Saturday, May 5, 2018

How Will 5% Mortgage Rates Impact Buyers In 2018

Mortgage rates have not been 5% since 2011 and we are starting to see rates getting close to 5%.
The 30-year mortgage average rate is now about 4.5% for most borrowers but if your credit scores are low making you a higher risk, get ready for a higher rate closer to 5%.

For the first time in years we will see buyers with less buying power, they will qualify for less as we see increasing housing prices.  On the brighter side, I always look for a silver lining. Lenders are scrambling to provide new loan programs and guidelines to adjust to the raising rates.

Even with rates on the increase we are still seeing more buyers then housing inventory on the market. Making it a seller’s market and increasing prices.  If you are a buyer and thinking about buying this year you should be planning and preparing early, don’t wait to get pre-qualified, do it now. Your approval will be good for 90 days while you look for a home. If you go beyond those 90 days, it’s quick and easy to renew your approval for another 90 days. It’s very important you know how much you qualify for before you start shopping with your Realtor.  You can apply online on my secure website, you can upload needed documents making it very easy to get started. www.roxyloans.com
I am offering a buyer’s mortgage coupon $1000 off your closing cost to help make purchasing a bit more affordable. Request your coupon by sending me an email; roxy@roxyredenbaugh.com

The volatility in the market is due to the wide swings in the stock market. Mortgage rates tend to follow the 10-year Treasury yield. Yesterday’s bond market opened flat after economic data helped erase overnight lost. To get a full mortgage rate update each day you can visit my website,
This tool can be very helpful to know if locking your rate or letting it float is best.

If you would like my weekly mortgage rate update emailed to you, shoot me an email requesting to be added to my distribution list.
If you are a Realtor I can keep you informed on the market with this weekly mortgage rate update and my monthly newsletter that focuses on Real Estate trends and updates. Both allow for co-branding to help with your marketing efforts.

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts.


Roxy Redenbaugh
ACMC Loan Consultant
roxy@roxyredenbaugh.com
Mortgage Coach
Branch Manager
NMLS #269926

Wednesday, April 4, 2018

Why You Need An Annual Mortgage Analysis

Give your mortgage an annual once over
If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over.New loan programs and opportunities to leverage your home equity can bring you lower mortgage payments and new investment opportunities.

Is a fixed rate mortgage the best choice for you?
Many of us opt for the certainty of a 20 year or 30 year fixed rate mortgage when we get our first mortgage.If you anticipate selling your home within the next 10 years, one of our new hybrid loans may be a better financial fit for you.Hybrid loans typically have a lower fixed rate than a traditional 20 or 30 year mortgage.The savings you receive can well be worth switching to a hybrid loan.

Are you paying for Private Mortgage Insurance (PMI)?
There are a lot of new loan programs available that can help you eliminate PMI, even if you have less than 20% equity in your home. The monthly savings adds up quickly.  This money can be put to better use to help you achieve other short-term and long-term financial goals.

Are your taxes and insurance up to date?
Even though your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it just makes sense to periodically check to see that these payments are being made properly. While you’re at it, you’ll want to review your homeowner’s insurance policy. It’s a good idea to review your policy every two to three years to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation.

rightDo you have a Home Equity Line of Credit (HELOC) for emergencies?
Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies.  A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit. As you repay the balance of the draw, the credit becomes available again. Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency.

How’s your credit report?
The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan.  That’s why it’s important to periodically check your credit report.

Now it’s even easy to do so. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each credit reporting company provide you with a free copy of your credit report, at your request, once a year. To request your free credit report, visit http://www.annualcreditreport.com. 

Are you making the most of your home’s equity?
With rising home prices, you may have more equity in your home than you realize.  Taking out a home equity loan to payoff credit card debt, car loans and other higher interest debts makes good financial sense.

leftIs it time to refinance?
The timing might be right to refinance your mortgage loan.  New rates may help you significantly lower your monthly payment. Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation - whatever! Perhaps by refinancing you can even pay off your mortgage sooner! 

