News Channel Mortgage

King, Snohomish and Pierce Counties loan limits effective January 1, 2009 are:

• Single Family: $506,000
• Two Family:  $647,750
• Three Family:  $783,000
• Four Family:  $973,100

The new loan limit is lower than the current FHA Jumbo limit of $567,500 and is happens to be the same as the jumbo-conforming (aka high-balance) loan limits for our area for 2009.

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2009 FHA Loan Limits for Seattle-Bellevue and Beyond

• 2009 Conforming and Conforming Jumbo Loan Limits for Seattle Metro
• Friday’s Mortgage Interest Rate Update
• Friday’s Rates
• New Conforming Loan Limits for Washington State
• Interest Rates following the Jobs Report

It’s funny how sometimes a post will take on a life of it’s own within the comments…such is the case with my recent interview of Jillayne Schlicke.  My intentions were to call out to Washington State LOs to make sure they’re up to speed with the new year approaching…the comments have turned into a discussion of credit scores.  Most likely because of Jillayne’s prediction:

“I expect that underwriting guidelines will continue to go up as banks and conforming paper sold to Fannie and Freddie will raise minimum credit score requirements to 800 and require 20% down.  Everyone else will be pushed to FHA.”

Ardell offered stats from 2005 on credit scores and age so I thought I’d share credit score information from credit reports I’ve provided since the start of 2008.  Not all of the subjects obtained a mortgage loan.

• Age 18 - 29: average credit score = 697.   Don’t let age fool ya, this group had a high score of 807 and a low of 513.  (This group = 12% of the demographic).
• Age 30 - 39: average credit score = 735.  High score of 811 and the low at 614. (36% of demographic).
• Age 40 - 49: average credit score = 739.  High score of 819 and a low of 592. (31% of demographic).
• Age 50 - 59: average credit score = 759.  High score of 820 and the low at 680. (15% of the demographic).
• Age 60 - 69: average credit score = 714.  High score of 813 and a low at 589.  (4% of the demographic).
• Age 70 plus: average credit score = 805. High and low score: 805. (1% of the demographic).

The average mid scores, year to date credit reports I’ve ran is 732 for the borrower and 720 for the co-borrower.  This means that if they are considering locking, the rate would be based on the lower of the two mid scores.  I’m also pleased to see that the credit score criteria that I use (credit scores from 720-739) seems to be appropriate for when I’m post.

From the same interview with Jillayne post, Ardell asks:

“What good is it to say interest rates are at 5.875%, if only people 70 plus can get that rate? False advertising…no? If the average person buying a home can only get a rate of 6.5%, then we have to stop encouraging people to think their rate is going to be something that is unlikely”

Using the credit score data above, it’s very likely that the younger group would be FHA candidates.  Not just because of having an average credit score of 697, most are still working on building their savings and do not have 20% down payment.  Combine a 697 mid score with a 90% loan to value and (now costly) private mortgage insurance and FHA may be the better option.  The key is to investigate all available options if someone decides they should buy a home at this stage of their life.  

The next two groups, 30-49 year olds, would fit the rates that I quote at RCG since the credit score criteria I use is based on 720-739.  Based on Friday’s rates, their rate would be 5.875% at 1 point (total shown in lines 801, 802 and 808 of the Good Faith Estimate or HUD).   This combined group is 67% of the applications with credit reports that I have worked with year to date.

Credit scores 740 and above qualify for a slightly better rate.  Based on Friday’s scenario, they would have 0.25% improvement to fee–so 5.875% would be at 0.75% points (using the above example).  Or depending on how rates were, they could possibly obtain an 0.125% better rate.

The slight dip in average credit score to 714 for ages 60-69 I think just reflects that “life happens”.  Maybe something medical has taken place or you were on vacation and thought you paid that credit card or you’re helping your kids with college or you have an unknown parking ticket or an overdue library book turned into a collection.   I’ve seen many surprised people over the years where they had no idea their credit score dropped.   This is in no way a reflection on this age group, it’s just how the stats came in for this report based on my data.

