Category Archives: Refinancing

Now that Gay Marriage is Legal, What Does it Mean for the Mortgage Market?

On June 26, 2015, the U.S. Supreme Court handed down its ruling on the case of Obergefell v. Hodges.  This ruling gave gays and lesbians the right to marry in all states and struck down all current gay marriage bans.  While we may not realize exactly how this ruling affected the country for a few years, experts are already anticipating changes in a number of industries.  Those in the real estate industry have a few predictions for how same-sex marriage will affect the mortgage market.

CoupleMore Same-Sex Couples will be House Hunting

Gay and lesbian real estate agents have been helping LGBT couples find and purchase their dream homes for years.  Now that same-sex marriage is legal, many expect the number of gay and lesbian couples searching for a home to increase.  Newlyweds may want to jettison everything from their single lives, including their individual homes, now that they can legally create a life together.  This means that more houses are going to sell, and the number of mortgages is going to increase.

More Couples May Qualify for Mortgages

Some experts are going back and forth on this, but overall, most agree that married same-sex couples are likely to have a better chance at qualifying for a mortgage, which means lenders will be making more mortgages.  This is because when married couples apply for a mortgage, they’re considered as one unit.  The low income or bad credit of one can be counterbalanced by the higher income or better credit of the other.  When two people apply for a mortgage jointly as individuals, this isn’t always the case.  Of course, bad credit can still hurt a married couple, but it’s not necessarily going to deny them the mortgage.

More Refinancing

The mortgage market can also expect to see a surge in refinancing soon.  There are a couple of reasons that many predict this will happen.  First, now that they’re married, many couples will want to jointly own their property and share the responsibility.  This means putting both spouses on the mortgage, and that requires refinancing.  Second, as mentioned above, as a married couple, they may have a chance of getting better mortgage terms than they would have or did have when applying jointly as individuals.  Savvy newlyweds may be able to take advantage of lower interest rates and other savings by refinancing their home.  What better way to start their married life together than by lowering their house payment?

Gay Real Estate and the 15 Year Mortgage

Although 30-year fixed rate mortgages were the standard choice in the past, today lenders offer loans of varying lengths. Fixed rate mortgages are home loans where the interest rate remains the same throughout the life of the loan. Following are some advantages and disadvantages related to gay real estate and the 15 year fixed rate mortgage.

Benefits

images1. You will save money by paying less interest over the life of the loan. For example, a $100,000 loan at 8 percent interest for 30 years with a monthly payment of $734 adds up to $264,240, while a 15 year loan on those same terms results in a monthly payment of $956 and adds up to $172,080. The 15 year loan results in a savings of $92,160.

2. You may save money in interest. Many lenders charge lower interest rates on a 15 year loan than for longer term loans. For example, on the 30 year loan referenced above.

3. Your equity in the home builds up much faster than with a longer term loan. Equity is the difference between your home’s value and the amount that is owed on the mortgage. For example, if your home is valued at $150,000 and you owe $100,000 on your mortgage, your equity is $50,000.

4. You will own your home free and clear in a much shorter time. This may be very beneficial if you plan to retire in 15 or 20 years and do not want to worry about making a mortgage payment.

Disadvantages

1. Your monthly payment will be higher than for a longer term loan.

2. Since the amount of interest you pay over the life of a 15 year loan will more than likely be less than it would be for a longer term loan, you will have less of a mortgage interest tax deduction every year.

3. The higher monthly payments could be a disadvantage if one of you suffers a loss of income or unexpected expenses.

There are other aspects to obtaining mortgage loans that could save you money including mortgage discount points. These points can be purchased and paid for at closing. In return, you will pay a lower interest rate on your mortgage. The amount varies depending on the lender.

If you are considering a 15 year mortgage, you should consult with your lender to find out your options. The Federal government and each state have enacted laws that apply to mortgage loans. It would be wise to consult with a local LGBT friendly realtor or attorney to review your mortgage loan agreement before signing on the dotted line. Any of the gay realtors at GayRealEstate.com can assist you in referring you to lenders who are gay/gay friendly, and may give you the best options. We hope that this article has helped you understand a little about the 15 year mortgage.

Buying a Home When One Partner Has Bad Credit

Because both of your credit scores will be used by the lender when you apply for a mortgage together, one partner with bad credit could result in denial of your loan application or an offer to lend with a higher interest rate. Following are some tips for dealing with bad credit when buying a home with your partner.

download1. Under the Federal Fair Credit Reporting Act, FCRA, nationwide credit reporting agencies must provide individuals with a free copy of their credit report once every 12 months. Those agencies include Equifax, Experian and Transunion. Both of you should obtain copies of your reports and review them to ensure that they are complete, accurate and up to date before you apply for a mortgage.

