Category Archives: Idaho Interest Rates

Just finished up my busiest month since May of 2006!

Interest rates moved up around memorial day but my clients who listened to my advice to lock their loans got deals that probably wont come around again.

Right now, if someone was looking for a no cost VA refinance or an FHA streamlined refinance would pay about 1.25% higher than what was available before memorial day.

That doesn’t mean that rates are bad, in fact they are still great, just higher than they were a short time ago.

I keep track of my clients situations and needs and when I see a chance to improve it, I will contact them and let them know what is available. It was those past clients that listened to my advice and had me lock their rates that were successful in getting a no cost refinance in the low 3’s. The clients who didn’t want to lock all thought the rates would drop a little more and missed the opportunity when rates moved up 4 weeks in a row.

While I wish everyone had listened to my advice, most did and that made for a lot of work and long hours getting their loans set up, processed and closed. I did have to skip a few trips to the gym or lunch invites, but it was worth it to take care of my clients.

Rate sale now at Fairway!!

I have never seen this with any company I worked for, but Fairway Independent Mortgage Corporation is giving us a discount to pass along to our clients.

Our normal interest rates are great and our closing cost structure beats any mortgage broker, but now we have almost a full discount point to credit to our buyers.  This means a rate .25% less than the going rates.

The idea behind it is because mortgage interest rates have risen here in Boise, Idaho and the rest of the country, and that’s going to keep some people from taking advantage of the last best opportunity to refinance their home loan or buy a home for the lowest possible rates in decades.

I don’t know how long its going to last, but if you know of anyone who is sitting on the fence because interest rates have risen in the last month, here’s a last chance to get that low interest rate.

If you are in the Boise, Idaho area and want to see what is available, call me at 861-7579.

3 questions to ask yourself before you sign that 15 year mortgage

Some things to consider when choosing a 15 yr. mortgage:

Can I make my payments if my income were to drop in the future?

Am I putting money into an emergency fund or my retirement accounts?

Do I have any other, higher rate loans that need to be paid?

If the answer to any of the above is “yes”, you might want to reconsider.

Getting a lower interest rate will not help you if you cannot make the higher payment in the future.  A better choice might be to take a 30 yr. mortgage and pay on it as if it were a 15 yr. mortgage.  You simply calculate how much it would take to pay it off in 15 yrs. and send in the additional principle with your payment. If you don’t have a calculator, here’s one.

Be sure you indicate that the additional funds are to be applied to principle, otherwise your lender may not know what to do with it and instead put it in your escrow account.

If you want to discuss this with a lender who will look at your total situation, here I am.

 

 

What is the best loan for someone who has excellent credit and a large down payment?

This might seem silly to ask, but I do see people getting the wrong mortgage for their situation simply because someone told them about a special program.

If you have a decent down payment, say 20% or more, have excellent credit, and you have documentable income and assets, then you want a plain vanilla, Conventional Loan.  These loans are also called Fannie Mae Loans or Freddie Mac loans.

I have seen people seeking a VA loan because they are a Veteran and they feel they need to use their VA benefit.  VA loans are ideal for the Veteran who doesn’t have a down payment, as they can go up to 100% loan to value.  The down side is that VA charges the Veteran a funding fee that ranges from 2.35%-3.3% on top of the mortgage balance.

The same applied to FHA or USDA loans.  Yes, they are good for some people, ie first time home buyers, someone who needs help with the down payment, or some other situation.  FHA loans have Mortgage Insurance Premiums that are added to the loan balance and have a month fee as well.

Don’t get fooled by the difference in rates.  Right now the Conventional loans are about .25% higher than VA, FHA, or USDA loans.  They don’t have funding fees or Mortgage Insurance Premiums added to the loan balance or payment.

Any ethical mortgage loan officer will look at all options and make a recommendation based on your situation.  Every body’s mortgage needs are unique.

The lowest rate is usually not the best loan!

This might make some of you say “what has he been smoking?” but there is an important reason for this.  I see many people get sucked in to a “my rate is the lowest so I must have gotten the best deal” mentality.

You can’t go online without being bombarded with get a mortgage with a 2.25% rate(APR 2.78%) or other such message.  This is one of the most outrageous offers I have seen.  I can’t think of anyone who would be served by this offer. FYI, it was 3 yr. adjustable rate VA Loan with 1% discount and 1% origination plus all the other third party fees.

