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This should help!

2009-11-18T08:13:00.000-08:00

Please view this very brief video which shows how all of our efforts are making a difference!

TBWS - Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

Thank you to those of you that helped by sigining the petition Request For Reconsideration of HVCC Petition to the New York Attorney General, Fannie Mae, Freddie Mac, and the Office of Federal Housing Enterprise Oversight. http://www.hvccpetition.com/SignPetition.aspx

Amazing rehab/home improvement loan

2009-11-10T08:27:00.000-08:00

If you are thinking about buying a house, remodeling or repairing the house you have, then it's definitely in your best interest to know about the FHA 203k loan. This is truly and an excellent loan program in today’s market but not many people even know it’s out there to take advantage of.

So.....what the heck is it?? Basically, a 203k loan allows you to buy a house and fix it up without using money out of your own pocket and basing the loan amount on "future value" after the improvements have taken place. There are two flavors of 203k: Streamline & a fully funded. Here is what you need to know.

Streamline:
This is a less complicated 203k loan that should be used for improvements and repairs up to $35,000.
Types of work that can be done include:

Finish basement
Remodel Kitchen & baths
New furnace and air conditioning
Minor electrical and plumbing
Connecting to public water & sewer
Decks
New flooring
New paint
New cabinets or countertops
Siding
New roof
Buy Appliances: stove, refrigerator, microwave, dishwasher, hood vent, & washer & dryer

As an example: Jon and Jane want to buy a house for 200,000. The house needs a new furnace, roof & they would like to put on a deck which altogether costs $23,000. With their streamline FHA 203k loan, they will need a down payment of 3.5% of $223,000 (the purchase price plus the cost of repairs). The loan amount will be $215,195 and the down payment amount is $7805. Fifty percent of the funds that are needed to complete the project are released at the time the loan closes and the other 50% are held in escrow and disbursed upon completion.

A refinance would work in a similar fashion. Let's say Jim owns a home that today is valued at 300k. Jim owes 275k and he wants to finish the basement which will cost 35k. Jim can get a loan for up 96.5% of $335k to complete his project but since the project is using the maximum amount of 35k, Jim's loan amount will be $310,00. This would allow him to complete the lower level with no out of pocket expense.

Fully funded 203k loan:

This is the 'real McCoy' version utilizing the full potential of the funds for a complete rehab project. As an example, if Jon & Jane decided to buy a 300k home that needed to be completely rehabbed & planned on putting an addition, they would opt for a full 203k. Let's say the project will cost 160k. Provided the future value could be supported, Jon & Jane could have a loan amount for 96.5% of $460k, allowing them to cover nearly the full cost of the remodel.

In today's real estate market, the FHA 203k loan is a tremendous option. The government wants the housing market to recover and neighborhoods to flourish. While the tidal wave of foreclosures is not predicted to subside for some time, this provides unprecedented opportunity for a buyer with vision. Some of these places need some work, and the FHA 203k loan is ideal for those that have ability to buy but are not cash rich. Coupled with the extension of the tax credit (which is no longer just for first time home buyers), there is major incentive to get off the bench.

FHA announces changes

2009-09-21T08:08:00.000-07:00

FHA has announced some big changes on the heels of it's actuary report which is expected to show that the capital reserve ratio has dropped below the congressional mandate of 2%. Along with the planned changes, FHA commissioner David Steven's also announced his intention to hire a Chief risk officer for the first time ever!

“To be clear, the fund’s reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new Congressional action,” Stevens said. “That said, given the size and scope of the FHA and its importance to today’s market, these risk management and credit policy changes are important steps in strengthening the FHA fund, by ensuring that lenders have proper and sufficient protections.”

Amongst the changes, FHA will be raising the net worth requirement for FHA funding sources from $250,000 to ONE MILLION DOLLARS. Effective January 1 2010, financial institutions will have to submit yearly audited financials to FHA to prove they are adequately capitalized to meet the new standards.