FHA credit scores (where the credit report was ran and FHA was the identified loan program, the loan may be closed or just prequalified) averaged 680.  FHA is not as credit score sensitive as Fannie/Freddie.  FHA is looking for clean credit (no lates) in the past 12 months.

This data is hardly scientific and is really just a reflection of the people I work with which is really pretty diverse.  I don’t advertise or do cold calling or try to “specialize” in a niche market…so I’d like to think that this group is a good “norm”.

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Credit Scores for the Ages

• Major Credit Score Rate Adjustments — The Hits Keep Coming
• Just How Much Your Credit Score Impacts Your Interest Rate
• Mortgage Rates on a Summer Day & Adverse Market Pricing
• Friday’s Rates are Up and Down and Up and….
• Rates for Friday Afternoon

Mortgage rates continue to trend upwards like mummies crawling out of their graves.  (Sorry…bad reach. Booooo).  October has been terrible for rates!  The good news is that after today, it’s over!   Happy Halloween. 

*

Conforming rates are averaging 0.125% higher than last week’s post and the temporary jumbo rates are 0.375% higher in rate.  Next week, we should be learning what the new loan limits for 2009 will be for conforming jumbo and FHA jumbo loans.    We’ll end next week with the goulish Jobs Report.  Most traders should all ready be factoring bad news into their brew.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.   

30 Year Fixed @ 1 Pt:  6.25% (APR 6.564%)  0.125% to rate

30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.125% (APR 7.282%). Same rate as last week’s post.

15 Year Fixed @ 1 Pt: 6.000%  (APR 6.260%) 0.125% to rate

5/1 ARM - LIBOR @ 1 Pt:  6.250%  (APR 7.301%)   0.50% to rate

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.  

30 Year Fixed @ 1 Pt: 6.625% (APR 6.780%)  0.375% to rate

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.625% (APR 7.318%)   0.125% to rate

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt:  Pt: 7.125% (APR 7.818%)   0.375% to rate

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.   VA loan amounts over $417,000 are also available.  

30 Year Fixed @ 1 Pt:  6.625% (APR 6.750%) same

Non-owner occupied/Investment Property.  Pricing based on 25% down payment with a $400,000 sales price and credit scores between 720-739.

30 Year Fixed @ 1 Pt:  7.250% (APR 7.434%).  same.

Prime Rate (what HELOCs are based on):  4.00%    0.50%

12 Month LIBOR (what a majority of ARMs are based on): 3.2818% per WSJ.

This is just a small sample available of rates and products.  Rates are as of Friday, October 31, 2008 at 12:00 p.m. and may change at any time.  Available programs may change at anytime as well.    Check out RCG’s new Mortgage Info page for live rate quotes.

This is not a guarantee nor is it a commitment of interest rate.

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Just Tricks…No Treats for Friday’s Rates

• Friday’s Rates
• Friday Rates
• Friday’s Rates
• Friday’s Rates
• Friday’s Rates

This is Part Two of a series of articles on the foreclosure process.
This article does not constitute legal advice.
Foreclosure laws vary from state to state.

Homeowners in financial distress should always hire legal counsel. Call your local state bar association for a referral.  Reduced or free legal aid may be available in some states. Ask for a referral from the state bar association or through a LOCAL HUD-Approved Housing Counseling Agency.

For homeowners who are facing financial hardship, denial is a warm, safe comfortable place to stay, where tough decisions can’t hurt and the decision-making process is put off one day at a time.  There is FREE help available from your local state non-profit agencies.

