Category Archives: Mortgage Loan

Mortgage Rates Inch Up With Positive Job Report

After posting record lows the last few weeks, mortgage rates inched higher this week, Freddie Mac reports in its weekly mortgage market survey. Yet, rates still remain near 60-year lows.

An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well, Frank Nothaft, Freddie Mac’s chief economist, notes. In September, the economy added 103,000 workers; however, the unemployment rate still remained high at 9.1 percent.

Here’s a closer look at rates for the week ending Oct. 13.

30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.8 point, moving up from last week’s record-hitting 3.94 percent average. A year ago at this time, 30-year rates averaged 4.19 percent.

15-year fixed-rate mortgages: averaged 3.37 percent with an average 0.8 point–that’s up slightly from last week’s low of 3.26 percent average. Last year at this time, 15-year rates averaged 3.62 percent.
5-year adjustable-rate mortgages: averaged 3.06 percent, with an average 0.6 point, and inching up from last week’s 2.96 percent. Last year at this time, the 5-year ARM averaged 3.47 percent.
1-year ARMs: averaged 2.90 percent with an average 0.6 point, a drop from last week’s 2.95 average. A year ago, 1-year ARMs averaged 3.43 percent.

2011 Freddie Mac Standard Loan Modification

Struggling homeowners that have Freddie Mac mortgages will have a new opportunity for loan modifications beginning next month.

The new option is called a Standard Modification. It is intended for borrowers who are ineligible for a Home Affordable Modification Program (HAMP) loan modification, or have previously defaulted on a HAMP or other loan mod. If you are approved, the mortgage principle and monthly payment will be reduced by at least 10 percent, making the payments more affordable.

To qualify, you must be at least 60 days past due on your mortgage. If you are not at least 60 days past due, you could qualify if you can prove that you are in imminent danger of default. This would mean you must provide proof of an eligible hardship and providing verification of income.

Mortgages that are approved for modification will have their interest rates modified to 5 percent and the amortization period extended to 40 years from the time of the modification.

Similar to HAMP, borrowers approved for the program must undergo a three-month trial period during which they must keep up with their new payment schedule before the loan modification is finalized and made permanent. Lenders approving the new standard modification will receive cash incentives of up to $1,600 per homeowner approved to encourage them to finalize a borrower’s status within 2 months of the end of the trial period.

Lenders may begin trial modifications for approved homeowners under the program as soon as Oct. 1, 2011. As of Jan. 1, 2011, all borrowers seeking a loan modification of any type on a Freddie Mac-supported mortgage must be evaluated for eligibility under the program.

The new Standard Modification replaces the existing Freddie Mac loan modification called a Debt Coverage Ratio, which now is being referred to as a Classic Modification. The government’s HAMP loan modification will continue to be available as well.

CLick Here Does Freddie Mac Own My Mortgage

Minnesota mortgage first time home buyers FHA Qualification what is an underwriter looking for?

The 1st question my first time homebuyers ask is an underwriter looking at when trying to get approved for a new mortgage. The answer I always give is it’s big picture. Here are the primary points.

Credit- underwriters are looking for a minimum of a 620 credit score. Having said that they are also looking for credit quality and credit depth. How many tradelines do you have and for how long? A borrower could have a 620 credit score with 3 settled collections and $250 Macys credit card. In this instance this wouldn’t be an automatic denial, however the other aspects of their finances must be very strong. 3 years after a foreclosure or short sale, 2 years after a chapter 7 bankruptcy, and just 12 months after a Chapter 13 (with trustee permission) you can purchase a home again. BUT the underwriter will be looking at 2 things. Did you re-establish new credit and have you paid it on time? They will also be looking at the immediate previous 12 months. If in the last 12 months you were late on your car twice and accumulated 2 new utility collections an underwriter is not going to approve that loan due to previous financial catastrophe and failure to prove yourself credit worthy again.

Income/Employment- Is it consistent, stable, and likely to continue for 3 years. For employment you need a 2 year work history.Full time enrollment in secondary education does count for part of that history if your current job is full time. If your employment status is seasonal, temp worker, contractor, self employed, or part time you must have a 2 year history (no secondary education waiver) If you have bonus, overtime, or commission income that you would like to use for qualifying you must have that job for 2 years. In the case of child support, alimony, social security disability, ect you must prove stability of past receipt and proof it will continue for 3 years minimum. In the event of child support you’d prove the child’s age along with paternity court order or divorce decree  For disability income you’d provide a dr’s note indicating your disabled condition is not likely to change in the next 3 years.

Assets- As you can see there are many sources for help with down payment. The main important thing important with assets is clean bank statements. I define clean as no cash, no non payroll deposits unless a tax refund, insurance settlement, ect.  “my mom owed me some money and she paid me back” is not going to work for underwriting. When receiving down payment assistance 99% of the programs require a percentage in contribution of “your own funds” if someone paid you back, gifted, or lent you money it is not your own funds. Unfortunately stated explanations are rarely acceptable. Definitely bounced checks, NSF’s, overdrafts onto a line of credit, or regular overdrafts are acceptable. This indicates to an underwriter that you are having difficulty paying your current debts and obligations without having a home mortgage debt.