WE at Walker Mortgage are going to begin helping people with "loan modifications". There are a lot of shady characters doing it now for pretty steep fees. We think that we can do it as well as anyone and for a more reasonable fee. We will have a two part fee structure, a component that is non-refundable and a component that is refundable if we are not successful. That will be fair to both the client and to us. There is work and expense involved even if the lender rejects our plea. So there has to be some compensation for the work of getting it ready.
The world is full of people who will take your money and give little or nothing in return. WE have a long reputation of doing what we promised and of having fair pricing. That is what we will continue to do with the modification program. Fair and honest effort to benefit the customer. Local hands on face to face interaction with the customer with a good attorney in the loop to help if needed. While most of the modifications do not require legal help, some do and we are prepared with a solid experienced attorney to help when needed.
Who qualifies for a loan modification. First the loan must be owned by either FNMA or FHLMC or as you have come to know them, Fannie Mae and Freddie Mac. Second, you must have had a serious and probably long term financial setback. Such things as lost job, divorce and lost income, illness with loss of income, under-employment with accompanying loss if income may be qualifying examples of serious financial setback. However, you must have some demonstrated ability to repay on some schedule. The unemployed or those with minimal income may not qualify. The modification is supposed to reduce the loan terms to something affordable based on verified income. You need not be delinquent but delinquent loans may be modified. In the event that there is serious delinquency including Notice of Default, there is still hope for a modification. Finally, the lender must agree with us about the danger inherent in your financial reversal and the possibility of success with the modified terms.
Our experience, our integrity, and our ability to help will be put to work for you in seeking relief of your stress through loan modification. We can help, tell all of your friends or associates and family about us.
Watch for the actual announcement, but before the end of April we will be operating.
Thursday, March 25, 2010
Friday, March 19, 2010
New way to pay for Mortgage Insurance
Recently one of our investors informed us that they have a new single premium mortgage insurance plan for loans with 10% down. This plan is for single family residences no condo properties and is a very reasonable alternative to standard mortgage insurance which involves a monthly payment for a very long time. Basically the cost of this mortgage insurance is a one time payment of 1.35% of the loan amount. This eliminates any and all monthly mortgage premium payments for the life of the loan. It can save a significant amount of money if you have the home for more than 2 years.
For example, under the old monthly payment system if you purchased a home for $200,000 with standard mortgage insurance payments the mortgage insurance portion of the payment would be $93 per month for 120 months. If, you used the single pay plan the upfront cost would be $2430. So if you plan to have this home for longer than 26 months the single pay would be much less costly. Over say 5 years you would save $3348 and over 10 years you would have saved nearly $9000.
Another benefit of this plan is you can qualify for more house on the same income. How much more? You can qualify for nearly $20,000 more home on the single premium plan than with the monthly premium plan.
Where to get this extra 1.35% at closing? It can come out of the seller concessions, the mortgage broker can price it into the rate or you can have a gift from parents for this portion of the cost.
So if you are looking at buying a home soon, and if you have 10% down, this is a great plan for you.
Just a note to remember. When you have a 10% down payment, about 1/2 of that can be a gift from a family member. The lenders require you have at least the first 5% down as your own (borrower) funds. The rest of the down payment can be a gift as can all or part of the closing costs.
For example, under the old monthly payment system if you purchased a home for $200,000 with standard mortgage insurance payments the mortgage insurance portion of the payment would be $93 per month for 120 months. If, you used the single pay plan the upfront cost would be $2430. So if you plan to have this home for longer than 26 months the single pay would be much less costly. Over say 5 years you would save $3348 and over 10 years you would have saved nearly $9000.
Another benefit of this plan is you can qualify for more house on the same income. How much more? You can qualify for nearly $20,000 more home on the single premium plan than with the monthly premium plan.
Where to get this extra 1.35% at closing? It can come out of the seller concessions, the mortgage broker can price it into the rate or you can have a gift from parents for this portion of the cost.
So if you are looking at buying a home soon, and if you have 10% down, this is a great plan for you.
Just a note to remember. When you have a 10% down payment, about 1/2 of that can be a gift from a family member. The lenders require you have at least the first 5% down as your own (borrower) funds. The rest of the down payment can be a gift as can all or part of the closing costs.
Monday, March 15, 2010
Hope for small down payments
Monday, March 15, 2010
The days of 100% mortgages are pretty much over unless you are a qualified veteran. What to do if you do not have a 20% down payment.