I will work with you to determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your future plans.

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts.


Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Friday, March 30, 2018

Why You Should Get A Home Inspection


Whether you are buying or selling a home, you should have a professional home inspection performed.
A home inspection will look at the systems that make up the building such as:
  • Structural elements, foundation, framing etc.
  • Plumbing systems
  • Roofing
  • Electrical systems
  • Cosmetic condition, paint, siding etc.
If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should kill the deal.
Likewise, if you are selling a home, you want to know about such potential hidden problems before your house goes on the market. Almost all contracts include the condition that the contract is contingent upon completion of a satisfactory inspection. And most buyers are going to insist that the inspection be a professional home inspection, usually by an inspector they hire. If the buyer's inspector finds a problem, it can cause the buyer to get cold feet and the deal can often fall through. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute or take a lower price on your home.
It's better to pay for your own inspection before putting your home on the market. Find out about any hidden problems and correct them in advance. Otherwise, you can count on the buyer's inspector finding them, at the worst possible time.
Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 
Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Monday, January 1, 2018

TIPS On Getting Your Finances In Order for 2018

Like many families we need a bit of help organizing our finances to make sure we are in the best financial health, based on our own personal situations. I’ve put together some tips that will help you and possibly some areas where you can find money within your budget and spending habits to save and maybe even invest for your future.  
  1.  Savings, we all try but many are not able to save even 5% of our annual salary each year. Having an automatic savings that is forced is a great way. I know you may have heard this before but it’s important you pay yourself before you pay anyone else. By having an automatic savings deduction from your payroll or from your checking account that goes directly into a saving account is key. If you are not doing this, try it. Even if it’s a small amount it will add up over time. Having a nest egg for emergencies is critical, set your goal for one -two months of reserves. What I mean by this is add up all your monthly liabilities, times two and this should be your immediate goal to save and have on hand for an emergency or life changing event. 
  2. Analyzing your 401K, you should be watching your 401K for performance and make sure 
    you are experiencing gain and not losses, if you are losing money, contact your account manager and make some changes to your investments. It’s crazy not to do this, remember if you don’t, no one will.  Another tip on 401K is your contributions, are you over funding your 401K based on its performance. Maybe you could be investing the same money in a different type of account with a higher return. Also is your employer contributing to your 401k, hopefully they are to some degree but if not you might be better off with an IRA or ROTH IRA.
  3.  Insurance Policies are another great way to invest and can be added to your investment
    portfolio and paid with money from an over funded 401K. Life insurance policies have great rates of return and grow in cash value over time. If you already have a policy go over it and make sure you have enough coverage. Over time we increase our liabilities and networth so it is important to increase policies values. Insurance is a great way to invest long term and protect your family.
     
  4.  Budget is another thing you need to analyze. Many don’t even have one, so first it’s important to establish a budget. If this is you then please take some notes. Having a plan is critical to financial stability. Having no plan can be the reason you never have money and live from pay check to pay check. Many banks like BofA, Wells Fargo and others have spending reports you can run now that reflect your spending habits, use these reports to help you see where you can cut back your spending. This will help you free up money you didn’t think you had. You can also go through your bank statements to track your spending if reports are not available at your bank. Understanding where your money is going is the first step to controlling your budget.   
  5. Mortgage Analysis, it's important to look at the financing on your home and any other 
    property you own. Rates and programs change frequently.
    Do you have the best mortgage available that will save you money and reduce your interest paid each year. If you are paying mortgage insurance (MI) this step is critical to review 
    even twice a year and a must do each year. The value of your home is most likely increasing by 6% to 10% annually. This is why it's important to keep track of values because once you reach 80% loan to value you can request your MI be removed from your monthly payment. If you have an FHA loan you will need to refinance into a conventional loan to get your MI removed. 
  6. Start getting your documents in order for tax time. Remember to save your last paycheck stub for 2017, it will come in handy if you want to start your tax preparation early. 
I hope this post has been informative and will be helpful in 2018. I am here to help with any of these steps just contact me with any questions and I always welcome your comments and questions here on my blog. Thank you for stopping by!

