Mortgage Lender Atlanta

Get a No Closing Cost Loan in Georgia

Jim Duffy — Mon, 23 Aug 2010 20:40:08 +0000

We are in the middle of a refinance boom – which we all know. At least, hearing the news at all or turn on the radio, and we know it.

The biggest obstacle I hear from homeowners to refinancing is that the closing costs are so high. And they are…unless you structure your loan the right way.

Here are your options, based on a Good Faith Estimate that I did for a borrower last week. A $250,000 loan is what we were preparing to refinance. And here are the options that I gave him for a 30 year fixed rate:

4.25% with $5,300 in closing costs (including one percent origination, or $2500)
4.50% with $2,800 in closing costs, or
4.75% with No Closing Costs

You see, one thing is the “market” rate, which currently has been floating between 4.125% and 4.375% for a 30 year fixed rate loan. However, that is quoted with the higher closing costs. As the rate increases, lenders make what we term “Yield Spread” or the cost differential between market rate and the quoted rate, which we can use to pay all the borrower’s closing costs, and still make our profit.

Most borrowers who are planning on staying in the property for some time tend to opt for the middle option, the lower closing costs, balanced with a still quite low interest rate.

What makes sense for you? I can give guidance there based on your current situation and goals; but only you can ultimately make that decision.

Now You Can Get Mortgage Updates on the Radio

Jim Duffy — Fri, 20 Aug 2010 18:45:35 +0000

Every Saturday, from 12noon-2pm, I will be on the John Adams Radio Show providing mortgage news updates.

You can tune in, if you are out and about on a Saturday afternoon, on WGKA 920 AM.

It is a lot of fun, and a good time being on the radio; especially now when changes are coming fast and furious in the mortgage and housing arena. It makes for a lot to talk about, and a lot of good callers with some very intelligent questions.

I hope that you will tune in this Saturday – and call in with your question as well!

Bernanke Announces More MBS Buying = Lower Rates

Jim Duffy — Tue, 10 Aug 2010 21:35:55 +0000

Image via Wikipedia

Today the Federal Reserve announced that they would buy more Mortgage Backed Securities (MBS); those bonds that dictate the direction of interest rates.

And with that, bond investors jumped high and clicked their heels with joy…and mortgage rates fell.

Good news for Atlanta home buyers, for sure. Things just keep getting better for those looking to buy a home right now. Low prices, plenty of inventory, and now, officially, the lowest mortgage rates in history.

Proposed FHA Changes Will Increase Homeownership Costs

Jim Duffy — Sun, 08 Aug 2010 21:36:12 +0000

Congress has voted on a proposal to increase the cost of FHA mortgage insurance on a monthly basis. This change will decrease the Up Front Mortgage Insurance premiums, while increasing the monthly borrower paid Mortgage Insurance, based on a tiered cost, depending on the loan amount.

This short video explains the changes:

So, Atlanta FHA loans are set to increase for new loans with case numbers issued after September 7. Be prepared as you make plans to buy a new home with FHA financing; and plan accordingly.

Aug. 10 UPDATE: HUD announced today that the Mortgage Insurance Premium changes will take effect for new case numbers issued on or after October 4, not on September 7 as originally announced.

Purchase Loans Apps Down – Opportunity Buying Now

Jim Duffy — Thu, 05 Aug 2010 20:46:32 +0000

Below is a graph of the number of purchase mortgage loan applications taken each month. Notice what all of us in the industry have felt, that things have really fallen off since the expiration of the tax credit.

The good news if you are in the market for a home is that sellers are feeling it, too. After some time here where things have been uncharacteristically slow, sellers will be more likely to negotiate right now. And with Georgia mortgage rates this low still, now is certainly the time to put in an offer.

New Licensing Requirements for Georgia Loan Officers

Jim Duffy — Wed, 04 Aug 2010 15:15:07 +0000

Here is an interesting piece on the licensing requirements that I had to pass – but bank loan officers do not. I and my fellow non-bank loan officers had 20 hours of classroom work, then had to study for and pass a Georgia State test and a National Mortgage licensing exam, along with passing a criminal background check and a credit check.

What do you think about bank employees being exempt from all testing requirements? Comments are open below.

Here’s a New Trend: Cash-In Refinances

Jim Duffy — Tue, 03 Aug 2010 13:18:58 +0000

An interesting bit of information was released by Freddie Mac last week tracking the refinancing trends. Specifically that 22% of homeowners who refinanced actually brought money to the table to reduce their principle balances.

Anecdotally, I have been seeing the same trend – Atlanta homeowners are refinancing and either paying off a second mortgage while reducing their interest on the first mortgage; or at least bringing the money to the table to set up the new escrow account, then waiting on the refund of their current escrow account to arrive. In the past it was much more commonplace to roll the new escrow account funds into the new loan.

Certainly there exist legitimate reasons to do a cash-out refinance. But absent those, the cash-in refinance is safe. I speak with a lot of metro Atlanta homeowners whose view of homeownership is shifting. It used to be common to view the home as an asset, one that should appreciate and should be leveraged. Now the shift is to view the home as security for the family, and something that should be paid off quickly.

I must say, I like that trend. I am all in favor of leveraging investment property, balancing the leverage with positive cash flow. But the home…well, that is where memories are made and families grow, safe and secure. There are plenty of other, more suitable investment vehicles.

