New Rules For Mortgage Loans and How It Will Affect YOU!

The New Rules for Mortgage Loans call Qualified Mortgage Rule or (QM) will take effect on January 10, 2014.

What are these new rules and how it will affect you?

A Qualified Mortgage is one that meets certain standards set forth by Bureau of Consumer Financial Protection (CFPB) Two distinctive classification are Safe Harbor QM or Rebuttable Presumption (or HPML QM)

Safe Harbor; Most lender would most likely follow the ATR requirement and do already with most loans. With the provision if a borrower ends up in default/foreclosure down the road, the lender would be considered to have legally satisfied the Ability To Repay rule. Thus making it harder for the borrower to sue the lender in court.

Here's a list of Ability To Repay Determinations;
1. Current or reasonably expected income or assets
2. Current employment status
3. Monthly payment on the covered transaction
4. Monthly payment on an simultaneous loan
5. Monthly payment for mortgage related obligations
6. Current debt obligations, alimony and child support
7. Monthly debt to income ratio or residual income
8. Credit history

  

Rebuttable Presumption; This is related to higher-priced loans. Rebuttable Presumption assumes the creditor complied with the Ability-To- Repay rule and if followed even on a higher priced loan the consumer would have to show at the time of consummation the consumer’s income and debt obligations left insufficient income or assets to meet living expenses.

What defines a high priced mortgage is a loan with APR greater than Average Prince Offer Rate + 1.5%. High prices is not related to Points and Fees test. The APOR or Average Prince Offer Rate means an annual percentage rate that is derived from average interest rates, points and other loan pricing terms.

  

So you’re probably wondering how it will affect you the home buyer or home owner who is looking to finance. We’ve already been dealing with and adjusting to a tighter lending market with many added restrictions since Dodd–Frank Wall Street Reform and Consumer Protection Act. This new QM addition to the rules and restrictions to the lending industry is going to have an initial effect slowing the marketing until the lenders get their own houses in order, the first few months of 2014 is going to be slow with many delays if you happen to be a buyer or someone refinancing. I would advise adding a couple weeks to your escrow closing date. The interest rates are expected to reach 5.5% by end of 2014. With the added DTI ceiling of 43% and increase in rates, both factors are going to make it even more difficult to qualify for a home loan. This will have a negative impact on our housing market and its slow recovery at least in the beginning. On the up side there will be fewer foreclosures in the future and fewer lawsuits.

If you are a trying to qualify for a mortgage you still have many options. The dream of home ownership is NOT slipping away. You will need to be cautious and more diligent with your consumer credit. Most American’s carry far too much consumer debt. Set your goal of home ownership and find out where you stand. Work with a mortgage professional that will help you meet that goal by telling you what you need to do to reach it. There are still a few of us out there that do this type of counseling/coaching for home buyers.

I wish you the very best of luck in your home ownership journey. Stay positive and you will get there.
Contact me anytime, leave a comment or ask a question. I would love to hear from you. 

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011

Learn How to Reduce Your Mortgage and Save Thousands

 One Additional Mortgage Payment a Year

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan's principal.

This is the method being used by "Bi-Weekly Mortgage Reduction Services" and "Bi-Weekly Mortgage Savings Programs". Only, when you do it yourself, you don't pay a third party unnecessary set-up costs and fees!

Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate

Extra Mortgage Payments/ Year Principal & Interest Additional Monthly Payment SAVINGS Total Paid # of Years 0 $632.07 0 0 $227,542.98 29.92 / 359 mos. 1 $632.07 $52.68 $29,088.02 $198,454.96 24.12 / 290 mos. 2 $632.07 $105.35 $46,492.13 $181,050.85 20.5 / 246 mos. 3 $632.07 $158.02 $58,320.95 $169,222.03 17.92 / 215 mos. 4 $632.07 $210.69 $66,969.79 $160,573.19 15.92 / 191 mos. 5 $632.07 $263.36 $73,607.77 $153,935.21 14.34 / 172 mos.

One-time Payment

It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift. You could apply this money toward your loan's principal, resulting in significant savings and a shorter loan period.

Example:

With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.

If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That's a savings of $22,832.23 in interest.

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011

Mortgage Tune-UP Tips... Do YOU Need One?

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.

Do 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. (Free reports are being phased in over a nine-month period, rolling from the west coast to the east beginning December 1, 2004. By September 1, 2005, free reports will be accessible to all consumers.)

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.

Is 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.

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011

Home Builder's Rejoice with Home Starts Topping 1 Million

It’s been 5 years since US home builders topped 

1 Million home starts. This gain signals continued growth in the housing market. This is great news as home prices are raising. This jump is expected to continue throughout 2013 for a second year straight. However it’s not all good news because wages have not increased but steady job growth and near record low mortgage rates along with raising home values have encouraged people to buy homes. Home

builder’s are stepping up production due the higher demand.

