The immediate market response has been slightly negative. We are seeing pricing worsen by 0.125% to 0.375% depending on the lender.
From the Wall Street Journal "The Federal Open Market Committee voted 8-2 to cut the fed funds rate from 3% to 2.25%, its lowest level since December 2004, and signaled more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession. The rate cut, though extremely aggressive by any historical measure, was likely to disappoint many on Wall Street who thought a full percentage point was needed. The Fed's statement said: "Recent information indicates that the outlook for economic activity has weakened further. Financial markets remain under considerable stress, and the tightening of the credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.""
From the Wall Street Journal
"The Federal Open Market Committee voted 8-2 to cut the fed funds rate from 3% to 2.25%, its lowest level since December 2004, and signaled more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession. The rate cut, though extremely aggressive by any historical measure, was likely to disappoint many on Wall Street who thought a full percentage point was needed.
The Fed's statement said: "Recent information indicates that the outlook for economic activity has weakened further. Financial markets remain under considerable stress, and the tightening of the credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.""
If you or a client of yours has a purchase transaction that is closing within 30 to 45 days, be sure to contact your Mortgage Planning Specialist and have them lock your rate before it worsens even more.
Shawn
Pete Sutch and he has been a home inspector that I have been very happy to refer for the past two plus years. Pete has always treated my clients very well. He has a non-alarming approach that keeps both the buyer and seller at ease.
Pete is very thorough and provides a great finished report that is easy to understand while being detailed. My clients always rave about how great he is and they have gone on to use him again after being in their home for more than one year.
If ever you want to have a home inspected, or know of someone in need of a home inspection, Pete Sutch with WIN Home Inspection is the person to call. Pete can be reached at (360) 480-8083 or psutch@wini.com.
If you, your client, or someone you know is currently going through a purchase or refinance, please read on...
100% financing appears to only be available if it is a VA loan. The MyCommunity and Flex products that benefitted the borrower by giving them 100% financing, are no longer available. Why?
"Recent changes to Private Mortgage Insurance guidelines effectively created the demise of 100% MyCommunityMortgage (MCM) loans and FLEX 100 mortgages. With the exception of MGIC (who will follow suit effective 3/31/08) the PMI companies have ceased insuring conventional mortgages with LTV/CLTV’s above 97%. If you have any clients whose financing is a MCM or Flex 100 mortgage 3/31/08 is the drop dead date for MI coverage."~WLG
On the upside, the MCM program will still receive the discounted MI coverage. The 3% downpayment can still be achieved through Gift Funds, Unsecured loan through a relative, domestic partner, fiancee', or fiance', Unsecured loan through employer or nonprofit organization, or a second mortgage, where available.
Contact you client today if they are relying on 100% financing.
As loan officers, we receive calls every day from people wanting to know what rate they can get. Usually this question is asked without the caller providing any information at all. Any loan officer worth his/her salt will not provide a rate without some basic information being provided. The reason is that we would be doing the potential client a disservice by doing so.
Here are portions of a recent chat log from a visitor to my website:
Guest said: i have a 785 credit score Guest said: i am interested in buying a home Guest said: i don’t wa[n]t to pay any point Guest said: and i want my int[e]rest rate to be 5.5
Guest said: i have a 785 credit score
Guest said: i am interested in buying a home
Guest said: i don’t wa[n]t to pay any point
Guest said: and i want my int[e]rest rate to be 5.5
After asking where the visitor was currently living and if they wanted to purchase their new home in Washington, they responded with the following:
Guest said: can you offer me a loan at 5.5 fixed no points, i don’t want waste your or my time?
Against my better judgment, I did throw out some rates after looking at my board that shows the rates for the day. Here is why it was against my better judgment:
Simply put, I did not have enough information to quote this person an interest rate.
There are many aspects to a client’s financial and credit profile that affect the final rate quoted. When we look at your overall profile, the following factors affect the rate:
Property, Assets, Credit, Income, and Debt
Property: is this land only; is the home stick-built, a condo, a manufactured home or is it a 2-4 unit building; will you be occupying the home; is the home on more than 10 acres; etc. The type of property and the occupancy can have a substantial affect on the interest rate. The lender assumes a greater risk on a manufactured home than stick-built home because the default rate is higher. Lower the risk, lower the interest rate will be. Adversely; higher the risk, higher the interest rate will be. Assets: do you have money in the bank; have you invested, do you have a retirement; do you have to borrow for the down-payment; will funds be gifted to you, etc. If you are coming to the table with nothing to offer, the lender will see this as a riskier loan. If you come in with twenty-percent down, the lender will see you as a good risk and they will sell you their money at a lower rate. Yes, you are buying money and the interest rate is the cost of that money. Credit: your credit history is indicative of whether you will default on your mortgage or will make your payments on time and in full. The lower the credit score, the more risk the lender assumes and therefore it will be reflected in the interest rate. On the other hand, a great credit score will mean a lower risk to the lender and that will translate to a better interest rate. Income: the stability of your employment is a consideration when determining your ability to repay your mortgage debt. The lender wants to be sure that you have stable employment and that it is likely to continue. That is why lenders want to see at least two years of employment history when determining the risk level of a borrower. If you have less than two years or have had substantial gaps in your employment history, the lender will see this as a risky loan and may not approve it at all. Debt: one of the major factors in determining the risk associated with lending money to a borrower is their ability to repay the proposed mortgage. The debt-to-income ratio is determined by dividing your gross monthly income by the amount of debt shown on your credit report plus the principal, interest, taxes, and insurance, that makes up the proposed monthly mortgage payment. Lenders generally stick to a maximum of 45%* of your gross monthly income. Higher than 45%* means a higher risk and will be reflected in the interest rate or will actually return a denial of credit.
