, but ultimately it is worth what you are willing to pay, and what the bank is willing to lend you if you are getting financing. If the appraisal as commissioned by the bank does not equal your agreed upon price with the seller, the bank will notify you and you can either renegotiate or walk away from that house. It's a wonderful third party check on value.

How do I know if I am getting a good deal on a mortgage?

You must compare loan packages. There is just no way around it. Shop for rates, but do not give out your social security number to various lending institutions, as it will lower your credit score and raise your interest rate. Obtain your score from one  lender and use that  number to shop around. Make sure you add up all the fees  to compare apples to apples when you shop.

Do I really need to use an Agent to buy a house?

I would highly recommend it!  Buyer Agency contracts are generally  written with the proviso that the agent will obtain their fee from the seller. In that case, there is no cost to you to have an expert and advocate on your side, who is bound by law to hold a fiduciary responsibility to represent your best interests . 

Should I sell my current home first?

Although this will differ for some homeowners for  various reasons, generally speaking you should get your home under deposit first,  in either a buyers market or a sellers market.

Do I really need a building inspector?

YES! Unequivocally yes.  A home purchase tends to be emotional, and you may unconsciously overlook issues  even if you are very well versed and knowledgeable about homes, their components, and construction.

How much will my closing costs be?

Figure your closing costs to top out at about four percent of the mortgage amount, and we can work on shaving that number down depending on whhat time of year you close, what day of the month that you close, and what type of mortgage you obtain.

Just one closing thought (pardon the pun)  If you get the jitters the night that you put your offer in on your house, try and relax. It's absolutely normal.  It doesn't mean that you shouldn't buy that particular house. It's a big decision and having a  little anxiety as to whether you have done the right thing, or  whether or not the bank will approve your loan is quite normal- just try and relax.

If it makes you feel any better, I have been in real estate for 27 years, and every time I purchase a home I even get a little anxious. You would think that helping buyers for this amount of time would make me immune to that. It doesn't.  So yes, I've been there. I understand how you feel. Get a good nights rest and it will be okay, I assure you. If you happen to be one of my future clients,  remember-I am always there for you.

When you are ready to buy a home, contact me. I'm there start to finish ....and beyond.

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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Connecticut Mortgage Rates and Financing Update November 4, 2011

HARP update (Home Affordable Refinance Program)

On October 24th the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac announced several changes to the HARP in an effort to help borrowers benefit from refinancing. Only borrowers with a loan sold to Fannie Mae and Freddie Mac prior to June 1, 2009 are eligible for the HARP program (which is commonly known as Refi Plus or Relief Refinance Open Access). For full details, the FHFA announcement and frequently asked questions can be accessed at www.fhfa.gov  under 2011 News Releases.

The full details of HARP 2.0 have yet to be released (there is an 11/15 deadline), documents released so far set out the broad structure. Gone is the LTV cap for fixed rate borrowers: borrowers with LTV’s in excess of 125% will now become eligible for the HARP program, though execution strategy for those loans remains unclear. A maximum LTV of 105% remains in effect for borrowers refinancing into an ARM.  The program (as outlined) suggests a reduction in loan level pricing adjustments for HARP eligible borrowers and waiver for those who choose to refinance into a shorter term.

The Treasury announced it will be selling $32 billion 3-year notes, $24 billion 10-year notes, and $16 billion 30-yr bonds next week - the same as in August. When this happened, rates were driven lower for a short window of time - however, rates are now back at that window of all time lows - so stay tuned to see how this auctions affects rates next week.  I am hard pressed to imagine rates dipping much lower. 

Today's Mortgage Rates

30 year fixed - 3.875% + .375% cost points for rate
20 year fixed - 3.875% + 0 % points for rate
15 year fixed - 3.250% +  0% points for rate
10 year fixed - 3.250%  + 0%  points for rate
5/1 ARM - 2.625%  +0 points for rate
7/1 ARM - 2.750 %  + 0 points for rate
10/1 ARM 3.375% + 0 points for rate

FHA/VA
30 year fixed - 3.875% with +0 % points for rate
5/1 ARM - 2.75%  with + 0 points for rate
7/1 ARM - 3.25 with .50% CREDIT  point for rate

Jumbo - over 576,000 (in Fairfield County, CT)   to 2,000,000
30 year fixed - 4.625 % with 0 points  for rate
15 year fixed - 4.125% with +.50% points for rate
5/1 ARM - 3.250% - 0 points for rate
7/1 ARM - 3.625 % - 0 points for rate
10/1 ARM - 4.250% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

What NOT to do Before Buying A Home: WORST Moves for Homebuyers

There are a number of things that could either hurt your chances of buying a home, or severely hinder them, but just a few very smart preparations  on your part can make the process exponentially easier. When you decide that you are ready to buy a home, or sell your existing home and buy another home, remember these important tips:

1. First things first, get your finances in order.

2. As a rule, do not deposit a large sum of money into your bank account within three months of purchasing a home without being able to explain in detail and prove exactly where the money came from.

For example, If you are getting any money as a gift for the downpayment, get it now and put into your bank account. As a safeguard, also have whomever is "gifting" you this money maintain the prior three and following three months statements on the account from which the money came from. This may be a requirement from the bank.  The bank may also require a signed "Gift Letter".

3. Do not change banks, or move money around from bank to bank. Your future lender will require to see proof of your  source of funds for your down payment and closing costs. Most banks request statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.

4. Do not apply for any credit cards, and if you have balances on your credit cards, PAY THEM OFF. It is not uncommon for a credit card balance to hurt your buying power. There are guidelines on the amount of debt that you can have without cutting into your ability to obtain a mortage at the desired amount. Going to a store and  obtaining a credit card for just that store for a purchase you intend to make is just as bad. Just wait.

5. Do not co-sign a loan for anyone, period.

6. Do not make any major purchases. That means wait to buy the car until after you have closed on your home, and wait to buy any furniture or appliances as well. If you have to make a major purchase, speak with your loan officer.

7. If you haven't already contacted a loan officer or a real estate agent, do so now.

8. Don’t change jobs, especially in today's teetering economy. A lengthy employment history with one company shows stability in your life and in your work. Believe me, that counts significantly.  A number of recent job changes even if they are in the same field does not look good on an application. Likewise, if you have only been at your current job for less than a year, it is not ideal as far as lenders are concerned.  Wait until aftter you close on your new home.

9. None of the above should change AT ALL until you actually have the keys to your new home in your hands. Do not apply for any credit between the time your loan is approved and the time that you close on your home, either. The bank will do a final credit check, and any inquiries at all are red flags. You will also be asked AT THE CLOSING to verify your original application and whether or not everything is correct on your original application. Heaven forbid something changed, and you didn't disclose it to the bank and major repercussions ensued. Just don't do it.

10. If you happen to be buying a home direct through the owner, NEVER give a deposit or  earnest money directly to that seller.

Lastly, and most importantly, don’t go through the process without the professionals that you need. That means an attorney, a real estate agent (that would be me!), a loan officer, and a building inspector.

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