Local, HUD-Approved Housing Counseling Agecies received 1.5 million dollars from Washington State when Gov. Gregoire signed SB 6272 State agencies saying are already whining that they are “overwhelmed” until as a taxpayer, the agencies show us exactly HOW the 1.5 million dollars was spent. Do NOT ask us to support ANY MORE handouts until we can see how much of that 1.5 million dollars was spent hiring and training competent counselors and how much went into executive salaries, high paid consultants and task force meetings.  There are plenty of out-of-work mortgage production people who are (at this point) probably willing to work at non-profit agencies. Put them to work.  Perhaps I am in denial as to the extent of the problem at our state agencies. If so, agencies: please enlighten me and RCG readers.  If the problems are with the banks and their ability to handle the calls, that doesn’t mean we throw more money at the state agencies.  In part five of this series, I will ponder about massive government intervention. For now, we’re left dealing with the problems at hand.

If you are a homeowner reading this article, that means you’re starting to come out of denial.  Maybe a friend or relative forwarded this to you.  Welcome to raincityguide.com  How are you? Don’t say “fine” through tears or clenched teeth.  Not so good, right?  Okay then. Is your financial distress temporary or long term?  THIS is perhaps the most important question you’ll need to answer. This is going to require that you get real with where you are in life.  Long term, permanent financial distress situations are going open up options that might be different for a homeowner who has a short term financial distress problem.  Let’s try to break things down even more.  Long Term: You’ve been laid off and have been unable to find work at your former pay level for along time and you have third party confirmation that the chances of being able to reach that pay level again are very low. Short Term: You’ve been laid off and have been unable to find work at your former pay level but your prospects are good or you’ve recently been re-hired at a similar pay level. 

Reinstatement
If you are payment or two behind, which may happen with temporary financial distress, your lender will be thrilled beyond your wildest expectations to accept the total amount owed in a lump sum.  Reinstatement often happens simultaneously with a forbearance agreement.

Forbearance Agreement
Your lender agrees to reduce or suspend your payments for a short period of time.  These two options are good for people whose financial distress situations are temporary.

Repayment Plan
Your lender helps you get “caught up” by allowing you to take missed payments and tack them on to your existing payment each month until you are caught up. 

If your financial distress is long term and will permanently affect your ability to continue making your payments:

Consider Selling
With home values going down, if you do have some equity remaining in your home, you may be better off selling NOW rather than waiting until next year when scads of REOs (already foreclosed-upon homes that the lenders must dispose of) will continue to hit the market, driving inventory up and home values down.  If you owe more on your home than what the home can be sold for in today’s market, you have probably already heard of the term Short Sales.  In this case, the lender is asked to reduce the pricipal balance and allow the loan to be paid off in order to facilitate a sale.  Most lenders are not radically motivated to approve short sales unless foreclosure is imminent.  This author does not recommend that you stop making your mortgage payment in order to force the bank to approve your short sale. All homeowners in financial distress should have an attorney holding their hand the entire time.  If you have assets, you do not qualify for a short sale. Short sales are reserved for homeowners with NO MONEY and you will be asked to provide proof that you have no money.  If you have money, this is a different kind of transaction. It’s called ”Making Your Downpayment in Arrears” and you’ll be asked to bring that money at closing.  Don’t ask anyone to help you hide your assets. Doing so may constitute mortgage fraud which is now a class B felony in Washington State. I could go on and on about short sales. If you need more education in this area, we’ve covered the topic in these RCG articles:

Short Sales
Question from today’s Short Sale class
Should You Buy a Short Sale Property?
Is a Short Sale a Bargain?

Maybe you would prefer not to sell. Consider taking on a tenant or moving out into more affordable living quarters and renting out your home.

Refinancing is a tough road for homeowners in financial distress. On the one hand, they have been hit by some kind of financial hardship and this typically affects their credit score, which means lender’s rates and fees will be higher.  In addition, tightening underwriting guidelines is something banks do in order to help stop the rising tide of foreclosures. People who hold mortgage loans today might not be able to re-qualify for that same loan if they had to requalify under today’s guidelines.  Income and assets must be fully documented. Find a licensed, local mortgage lender with FHA-approval to see if you might qualify for an FHA loan.  For people who made the conscious decision to state their income higher than reality are out of luck, unless they can prove that they were coached to do so by their lender.  Consult a local attorney for further guidance.  Since refinancing might only be yesterday’s dream for some, Loan Modifications are all the rage in my spam bin. We’ll cover Loan Mods in Part Three.