USDA Loans Coming Back to Georgia

Jim Duffy — Thu, 29 Jul 2010 21:05:24 +0000

Georgia is about to see a very good and welcome loan program come back – USDA home loans.

USDA Rural Housing loans are about the only option for 100% financing, but this year the program was so popular that the government agency ran out of funding quite early in the year. But, a bill has passed Congress and will be signed soon by the president that authorizes more funding.

The details appeared in on the WSJ blog, and my friend, Sue, who is a loan officer in Florida was quoted.

The Funding Fee will rise from 2% to 3.5%. That is the fee normally rolled into the loan that insures the loan, much like PMI insures a conventional high Loan-to-Value mortgage. Otherwise, everything else remains the same on these deals – the property being purchases must be considered ‘rural’, and the household income cannot exceed 115% of the county median income.

Where income is concerned, just call me if you are interested in applying for a USDA loan in Georgia, since it is easier to look the medians and exceptions than to calculate it.

So, good news for homeowners buying outside the metro areas – USDA loans are back as a financing option.

Georgia Refinance Out of A.R.M.s

Jim Duffy — Tue, 27 Jul 2010 14:47:35 +0000

I have spoken to a few people recently who are in adjustable rate mortgages who were interested in refinancing, until they got “that” notice in the mail, that on their first adjustment, their interest rate was about to drop. That’s right, their dreaded adjustable rate mortgage was about to go down in rate.

Wow. Who knew? Happy days.

But to stay in that ARM right now is not a good idea. Here’s why:

Your ARM is probably tied to the LIBOR index. When it adjusts, the fixed Margin (say, 2.25 or so) is added to the Index to produce your new rate. So, right now, ARM’s are in good shape. As they adjust, they are all going down.

Look at the very end of that chart. We are now seeing an uptick in the LIBOR after a very long down-trend. So this year when your ARM adjusts, you will see rates drop. And if the LIBOR rises slowly and steadily, then next year you will see your rate rise a little, but possibly not even to the original start rate that you locked at when you took on the loan.

But the year after that…well, just add a Margin of 2.25 to the LIBOR where it was in early 2006, at nearly 6%. That would be a rate of 8.25% for the following year. Ouch!

And as short term rates such as the LIBOR march upward, long term rates – read 30 year fixed rates – will have to move upward as well. At that point, it will be too late to refinance with the savings you could realize by fixing your rate now.

So, if you are in an ARM that will adjust soon, here’s what I would do:

If you plan on selling and moving in the next two years, then stay put, keep your ARM, and enjoy the low rate.
If, on the other hand, you are sure you will move in the next 5-7 years, then I would definitely refinance now, and would highly consider another 5- or 7-year ARM. Fix the rate in during that period of time in the 3′s. Or, a fixed rate in the 4′s if you have any doubt about the time-frame for moving.
However, if this is your home, and you are staying and paying it off, then hands down I would lock in a fixed rate in the 4′s right now, and never look back.

So, don’t be lulled by short term low rates. Think of the bigger picture and pull the trigger, if it needs to be pulled.

Strategies from a Top Short Sale Buyer Agent and a Lender

Jim Duffy — Sun, 25 Jul 2010 20:16:57 +0000

Short sales are all over the news these days, just behind the reports on the record number of foreclosures. And, a lot of homeowners are either severely under water on their mortgages - owing more than the home will sell for and do not have the funds to make up the difference – or are in economic woes themselves due to job loss or any number of other of life’s difficulties.

Yet, they do not want to just walk away, or turn in the keys. Simple honor prevents these homeowners from just walking away; so they turn to the relatively new phenomenon of the short sale. That is, the lender agrees to take less for the home than the mortgage balance on that home, as payment in full.

And that creates a potentially terrific buying opportunity to get a great deal on a home, and help out a homeowner in need.

Having been the lender on quite a number of short sale purchases over the past couple of years, I can offer some advice for a buyer who is considering putting an offer on a home that is offered as a short sale. And the very first piece of advice I would give is to choose your Realtor well. Sure, that goes for all real estate transactions. But with a short sale, it is vitally important.

You may not realize, but most real estate agents do not like to work with short sales. I sat down with one who does, Joshua Jarvis. In fact, Joshua successfully navigates the short sale process for buyers more than nearly any other agent in north metro Atlanta. And he sure had a lot of advice.

So, between the two of us, here are the top strategies to do when buying a short sale property:

Short sales take time and require patience: So make sure you choose an agent who is experienced in short sales and can therefore manage expectations along the long road.
Most banks will pay a maximum of 3% toward the seller closing costs; HUD will only pay 1% however. Plan accordingly for cash to close.
Most banks will only entertain a short sale on a property when the homeowner is 30 to 60 days behind on their mortgage.
Given that, it generally takes a minimum of 90 days from offer to closing. Again, patience will help this transaction succeed.
The due diligence time for inspections, etc, begins once the lender approves the short sale. No sense shelling out for inspectors until the lender gives the go-ahead.
And, possibly most important – get your loan approved early. There is nothing worse for all parties than going through the grueling process of getting a short sale approved, only to find that the buyer does not qualify for the mortgage. Don’t get pre-approved. Get fully approved, early.

So, with the right lender and the right agent, venture out with confidence and put an offer on a short sale property. With patience, you really could get the deal…of a lifetime.

No related posts.