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926


Saturday, December 23, 2017

Changes Coming to Lending and How It Will Affect You

We have all seen many changes in the mortgage industry over the past several years. More regulations and more disclosures to meet CFPB’s requirements for lenders and everyone that works for them.
For more then 20 years we have been using the same Uniform Residential Loan Application = URLA or 1003 for short. During our CE training this year we were all introduced to a NEW and improved URLA. We are going from a 4 to 5-page application to a 8-page application. The new form is more in depth and has an extensively enhanced Home Mortgage Disclosure Act = HMDA section for government monitoring. I’ve listed the changes below. It should be very interesting to see everyone's reaction when they complete this new form. I am going to keep an open mind to change and hope others will do the same.
This new form was reported to be available to use Jan 2018, but it doesn’t look like Fannie or Freddie will have their automatic underwriting systems ready for this start date. Looks like we will have a brief reprieve on the start date 7-2019. The borrower will only realize some minor changes in documentation and if you have a good loan officer they will help you complete this form and explain any changes. 
Here are some changes on the new form; 
·       Updated borrower contact information, such as cell phone number and email address.
·       Added a new military service section to assist veterans seeking and qualifying for VA loan opportunities.
·       Made it easier to identify employer and self-employment information.
·       Included fields to collect more detailed information about the property and loan purpose, including refinance types, energy improvements, and project types.
·       Added amortization types and loan features describing the mortgage and loan terms.
·       Updated the acknowledgement, agreement, and authorization sections to benefit the consumer and industry participants who use the loan application (e.g., mortgage insurers).
·       Revised government monitoring information (ethnicity and race) in accordance with the new Home Mortgage Disclosure Act requirements issued by CFPB.

The next change will be the increase loan limits for a conforming loan. In 2017 the loan limit has been $424,100 but starting on Jan 1, 2018 this will increase to $453,100 and increase of 6.8%. 
I’ve never been sure what the $100 is about as it’s much easier to have round numbers.
I think someone likes messing with us! 😊
The best part about this change, it will allow for more people to obtain cheaper financing on their conforming loans. Rates are lower then loan over this amount that are considered High Balance or Jumbo loans.


With the passing of the NEW Tax bill a couple BIG changes involved our home loans and the interest we get to deduct each year. This will now be limited to $750,000 per year. 
In addition, you will no longer be allowed to deduct the interest on your equity loan or line of credit. 

If you have one of those equity loans, line of credit etc. you will want to see about refinancing to include that equity line of credit in with your regular mortgage. Chances are you will save money with a better rate and you will be able to continue to deduct the interest on the same borrowed money! 

Getting a free mortgage analysis would be beneficial if you have this type of loan.  I can do this very quickly with just a copy of your mortgage statement on both your 1st lien and your second lien, or line of credit. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Friday, December 8, 2017

Loan Scams and What To Watch Out For

Many loan officers are going through continuing education this time of year to renew their license for 2018. The educator's in our industry are expressing the need for all of us in finance to be more vigilant when it comes to recognizing fraud when we come across it. 
It’s interesting to me some of the things STILL happening in our industry that are fraudulent and harmful to consumers, the mortgage and real estate industies and ultimately the economic health of our country.
I guess I am naive to think because of all the new regulations there would be less fraud happening. Unfortunately, all of us need to be more aware because there are many criminals committing fraud and stealing our identities, our homes and our equity. 
We all need to educate ourselves and do our homework. Researching companies and individuals before we provide any personal information to anyone, we need to have our guard up always. I’ve listed some information in this post that will hopefully help you to better recognize and avoid being a victim of mortgage loan scams, fraud and ID theft.