According to the FCRA, both the agencies and the entity providing the information are    responsible for correcting incomplete and inaccurate information on your report. If you find inaccurate or missing information, you should let the reporting agency know what information is inaccurate. The agency will then conduct an investigation by notifying the information provider that will, in turn, complete an investigation and report back to the reporting agency. You will receive a written copy of the results of the investigation and, if it results in changes to your credit report, a free copy of your credit report. That report does not count against your once every 12 months free report.

2. If your partner’s credit report is accurate and complete, you should explain the reason for the bad report to your potential lender. For example, reduced income as a result of unemployment, illness or other unexpected events that occurred. This may make them more willing to work with you.

3. Lenders may feel more comfortable giving you a mortgage loan if you pay a larger amount of money for your down payment, generally more than 20 percent. This may make the lender more comfortable about getting the house back if there is a need to foreclose.

4. Consider delaying the purchase of a home until the partner with bad credit has improved his credit. According to the New York Times, correcting any credit report errors, paying all bills on time for at least a year and paying down credit card balances is a good way to raise your credit score.

Mortgage lenders look at your credit report, your income, your debt to income ratio as well as the condition of the home and its current market value when making a decision to approve your loan. It is possible that, once all factors are considered, the lender would be willing to finance your home for you.

The first step in purchasing a new home is to speak with a local LGBT real estate agent at www.GayRealEstate.com. He/she will have the knowledge to assist you through the process, including referring you to the appropriate lenders.

Home Purchase Mortgage Terms Explained

Buying a home can be a stressful, confusing process ~ knowledge is power, and when it comes time to start interviewing mortgage lenders it will help to have the basics of the “business terminology” under your belt!

Mortgage  InterestHere’s a few terms that you should be familiar with;

 

APR

APR means annual percentage rate. Each time a mortgage lender quotes a mortgage rate, the loan’s APR has to be disclosed as well. The stated rate is used for monthly payment calculations; however it doesn’t prove anything concerning the cost of financing. APR will assist a lot in comparing the mortgages that have different rates and costs.

LTV

LTV stands for loan-to-value, which is a percentage of the homes selling price or appraised value (whichever is lower) that’s being financed. Loans that have a lower LTV are safer for lenders and they normally come with reduced mortgage rates.

ARM

This is the short form for adjustable rate mortgage. Unlike FRMs (Fixed-rate mortgages), ARMs have varying interest rates over time. ARM loans have rates that vary with economic conditions… most home buyers feel more secure with a fixed rate mortgage.

TIL

TTL stands for truth-in-lending. TIL will disclose your APR, which shows the cost of your mortgage in terms of investment rates and this allows easier comparison amongst other programs with varying rates and fees. The other thing is that it can give you the credit cost of the loan over the loan period and it can tell you when your payments are due and the amount to pay.

GFE

GFE stands for your good faith estimate. It shows the costs of your mortgage. Each time you apply for a home loan, the lenders need to provide a GFE for you within three business days. According to law, the real cost upon the closure of your home loan must be equivalent to what was disclosed within specific margins. Some of the information that the GFE has include;

  • Summary of your settlement charges
  • Adjusted origination charges
  • Escrow account information
  • Total estimated settlement charges.
  • Charges for All Other Settlement Services.

DTI

This stands for debt-to-income ratio. A DTI is calculated in two forms if your mortgage underwrites the evaluation of your application. The first form is known as your front-end or top-end ratio, and this represents your housing expenses divided by gross income (before taxation). The other form is called the back-end or bottom end ration. This is considered as the most important number; it would mean dividing monthly obligations (for example, car payment, credit cards, housing expenses and student loan payment) by your gross income.

If you are able to internalize the terms used before searching for a home loan, you will be more comfortable when talking to home lenders.

Posted on December 12, 2013 in Home Buying, Loans, Mortgages, Refinancing

HARP Program Extended Another 2 Years

The Home Affordable Refinance Program — a government refinancing program for underwater home owners — will be expanded for another two years, the Federal Housing Finance Agency announces. HARP was originally set to expire Dec. 31, 2013, but will now be extended to the end of 2015.

“More than 2 million home owners have refinanced through HARP, proving it a useful tool for reducing risk,” says FHFA acting director Edward DeMarco.

Home owners eligible to apply for refinancing under HARP must have a Fannie Mae- or Freddie Mac-backed mortgage that was guaranteed on or before May 31, 2009, must be current on their loan, and must have a current loan-to-value ratio more than 80 percent.

The author of this article is: realtormag.realtor.org

 See the original post at: http://realtormag.realtor.org/daily-news/2013/04/12/harp-program-extended-another-2-years

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.

If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at: manager@gayrealestate.com

Posted on April 12, 2013 in Refinancing

HARP Refinancing Continues to Surge

About a third of all Fannie Mae and Freddie Mac loans refinanced in June went through the recently revamped Home Affordable Refinancing Program (HARP). That’s up from a 20 percent share in April.

