Register Real Estate Advisors

 WEST PALM BEACH, Fla. (Cox Newspapers http://www.statesman.com/business/content/business/stories/other/2009/09/30/0930subprime.html ) – As of yesterday, borrowers with bad credit or no verifiable income will not be eligible for a home loan.  The new rule, approved as part of the Housing and Economic Recovery Act of 2008, requires lenders to prove a person’s ability to repay a loan before awarding one.  This guideline mostly concerns subprime or high-interest loans for people with weak credit.

AUSTIN (Austin American-Statesman) – Applications for mortgages have jumped in the past week as the average interest rate on 30-year loans fell below 5 percent for the first time since May, the Mortgage Bankers Association reported Wednesday.

As the average interest rate for 30-year loans fell from 5.08 percent to 4.97 percent in the week ending Sept. 18, the association’s index of mortgage activity rose 12.8 percent and was 14 percent higher than the same week in 2008.

As has been the case for months, most applications continue to be for refinancings, which accounted for almost 64 percent of the total.

The association’s purchase index was up 5.6 percent last week from the previous week.

The average rate for 15-year loans was unchanged at 4.41 percent, and the rate for one-year adjustable loans slipped to 6.52 percent from 6.61 percent the previous week.

WASHINGTON, D.C. (New York Times) – The Federal Reserve acknowledged on Wednesday that an economic recovery was underway but signaled that it was still much too early to start raising interest rates.

In a statement following a two-day meeting by the Fed’s policy makers, the central bank repeated that it would keep its benchmark overnight interest rate at virtually zero for “an extended period.”

Policy makers also announced that they would extend the Fed’s program to buy up almost $1.5 trillion worth of mortgage-related securities through the end of March.

WASHINGTON (National Association of Realtors) – Lenders will soon be subject to new disclosure requirements for mortgage loans.

Among the new requirements, which will apply to all mortgages secured by a borrower’s home:

• Lenders must give good faith estimates of mortgage loan costs within three business days after the consumer applies for a loan. The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
• The closing may not take place until expiration of a seven-day waiting period after the consumer receives the early disclosure.
• If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional three business days before closing the loan.
• The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.

The new requirements will apply to loan applications filed on or after July 30, 2009.

Mortgage rates spiked this past Wednesday.  If you have been on the fence about buying, I highly suggest you lock in your rate.  We might see rates continue to climb.

If you are thinking about buying a home and want to start looking, you will need to get a copy of your mortgage pre-approval letter to your Realtor.  This is important because most homes listed on the Houston Multiple Listing Service (MLS) require such a letter accompany the offer being submitted to purchase the home.  This protects the seller, as he is taking his home off of the market for the proposed buyer.  Without some indication the buyer will qualify for the loan, the seller will not want to take his home off the market for you.  A pre-approval is a commitment from the mortgage company.  A pre-qualification letter is different.  There is no commitment from the lender.  That is why a pre-approval letter is necessary.

What it means to homebuyers

The Housing & Economic Recovery Act of 2008 introduced changes in the mortgage industry that affected the housing market. Below is a brief summary of the legislation & what it means for homebuyers.

Purpose of the legislation:

• Make it easier to buy or sell a home
• Slow down the rate of foreclosures
• Ensure the financial stability of Fannie Mae & Freddie Mac

Highlights:

• Higher permanent loan limits for conventional, FHA, & VA Loans
• Tax credit for first-time homebuyers – up to $7500 in the purchase year, for homes purchased between April 9, 2008 and July 1, 2009
• Modernization of FHA Loan Programs – including a 3.5% minimum down payment
• Fannie Mae & Freddie Mac get a financial boost from the U.S. Treasury, & they will have a new regulator with broader authority
• FHA “HOPE” Rescue Plan – refinancing for homeowners at risk of foreclosure

What this means to homebuyers:

The higher loan limits could help buyers obtain more affordable financing; however, the effects will vary by geographical location – so ask your local Mortgage Adviser for details. Since the new permanent limits are less aggressive than the “conforming plus” limits that expired on December 31, 2008, buyers must act soon to take advantage of current higher limits.

The initial cash savings from the tax credit may be very atractive to many first-time homebuyers; however, buyers must act soon to take advantage of the tax credit by closing on a new home before July 1, 2009.

Help for Fannie Mae & Freddie Mac makes it easier to buy or sell a home by boosting investor & consumer confidence in the housing market. THe FHA “HOPE” Rescue Program may help some homeowners avoid foreclosure, potentially reducing the inventory of homes entering the market. This is good news for everyone.

Contact your Coldwell Banker REALTOR to learn more.