Foreclosure Rescue and Mortgage Reduction or Refinancing Scams
The scammer will contact a distress homeowner by phone or by a knock on their door. They will make all kinds of promises to get you to allow them to work with your lender on your behalf to adjust your loan by reducing payments, even promising principal reduction. Some will even claim to be a government agency. They will charge the homeowner a large upfront fee for their services and then do nothing for the distress homeowners, leaving them in worse financial condition then when they found them.
There are many companies mostly non-profits that do help distress homeowners. But you won’t get a call from them without you first calling them. Look up any company claiming to perform mortgage relief services with the BBB and your states Attorney General to see if they have complaints or they are a real company. Look up their licenses to get information about them and their services. Be careful and just because they state they work for an attorney doesn't mean what they are are doing is legal. 

Predatory Lending comes in many different forms. A lender using hard selling tactics and not providing all the information about the loan. Including not telling you the rate and term, telling you one thing and then changing the loan type, rate or term, that's called a bait and switch sells tactic. Maybe they do give you a few days to think it over, but you have already spent money on appraisal etc. so you move forward because you don’t want to hold up closing. Then months later after you close you find out your rate is about to change or you have a balloon payment you didn't know about. Within your loan documents the most important document is your Note, Deed of Trust or Mortgage Deed, READ them make sure the match your original loan estimate or loan disclosure. The information on your Note will be what you have to pay for the term of your loan. Any changes to rate or term will be listed in your Note with the date of change.
Most lenders who do this come from unsolicited phone call or telemarketer. Before you start a loan with a lender do your homework, find out about the company you are considering, check out their licensing. National Mortgage Licensing System NMLS keeps track of lenders and the people or loan officers that work for them.  
NMLS Consumer Access  Then check with the Better Business Bureau (BBB) Check your states Attorney General Office and see if that company is in good standings. 

Equity Stripping is another horrible way a lender can assist you into defaulting your home loan.  You decide to refinance because rates have dropped but you may not qualify for a normal refinance. A lender gives you a loan based on the equity in your home NOT your ability to repay. These lenders are hoping you default because they are lending based on your equity. They want your home!

Loan Flipping is another way a lender is after your equity. You refinance your loan adding all the loan fees to your principal. This is normal practice when you refinance so you don’t always see this coming. Then 12 months goes by and that same lender contacts you and says rates have gone down even more and offers to refinance and reduce your payment even more. Again, adding loan fees onto your principal.
This is done repeatedly, and they may even offer to let you take cash out for a vacation or to consolidate your other debts increasing the loan amount each time and adding onto your principal with each refinance, before you know it you are upside down in your mortgage and in jeopardy of foreclosure.
There are many good reasons to refinance your home just be aware of your situation and know the amount of your equity. Don’t be blindsided and end up with a home that you owe more then it’s worth.

Upfront Fee Scams, lenders that require upfront fees for processing or an application fee. These can be substantial fees of $500 to $1000 or more and non-refundable. Lenders will target people with bad credit and tell them that their credit will not prevent them from getting a loan. They collect these fees and nothing else happens, the borrower never gets a loan and because it’s non-refundable you lose your money.
The only fees a lender can charge is for your credit report. This fee is normally paid to a 3rd party credit bureau and the lender is not allowed to charge a penny over the fee.
The other fee is for your appraisal this is also paid to a 3rd party appraisal vendor or AMC. Again, the lender is NOT allowed to charge a penny more then the report cost.
If they insist you pay any other fees RUN and don’t give them any of your personal information.

ID theft can happen to any of us doing things like applying for a home loan, buying a car, shopping online and many other situations we come across all the time. Ways you can avoid ID theft is to safeguard your personal information as best you can. Don’t email personal information because email is not secure. Don’t give out your Social Security number to anyone that calls you for any reason. Monitor you bank accounts and your credit accounts and set up alerts for both.

I have listed some resources below. I hope this information helps you and if you ever have any questions please contact me. 

  


Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Friday, December 1, 2017

Tips On Selling Your Home In The Winter

If you find yourself needing to sell your home in the winter months, it’s important to consider a few things that could help you get the job done without compromising on the value of your home.

