First Priority Financial

Hot Cars Hot Models and Hot Mortgage Insurance Returns to the Real Estate Purchase Market in Alameda

October 18, 2011 by · Leave a Comment 


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http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/u/0/1dhV0cuEX9s

Did you know that Conventional Mortgage Insurance is back?

Home Buyers have more opportunity than they have had since January 2008!!!

With National Conforming Loan limits of $417,000 and below home buyers can once again put just 3% down if they have a 680 fico credit score! FHA currently still requires 3.5% down and a 96.5% loan to value.  Conventional mortgage loan pricing does have pricing hits associated with higher loan to value loans so FHA financing may have a lower interest rate.  FHA financing however, has both upfront and monthly mortgage insurance.  As a consumer, it’s important to go over both options very carefully with your mortgage professional.

On High Balance Loans now going to $625,500.00 from $729,750 in high cost counties like Alameda, Contra Costa, Santa Clara, and San Francisco, Conventional Financing has a minimum down payment of 10%.  A borrower must have a 620 fico however with a lower credit score there will be hits to both mortgage insurance and interest rate.  The maximum purchase price for conventional high balance loans in high cost areas is $695,000.

FHA also goes to $625,500.  FHA allows just 3.5% down on their high balance loans as well allowing a borrower to purchase upwards of $648,186 in high cost areas like Alameda, Contra Costa, Santa Clara, and San Francisco.

Loans above 625,500 are available and still very favorable, however because this is primarily portfolio money the most attractive terms are adjustable rate mortgages fixed for a maximum of 10 years. The good news is Mortgage Insurance is available for Jumbo Loan as well.  Currently a home buyer can purchase a home using jumbo financing and 10% down to borrower up to 2 Million!

 Related Videos:

FHA vs Conventional Financing:

http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/u/18/9aCQ0pI2Ky8

The Top 5 Questions Home Buyers Have When Getting a Home Loan

http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/u/17/TjV5MPWETK0

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The Double Dip Recession of Real Estate Proven in Case-Shiller Report Alameda

June 1, 2011 by · Leave a Comment 

Clearly this article is much longer than usual but the content is important…

Today I am floored.  All the gains of the real estate market we saw from the Bush administration are officially gone. Lately, in The Werdmuller Group’s local market, Alameda, with somewhat of an emphasis on Harbor Bay Isle/ Bay Farm Island, I have seen huge losses in equity on properties I thought would appraise with no problem. Also, clients of mine who purchased in 2008, after the whole credit crisis thing had resided…mostly…have lost about 180K on a property they purchased for just under 600K.

I have been saying for months to clients “It’s unbelievable what is happening” however, I was still shocked!  Because the Mortgage News Daily’s Matthew Graham will say it far better than I…

“The indices, which are billed by S&P as the leading measure of U.S. home prices, are constructed to track the price path of typical single-family homes in a number of metropolitan statistical areas (MSAs).  The study uses matched price pairs of individual houses to construct a 20-City Composite Index and a 10-City Composite Index which are updated monthly. The indices have a base value of 100 which was set in January 2000.  Thus a current index value of 150 indicates there has been a 50% appreciation since that date for a typical home in the subject market.”

Excerpts From The Release…

The U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.

Twelve of the 20 MSAs and the 20-City Composite also posted new index lows in March. With an index value of 138.16, the 20-City Composite fell below its earlier reported April 2009 low of 139.26.  Minneapolis posted a double-digit 10.0% annual decline, the first market to be back in this territory since March 2010 when Las Vegas was down 12.0% on an annual basis.

Eleven cities and both Composites have posted at least eight consecutive months of negative month-over month returns. Of these, eight cities are down 1% or more.

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index, the 20-City Composite and 12 MSAs all hit new lows with data reported through March 2011. The National Index fell 4.2% over the first quarter alone, and is down 5.1% compared to its year-ago level. Home prices continue on their downward spiral with no relief in sight.” says David M. Blitzer, Chairman of the Index Committee at S&P Indices.

“The rebound in prices seen in 2009 and 2010 was largely due to the first-time home buyers tax credit. Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession. Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains.”

“Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities – Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa – fell to their lowest levels as measured by the current housing cycle.”

In the midst of all these falling prices and record lows, Washington DC was the only city where home prices increased on both a monthly (+1.1%) and annual (+4.3%) basis. Seattle was up a modest 0.1% for the month, but still down 7.5% versus March 2010.

S&P/Case-Shiller reports data on both a seasonally adjusted and non-adjusted basis but recommends using the latter as being a more reliable indicator.  We have used only the non-adjusted data in compiling this summary.”

The good news for the Bay Area is we didn’t make the list this time.  Poor Las Vegas and Phoenix!  Are there two cities that have been hit harder???

I predict these will be the “HOT” Mortgages for the Werdmuller Group, of First Priority Financial, for the summer based on what I see…

FHA 203K – first and foremost – We have a great HUD consultant, as well as contactors, and realtors ready to write the deal.  This loan allows for construction costs to be built into the loan with Purchase or Refinance.

The Truth About the 203K Rehabilitation Loan in San Francisco

What’s the Difference Between a Full 203K and Streamline Mortgage in Alameda?

FHA 203B – This loan with the increase in FHA loan limits in 2008 has definitely helped the housing market and first time buyers trying to take advantage of the market.  Just 3.5% down up to $729.750.  Also, this will be a great option for those who foreclosed and short sold recently trying to get back into the market.

How to Purchase a Home One Day After a Short Sale 

Private Money – Cash is king – right now cash deal are 1/3rd the market.  That means if you are a loan officer reading this,  you and I cannot compete on 1/3rd of the market.  This is also truly astonishing!  However, we work with many investors and private money offering short terms, quick funding, and can blanket several flips with 1 loan allowing the all cash buyer to take out cash after purchase to buy more all cash properties.  We at the Werdmuller Group are currently working on financing 15 properties with 1 loan.

