Category Archives: Mortgage Information

VETS Need a Home Loan? The Time May Be Now

Posted on October 26, 2014 | Leave a comment

Not only has the Department of Veterans Affairs’ VA home-loan program gained significant market share compared with competing private and government mortgage options, but big banks and mortgage companies have stepped up efforts to help returning veterans obtain decent and affordable housing, including by gifting them hundreds of homes free of charge, with no mortgage attached.

Have questions about the appraisal process for a VA loan? Contact the appraisers at www.scappraisals.com; they have VA certified appraisers that are glad to help.

The VA’s home-purchase financing program is now at record levels. New loans to buy houses have more than doubled since 2007.

Since 2011, when VA-backed mortgages represented about 3 percent of total home-purchase mortgage activity, they’ve soared to roughly a 7 percent share, according to the Mortgage Bankers Association.

For sales of newly built homes, the VA share is much larger — it was 14.5 percent in September compared with a 16.7 percent share for the other major federal housing finance program, FHA, the Federal Housing Administration.

So VA loans are housing’s hot product, but why? Lots of reasons:

VA-guaranteed mortgages come with terms that no other financing source can match — zero down payment; flexible and generous credit underwriting that emphasizes the applicant rather than the algorithm-driven computer programs that dominate conventional lending. Plus VA interest rates are competitive, and maximum loan amounts go into the jumbo range.

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Mortgage Rates Sliding for the Fifth Straight Week

Posted on October 24, 2014 | Leave a comment

WASHINGTON (AP) — With mortgage rates sliding for a fifth straight week, the possibility of locking in a rate below 4 percent is tempting for consumers and could unleash a wave of refinancing. It may even convince some Americans to buy their first home.

Yet there are limits to how far the wave can extend. Millions of homeowners already re-financed in 2013, when the average 30-year mortgage rate stayed below 4 percent until mid-year. And the overall housing market remains hampered by tight mortgage credit, rising home prices and stagnating incomes.

This week the average rate on the 30-year loan fell to 3.92 percent, mortgage company Freddie Mac reported Thursday. The average for a 15-year mortgage, a popular choice for people who are refinancing, retreated to 3.08 percent from 3.18 percent.

That is sparking a boomlet of homeowners looking to refinance as long-term mortgage rates plummet. Homeowners eager for a bargain rate are firing off inquiries to lenders. Applications for “re-fi’s” jumped 23 percent in the week ended Oct. 17 from the week before — reaching their highest level since November 2013, figures compiled by the Mortgage Bankers Association show.

The average 30-year mortgage rate nationwide that week breached the 4-percent threshold and hit 3.97 percent from 4.12 percent the previous week. It was the lowest level since June 2013. Deepening concern over the health of the world economy compelled investors to flee stocks and move into bonds. That pushed up prices of Treasury notes and suppressed their yields, which often pull along mortgage rates.

But it remains to be seen whether the uptick in refinancing will turn into an extended boom.

About half of all homes with a mortgage have rates at about 4.3 percent or less, according to real estate data provider CoreLogic. It may not be worth it for those homeowners to refinance at current rates because refinancing carries its own costs and fees.

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FHA: End of House Flipping Waiver December 31, 2014

Posted on October 19, 2014 | Leave a comment

In an effort to stimulate repairs and sales in neighborhoods hard hit by the mortgage crisis and recession, the agency waived its standard prohibition against financing short-term house flips. Before the policy change, if you were an investor or property rehab specialist, you had to own a house for at least 90 days before reselling — flipping it — to a new buyer at a higher price using FHA financing. Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a purchaser using an FHA mortgage — provided you followed guidelines designed to protect consumers from being ripped off with hyperinflated prices and shoddy construction.

Since then, according to FHA estimates, approximately 102,000 homes have been renovated and resold using the waiver. The reason for the upcoming termination: The program has done its job, stimulated billions of dollars of investments, stabilized prices and provided homes for families who were often newcomers to ownership.

However, even though the FHA waiver program has functioned well, officials say, inherent dangers exist when there are no minimum ownership periods for flippers. In the 1990s, FHA witnessed this first hand when teams of con artists began buying run-down houses, slapped a little paint on the exterior, and resold them within days — using fraudulent appraisals — for hyperinflated prices and profits. Their buyers, who obtained FHA-backed mortgages, often couldn’t afford the payments and defaulted. Sometimes the buyers were themselves part of the con and never made any payments on their loans — leaving FHA, a government-owned insurer, with steep losses.

Disclaimer: for information and entertainment purposes only

Category Archives: Mortgage Information

VETS Need a Home Loan? The Time May Be Now

Mortgage Rates Sliding for the Fifth Straight Week

FHA: End of House Flipping Waiver December 31, 2014

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