While doing research for this blog post, I stumbled upon even more money that went from our state government’s rainy day fund, into a state fund to help low to moderate income Washington State homeowners in foreclosure refinance into new loans through the Wash State Housing Finance Commission.  Read more here.  I sent an inquiry asking the WSHFC how many WA State Homeowners have been helped this far by this new law and they said, emphasis mine:

Dear Ms. Schlicke:

Thank you for your interest in the Smart Homeownership Choices Program. To date, we have not made a loan to a prospective applicant.  The good news is that when we have talked to the delinquent homebuyers, it seems they have not been able to make contact with their lenders to discuss foreclosure options.  So, we have been able to facilitate getting them to the right person for loan modifications, etc.  There have also been homeowners who have not been pleased with the fact that the assistance is in the form of a loan and not a grant.  They believe the government should be giving them the money to save their home.  While we cannot respond positively to these folks, we do send them to one of our homeownership counseling partners to help them with other options that   might be available.

If you know someone who might benefit from the program, please feel free to give them my contact information.

Sincerely,
Dee Taylor
Director, Homeownership Division
Washington State Housing Finance Commission
1000 Second Avenue, Suite 2700
Seattle, WA 98104-1046
(206) 287-4414

Part one: Foreclosure; Losing the American Dream
Part two: Options for Homeowners Facing Foreclosure
Part three: Loan modifications
Part four: Rebuilding
Part five: Government Intervention

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Options for Homeowners Facing Foreclosure

• Question from today’s short sale class
• Keeping the Keys to Your Home
• Foreclosure; Losing the American dream
• Short Sales
• Homeowners in Foreclosure Should Hire an Attorney

Rates have been so volatile lately it’s insane.  On Tuesday, I was quoting 5.875% (apr 6.133); Wednesday rates dropped to 5.625% (apr 5.818) then popped back up on Thursday.  This morning I quoted 6.00% (apr 6.155) all for 30 year fixed conventional with 720-739 mid scores priced w/1 point; now it’s 0.125% higher.  I’ve seen rates bounce around a 0.5% change to rate just this week (that’s 2 points to fee).

If you are seeking a mortgage, I recommend asking your loan originator if they have the ability to renegotiate locks should rates improve (most do).   This will allow you to lock in at contract which provides you a ceiling for your rate, with the possibility of floating down to a lower rate during this turbulent market.

Next week is jam packed full of events and reports that will impact mortgage interest rates (we won’t even discuss the stock market–ouch) including a FOMC meeting.  

Also important to be aware of in early November, we are anticipating the new median home values to be released.  2009 conforming jumbo and FHA jumbo loan limits will be based off of 115% of the new values (currently the factor is 125%, HR 3221 has reduced the %).  Based on the current data, the new loan limit would be around $522,100…but we won’t know for certain until we have the data that will be used for 2009.  I’ll let you know as soon as we have it available.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.   

30 Year Fixed @ 1 Pt:  6.125% (APR 6.564%) unchanged since last Friday’s post.  

30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.125% (APR 7.282%) unchanged

15 Year Fixed @ 1 Pt: 5.875% (APR 6.133%) unchanged

5/1 ARM - LIBOR @ 1 Pt:  6.250%  (APR 7.301%)   0.25% to rate

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.  

30 Year Fixed @ 1 Pt: 6.250% (APR 6.%)  0.25% to rate from last week (up 0.25% from this morning!)

5/1 LIBOR @ 1 Pt:  6.25% (APR 7.292%)  0.125% to rate

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.500% (APR 7.191%)   0.125% to rate

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.750% (APR 7.191%) unchanged

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.   VA loan amounts over $417,000 are also available.  

