Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

Jump back to January of 2008.  If you had a middle credit score of 700 and a loan-to-value ratio of 80% or under, you would qualify for the very best mortgage rate.  You were perfect!

Not anymore.

By April of 2008, Fannie Mae and Freddie Mac imposed Loan Level Pricing Adjustments (read…Penalties) for credit scores below 740 and LTVs over 60%.

There are also additional Pricing Adjustments imposed on Cash-Out loans (when more than one mortgage is being refinanced or cash is being taken out of a refinance).

Mortgage rates are advertised based on the “perfect” customer in a “perfect” scenario.  Don’t be surprised if you are offered a mortgage rate that is higher than advertised rates if your credit score or loan scenario doesn’t fit the “perfect” model. 

Posted by Mike Owens Partner/Mortgage Planner with Horizon Financial. Inc.  You can reach Mike at MOwens@HorizonFinancial.org or at (864) 907-2678

The good thing about closing costs is that they’re negotiable, in some respects.  You can’t avoid paying underwriting fees or taxes to the government, for example, but you can arrange to have loan costs paid on your behalf.

It’s called a “zero-cost mortgage”.

A zero-cost mortgage is exactly what it sounds like — it’s a mortgage in which all closing costs are paid by the lender instead of the borrower. Loan sizes don’t increase and nothing is “rolled in”.  It’s a true no-cost loan.  However, there is a trade-off.  In order to have your closing costs waived in full, you’ll be asked to accept a higher mortgage rate than the “market” rate.

For larger loan sizes, the bump to interest rate is usually about a quarter-percent; for smaller sizes, it’s about a half.

Zero-cost mortgages are excellent in a falling interest rate environment because they limit  costs to zero, and because they offer an immediate payback.  Not every bank or lender will offer them, though.  Horizon Financial, Inc. does.

If you’d like to see the math on a zero-cost mortgage,  call or email me. I’m happy to talk to you about it.

Posted by Bob Dangelo, a senior Loan Officer with over 20 years mortgage lending experience.  You can reach Bob toll free at Horizon Financial (877) 627-9211 ext 110 in Greenville, SC    864-527-8900 ext 110 or email at bdangelo@horizonfinancial.org.

Adjustable rate mortgages or ARMs can be a wonderful mortgage tool or they can be downright ugly.

ARMs typically come in flavors such as the 3/1, 5/1, 7/1 or 10/1.  The first number is the number of years that the initial interest rate is fixed.  The second number means that after the initial fixed rate period ends, the interest rate can change once a year.

ARMs have caps, typically 5/2/5.  The first number means that the interest rate can go up 5% in the first adjustment after the fixed rate period.  The second number means that the interest rate can go up a maximum of 2% per year after the initial adjustment.  The third number means that the interest rate can only go as high as 5% over the initial fixed rate.

So, if you have a 5/1 ARM with 5/2/5 caps and an initial fixed rate of 4%, the interest rate could go up to 9% at the very first adjustment after 5 years.  But if the ARM rate only went up to 6% after the first adjustment, the rate could only increase by 2% in the second adjustment to 8%. And the rate could never go above 9%.

ARMs can be a great mortgage tool if you are planning to pay off your mortgage or move within the fixed rate time frame.  Rates on 5/1 ARMs are below 4% at this moment.

If you are not planning to move or pay off your mortgage within the fixed rate time frame, ARMs can pose a big risk.  With the U.S. Government spending money as fast as they can print it, mortgage rates are going to go up in the near future.  And rates are probably going to go up dramatically.  If you are in an adjustable rate mortgage and are not planning to move or pay off the mortgage, it would probably be wise to refinance into a fixed rate mortgage while rates are low.

And now for the ugly.  If you have an Option ARM and have been paying the minimum payment, you probably have a negative amortization loan, meaning that the amount of principle that you owe is increasing every month.  You are either underwater or sinking fast.  Refinance if you can, as soon as you can.  

Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

Having chosen South Carolina as your home, you’re now ready to find the cheapest first, second, or refinance mortgage rates available. The process of finding and comparing low-cost mortgages can be summarized into the following steps:

• Learn the options.
• Know the rates of interest.
• Determine your budget.
• Collect quotes.
• Compare your offers.

