Tag Archives: delaware refinance
Will Your Credit Score Affect the Interest Rate You Get?

pre-approval

  I asked if he have any idea what his credit score was

  He said he went on line and it was 900+

  I advised him that that score was impossible because credit scores range from 300 to 850

The credit scoring mechanism used by mortgage lenders is called a FICO score

 This credit scoring pulls its scores from three different credit bureaus,

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How to Buy a Fixer Upper with a FHA 203K Loan

FHA’s 203(k) program lets you buy the house you want now and then provides the money you need to make repairs

With 203(k) financing you can buy an older home and fix it up, or you can purchase a short sale or foreclosure in need of repair with the 203(k)

You can also buy a property which is in good shape but would be better with modernization and more energy efficiency

With the typical mortgage you apply for financing, get an appraisal and go to closing

The mortgage is used to pay for the acquisition of the property

However, if you want to make additional improvements you then need cash or an additional loan

The 203(k) allows the borrower to acquire the property and fund improvements after settlement

It can save time and money

There are three steps to obtain a 203(k) loan:

1) Find a loan

The borrower locates an FHA lender who offers 203(k) financing

Many lenders do not provide such financing because the program requires more follow-up than a typical mortgage

Once a property is located the lender will want to know how the funds will be used

At this point the borrower usually obtains help from an “independent consultant,” a 203(k) expert familiar with the program

The cost of the independent consultant can be financed under the 203(k) mortgage

2) Settlement

The money needed to acquire the property is paid out at closing by the lender

With most loans all the money due to the borrower is paid out at closing

However, with 203(k) financing a portion of the loan amount is retained by the lender and set aside for repairs

3) Disburse funds

Money from the loan is disbursed as approved work is undertaken and completed

This means the lender’s involvement with the property continues after closing

 

So how does the 203(k) program really work? Let’s look at some particulars

Down payment

The FHA currently requires at least 3

5% upfront as a down payment plus closing costs

The 203(k) down payment is calculated on the total loan amount, including the money needed for improvements

Refinancing

You can use the 203(k) program to refinance an existing loan for a qualified property and for approved repairs and replacements

Type of propertyGenerally the property must have one to four units, including one which will be owner occupied

The dwelling must be at least one year old

The 203(k) can be used with condos but not with cooperative units

HUD states, “Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place

You can also use the 203(k) program to finance what is known as a “mixed use” property

This means some of the floor area can be used for commercial purposes

However, 203(k) funding can only be used to refurbish the residential portions of the property and not the commercial areas

Type of improvements

HUD says “luxury items and improvements” are not eligible for 203(k) financing

However, a wide range of repairs and improvements are okay including painting, plumbing, electrical work, flooring, room additions, energy conservation and decks

Investors

The 203(k) would seem to be ideal for investors, however under HUD rules the program is only open to owner occupants

 

Sam Collins with Delaware Financial Captial Corp can answer 203(k) questions and explain in detail how the program works

More information can be found at (function(){ var hsjs = document

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Mortgage Rates Hit New Lows!

fixed rate 30-year mortgage fell this week, yet to another record low, according to data from Freddie Mac

The low rates come amid signs of improvement in housing — declining foreclosures and delinquencies, and increases to housing starts and the NAHB housing index — and would be a nice touch for those looking to refinance, although many have struggled to take advantage

An array of weekly and monthly data have been closely watched as economists look for affirmation of a trend — be it improvement or continued distress — and as homeowners and prospective buyers wrestle with regional realities, which vary greatly

When it comes to rates, some of the factors hitting home are originating further away

  The economic turmoil in Europe, in particular, is having an effect, according to Freddie Mac vice president Frank Nothaft

The low rates are encouraging demand

Mortgage applications increased 9

2 percent last week from one week earlier, according to data from the Mortgage Bankers Association’slow rates, in part because of backlog at large banks

Thursday’s data follow a report that foreclosure filings in the U

S

dropped to a five-year low last month as lenders upped efforts to avoid seizing properties

Bank of America (BAC), for one, said last week that it was rolling out new efforts to help keep homeowners out of foreclosure thanks to the robo-signing settlement

It began mailing 200,000 letters offering certain customers mortgage principal reductions, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages

One improvement in the housing landscape: The delinquency rate for one-to-four-unit residential properties decreased by 18 basis points in the first quarter from the fourth quarter of 2011

At the end of the first quarter, there was a delinquency rate of 7

4% of all loans outstanding

“Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve,” said Michael Fratantoni, MBA’s Vice President of Research and Economics

  “Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future

Data on housing starts in April and the NAHB housing index in May, released earlier in the week, both increased more than expected

 

How low will mortgage rates go? And have you been able to take advantage? Let Sam know by clicking on the button below with your input

  You can also give him a call at (302)266-9500


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Mortgage Rates Hit Record Lows, Again

lower mortgage rates, mortgage
The great housing debate continues, and this is another week for the bears. That is, unless you are looking to refinanceat a lower rate and not among those caught up in the backlog of demand.

The average 30-year fixed-rate mortgage hit a new record low, again, of 3.83% for the week ending May 10, down just a tad from 3.84%, according to mortgage giant Freddie Mac (FMCC.OB). The 15-year averaged lower as well, at 3.05%, down from 3.07%.

The latest data mark the second straight week of record low rates. Rates touched 4% briefly earlier this spring but have yet to return as a string of economic concerns weigh. (Track the average 30-year fixed mortgage rate, per Freddie Mac, in the chart below.)

 

“Following April’s weaker than expected employment report, and the French and Greek election results raising concerns over the stability of the Euro currency zone, long-term Treasury bond yields declined allowing fixed mortgage rates to ease to new all-time record lows this week,” said Frank Nothaft, vice president and chief economist at Freddie Mac.

CreditSesame.com says its data show that homeowners are costing themselves an average of $4,788 a year, or $399 a month on average over the life of a mortgage, because they don’t own the best loans they’re qualified for. And that’s net of any administrative charges they would face to refinance.

“Refinancing is thought to be a painful, time-consuming process and to a large extent it is true,” says CreditSesame’s mortgage authority Tony Wahl.  “Overall, consumers just don’t feel that they are in control of the process and as such are less likely to act as a result.”

Underwater homeowners are the most reticent to act, says Wahl. Programs such as HARP II and FHA Streamline refinance products help underwater consumers “but you still don’t see consumers clamoring for details,” he says. “Many underwater homeowners seem to have given up; they think of their home as weight around their neck and have given up on the dream of owning their home outright.”

Those who have been in their homes a long time are also reticent. “They feel that by refinancing they’ll be effectively resetting the clock and returning to square one even though they might be able to drop their interest rate significantly,” he says, adding that they aren’t generally aware of the variety of loan products and loan terms that could be used to improve their finances.

Of course, not everyone is motivated, nor obligated, to help. Reduced rates mean the lenders will make less per payment, and in some situations the bank that you make your payment to might not own the mortgage anyway. And although Wahl says lenders in general are highly motivated to originate new loans, “many of the aggressive programs that you hear about in the news get significantly watered down by guideline overlays before they hit the streets,” he says.

 

What do you think? Have you been able to refinance lately? What was the process like? Let us know by clicking the button below:

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