I know why online lenders offer it, to make the phones ring.  They later pull a bait and switch and get the borrower into a more realistic loan that their local bank or broker could have gotten them.  For most people, that would have been a 30 yr. fixed rate in the 3’s with either a no points/no origination fee structure.

Lenders offer a wide range of rates and terms for clients so they can select the best mortgage for their situation.  For some, they are never going to move and it might make sense to pay a discount point, origination fees, and closing costs.  On a 30 yr. fixed rate mortgage, it takes about 7 years to recoup the cost of a 1% discount point.  If you are sure you will live there for longer than 7  years, then you would come out ahead.  If you think  you might move in a few years, then don’t pay closing costs or even a 1% origination fee.  The no points/no origination fee option is a much better mortgage for your situation.

There is even an option called the No Cost Refinance that is very popular.  For the record, I call it Lender Paid Closing Cost Refinance as that is more accurate but the slang term is No Cost Refinance.

Here is how it works:  Say a lender offers 3.25% on a VA streamline refinance with no points, just third party  plus your escrow account set up.  That can be about 1.5-2% in most areas.  At 3.75%, that same lender may offer a lender credit of 2% that gets credited to the borrower to offset your closing costs and new escrow account set up.  This means you are not rolling any costs into the loan.  Yes, the rate is higher, but you didn’t pay anything upfront to get it.  The difference in payment might only be 25 dollars more and that would take 10-11 years to recoup if you rolled the closing costs into the new loan.

What I like to do with all my clients is to find out what their reasons are for getting the loan, their goals for the home, and sometimes even their retirement planning goals so that I can help them select the right loan for their situation.  This is why my past clients call me to help them finance their next home or to send a family member to me for help.

The shady gimickmeisters are coming out again

Its only a matter of time when an industry is growing before the slick gimickmeisters come out and try to get into what is percieved as easy money.

I get calls almost weekly from past clients and friends saying they a got a call or a mailer from a company offering a rate of 2.5% on a loan.

In most every case, the offer has been something they didnt think it was, ie a 10 yr fixed rate at 2.75% or a 2.25% VA loan that actually turns out to be a 3 yr adjustable rate with 1% origination and 1% discount points.  Compare that to a regualr 30 yr fixed rate VA loan in the 3.5% range with zero origination points and zero discount points.

My advice is to deal only with a local, trusted advisor, never someone over the phone.  If you don’t have one, I would love to help you.  I’m in Meridian, Idaho.  I can be reached at 861-7579.

Some local Idaho resources that other states don’t have.

In Idaho, we are blessed to have Idaho Housing and Finance Association, a local non profit agency.  IHFA has a far reaching mission to promote home ownership and affordable housing in Idaho.

I have used IHFA on numerous occasions to get the best possible loan and interest rates for my Idaho mortgage clients.  there are times when an IHFA loan is not the best loan for my client, but I always check early in the process.  IHFA also services their loans afterwards.  That means my Idaho mortgage clients will get a statement from IHFA and make their monthly mortgage payment to IHFA.  They have a local office in Boise, Idaho where one can even make a payment in person.

In addition, they offer home buyer education, down payment assistance, and housing counseling for those facing financial difficulties after they buy a home.

If you are a first time home buyer or a repeat buyer, you might be well served by using an Idaho Housing and Finance Association mortgage loan program.

to learn more about IHFA mortgages, call me at 208-861-7579.

Don’t fall for that “too good to be true” interest rate offer!

I have the advantage of being in the industry and can see a misleading offer a mile a way.

Recently, I was shown an offer for a VA refinance at 2.25% (3.94%Apr) and had to dig into it.  Sure enough this national, Internet only, lender was offering a 3 year adjustable rate VA Loan.  Furthermore, it had a 1% origination fee plus at least 1% in discount points.  On a $150,000 loan that would be over $3000 in additional costs borrower would have to pay just to save about $75 a month instead of taking a 30 yr fixed rate in the low 3’s.  In today environment, it just doesn’t pencil out when you run the savings vs the cost and the projections for long term interest rates.

