January 21st, 2010
An HO-6 policy is the form used for a condominium insurance policy. This condo policy will provide for coverage on the interior walls, interior upgrades, and for personal property held within the dwelling.
How does this apply to mortgage finance? In 24 years of mortgage banking, I have never even heard of HO6 insurance. And that is because when underwriting a condo loan, the banks only cared to see that the dwelling was insured in case of damage. And in a condo, part of condo fees go towards the master umbrella policy, so the unit owner usually does not concern himself with getting dwelling coverage, because the master policy covers the reconstruction of their unit. But now, banks have new HO6 rules. This changed in the middle of 2009, and I have done 30-40 condo loans since then, and am just finding out now! Read the rest of this entry »
Tags: condo insurance
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January 19th, 2010
Interest rates remain low, and have been low, for years it seems like. Although a consumer may complain about getting 5.625% instead of 4.875%, rates have been in a very tight range for quite a long time. We have not had a rate with a ‘6′ in front of it for years. And I can remember when 6% was thought to be a very low rate!
Of course, the whole discussion of rates has to incorporate the price of what one is financing. Read the rest of this entry »
Tags: Interest rates low
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January 12th, 2010
The statement that all real estate is local is shown to be true by taking a look at the Washington DC real estate market. This is the market I work the most in mortgage business, and I see the data first hand. Real estate prices seem to be holding up except for a few pockets in some neighborhoods on the edge. Condo sales, as an example, are way up, a 34% increase for 2009! Read the rest of this entry »
Tags: washington dc real estate2
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January 7th, 2010
This blog post will definitely be educational, and does have a specific topic. However, it will end up sounding like more of a rant than anything! The topic for today’s blog post is a loan program called the “Refinance Plus.”
The Refinance Plus allows people to refinance who have less equity than when they bought the home. There are numerous guidelines that I will not bore you with, as I want to focus my rant/blog on one specific area of this loan program. Read the rest of this entry »
Tags: Refinance Plus
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January 5th, 2010
When you decide to sell your home you usually think you have a fairly good idea of what its worth, after all, you live in the neighborhood! Most of us schedule appointments with three local listing agents who we know, or we have been referred to, or maybe we have been getting their marketing material in the mail. Usually each Realtor will recommend a different sales price. Sometimes those prices are close together, but usually there is one or more Realtors who give you a much higher number, that excites you, and seems to agree with what you thought your place was worth. But, if this is the case, how is it that most homes seem to sit on the market for a long time, and end up getting the price dropped one or many times? Is it just due to a slow market? But even in a slow market won’t just about anything sell if its priced right? The problem is most of us are convinced our house is worth more than all of our neighbors, for varied reasons. Read the rest of this entry »
Tags: realtor
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December 31st, 2009
Happy new year to all! I want to close out the year 2009 with a few short thoughts and favorite quotes from people far smarter than me:
1. Never act on emotion, unless love is involved.
2. Get information from more than one source, and consider the source.
3. Buy a house as if you will live there a long time, you just may.
4. Big government has never solved any problem, big government only creates problems. Before the Civil War government in America was the highly decentralized, limited government established by the founding fathers. The Civil War (and further the New Deal) created the highly centralized state that America labors under today. The purpose of government was transformed from the defense of the individual, to the quest for an empire. Read the rest of this entry »
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December 26th, 2009
Should I Buy Now And Avoid Higher Interest Rates?
This is a common question I get. Potential home buyers will worry that rates are going to spike, after all, “how long can they stay this low,” goes the logic. So some buyers assume they should buy now, at any price, and avoid a future rate increase. I am not sure how long rates can stay low, they have been low for almost two decades in Japan! But, I thought for fun, we’d look at some different numbers. Keep in mind the below are based off of broad assumptions of my own:
Buying a three bedroom house today, in the Washington DC Metro area in a good neighborhood, let’s assume costs $700,000. Further, let’s say the buyer is ecstatic to get a rate of 4.875% on a 30 Year Fixed Rate mortgage, and that they have a 20% down payment. Should the buyer be ecstatic? Read the rest of this entry »
Tags: real estate prices
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December 14th, 2009
The FHA is reeling from rising defaults in its mortgage business. By law the agency must set aside 2% cash to deal with unexpected losses. As of September 30, those reserves had dropped from almost $13 billion to just over $3.6 billion. This total represents only one-half of one percent of all outstanding single-family-home loans insured by the FHA, the first time since 1994 that it has been this low. Read the rest of this entry »
Tags: FHA rule changes
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December 11th, 2009
Debt ratios are what banks use to qualify a mortgage borrower. Your debt ratio is what percentage of your gross income a bank will allow you to spend on a new mortgage and your existing debts.
The debts that a bank will count against you are car loans, student loans, credit card debt, the new mortgage you are qualifying for, and any other mortgage debt you may have. They do not count debts like auto insurance, utilities, cell phone bills, etc.
Fannie Mae is currently dropping there maximum debt ratio Read the rest of this entry »
Tags: debt ratios
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December 7th, 2009
Just when everyone thought rates were on a straight trend line pointing down! A few days ago, on Friday, December 4, 2009, there was a fairly bullish jobs report. Bond yields jumped up, hence, interest rates rose a bit. For a few days, I was locking-in clients interest rates at 4.75% with zero points on a 30 year fixed-rate conforming loan (which is a loan that is equal to $417,000 or less). Read the rest of this entry »
Tags: interest rates2
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