30 Year Fixed @ 1 Pt:  6.625% (APR 6.750%) unchanged

Non-owner occupied/Investment Property.  Pricing based on 25% down payment with a $400,000 sales price and credit scores between 720-739.

30 Year Fixed @ 1 Pt:  7.250% (APR 7.434%).  New addition to rates at Rain City Guide.

Prime Rate (what HELOCs are based on):  4.500%  unchanged.  Note: the next scheduled FOMC meeting is October 28-29, 2008. 

12 Month LIBOR (what a majority of ARMs are based on): 3.509%.   New addition to rates at RCG.

This is just a small sample available of rates and products.  Rates are as of Friday, October 24, 2008 at 1:00 p.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.

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Friday’s Rates are Up and Down and Up and….

• Friday’s Rates following the Rescue/Bail Out
• Rates for Friday Afternoon
• Friday’s Rates
• Mortgage Rates on a Friday Afternoon
• Friday’s Mortgage Interest Rate Update

“Cautious Buyer” asks this question on my post the other day when I referenced that my first house had a rate of 11% during the comments:

“Do you think a young couple with similar jobs could buy the same place in Tacoma today? How about 1 year ago today?”

Then

My first house was a rambler in northeast Tacoma.  It’s a 3 bedroom with 1 bathroom and a galley kitchen. 

• 3% down = $2,040
• Estimated mortgage payment (PITI) @ 11% = $765

At the time, we were both 21 years old.  I worked at in the title insurance industry as a “home equity title rep” and my boyfriend was a bagger/meat room cleaner for a large grocery store.   Our combined income at that time was about $34,000.

• 34,000 /12 months = 2,833 monthly gross incomes x 28% = $793.  (We were barely below the recommend “front ratio”).  
• 2,833 x 43% = 1218 less our mortgage payment of 765 = $453 for maximum allowed monthly debt.  

I didn’t have a company car yet and so I’m sure we were pretty close to using the maximum allowance when we qualified for this mortgage.  Plus, I began receiving offers for credit cards at 18 years old.  I think I was the first girl in school to get a Nordstroms card (I haven’t had a Nordie’s card in YEARS.   I was young and naive when it came to credit.  I managed to pay our bills on time but did learn the hard way…I digress).

Now

Current guestimated value of my first house is around $220,000.  I verified this with ARDELL and it happens to be fairly close to what Zillow is zestimating as well (Zillow is a little higher).   This is assuming it has been updated along with the rest of the neighborhood.

• 220,000 x 3% down payment = $6,600.  Assuming the seller is paying closing costs.
• Base loan amount = $213,400 plus upfront mortgage insurance @ 1.75% = $217,134.
• Interest rate of FHA 30 yr @ 6.500% (apr 7.191% per Friday’s rates) = $1,372.44.  Plus monthly mortgage insurance of 0.55% = 97.81.  2008 taxes = $2525/12 = $210.43.   Total payment (incl. estimated $40 per month home owners insurance) = $1,720.68.

I estimate incomes for both jobs at $67,000.  (I have close sources in both the title and grocery industries).

• 67,000 /12 = $5,583 gross monthly income.  The total proposed payment of 1,720.68 divided by the monthly gross income = 31%.   This is an acceptable front ratio with FHA. 
• $5583 x 43% = $2400.69.   2400 less the proposed payment of 1720 =  $680 of allowed monthly debt for FHA in order to stay within a 43% total debt ratio.

It’s been twenty years since I bought my first house.   The house has tripled in value while the incomes for our jobs have pretty much doubled.  I commuted 27 miles one way each day (not even factoring when I made calls on accounts, which at that time my territory was banks and credit unions in King County)…I was thankful once I was promoted to a real “title rep” and had a company car to clunk the miles onto instead of my personal one.  