Additionally, the new policies will make it more cumbersome to do 'streamline refinances'. This is a rate reduction program for FHA to FHA financing which currently requires little to no documentation to complete. FHA will now establish new requirements for seasoning, payment history, income verification and demonstrate a net tangible benefit to the borrower. The new changes provide for a collection of credit score information when available and caps the maximum loan-to-value (LTV) ratio at 125%.

Furthermore, new guidelines will be set forth on ordering appraisals for FHA-insured mortgages. Although the Home Valuation Code of Conduct (HVCC) does not apply to FHA, the plan is to adopt language from the Code to align its standards with those government-sponsored enterprises (GSEs), which fall under HVCC. Boooo!

HVCC was implemented by Fannie Mae and Freddie Mac on May 1, 2009. At that time the FHA decided not to adhere to the policy arguably increasing demand for FHA loan products as originators and Realtors alike quickly learned of the problems associated with HVCC. Although they are not requiring the use of AMC's or other third parties to order the appraisal, the new requirements do not allow any commissioned based lender staff member to order an FHA appraisal.

When it comes to ordering appraisals, currently FHA requires that the appraisal must be transferred if switching lenders. This slows the process in cases where the original lender is reluctant to transfer the the appraisal in a timely manner. The new policy allows for a new appraisal to be ordered if there are mistakes, the appraiser is on the 2nd lenders ineligible list or if the "Failure of the first lender to provide a copy of the appraisal to the second lender in a timely manner would cause a delay in closing, posing potential harm to the borrower". Potential harm includes events outside the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees. FHA also reduced the length of time an appraisal can be used from 6 months to 4 months.

While lenders seeking to originate, underwrite or service FHA loans must meet the new eligibility criteria, mortgage brokers such as ourselves will still be able to originate these loans through their relationships with approved lenders, but we will no longer receive independent FHA approval of eligibility, according to the new changes.

The lenient policies of FHA have been widely critisized and called "The New Subprime". FHA loans are federally insured mortgages made available to first-time home buyers. They require down payments as low as 3.5% (but it's really less because closing costs can be rolled in) and a credit score of just 620 in contrast to 700+ required by most private lenders right now.
As the subprime market crashed and burned, less qualified home buyers returned to FHA, leading to a huge increase in FHA loan volume. Almost a third of mortgages are FHA loans now, up from just 2% in 2006. Unlike most of the Subprime loans however, FHA loans are are sold as fixed rate mortgages and require full documentation of income and assets. While the rise in delinquency has certainly been noticable, the likelihood of a Subprime-esque repeat is not high. In fact, it is more likely that inflation will cause these borrowers' incomes to rise and thanks to the low fixed rates, thier payments will remain flat. While some minor changes to FHA seem appropriate, any drastic modifications would be a "pox on both your houses", the one you own and the one next door..... that won't sell because nobody qualifies to buy it.

2009-08-17T08:51:00.000-07:00

It's a great day to lock if you can. As expected the Fed announced quantitative easing (QE) will come to an end. By slowly weaning the Treasury market from Federal Reserve buying, Chairman Bernanke will be causing treasury rates to rise and satisfy US creditors. In the mean time, the story this morning is the huge sell-off in the global equity markets, and the outlook for a serious decline in the US stock market this morning. If you haven't noticed, what's bad for the market is good for rates and thus we have once again dipped below that Mendoza line of 5.0% for a conventional 30 year fixed. The moral of this story...it's time to lock! If you are considering refinancing, it is my opinion that this recent dip will be short-lived and while the Fed will continue use its substantial balance sheet to buy mortgages, having the effect of keeping mortgage rates low, I expect that 4.875 soon will be history.

Here are today's rates at Primestar...please call us for a 5 minute consultation and reference this blog 952-548-8840 or go to http://www.goprimestar.com/contact_us.html

15 year fixed
Rate 4.500%
APR 4.697%
Details

30 year fixed
Rate 4.875%
APR 4.991%
Details

5 yr ARM
Rate 4.25%
APR 3.939%
Details

FHA
Rate 5.000%
APR 5.110%
Details

VA 30 year fixed
Rate 5.125%
APR 5.276%
Details

http://www.goprimestar.com/

Would you lock your rate if you were offered....

