Tag Archives: Idaho Home Loans

Mortgage improvements and updates in 2017, My predictions…

 

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2017 will bring many new and exciting changes to the mortgage industry and those seeking a home loan.  Some are new programs and new sources for those programs, others are updates and changes to existing residential home loan programs.

These include:

FHA lower Mortgage Insurance premiums                                                              

Increased loan limits on Fannie Mae and Freddie Mac loans

New, affordable home buying programs for first time home buyers

Higher, maximum loan limits on Home Equity Conversion Loans (Reverse Mortgages)

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Some, others are more predictions, like:

Higher interest rates

An improving economy, or even the expectation of a better economy and consumer confidence will cause higher interest rates as investors demand a higher return for their money.  The rates we have seen the last few years were below market in an attempt to keep the economy from slipping back into a recession.

Continued home sellers market

This contributes to higher prices, although higher rates will eventually slow this down.

Housing shortages in some markets

Home buyers continue to move out of state for work or other reasons.  Our market in Boise, Idaho continues to benefit from the influx of out of state buyers moving here.

Tightening of the zero down payment options.

last year, Idaho Housing and Finance Association made several changes to their down payment assistance programs.  Still there are several zero down payment options available and ways to make it very little out of pocket.

With all the changes that happen in the market, it’s really important to get a local expert team working on your behalf.  That being said, I feel optimistic for home buyers and home owners seeking a home loan in 2017.

For more information or answers, contact me here at www.loansbyrogerhowell.com and I will be delighted to help you.

 

 

How to increase your credit score, FAST!

Outstanding credit card balances can impact a large portion of your total credit score.

Look at the available credit line vs what you owe.

If you have accounts that are being utilized over 50%, pay them down to under this amount.

If you are actually over the available balance, pay that down first.

The credit card companies usually report new data every month, and that will impact your next credit score when factored into the overall credit report.

 

Got a credit Question, ask below!

 

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.

 

 

I’ve recently changed jobs and get paid on comission, what can I qualify for?

I see this situation a lot.  It is usually a new Financial Advisor or Realtor and they are going from a job that paid them a salary or hourly wage and now they are a commissioned sales person.  This can be an issue when qualifying for a loan.

All the main loan programs today, Conventional, FHA, VA and USDA home loans require a borrowers income to be stable.  A borrower who is going to be paid on commission needs to have a two years history of being able to earn steady commission income.  That income is usually averaged for two years and the monthly average is the figure used to determine what they can qualify for.

On a side note, Self Employed individuals are treated the same way in regard to income calculation.  Both require us to submit 2 years tax return and average the income.

Even the stated income loans of the past didn’t allow for recent commissioned or self employment.  If you had just gotten your real estate license and wanted to qualify for a home loan, you had to go with the No Doc loan, where income, assets, and employment were not stated.  There were many companies willing to do those loans, albeit at a higher rate and larger down payment.

My advice for anyone considering a new career where you are going to be paid on commission is to maybe get the home first before making a career change.  Another option is to continue to work your old job and keep a steady income and do the commissioned job part-time or after hours.  This can be hard but you’ll make extra money and still qualify for the home loan.

 

 

 

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.

 

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