Pre-Purchase Rate Protection (PPRP) offered by Coldwell Banker Mortgage safeguards your rate no matter what.  You’re protected whether rates go up, down, or stay the same.  Every customer is given the opportunity to enroll in this unique program as soon as they have a mortgage pre-approval decision.  PPRP is a service that safeguards your interest rate against market fluctuation.  When you sign up, your interest rate will be capped according to where rates are at that time.  No matter how high rates go, you won’t pay more that the capped rate.  If rates go down, you’ll have a one-time opportunity time to “float down” and lock in a lower rate before closing.  No matter which way rates go, you’re protected.  With Coldwell Banker’s Four to the Door program, buying a home is easy.  Their four-step mortgage program starts with getting a pre-approval, then you and your REALTOR  find a home.  Next, return documents and lastly, close on time.  Call your Spring Specialist Real Estate Professional today for more information – Shannon Register 832.628.7355.

Why Coldwell Banker Mortgage? With a variety of products to choose from, they’ll help you find the mortgage that’s right for you. Coldwell Banker Mortgage is one of the top ten retail mortgage originators in the country. Coldwell Banker REALTORS are able to offer clients convenient mortgage resources both online, by phone, and through our office locations. Coldwell Banker Mortgage is an industry leader in originating mortgage loans over the phone and online. They offer Four to the Door, which is the easiest mortgage experience in the industry. The easy, four-step mortgage process, coupled with customer service guarantees and competitive rates makes them among the strongest in the industy. You can be pre-approved over the phone within four hours, even on a Saturday! By attaching your pre-approval letter, your offer suddenly becomes stronger and helps you in negotiating the best terms with a seller or builder. Despite current credit conditions, our mortgage company still has plenty of money to lend borrowers. So whether you are looking for a mortgage or a second opinion on your rate, we are here to support your needs. Our Mortgage Advisor at the Greater Northwest Branch is Melanie Chilek. Her email address is melanie.chilek@mortgagefamily.com. You can visit the online resource center at melaniechilek.coldwellbankermortgage.com or call our Greater Northwest Office at 281.655.2005. Tell her Shannon told you to call! Rates have not been this low since 2003.  It is a buyers market so make your move today!

Pre-Purchase Rate Protection

Pre-Purchase Rate Protection (PPRP) offered by Coldwell Banker Mortgage safeguards your rate no matter what. You’re protected whether rates go up, down, or stay the same. Every customer is given the opportunity to enroll in this unique program as soon as they have a mortgage pre-approval decision. PPRP is a service that safeguards your interest rate against market fluctuation. When you sign up, your interest rate will be capped according to where rates are at that time. No matter how high rates go, you won’t pay more that the capped rate. If rates go down, you’ll have a one-time opportunity to “float down” and lock in a lower rate before closing. No matter which way rates go, you’re protected. With Coldwell Banker’s Four to the Door program, buying a home is easy. Their four-step mortgage program starts with getting a pre-approval, then you and your REALTOR find a home for your family. Next, return documents and lastly, close on time. Call your Spring Real Estate Professional today for more information – Shannon Register 832.628.7355.

Four to the Door – The Four Step Mortgage Program

Step 1: Get Pre-Approved

• Guaranteed same-day loan decision – often Loan decisions are made within 20 minutes or less. When you are talking to your loan consultant, you can choose the Pre-Payment Rate Protection, which safeguards your interest rate against market fluctuations and gives you the option of locking in a lower rate if rates drop.
• Pre-Approval Letter – Once you are pre-approved, your letter will arrive immediately via fax or email, so you can begin house hunting.

Step 2: Find A Home

• Guaranteed to beat any lender’s mortgage price – Coldwell Banker Mortgage will beat any competitor’s rate and fee combination by $100 – or they will pay you $500. (Applies to all first lien conventional conforming mortgage loans. Customer must provide a complete and accurate system generated Good Faith Estimate, listing a specific lender’s name, that is dated the same day as the rate quoted by us. If such Good Faith Estimate indicates an equivalent or lower interest rate and closing costs package, for the same loan program that’s offered by us and we have verified the accuracy of the rate and fees listed then we will have the option of beating the lender’s total loan costs by $100 or paying the customer $500 when they close with that lender and provide us with a copy of the signed Note and Final HUD-1 Settlement Statement.)
• Call with a property address – The moment you notify them of the property address, they will order an appraisal (if needed) and send you a package containing important next steps. As soon as you have agreed on a price and signed the contract, call Coldwell Banker Mortgage.

Step 3: Return Documents

• Confirmation and Documentation – At this step, they will need you to verify the personal information supplied to them earlier, as well as any required documentation for closing.
• Loan Application Package – With this package, you will confirm the information you supplied during your pre-approval process. Just review the papers and make any necessary changes and sign and return in the overnight envelope provided.