The answer to your question, Cautious Buyer, is:  YES.  Someone could buy that home today with the same jobs that we had when we purchased it.  Last year’s value?  Since it’s in NE Tacoma, I would say that it hasn’t experienced the same degree of ”appreciation” as the Seattle/Bellevue markets did.   According to Zillow, the home is worth 0.9% more now than a year ago and 0.4% less in the last 30 days…so we’re splitting hairs.  

What I wonder is how many first time home buyers would be willing to commute like I did or to buy a true starter home? 

Our agent for our first home did select our loan officer.  As I mentioned, we were 21 and were totally green.  Even though I had worked for a title company for a few years, it’s completely different to actually go through the process.  With our subsequent home purchases, we selected our loan officer first and then the home.

By the way, we did sell that house one year later.  There was a bit of a housing panic (at least I had one at the time) and we sold it for $90,000.  The proceeds was the down payment on our next home located in Federal Way’s ”Affordable Street of Dreams“.  Yes, that’s how the new plat was marketed.  Affordable dreams (our “affordable dream” was $125k for 1500 square feet in 1990).   We were able to move just a little closer to family and jobs (and continued to do so with the next home we purchased together).   This photo is from our second home in Madrona Meadows.   We lived in my grandparent-in-laws (we were married at this point) basement for a few months until this home was finished since our first home sold in days with back up offers.

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My First House: Then and Now

• Friday’s Rates and FHA 4-1-1
• LPMI, PMI and 80/20 Mortgages…Oh My!
• Renters Have Much to Gain by Pursuing Home Ownership
• The Great Rent vs. Own Debate
• Loan Calculators

This morning I’ve been trying to update articles I’ve written on FHA in an attempt to have the information be accurate during this day and age of the ever-changing-loan-guidelines.  Please don’t rely 100% on information you find about mortgages on the web.  Programs and products are simply changing too often to keep up and information is becoming quickly outdated.  

This month, FHA loans have seen a few changes, many with the passage of HR 3221.   Let’s see if I can get us all caught up in one post.

Effective for FHA case numbers issued October 1, 2008 and later:

• FHA mortgage insurance increase.  First FHA mortgage insurance was going to have risked based pricing, then HR 3221 came along and put a moratorium in effect until September 30, 2009.   Until then, for a FHA purchase 30 year fixed mortgage, upfront mortgage insurance has increased to 1.75% and monthly mortgage insurance is 0.55% for loan amounts over 95% LTV and 0.50% for borrowers putting more than 5% down on their home. 
• Down payment assistance programs.  Seller funded down payment assistance programs are currently not allowed.  However there is a bill in Congress (HR 6694) that if passed, would allow DPAs once again but only to borrowers within certain credit scores.   Home Buyers can still obtain a gift or loan from family members as long as it meets underwriting guidelines.
• Rental income credit when buying a new home and renting the existing residence.  This actually became effective in mid September.   When converting a primary residence to a rental home, the rental income can only be used for qualifying if:(1) the borrower is relocating or (2) the new rental meets at least 25% equity (to be determined by an appraisal < 6 months old or the existing mortgage balance is 75% of the original sales price).   Both mortgage payments are factored for qualifying purposes.  HUD (and Fannie/Freddie) have cracked down on this due to home buyers purchasing a new (less expensive) home and “walking away” from their McMansion mortgage payment.

Effective January 1, 2009:

• Minimum down payment increases to 3.5%.  Home Buyers have until the end of the year to purchase under the 3% down payment requirement.   Sellers can pay actual closing costs once the buyer meets the minimum down payment requirement (which can be gifted or loaned by a family member).
• FHA Jumbo loan limits to change.   HUD is in the process of reevaluating median home prices and will announce new loan limits before the end of the year.  With the passage of HR 3221, the maximum loan amount for FHA Jumbo was reduced to 115% of the median home price (currently, the $567,500 limit is based on 125% of the median home price).   Should HUD determine that our home values are unchanged, then the new limit would be reduced to around $522,100.   However, many areas have not had their values reevaluated by HUD in many years…so for now, we really don’t know what the new “FHA jumbo” loan limit will be.