Horizon Financial is here to help. Our content is informative, and our information is accurate. You can request free quotes online, crunch numbers on the mortgage calculators, or calling Horizon Financial directly.  Take advantage by using our thorough South Carolina broker/lender mortgage loan programs knowledge to get the mortgage loan that is right for your situation.  Whether you are just starting to research or have a written offer on your dream home, we have Conventional, FHA, VA & USDA Rural Housing expects ready to assist with your hassle free options.

Posted by Bob Dangelo, a senior Loan Officer with over 20 years mortgage lending experience.  You can reach Bob toll free at Horizon Financial (877) 627-9211 ext 110 in Greenville, SC 864-527-8900 ext 1100 or email at bdangelo@horizonfinancial.org

The reason Fannie Mae has started its Loan Quality Initiative is to improve its loan pool’s performance.    

Better loan quality should help keep conforming mortgage rates down, while reducing the taxpayer’s burden for foreclosures. Unfortunately, it’s also going to lead to more mortgage denials and a lot of busted purchase closings. Therefore, be extra careful with your credit between the date of application and the date of closing. If you must buy something “big”, consider paying cash.  Anything that goes on a card can be used against you as grounds for revoking your approval. Even if your loan is underwritten and ready to close.   

What the bank will do: Look at the Credit Inquiry section of your credit report to look for “non-disclosed liabilities”. If items are found, the bank will ask for supporting documentation on the inquiry, and will use the information to re-underwrite your mortgage.

What you should do about it: Don’t go looking for new credit until after your loan is funded.  Period.  Now re-read the prior sentence, please, to help it sink it.

 For help with your mortgage approval, or questions about the Loan Quality Initiative, let us explain your options in easy terms.

Posted by Bob Dangelo, a senior Loan Officer with over 20 years mortgage lending experience.  You can reach Bob at Horizon Financial (877) 627-9211 ext 110 or email at bdangelo@horizonfinancial.org.

God Bless Our Troops And Veterans!

Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

In the past year the government has enacted several new rules to protect consumers and stop appraisal coercion by evil bankers and brokers.

HVCC (the appraisal code of conduct) has already forced many experienced and qualified appraisers out of the business.  It has also helped to propel home values lower by allowing Appraisal Management Companies to seek out the cheapest appraiser (inexperienced, out of area appraisers who have no knowledge of the local market) so they can fatten their profits.

The new Good Faith Estimate has certainly helped to confuse more consumers when they try to compare financing charges for purchasing or refinancing a home.

Of course, the lenders and regulatory agencies (Fannie, Freddie, FHA) have helped too by tightening up on their financial requirements to purchase or refinance.

All this consumer assistance hasn’t been totally successful.  Consumers are still slipping through the cracks.

WILY, CUNNING AND DETERMINED CONSUMERS ARE STILL MANAGING TO PURCHASE OR REFINANCE HOMES AT EXTREMELY LOW MORTGAGE RATES!  THIS IS TOTALLY UNACCEPTABLE!

If the government really wants to help consumers, they could force everyone who wants to purchase or refinance a home to take a two month training course so that the consumer clearly understands how the government has helped them.  Consumers should have to pay for this training and a final test.  The training and test money could be used as a much needed income stream for further government housing assistance.

The government could get Homeland Security involved as well.  By requiring all consumers to provide fingerprints and hair follicle samples we might well prevent a covert terrorist cell from purchasing a safe house. And if Homeland Security coordinated with the local DMVs to collect unpaid traffic/parking tickets from consumers attempting to purchase or refinance, another income stream would be generated so that local politicians could go on more Global Warming junkets to exotic places.

Lenders and regulatory agencies could also assist consumers by demanding more skin in the game.  Instead of a 20% down payment, how about a 50% down payment?

I’m confident that, working together, we can force all of the greedy and diabolical loan officers, appraisers, inspectors, real estate attorneys, homeowners insurance agents, etc, out of the financing business once and for all.  We can shut down the housing industry altogether.  All we need is a little more “HELP”.

Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

http://forecasts.org/fha.htm

-Gary Schoenholz (864)979-1111.  15+ Years of mortgage experience. Website:  www.GarytheMortgageExpert.com