Make sure your home is cleared out and clutter free especially important that you clear your entry way of muddy or wet shoes and boots. I know it is difficult but try to remove your personal items and family pictures.
You want your buyers to imagine themselves in your home not your family.

Be sure to have your thermostat set at 68-70 degree, this is very important if your home is vacant. If a buyer is freezing during their visit they are less likely to stay and explore your homes great features. If you are living in the home and have a fireplace, have a fire going. Make your home warm and cozy. The same is true for any outbuilding you may have. A warm shop or garage is much more inviting.

Lighting is very important during the winter when our natural sun light is limited, and the days are shorter. Make sure your rooms are lite up and your dark hallways have recessed lighting, it’s an easy and inexpensive area you don’t want to crimp on.

If you are selling during the Christmas holiday, it’s a great time to show off how festive your home can be, make it beautiful with decorations and let the buyer see how it shines during the holidays.

Be sure to have a photo album or slide show running on your TV that delay’s your home during the spring and summer months. Show off your vegetable and flower garden. It is sometimes hard for a buyer to picture what it may look like during the summer.

Have your home ready and easily accessible by removing any snow or ice on the driveway and walkways all around your home. Make it safe for people to see your entire property.

According to Redfin reports and Bankrate your home is 9% more likely to sell, a week faster for 1.2% more in the winter! Good stats, right? This could be because seller's are more willing to negotiate during what is a difficult time to buy a home. 

I hope this information will help you sell your home. If you have any questions, please ask, I would be happy to help. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Tuesday, November 28, 2017

Advantages Of Buying A Home In The Winter

Winter brings a different perspective to buying a home. Although the winter has it's challenges when it comes to buying a home it can be a very a good time to buy for several reasons.
There are fewer buyers out looking with most of them sitting by the fire trying to keep warm. Many don’t want to brave the rain and snow looking for a home. It’s hard enough in the summer, right? It may be more difficult but well worth your time and effort to find the perfect home at a great price.
With fewer buyers out looking you are less likely to come across a multiple offers situation.

Sellers are highly motivated, if a house is listed during the winter months the seller’s circumstance could be to your advantage. They could have a new job and need to relocate. Financial problems or a divorce. Depending on the seller’s situation they may be more acceptable to negotiating.

A home listed in the winter may have been listed for a long period of time. If a home is listed for several months you may be able to offer less. Don’t be afraid to make an offer below asking price. But be careful not to offend the seller with a low-ball offer either.

Very important is the home itself, during the winter is an excellent time to see how a home performs when it is cold, after a good snowfall or rain storm. You can see if the home has leaks or a problem with insulation or lack of it, check for cold corners or rooms. A well-built home will not have icicles hanging from the eves or snow collecting on the roof.

Another advantage is finding a Realtor in the winter months is much easier because most of them are not as busy. They can spend more time with you and help you find the perfect home.
The same could be said for your mortgage professional.  

Another great motivator is your loan and what interest rate is available. Lender’s are less busy during the winter and we often see lower rates during the winter months. Take advantage of this, it could save you thousands over the duration of your loan just by buying during the lull in the market. We never know when rates will go up.

I have given you some great reasons to buy this winter, do your homework and due diligence before you buy your home. Talk to professionals and get the knowledge you need to make your best choice and then put your knowledge to action. Go for it! It’s fun and who doesn’t like moving into a new home no matter the season.

If I can help in any way with questions or your financing I am always available and just a phone call away.

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926
www.roxyloans.com

Friday, November 17, 2017

Mortgage Insurance Explained

There are two different types of mortgage insurance. 
    1. Mortgage Insurance Premium or MIP
          2. Private Mortgage Insurance or PMI

Mortgage insurance is required on any real estate loan that has a loan to value (LTV) above 80%. Not everyone can save up 20% for a down payment so MIP or PMI allows a buyer to put less down and pay insurance to protect the lender against default and foreclosure.

To explain the difference between MIP and PMI:
MIP is used for FHA loans that require a small down payment of 3.5%. You pay MIP in the form of an annual up-front mortgage insurance premium or (UFMIP) this can be financed into your loan and the current amount is 1.75% of the principal balance. In addition to this UFMIP is a monthly premium of .55% added to your mortgage payment each month.