2009-08-11T08:49:00.000-07:00

What would it take to lock your rate in? Please take this super fast survey. It will take you less than two minutes........I promise!

Thank you so much! Click here to take survey

2009-07-16T08:54:00.000-07:00

Banks vs. Mortgage Brokers

Many people think they can avoid paying mortgage broker fees by refinancing their home loan with a bank. After all, your bank is a direct lender right? Unfortunately banks are just as guilty, if not more so of overcharging their customers as mortgage brokers. In fact, the Banking Lobby in the United States spent millions of dollars having the disclosure laws changed to exclude banks. That’s right; your bank is exempt from the Real Estate Settlement Procedures Act and is not obligated to disclose their profit margin or markup on your home loan.

Bankers are now also in opposition to Obama's proposal to create a 'Consumer Financial Protection Agency' to regulate mortgage lending and protect conusmers from financial abuse. On the other hand, the National Association of Mortgage Brokers (NAMB) is waiting to see how the legislation plays out. This legislation would put banks at a level of transparency that mortgage broker's have been abiding by for years. According to NAMB executive VP Roy DeLoach "The NAMB applauds provisions calling for all originators to disclose all direct and indirect income". We agree with NAMB and while botched legislation has the potential to hurt consumers by limiting choices, it would be nice to see the playing field evened out. In the mean time, consumers need to stay vigilant and educated about the choices they have today.

As a mortgage broker we have access to wholesale rates and we are willing to work for a flat origination fee. Much like your bank, we can mark up your mortgage rate for a commission from the lender. This commission is known as Yield Spread Premium but as brokers we are obligated to disclose the rate markup and we often use this as an alternative to paying up front fees. When you hear the term "no cost", this is in reference to paying the fees as yield spread, rather than up front. It works like a seesaw, higher rate/lower fees and vice versa but you can see your options clearly and you have the choice to balance your loan to meet your needs. It is also possible to refinance your mortgage paying a flat origination fee without markup of your mortgage rate. This is a deal that is tough to get from your bank or credit union and will save you thousands of dollars every year you keep the loan. Working with a mortgage broker like Primestar, you can be sure that everything is disclosed to you about your loan upfront.
Educating our clients + complete transparency = TRUST! https://www.bbb.org/online/consumer/cks.aspx?id=10407098525144643

How much is your house worth & sustained growth indicators

2009-07-01T12:57:00.000-07:00

We had a nice downward trend in rates last week after the Fed announced that they they left their target rate at 0% to 0.25% and the continuation of their previously announced $800 billion dollar purchase of US Treasuries as well as the previously announced $1.25 trillion dollar purchase of MBSs by the end of the year.

We have another big week in announcements including the Unemployment rate tomorrow so we can expect the volatile rate environment to continue for the time being. After last months report from National Association of Realtors (NAR) indicated that existing home sales showed the first month over month increase since September of 2005, a report today shows that the pending home sales rose .1% during the month which is up 6.7% compared with May surprising prognosticators who had forecast no growth.

In May, existing SFR, Townhomes, condos & co-ops rose to an annual rate of 4.77 million units which was a 2.4% increase from 4.66 in April. Keeping with this (hopeful) trend, the U.S. Census Bureau separately reported the median sales price of new homes rose to $221,600 in May which is a 4% increase from April.

All this activity is good news as climbing out of the housing crisis is the first step to an overall rebound. People who are looking to refinance with today's low rates are left wondering how to determine what their home is now worth. It's a good question and today there are really two markets; the distressed foreclosure market and the ordinary market. In the current environment it has been difficult to distinguish between the two when home appraisals are often based on values of foreclosed properties, which sell for significantly less than homes of ordinary sellers.