A few more reminders about FHA insured mortgages…

• Not all lenders are approved to originate FHA loans.  Check HUDs site to verifyif the mortgage company you work for is approved.   One clue I’ve noticed by LO’s who are trying to “fake it” is that they’re charging more than a 1% origination fee.   This is not allowed.
• FHA does not have income limitations or geographic requirements.
• FHA is not limited to first time home buyers.
• FHA is not just for lower credit scores.

Sellers, you are reducing your exposure to more buyers if you are not considering those approved with FHA financing…especially with the higher loan limits.   A $700,000 sales price with 20% down is pretty close to the current limit.  Anything shy of 20% down would probably lean towards FHA jumbo.

Want more reasons to consider FHA financing?  Here’s how conventional compares:

• Tighter guidelines.  And if you think DU 7.0’s been tough…wait until you get a load of version 7.1 which goes into effect early next year.
• Risk based pricing on credit scores below 740. (FHA has risk based pricing starting at 620 and below).
• More expensive private mortgage insurance for loans over 80% loan to value.

It’s easy to see why FHA has become very popular…you could say FHA is the “It Girl” of Mortgage.

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FHA Update: The “It Girl” of Mortgage

• FHA Jumbo
• Friday’s Mortgage Interest Rate Update
• Friday’s Rates
• Friday’s Rates
• Interest Rates following the Jobs Report

It’s really interesting pricing rates these days.  I used to be able to use one lenders rates and compare to a pricing engine I use to make sure the rate was correct.  With how volatile the markets are, I have to check several lenders to try to find the rate I would quote based on the criteria I’ve described below.  For a 30 year fixed conforming mortgage, there’s an easy 0.25% difference in rate with the various banks/lenders our company works with.   Some lenders are changing rates more often than others and rates rise much quicker than they fall.  Even though we have fewer options (wholesale) to chose from, I thankful to have them. 

Pricing rates from Friday to Friday is not showing you an accurate picture of just how much rates change during the week.   Things are not as calm as they might appear.  ;)  Just this week, on Twitter, I’ve quoted anywhere from 6.125 - 6.625% for a 30 year fixed with priced with 1 point (apr 6.282-6.894%).

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.   

30 Year Fixed @ 1 Pt:  6.125% (APR 6.564%)  0.125% to rate since last Friday’s post.  

30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.125% (APR 7.282%) unchanged

15 Year Fixed @ 1 Pt: 5.875% (APR 6.133%) unchanged

5/1 ARM - LIBOR @ 1 Pt:  6.000%  (APR 7.200%) unchanged 

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.  

30 Year Fixed @ 1 Pt: 6.500% (APR 6.653%) unchanged

5/1 LIBOR @ 1 Pt:  6.375% (APR 7.164%)  0.5%

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.500% (APR 7.191%)   0.125% to rate

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.750% (APR 7.191%)  0.5% to rate

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.   VA loan amounts over $417,000 are also available.  

30 Year Fixed @ 1 Pt:  6.625% (APR 6.750%) unchanged

Prime Rate (what HELOCs are based on):  4.500%  unchanged.  Note: the next scheduled FOMC meeting is October 28-29, 2008. 

This is just a small sample available of rates and products.  Rates are as of Friday, October 17, 2008 at 12:30 p.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.

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Rates for Friday Afternoon

• Mortgage Rates on a Friday Afternoon
• Friday’s Rates following the Rescue/Bail Out
• Friday’s Rates
• Friday Rates
• Mortgage Rates on a Frantic Friday

All I can say is THANK GOD IT’S FRIDAY!  What a gut wrenching week this has been for the global markets.  I truly hope that no one has tried to float their interest rates during this time, especially since most lenders can and will re-negotiate or float down your rate should they improve.   Those waiting to lock over this past week have been burned.   Of course this coming from someone who typically always has a locking stance. 