Property: is this land only; is the home stick-built, a condo, a manufactured home or is it a 2-4 unit building; will you be occupying the home; is the home on more than 10 acres; etc. The type of property and the occupancy can have a substantial affect on the interest rate. The lender assumes a greater risk on a manufactured home than stick-built home because the default rate is higher. Lower the risk, lower the interest rate will be. Adversely; higher the risk, higher the interest rate will be.
Assets: do you have money in the bank; have you invested, do you have a retirement; do you have to borrow for the down-payment; will funds be gifted to you, etc. If you are coming to the table with nothing to offer, the lender will see this as a riskier loan. If you come in with twenty-percent down, the lender will see you as a good risk and they will sell you their money at a lower rate. Yes, you are buying money and the interest rate is the cost of that money.
Credit: your credit history is indicative of whether you will default on your mortgage or will make your payments on time and in full. The lower the credit score, the more risk the lender assumes and therefore it will be reflected in the interest rate. On the other hand, a great credit score will mean a lower risk to the lender and that will translate to a better interest rate.
Income: the stability of your employment is a consideration when determining your ability to repay your mortgage debt. The lender wants to be sure that you have stable employment and that it is likely to continue. That is why lenders want to see at least two years of employment history when determining the risk level of a borrower. If you have less than two years or have had substantial gaps in your employment history, the lender will see this as a risky loan and may not approve it at all.
Debt: one of the major factors in determining the risk associated with lending money to a borrower is their ability to repay the proposed mortgage. The debt-to-income ratio is determined by dividing your gross monthly income by the amount of debt shown on your credit report plus the principal, interest, taxes, and insurance, that makes up the proposed monthly mortgage payment. Lenders generally stick to a maximum of 45%* of your gross monthly income. Higher than 45%* means a higher risk and will be reflected in the interest rate or will actually return a denial of credit.
Knowing that all of the above factors play a huge part in determining what interest rate a client may qualify for; why would anyone want to work with a loan officer that will randomly quote an interest rate? The fact is if they do quote you a rate without knowing anything about the transaction, financial profile or goals, you will not have that same interest rate at the closing table.
As a Mortgage Planning Specialist, I want my clients to have the best possible experience while purchasing or refinancing their home. Call or email me today so that you and I can find the best rate and program to fit your financial goals. I can be reached at (360) 412-1000, ext. 237 or you can email me at: shawn@soundmortgageplanning.com.
Fannie Mae and Freddie Mac conformng loan limits for the high cost areas below may rise on a temporary basis to the corresponding levels listed. These temporary "jumbo" conforming loan limits apply to loans originated from July 1, 2007 to December 31, 2008. The 2008 conforming loan limit of $417,000 remains in place everywhere else.
Limit:
1-Unit
2-Unit
3-Unit
4-Unit
WA San Juan County
I will keep you posted regarding when the new limits will be in place.
It’s true. All successful Loan Officer’s have one thing in common; a great Loan Processor.
Who is this person and why are they so important to you? The Loan Processor is truly the back-bone of any mortgage company. They bear the burden associated with the loan process. They communicate with all parties involved in the process; the underwriters, insurance agents, appraisers, inspectors, closers, title companies, escrow agents, real estate agents, the borrowers, and of course, the Loan Officer.
A great Loan Processor can take a loan and make it appear seamless and effortless. Loan Officers are responsible for the loan transaction overall, but it’s the Loan Processor that makes the loan flow through to the closing table. Loan Processors play a critical role in the success of the transaction and if they were not experienced or were not good at processing, the transaction would in all likelihood never make it to the closing table.
The job of the Loan Processor may appear easy, but it is not. They are responsible for taking various elements of the loan approval, put them together in the correct order, and making sure everything is done when and how it is supposed to done. Loan Processors deal will people that can be quite volatile and verbally abusive over issues the Processor has no control over. Because of their experience they are able to diffuse most situations and continue to process the file.
So, who is my Loan Processor?
Wendy Day is the Processor for Versata Home Loan Solutions. Wendy has been in the industry since 1993 and her vast experience and knowledge contributes to the daily success of every Loan Officer here. Because of Wendy’s expertise as a Loan Processor, she is able to move the loan transaction through to closing table on time and without any hiccups. Should there ever be a snag in the process, Wendy is quick to solve the issue and have the loan moving again toward closing.
By having a Loan Processor as experienced and dedicated to the client as Wendy, I am able to ensure that my clients will experience a low-stress loan process and will be much happier that they decided to place their trust in me, Versata, and Wendy.
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