Example:   250,000 Loan Amount x 1.75% = $4,375 Annual UFMIP 
                   250,000 Loan Amount x .55% = $1,375 /12 = $114.58 Monthly MI

FHA MIP is on your loan until the loan is paid in full or you refinance into a conventional loan and remove it after you have 20% equity in your home.

PMI is for conventional loans when you put less than 20% down. The rate factors are based on the individuals credit history and risk factors. Typically ranging from .35% to 1% of principal balance. Most insurance companies require a 660-fico score before they will cover your loan.
There are different ways to pay this type of PMI, you can choose to pay it all upfront at time of closing or as a monthly premium or a combination of both.

Lender’s also offer a slightly higher interest rate to cover the cost of the insurance called lender paid MI. I don’t recommend this if you plan to stay in your home for more than 5 years, because the higher rate is for the life of the loan and the best part about this type of PMI is you can request to have it removed after you have 20% equity in your home.

When you request your PMI to be removed you must do it in writing and they will require an evaluation of value to done on your home to establish your LTV and confirm you have 20% equity. You may have to pay for an appraisal to confirm value.

The Homeowners Protection Act of 1998 became effective in July 1999 and is known as the PMI Cancellation Act.  It was enacted to protect homeowners from the difficulty of cancelling PMI from their home loan. Now if you forget to request removal the lender is required to remove your PMI automatically when your LTV reaches 78%. I still recommend you keep track of your home’s value annually if you have PMI.

How you can avoid PMI and MIP is with a VA loan. Veterans who qualify can get 100% financing. With a VA loan there is a funding fee that is normally financed within the loan but no monthly mortgage insurance. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926

Wednesday, November 8, 2017

Piggyback Loans are Making a Come Back!

A piggyback loan is used when a buyer doesn’t have 20% down. This loan is considered a purchase money loan and goes in second place after the first lien. In most cases we are seeing a combination that is 80/10/10 meaning you get an 80% loan, a 10% piggyback/second loan and you put 10% down payment. Other combinations are 80/15/5 and an 80/20. All making a comeback..
By doing this it eliminates the requirement for principal mortgage insurance (PMI)


We are seeing more lender’s in 2017 take on this risker scenario not seen since before the 2008 mortgage crisis. These loans are an alternative for the buyer who doesn’t want to pay mortgage insurance.

Mortgage insurance is paid on any loan that exceeds 80% loan to value (LTV) there are several different ways (PMI) can be paid. I’ll go into mortgage insurance on my next blog post.
Piggyback loans are typically at a higher rate than the first loan and often made by the same lender.
I have seen some lenders match the rate of the first if the borrower’s risk factors are low. Meaning the borrower has a higher credit score and low debt to income ratio.

The only loan above 80% LTV that avoids PMI is a VA loan for our military folks. The VA loan for purchase and refinance is 100% financing and the ability to add their VA funding fee and closing costs to the loan, so the Veteran has no out of pocket money required. Great deal for our veterans. 

I am not sure if bringing back the piggyback is a good idea or not, they did cause their share of problems for both homeowners and lenders, causing many foreclosures which is why they disappear for so many years. I see an ever changing environment in the lending industry with lenders taking on more risk. Good or bad not sure!

I think it’s important to make sure that you research the difference between paying PMI or getting a second lien and the rates offered on the piggyback vs the factor used for the PMI.
Other things to consider is the tax benefit of each and with this new tax plan being introduced by our current president. Most of us can deduct our mortgage interest and mortgage insurance but that is likely to change if the new plan passes, at least to some degree depending on the size of your mortgage.

Thank you for visiting my blog and I encourage you to leave a comment or questions. Let me know if my blog has helped you to answer any questions you had. I would love to have ideas about what you all would like to learn about regarding financing or real estate.
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Mortgage Coach
Branch Manager
NMLS #269926