Now to be fair, I do have adjustable rate mortgages available to my Idaho Mortgage seekers, I just don’t think they are the best choice for most borrowers.  If someone just has to have the lowest rate and will tolerate the risk of an adjustable rate mortgage, then I guess I would write the loan for them after much disclosure of how much they are going to pay if the loan adjusts to its maximum over the life of the loan.

Many times online only lender use these advertisements to simply make the phone ring and then switch the borrower to a normal fixed rate loan once they find out that too good to be true rate is for an adjustable rate mortgage.  This is a classic case of “bait and switch.”

 

 

 

How does a VA refinance work?

If you have a Veteran’s Administration Loan, you may qualify for one of the best loan programs in existence today, the VA Interest Rate Reduction Refinance Loan.  This loan is also sometime referred to as a “VA Streamline” or IRRRL  (pronounced Earl.)

The VA IRRRL allows a Veteran or in some cases, the widow of a Veteran to refinance their loan into a lower rate or from an adjustable rate to a fixed rate without getting a new appraisal or providing a lot of new documentation.  The Veteran’s Administration doesn’t care about the present value of your loan, instead they are more concerned that you have been making your payments on time.  Most people in my area, Boise, Idaho have experience a loss of value in the housing crisis that hit us in 2007.  I have been successful in helping my clients get lower rates and payments even though their current market value is probably less than when they originally took out their VA Loan.

One thing to note about the VA IRRRL, it doesn’t let you obtain any extra cash out of your loan nor does it allow you to payoff a 2nd mortgage or Home Equity Line of Credit (HELOC.)  A Veteran home owner could take their extra mortgage payment savings and apply that to any second mortgage and accelerate the payoff.

It also requires a process called a subordination of the second mortgage where the second mortgage lender agrees to allow the new first mortgage.  Many times there is a fee from the second mortgage holder to do the agreement and it takes a week or two to get it done.  It is something we do as part of our service.  I advise my clients when seeking to refinance their Idaho VA Mortgage if they have a second mortgage that needs subordinating.

Currently in my market, Boise Idaho, we are refinancing VA Mortgages into new, lower rate loans in the 3’s.  We also have a No Cost VA Loan where for a slight increase in the mortgage rate, we obtain a large mortgage credit for our clients to offset their closings costs.  those No Cost Va Loans in Idaho are also in the 3’s for 30 yr fixed rate loans.

It is common for many of my past clients to call me up and have me run their numbers and see if another No Cost VA IRRRL is available.  If someone saves even $50 per month and they are not increasing their loan balance, it is like getting a free $50 or more per month.

There is not enough space here to go into all the details of getting a VA refinance in the Boise, Idaho.  should you have any questions or want me to look at your situation, call me at 208-861-7579 or simply shoot me an email and I can get your custom mortgage quote for you.

 

4 loan programs for “upside down” home owners

In my area, Boise Idaho, the home values jumped from 2004-2007 and as a result, many homeowners bought at the peak prices.  In 2012 interest rartes are much lower but most of those homeowners owe more than their home is worth.

The “upside down” homeowner may think that they cannot refinance and lower their mortgage payments, but there are options available right now.

1. VA Interest Rate Reduction Refinance Loan, or IRRRL:  If you ahve a VA loan,and have been current on your payment the last 12 months, then you may refinance your mortgage without having to get a new appraisal.

2.  FHA streamline refinance:  The same as the VA IRRRL, you may refinace into a lower rate without having to get a new appraisal.

3.  USDA  Rural Developement refinance:  This is a new program that was recently rolled out in a few test states.  It doesn’t require a new appraisal to get a lower interest rate.

4.  Home Affordale Refinace Program, or HARP:  If you ahve a Fannie Mae or Freddie Mac owned loan prior to 5/31/2009, you may refinance regardless of how far upside down your are.

Now with all of these programs, there are different requirements and features that are too numberous for one posting.  Some lenders hsve “overlays” on the programs that may add additional requirements to the basic loan progra.  for example, many lenders require some sort of appraisal on a VA IRRRL.  I have several, that follow the program’s guidelines of no new appraisal needed.

If you are talking to a mortgage lender and they dont have the no appraisal requirement, then call around until you find one who follows the intent of the program.  If you are in Idaho and need help with a FHA Streamline Refinance, VA IRRRL, or a Home Affordable Refinance Program loan, you can call me and I can help you lower your mortgage payment.

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