Monday, October 13, 2008 is Columbus Day and the bond markets and banks will be closed.  

Rates are increased across the board.  The only green you’ll find on today’s rates is for Prime, which was reduced by 0.5% when the FOMC cut the Funds Rate.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.   

30 Year Fixed @ 1 Pt:  6.250% (APR 6.409%)  by 0.375% to rate since last Friday’s post.  

30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.125% (APR 7.282%) by 0.75% to rate. 

15 Year Fixed @ 1 Pt: 5.875% (APR 6.133%) by 0.375% to rate. (up 0.5% from 9/12/2008).

5/1 ARM - LIBOR @ 1 Pt:  6.000%  (APR 7.200%) unchanged . (up 0.625 from 9/12/2008).

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.  

30 Year Fixed @ 1 Pt: 6.500% (APR 6.653%)  by 0.50% to rate

5/1 LIBOR @ 1 Pt:  6.625% (APR 7.315%)  by 0.125% to rate

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.625% (APR 7.318%)  by 0.375% to rate

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 7.250% (APR 7.945%) by 0.625% to rate

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.   VA loan amounts over $417,000 are also available.  Contact your local Mortgage Professional for more information.

30 Year Fixed @ 1 Pt:  6.625% (APR 6.750%) by 0.375% to rate

Prime Rate(what HELOCs are based on):  4.500%   0.5%

This is just a small sample available of rates and products.  Rates are as of Friday, October 10, 2008 at 11:30 p.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.  To see live rate quotes, you can follow my Twitter.

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Mortgage Rates on a Frantic Friday

• Friday Rates
• Friday’s Rates
• Mortgage Rates on a Friday Afternoon
• Friday’s Rates
• Friday’s Rates

There have been so many factors that typically influence the direction of mortgage rates over this past week, it’s amazing.  Just this morning we had another dismal Jobs Report with a greater loss than expected (for the 9th consecutive month); typically, this would improve mortgage interest rates.  However, as Jillayne mentions, there are rumors of the FOMC cutting interest rates; which tends to increase mortgage interest rates (bonds react negatively to inflation).  Last but not least, we have the House passing the Rescue Bill…and, after all this drama, rates are for the most part, unchanged from this morning and last week (comparing Friday to Friday).

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.   

30 Year Fixed @ 1 Pt:  5.875% (APR 6.029%) unchanged

30 Year Fixed with 10 Year Interest Only @ 1 Pt:  6.375% (APR 6.520%) unchanged

15 Year Fixed @ 1 Pt: 5.500% (APR 5.753%) unchanged

5/1 ARM - LIBOR @ 1 Pt:  5.875%  (APR 7.135%)   0.125% to rate

Conforming-Jumbo Rates.   Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.  

30 Year Fixed @ 1 Pt: 6.000% (APR 6.148%) unchanged

30 Year Fixed with 10 Year Interest Only @ 1 Pt:  7.375% (APR 7.529%) unchanged

5/1 LIBOR @ 1 Pt:  6.500% (APR 7.142%)   0.375% to rate

FHA.  Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.250% (APR 6.933%)  unchanged

FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  

30 Year Fixed @ 1 Pt: 6.625% (APR 7.312%) 0.25% to rate

VA.  Pricing based on credit scores of 620 or better based on loan amounts up to $417,000.   VA loan amounts over $417,000 are also available.  Contact your local Mortgage Professional for more information.

30 Year Fixed @ 1 Pt:  6.375% (APR 6.497%) unchanged

Prime Rate (what HELOCs are based on):  5.000%  

This is just a small sample available of rates and products.  Rates are as of Friday, October 3, 2008 at 1:45 p.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.  To see live rate quotes, you can follow me on Twitter.

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Friday’s Rates following the Rescue/Bail Out

• Friday’s Rates
• Mortgage Rates on a Friday Afternoon
• Friday’s Mortgage Interest Rate Update
• Friday’s Rates
• Friday Rates

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