Distressed homes usually sell for around 20% less than normal homes in the same area, but unless the appraiser takes the time to make this distinction, a traditional home can get lumped in with the bargains. Appraisers are required to use comparable properties that have sold recently, and if there is nothing but distressed sales, what is left to compare to? Is your house worth more because you paid your mortgage on time? We'd like to think so but in a less than ordinary market, it's very difficult to prove.

Still the indicators for recovery are there. NAR's affordability index is near historic highs because with the combination of low housing prices and low rates, the average family is required to devote less of their income toward the mortgage. This should continue to have a positive effect on demand and although the market is not likely to rebound very quickly, we should begin to see a gradual recovery.

To access our custom instant rate quote go to http://www.goprimestar.com/Search_20_Rates.html

Hits and bumps WHAT'S THE RATE????

2009-06-22T13:19:00.000-07:00

If you are like most people, before you call an actual human mortgage professional who might try to talk you in to something, you go to the web (which I'm told by Homer Simpson comes on computer's now). The problem is that rates are extremely difficult to track, especially considering all of the regional and loan specific price bumps that are baked in to each individual loan. It depends.... how much do you owe, what is your credit score, do you need cash, how big is the loan, what was your grandmother's middle name???? (mmmm.. last part doesn't matter so much). The worst thing you can do is watch the news or rely on the mainstream media to find out what kind of deal you can get. These outlets always seem to be a week behind what's actually happening, but why? The reason is because the nation's media uses the flawed timing of the Freddie Mac Mortgage market survey. I liken it's accuracy to weather reports in Minnesota...also flawed. If I need to know what the weather is doing, I use my window. It's sunny right now...I can see that! The Freddie survey collects from it's participants Monday through Wednesday and then publishes the results on Thursday. Huh? The point is, rates are a moving target and the price on a Wednesday or last hour can be vastly different from the price now. How about now? And so it tends to be a very frustrating search for rate shoppers who can find so much information by searching for Mortgage rates on the Internet that one could practically have their originator's licence. But the one thing you'd really like to know is the ever elusive price...right?!
Our solution: Primestar can save you all of this dreaded the hassle with an Instant custom rate quote. Or for those who would like to stay in the know without having to keep checking back please e-mail nkoster@goprimestar.com a request for Rate monitor.

Rates back down pheww!

2009-06-15T08:06:00.000-07:00

Rates reached a high point last week of around 5.75 but have now relaxed by about half a point. So how can this volatility be explained and will rates stay at these historic lows?

The Federal Reserve has been flooding the mortgage market with money by purchasing billions of dollars' worth of home loans, which is what drove rates down this winter and spring. But the Treasury Department has started to borrow the mind blowing amounts of money needed to finance the record federal budget deficit, which is projected to reach $1.84 trillion this fiscal year, quadrupling last year's record $454.8 billion deficit.
This drove up the cost of all types of long-term debt, including mortgages, despite the Fed's best effort to keep rates low.

Rates started to go back down on Thursday 6/11.
The latest sell-off in Treasury bonds may have peaked, as a steep jump in yields finally has lured buyers off the sidelines.
That could end the upward pressure on mortgage rates, atleast for the time being.
Bonds are rallying today, driving interest rates lower, after the Treasury sold $11 billion in 30-year securities at a yield of 4.72% -- the highest auction rate in nearly two years but well below the 4.8% predicted by bond dealers in a survey by Bloomberg News.
"Something seems to have changed here" in terms of the market's mentality, said Charles Comiskey, head of Treasury trading at HSBC Securities in New York. "The price action is telling you" that rates have reached at least a short-term high, he said.
http://latimesblogs.latimes.com/money_co/

Here are today's rates at Primestar:

30 year fixed
Rate 5.25%
APR 5.371%
Details

15 year fixed
Rate 4.75%
APR 4.958%
Details

FHA
Rate 5.375%
APR 5.505%
Details

5 yr ARM
Rate 4.25%
APR 4.375%
Details

Perspective

2009-06-08T08:31:00.000-07:00

Rates have jumped up to the mid 5% range due to dramatically increased volatility. “A lot of that has to do with uncertainty about whether the Fed will increase purchases of Treasuries. The market is looking for some change in the Fed’s plan.” according to Thomas Roth, head of US government bond trading. As a home owner or perspective buyer please keep in mind a little perspective amidst the gloomy headlines. Rates are still at a 40 year low. Since 1963, there have been only a hand full years in which the popular 30 year fixed has trended below 6%. These years include 1964, '65, '03, '04' and 05'. http://mortgage-x.com/trends.htm In the first half of this decade when rates were low & loans were being shamelessly allotted to anyone with a faint heartbeat, purchasing seemed the thing to do. As we all know however, home prices were elevated and have since notoriously deflated. Today in 2009, we are in a much different predicament. Rates are not only below 6% but as never before, they have averaged below 5.5 all year. Housing prices are down & in my opinion, very close if not at the bottom. While the Fed may be "stuck in a very difficult place" (Mark McQueen), for the rest of us there has seldom been a better time to buy.

Rates up yesterday but outlook is to remain low

2009-05-29T07:44:00.000-07:00

As you may have heard, the market went bananas yesterday so here is a quick analysis.

The mortgage market was so volatile yesterday that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day. Mortgages significantly sold off yesterday afternoon. The 4.0% and 4.5% was down over 2.25 pts and 2 pts respectively. The reason is that there was an excessive dumping of supply. Servicers and banks were selling and more notably, the Fed never came in and made any purchases. There’s more room to fall and the expectation using technical analysis shows we could sell off by another point over the coming days. Volatility is through the roof which makes hedging expensive and tough. Still the sentiment is that the Fed is expected to keep purchasing and keep rates low.

Rates have relaxed slightly today. Some may see short term ARM interest rates as a more attractive option while fixed rates stay north of 5%.

Opportunistic rate catchers

2009-05-27T08:54:00.000-07:00

Everyone knows that Mortgage rates today are at a historic low so what does it take to capitalize & catch the market while it hits that proverbial bottom?

Understanding if you what you qualify for can take the burden of uncertainty out of the home shopping experience.
If you are purchasing a home, there are plenty of programs to take advantage of. First time home buyers qualify for Obama's $8000 tax credit. FHA loans require a minimal 3% down payment and they can be coupled with DPA (down payment assistance) programs that exist in most MN townships. Looking at the foreclosed inventory? A 203k loan can provide funds to get a distressed property in to move in condition. If you want to take advantage of super low conventional rates you need to be aware of a few things. Conventional lenders are requiring more documentation than ever to approve your loan so be prepared with all of your income and asset documentation at the ready. Also, don't go car shopping or apply for any credit during the mortgage process as inquiries can negatively effect your credit score. In order to avoid any rate bumps, a conventional borrower needs to have a 740 credit score.

Refinancing? Having some equity in your house is key to getting a new loan. If your current mortgage is less than 80% of the value of your home or less than 75% of your condominium or co-op, you should have refinancing options.
If your mortgage is between 80% and 105% of your home value, you're current on your payments and your loan was bought by Fannie Mae or Freddie Mac, you may be able to refinance under a two-month-old government program called "Making Home Affordable." Fannie and Freddie have different requirements, so go to the program's Web site (www.MakingHomeAffordable.gov) or contact us to see if you qualify. 952-548-8840.

Trust and Mortgages

2009-05-22T09:03:00.000-07:00

Having gone through the housing crisis and the sub-prime meltdown, home owners and perspective buyers have emerged as a much more savvy and more notably wary crowd. Rightfully so! There are still a lot of choices to sift through. To start with, who are you going to trust with what is most likely the largest loan in your life? Primestar Mortgage has an A+ Accredited Business rating with the Better Business Bureau and its not because we just opened our doors yesterday. We have been around since 2002 and our reputation has remained unscathed through thousands of mortgage transactions and through the toughest of all lending environments. You can trust us and the proof is in the rating. https://www.bbb.org/online/consumer/cks.aspx?id=10407098525144643