Federal Housing Administration (FHA) are making some changes to guidelines and preparing for the increase in applications. USDA is following with increase funds. On March 26, 2013, the President signed “H.R.933. Consolidated and Further Continuing Appropriations Act, 2013” which provides funding through September 30, 2013.  The Bill also extends the eligible rural areas that were in effect as of September 30, 2012 until September 30, 2013 for Rural Housing Service rural housing programs. A complete loan guarantee request received by Rural Development on or before September 30, 2013, will not be subject to the new rural area designations that will take place on October 1, 2013, barring any Congressional action that extends current eligibility areas. 

To purchase using FHA , USDA or Conventional financing contact me today for a free consultation. Also get a FREE appraisal when you mention this article and follow my blog. That’s a value of up to $650.

Call today for a FAST and Easy Pre-Qualification. 

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011

HARP 3.0 Will we EVER see it come to life?

Millions of homeowners are waiting for HARP 3.0 to come to life. Many of us in the mortgage industry are wondering if this will ever happen. It’s greatly needed and will open up refinancing options for millions of homeowner with loans that do not fall under the Fannie Mae or Freddie Mac umbrella.

HARP 3.0 was introduced by U.S. Senators Barbara Boxer and Robert Menendez, Senate Bill 3085. Expanding the affordable refinancing of mortgages held by the Federal National Mortgage Association and the Federal Home Loan Corporation.

 

President Obama rolled out a #MyRefi Campaign to support HARP 3.0 with Social Media

 

HIGHLIGHTS

• #MyRefi is a White House initiated social media campaign.
• The Refi program is a HARP 3 mass refinancing program for those homeowner's not supported by Fannie or Freddie
• The Refi Plan will allow underwater borrowers to refinance with limited credit requirements.

If you are one of those homeowners in waiting I believe the only way to get HARP 3.0 available is to contact your Senators and Congressman/woman and tell them your story. Put the pressure on them and ask them to support this bill. Keeping this issue in front of them and the pressure on to make HARP 3.0 a reality is key to getting it passed.

We are hoping that HARP 3.0 will have most if not all the same guidelines as HARP 2.0 with unlimited Loan To Value (LTV) and appraisal waivers. We also have to get rid of the obstacles like 2^nd mortgages and their ability to deny subordinating a new 1^st mortgage and MI mortgage insurance companies currently will not renew the insurance if the loan is refinanced which doesn’t make sense on the risk factor they face if the homeowner defaults.  On the other hand if they are able to refinance with a better rate and lower payment there is less risk.  Understanding risk with these loans as I believe been why HARP 3.0 has not happened. If risk factors were put in place just like they did with HARP 2.0 revisions, we could all get pasted this hurdle and start helping responsible home owners reduce they mortgage payments and hold onto their homes. This is a win win for all as neighborhoods will rebound and the saved money can go back into new consumer purchasing and help our economy.

Start by contacting your Senators and legislators’ to get this passed and available.

 If you have any questions please don’t hesitate to contact me. I welcome your comments and questions. Thank you for stopping by today.

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011

Fast Becoming a POPULAR Choice is the 15 Year Mortgage

Due to historical low rates the 15 year mortgage is the choice for approximately 30% of loan originations this year so far. It’s easy to understand this movement to a shorter loan term with even lower rates. You can SAVE a whole lot of money on interest and own your home faster. We haven’t seen these rates since 1940 making this a GREAT time to refinance.

It’s easy enough to do the math go to Mortgage Calculator and try it and you will be surprised to learn how much you can save. Use this week’s prevailing average rate for the 15 year fixed 2.79% and your current loan balance. You may be surprise to see your payment is the same or less than your 30 year fixed especially if you have been paying on that loan for a few years.

Even if you owe more than your home is worth you may be able to refinance. If you currently have a Fannie Mae or Freddie Mac loan, you may qualify for a government sponsored HARP loan and still be able to convert that 30 year to a 15 year mortgage. HARP loans are available for owner occupied homes both primary, second home or vacation homes, even investment property if you meet the guidelines. In most cases appraisal waivers are issued by the lender and no appraisal is needed.

 

We all have the dream of paying off our mortgage and actually owning our home. Most of us would like to do this before we retire and stay in our home during our golden years. You might be surprised to hear that more young people between ages 24 – 39 owned their home outright then folks between ages 40 – 65. They are doing it with smart finance choices. 

You can reach out to me and we can go over your current mortgage statement and run the numbers. I would love to hear from you. Leave your comments or questions they are always welcome. Thank you for stopping by.

Roxy Redenbaugh

ACMC Loan Consultant

Branch Manager

NMLS #269926

www.roxyloans.com

808-637-0011