The VA LOAN – We have been posting extensive information on Va Financing because basically, if you are in the military it is WAY cheaper to buy than rent – also if you are at 100% Loan to Value, we can still put you in a refinance loan in the mid 4’s!

Details….

How to Purchase Home with a VA Loan in Alameda, CA

Approved Property Types and Loan Limits for VA Loans 

VA Loan Requirements and Eligibility in Alameda, CA

We are doing great things for our clients, our referral partners, our local market, our industry, and the National Economy on the local level, where it starts, contact us today for superior everything. 510.282.5456.

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Understanding the FHA Mortgage Insurance Premium (MIP)

March 28, 2010 by · Leave a Comment 

* Disclaimer – all information in this article is accurate as of the date this article was written *

The FHA Mortgage Insurance Premium is an important part of every FHA loan.

There are actually two types of Mortgage Insurance Premiums associated with FHA loans:

1.  Up Front Mortgage Insurance Premium (UFMIP) – financed into the total loan amount at the initial time of funding

2.  Monthly Mortgage Insurance Premium – paid monthly along with Principal, Interest, Taxes and Insurance

Conventional loans that are higher than 80% Loan-to-Value also require mortgage insurance, but at a relatively higher rate than FHA Mortgage Insurance Premiums.

Mortgage Insurance is a very important part of every FHA loan since a loan that only requires a 3.5% down payment is generally viewed by lenders as a risky proposition.

Without FHA around to insure the lender against a loss if a default occurs, high LTV loan programs such as FHA would not exist.

Calculating FHA Mortgage Insurance Premiums:

Up Front Mortgage Insurance Premium (UFMIP)

UFMIP varies based on the term of the loan and Loan-to-Value.

For most FHA loans, the UFMIP is equal to 2.25%  of the Base FHA Loan amount (effective April 5, 2010).

For Example:

>> If John purchases a home for $100,000 with 3.5% down, his base FHA loan amount would be $96,500

>> The UFMIP of 2.25% is multiplied by $96,500, equaling $2,171

>> This amount is added to the base loan, for a total FHA loan of $98,671

Monthly Mortgage Insurance (MMI):

  • Equal to .55% of the loan amount divided by 12 – when the Loan-to-Value is greater than 95% and the term is greater than 15 years
  • Equal to .50% of the loan amount divided by 12 – when the Loan-to-Value is less than or equal to 95%, and the term is greater than 15 years
  • Equal to .25% of the loan amount divided by 12 – when the Loan-to-Value is between 80% – 90%, and the term is greater than 15 years
  • No MMI when the loan to value is less than 90% on a 15 year term

The Monthly Mortgage Insurance Premium is not a permanent part of the loan, and it will drop off over time.

For mortgages with terms greater than 15 years, the MMI will be canceled when the Loan-to-Value reaches 78%, as long as the borrower has been making payments for at least 5 years.

For mortgages with terms 15 years or less and a Loan -to-Value loan to value ratios 90% or greater, the MMI will be canceled when the loan to value reaches 78%.  *There is not a 5 year requirement like there is for longer term loans.

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Related Articles – Mortgage Approval Process:

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Why Do I Need To Pay A VA Funding Fee?

March 28, 2010 by · Leave a Comment 

The VA Funding Fee is an essential component of the VA home loan program, and is a requirement of any Veteran taking advantage of this zero down payment government loan program.

This fee ranges from 1.25% to 3.3% of the loan amount, depending upon the circumstances.

On a $150,000 loan that’s an additional $1,875 to almost $5,000 in cost just for the benefit of using the VA home loan.

The good news is that the VA allows borrowers to finance this cost into the home loan without having to include it as part of the closing costs.

For buyers using their VA loan guarantee for the first time on a zero down loan, the Funding Fee would be 2.15%.

For example, on a $150,000 loan amount, the VA Funding Fee could total $3,225, which would increase the monthly mortgage payment by $18 if it were financed into the new loan.

So basically, the incremental increase to a monthly payment is not very much if you choose to finance the Funding Fee.

Historical Trivia:

Under VA’s founding law in 1944 there was no Funding Fee; the guaranty VA offered lenders was limited to 50 percent of the loan, not to exceed $2,000; loans were limited to a maximum 20 years, and the interest rate was capped at 4 percent.

The VA loan was originally designed to be readjustment aid to returning veterans from WWII and they had 2 years from the war’s official end before their eligibility expired. The program was meant to help them catch up for the lost years they sacrificed.

However, the program has obviously evolved to a long term housing benefit for veterans.

The first Funding Fee was ½% and was enacted in 1966 for the sole purpose of building a reserve fund for defaults. This remained in place only until 1970. The Funding Fee of ½% was re-instituted in 1982 and has been in place ever since.

The Amount Of Funding Fee A Borrower Pays Depends On:

  • The type of transaction (refinance versus purchase)
  • Amount of equity
  • Whether this is the first use or subsequent use of the borrower’s VA loan benefit
  • Whether you are/were regular military or Reserve or National Guard

*Disabled veterans are exempt from paying a Funding Fee

The table of Funding Fees can be accessed via VA’s website – CLICK HERE

The main reason for a Veteran to select the VA home loan instead of another program is due to the zero down payment feature.

However, if the Veteran plans on making a 20% or more down payment, the VA loan might not be the best choice because a conventional loan would have a similar interest rate, but without the Funding Fee expense.

The best way to view the VA Funding Fee is that it is a small cost to pay for the benefit of not needing to part with thousands of dollars in down payment.

* Disclaimer – all information is accurate as of the time this article was written *

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Related Articles – Mortgage Approval Process:

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