FHA remains a good source of minimal down payment loans, minimum FHA down is 3.5% as of this writing. FHA has one other advantage in the manner in which it treats non-occupying co-borrowers. It is very friendly and allows parents to co-sign with children and actually carry the day in qualifying. The children occupants need to have adequate credit but the income of the parents can carry the day for loan qualification. That is not necessarily what parents should want, to be tied to the debt load of the adult child, but if that is not a concern for you, it is a good solution. It is also true that the entire 3.5% down payment may be a "gift" from the same or other parents. I have a truism that I remind folks about from time to time, everyone makes a down payment on their home, most at the time of purchase and some at the time of sale. If you have the minimum down payment and you need to sell too soon, you will have to increase that down payment at the time of the sale.
Now the conventional side. There are still a few companies that will finance 95% of the purchase price on a single family residence. That does not include condominiums, town homes or most Planned Unit Developments. The cost of the mortgage insurance is high, nearly 1% but it is none the less available and the mortgage insurance premiums may be tax deductible for some borrowers. The best part of this type of loan is that your down payment stays with the home. You can have gifted funds if you get them gifted far enough in advance. The parents co-signature is not much help and is pretty much discouraged.
So a comparison between FHA and the 5% down payment conventional will reveal that beginning in April, the FHA up front portion of the Mortgage insurance will increase to 2.25% of the loan amount. That is a big fee. The impact is softened by the fact that the fee is included in the loan amount, but that effectively shrinks the down payment or contributed equity from 3.5% to 1.25%. So if you purchase a home at say $160,000 with an FHA loan you put down $5,600 and then the loan balance is increased by $3600 so you have left only $2000 in equity. Then the FHA on going mortgage insurance premium of .5% is included in your payment. So what you have in the end is a loan of $158,000 at some rate plus .5%. If the rate is 5% your payment will be $848.18 plus the mortgage insurance component of $66 for a combined total of $914 plus taxes and insurance.
If on the other hand you make the same purchase with a conventional loan at the same rate with the required 5% down your loan will be $152,000 and your payment will be $815.97 plus the mortgage insurance component of $121 for a combined total of $937. this payment is actually $24 per month higher but consider the equity. You have put down $8,000 and it is still there. If you were to sell this home some time soon, you would have a balance $6,000 less on the conventional than on the FHA version. How important is that $6000? To be factual, $2400 of that $6000 was your increased investment so you are really out $3600. If you put the $24 you were to save on the FHA version into a bank each month is would take over 12 years for you to accumulate the $3600.
So which is better for you? It depends on a number of factors. First do you qualify on your own income and debt ratios? If you do, then FHA is less necessary for you to qualify. Second do you have excellent credit? To obtain a 95% loan your credit must be very strong. Third, do you have the down payment? If not, the FHA allows more flexibility to obtain it as a gift at closing but if the gift can be given about 90 days prior to applying for a loan, then it will be accepted.
In conclusion, if you have excellent credit, good income and reasonable debt and can obtain a 5% down payment, that is the best way for you to finance a new home.
Stay tuned for more tips and comparisons
The days of 100% mortgages are pretty much over unless you are a qualified veteran. What to do if you do not have a 20% down payment.
FHA remains a good source of minimal down payment loans, minimum FHA down is 3.5% as of this writing. FHA has one other advantage in the manner in which it treats non-occupying co-borrowers. It is very friendly and allows parents to co-sign with children and actually carry the day in qualifying. The children occupants need to have adequate credit but the income of the parents can carry the day for loan qualification. That is not necessarily what parents should want, to be tied to the debt load of the adult child, but if that is not a concern for you, it is a good solution. It is also true that the entire 3.5% down payment may be a "gift" from the same or other parents. I have a truism that I remind folks about from time to time, everyone makes a down payment on their home, most at the time of purchase and some at the time of sale. If you have the minimum down payment and you need to sell too soon, you will have to increase that down payment at the time of the sale.
Now the conventional side. There are still a few companies that will finance 95% of the purchase price on a single family residence. That does not include condominiums, town homes or most Planned Unit Developments. The cost of the mortgage insurance is high, nearly 1% but it is none the less available and the mortgage insurance premiums may be tax deductible for some borrowers. The best part of this type of loan is that your down payment stays with the home. You can have gifted funds if you get them gifted far enough in advance. The parents co-signature is not much help and is pretty much discouraged.
So a comparison between FHA and the 5% down payment conventional will reveal that beginning in April, the FHA up front portion of the Mortgage insurance will increase to 2.25% of the loan amount. That is a big fee. The impact is softened by the fact that the fee is included in the loan amount, but that effectively shrinks the down payment or contributed equity from 3.5% to 1.25%. So if you purchase a home at say $160,000 with an FHA loan you put down $5,600 and then the loan balance is increased by $3600 so you have left only $2000 in equity. Then the FHA on going mortgage insurance premium of .5% is included in your payment. So what you have in the end is a loan of $158,000 at some rate plus .5%. If the rate is 5% your payment will be $848.18 plus the mortgage insurance component of $66 for a combined total of $914 plus taxes and insurance.