Step 4: Close on Time

• Guaranteed to meet closing date – Because you selected Coldwell Banker Mortgage, they will meet your closing date – guaranteed – or they’ll reduce your interest rate by 1/8 of one percent for the life of the loan. (Approved, conventional, purchase loans only. Customer must provide all required documentation.)

Mortgage Options

Once you have been pre-approved for a mortgage, you need to decide which type of mortgage to get. This decision is usually based on the interest rate of the loan and how much time you’re given to pay the lender back. The interest rate is the percentage of the loan the lender earns for lending you the money.

• Fixed Rate Mortgage

This is the traditional method of financing a home. The interest rate stays the same for the entire term of the loan – usually 15 to 30 years. This means that the interest and the principal portions of your monthly payment remain fixed. With a Fixed Rate Mortgage, your payments are stable and predictable, but initial interest rates tend to be higher with a fixed rate than with an adjustable rate.

• Adjustable Rate Mortgage ARMs)
  

The interest on an Adjustable Rate Mortgage is linked to a financial index, such as a Treasury Security, so the interest rate fluctuates with changes in market conditions. With an adjustable rate, your payments will vary over the life of the loan. Most Adjustable Rate Mortgages have a lifetime cap on the interest rate increase to protect the borrower.

The advantage of an Adjustable Rate Mortgage is that it offers lower initial payments and this makes it easier for buyers to qualify. Some Adjustable Rate Mortgages may be converted to Fixed Rate Mortgages at specified times, usually within the first five years.

You are not limited to Fixed Rate and Adjustable Rate Mortgages. Currently, there are over 50 different mortgage programs available. Here are a few:

1. 15, 20, & 30-year Fixed Rate Loans
2. New Construction Financing
3. VA & FHA Loans
4. 5 & 7 year Balloon Loans

• VA Loans & Coldwell Banker Mortgage

VA loans through Coldwell Banker Mortgage are cheaper than going through other lenders because Coldwell Banker absorbs costs that the seller usually has to pay. It is a smooth closing because Coldwell Banker has no loan conditions that must be satisfied at closing. If you’re looking for an easier way to buy a home, you’ve come to the right place! Our local Mortgage Adviser will review your needs, suggest financing options to meet them and take your application for a pre-approval loan decision – in person or over the phone. She has twenty years of experience and will ensure that one of the biggest and most important purchases you’ll ever make will also be one of your easiest. Plus, Melanie and Shannon both have personal experience with VA Loans. They know what it means to serve!

Coldwell Banker Mortgage Update October 2008 Volume 3/Issue 43

We’ve all seen the headlines credit squeeze, credit freeze, credit-system seizures. Mortgage companies are folding left and right and banks seem to be collapsing daily. We are all painfully aware on how severe the global financial breakdown has been, with banks unwilling to lend even to other banks.

But what about mortgages and real estate? Can you still get a home loan with less than a 20 or 30 percent down payment? Or with a credit score below 720?

Absolutely. It would be a big stretch to label housing the sunny side of the market at the moment, but there’s a lot more light here than in most other financial sectors. Consider these facts:

There is no shortage of money for home mortgages, no freezing of credit to purchase or refinance a house. Why? Because the mortgage market effectively has been federalized — at least for the time being. Most of our mortgages are being funded through the (FHA) insurance program, plus Fannie and Freddie. FHA is owned by the federal government, and Fannie and Freddie are operating under federal conservatorship giving all three virtually unlimited funds because their borrowings are fully guaranteed by the Treasury. When we sell loans to these entities we are going to market with pools of loans in the BILLIONS of dollars. Think of it like buying in bulk at a discount club. Our cost per loan is significantly reduced because we work with such large quantities.

Loan terms and credit underwriting standards have been toughened up, but you can still put down 3 percent (3.5 percent after Jan. 1) on an FHA-insured mortgage and 5 percent on most of our conventional loan programs with private mortgage insurance.

FHA’s credit standards are generous and forgiving; the agency exists to help people with less-than-spotless credit histories. Fannie Mae and Freddie Mac have raised their credit-score requirements over the past year, but buyers and refinances with scores in the upper 600s can still qualify for loans having reasonable rates and fees.

Home prices have been pushed back by foreclosures and short sales have rolled back to 2003 levels or lower in many former boom markets. As a result, buyers are coming off the sidelines, making offers and writing contracts. The pending home-sales index jumped by 7.4 percent last month according to the National Association of Realtors.

So the way I see it…The prices of houses have dropped making it affordable for more buyers.

Coldwell Banker Mortgage Company has a huge supply of money and are currently closing loans in 2-3 weeks. Call your Realtor today and you can be in your new home before Thanksgiving!