If on the other hand you make the same purchase with a conventional loan at the same rate with the required 5% down your loan will be $152,000 and your payment will be $815.97 plus the mortgage insurance component of $121 for a combined total of $937. this payment is actually $24 per month higher but consider the equity. You have put down $8,000 and it is still there. If you were to sell this home some time soon, you would have a balance $6,000 less on the conventional than on the FHA version. How important is that $6000? To be factual, $2400 of that $6000 was your increased investment so you are really out $3600. If you put the $24 you were to save on the FHA version into a bank each month is would take over 12 years for you to accumulate the $3600.
So which is better for you? It depends on a number of factors. First do you qualify on your own income and debt ratios? If you do, then FHA is less necessary for you to qualify. Second do you have excellent credit? To obtain a 95% loan your credit must be very strong. Third, do you have the down payment? If not, the FHA allows more flexibility to obtain it as a gift at closing but if the gift can be given about 90 days prior to applying for a loan, then it will be accepted.
In conclusion, if you have excellent credit, good income and reasonable debt and can obtain a 5% down payment, that is the best way for you to finance a new home.
Stay tuned for more tips and comparisons
Friday, March 12, 2010
This is the first post for this Blog. When you read this Blog, you will find interest rates, programs, and other helps for you to make educated decisions about financing or refinancing your home, second home, or investment property.
What makes this Blog or the source worth your reading time? Terry Walker is the owner of Walker Mortgage, LLC located in Salt Lake City and serving the entire State of Utah. Terry has been in lending business at some level since 1972. In my spare time I teach finance classes at the University of Utah. I have supervised or participated in originating well over 30,000 home loans in Utah, California, Arizona, Wyoming, abnd Nevada. I currently only offer services in Utah.
Walker mortgage is a Boutique Mortgage Broker shop with a very small group of dedicated professionals. We are in our 13th Year in Utah. As you have watched our industry shrink, 13 years seems like a very long time to survive in this ever changing industry.
When you apply for a loan or seek the counsel of Terry Walker as your mortgage guide, you deal with him directly, no processor or clerks to get in the way. You deal with me and with me only application to closing. You are buying the 38 years of experience and you have access to that expertise at each step of the process with no junior helpers, no processors, no clerks between you and Terry.
Now is a great time to consider buying a home. interest rates are historically very low, prices are low, sellers are making great concessions, and believe it or not, lenders are actively mamking loan. While it is true that qualfiying is harder, you must have good credit and actual down payment, it is still possible to obtain a 95% conventional loan.
What you need is a guide, someone to take you through the jungle that is mortgage lending in 2010. Someone who has been through this jungle many times and can help you navigate the terrors of obtaining a loan without pain or high cost.
Give me a call, 801-652-5153 to see what you can do to obtain a home. AS you know, the $8,000 tax credit is scheduled to expire at the end of April, if that is important to you, you have about 10 days to get a home under contract and still close by the end of April.
Stay tuned to other interesting observations regarding this dynamic industry and how you can get the best loan for your circumstances.
What makes this Blog or the source worth your reading time? Terry Walker is the owner of Walker Mortgage, LLC located in Salt Lake City and serving the entire State of Utah. Terry has been in lending business at some level since 1972. In my spare time I teach finance classes at the University of Utah. I have supervised or participated in originating well over 30,000 home loans in Utah, California, Arizona, Wyoming, abnd Nevada. I currently only offer services in Utah.
Walker mortgage is a Boutique Mortgage Broker shop with a very small group of dedicated professionals. We are in our 13th Year in Utah. As you have watched our industry shrink, 13 years seems like a very long time to survive in this ever changing industry.
When you apply for a loan or seek the counsel of Terry Walker as your mortgage guide, you deal with him directly, no processor or clerks to get in the way. You deal with me and with me only application to closing. You are buying the 38 years of experience and you have access to that expertise at each step of the process with no junior helpers, no processors, no clerks between you and Terry.
Now is a great time to consider buying a home. interest rates are historically very low, prices are low, sellers are making great concessions, and believe it or not, lenders are actively mamking loan. While it is true that qualfiying is harder, you must have good credit and actual down payment, it is still possible to obtain a 95% conventional loan.
What you need is a guide, someone to take you through the jungle that is mortgage lending in 2010. Someone who has been through this jungle many times and can help you navigate the terrors of obtaining a loan without pain or high cost.
Give me a call, 801-652-5153 to see what you can do to obtain a home. AS you know, the $8,000 tax credit is scheduled to expire at the end of April, if that is important to you, you have about 10 days to get a home under contract and still close by the end of April.
Stay tuned to other interesting observations regarding this dynamic industry and how you can get the best loan for your circumstances.
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