Additionally, the number of HARP refinancing deals with high loan-to-value (LTV) ratios went up substantially. According to Mortgage News Daily, changes to the previous HARP program, such as removing the 125 percent LTV ceiling and eliminating fees, seem to be driving increased participation.

Freddie and Fannie refinanced 382,539 loans in June, 125,866 of which were though HARP. The total number of loans written under the restructured HARP in the first six months of this year totaled 422,969, exceeding the 400,024 written during 2011.

 

The author of this article is: realtormag.realtor.org

 See the original post at: http://realtormag.realtor.org/daily-news/2012/08/09/harp-refinancing-continues-surge

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

         Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.


If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at:
manager@gayrealestate.com

Posted on August 9, 2012 in Refinancing

Loan Applications for Refinancing Surge

Mortgage applications for refinancing soared to its highest level in three years, the Mortgage Bankers Association reported Wednesday in its weekly survey. Record low interest rates are prompting more home owners to try to lock in savings to their monthly mortgage bills.

Overall mortgage applications — which includes those for refinancings and for home purchases — inched up last week by 0.2 percent. The increase was driven by the surge in refinancings, which rose 0.8 percent from last week and was at its highest level since April 2009.

Meanwhile, mortgage applications for home purchases — often viewed as a gauge for future home buying — dropped 2 percent compared to the prior week, MBA reported. Stricter lending requirements may still be keeping some potential home buyers from taking advantage of low mortgage rates, according to housing experts.

 

The author of this article is: realtormag.realtor.org

 See the original post at: http://realtormag.realtor.org/daily-news/2012/08/01/loan-applications-for-refinancing-surge

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

         Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.


If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at:
manager@gayrealestate.com

Posted on August 1, 2012 in Refinancing

Senate Republicans may be on board with more HARP expansions

Senate Republicans are considering some Democrat proposals to expand refinancing to even more Fannie Mae and Freddie Mac borrowers.

The Federal Housing Finance Agency expanded HARP last fall to reduce upfront fees, eliminate a cap on negative equity and reduce some repurchase risk for servicers of the original home loan to allow for more refinancings. Major banks finished installing the program in March, but a major refinancing surge remains elusive.

The Senate Banking Committee held a hearing Thursday on a bill from Sens. Robert Menendez, D-N.J. and Barbara Boxer, D-Calif., to expand the Home Affordable Refinance Program. The bill would allow a new servicer of the loan avoid repurchase and warranty risk from the government-sponsored enterprises and extend the program to cover loans originated prior to June 2010 instead of June 2009.

Between 3 million and 4 million GSE borrowers are underwater, but to date, 1.2 million refinanced through HARP, and only 100,000 of them had loan-to-value ratios above 105%, according to Mark Zandi, chief economist at Moody’s Analytics. The housing analytics firm Zillow ($39.75 -0.52%) released a report Thursday suggesting that the negative equity problem might be larger than originally thought.

While the Menendez-Boxer ideas have been floating around for some time, some parts of the bill at least garnered support from opposing Republicans Thursday, suggesting that a gridlocked Senate may be nearing a compromise.

“I’m open to this. I hope that we’ll have a real mark-up on this bill,” said Sen. Bob Corker, R-Tenn.

However, Corker expressed some concern about allowing borrowers to refinance through the program multiple times. He also signaled opposition to expanding the eligibility date to June 2010.

“There’s been an unwritten rule that … we would not fiddle with things beyond June of 2009,” Corker said.

Zandi, a proponent of the bill, agreed.

“Between June 2009 and June 2010 there were already low rates, and I don’t think you’re giving up a lot of refinances if you keep the date where it is,” he said.

Increasing competition for an expanded HARP seemed to get the most support. Roughly 70% of GSE loans are serviced by the largest banks. Under the expanded program, the original servicer is required to underwrite a new loan to GSE guidelines. Instead, it must only verify a reliable source of income.

If a borrower goes to a new servicer for a HARP refi, the new bank must meet GSE underwriting guidelines for a new loan, thus making it more exposed to buy back the loan should it default.

“We need to inject competition into a market where the largest servicers have an unfair monopoly,” Menendez said at the hearing.

But so much business going to these firms is also slowing down the program.

“They simply can’t ramp up platforms and hire people fast enough to help the millions of homeowners eligible,” said Bill Emerson, CEO of Quicken Loans, which could see a wave of new business if the restrictions are lifted for new servicers. “This results in higher prices for new HARP 2.0 mortgages than otherwise would have existed. Simply implementing more competition could help million of underwater borrowers in short order.”

Corker said he was open to this as long as taxpayers wouldn’t be left without a major tool to limit bailouts needed for Fannie and Freddie.

“I would be open to streamlining in such a way without eviscerating the GSEs ability to put the loans back,” Corker said. “We are saving taxpayers a lot of money by putting loans back.”

Christopher Papagianis, managing director for the economic policy think tank e21, is concerned mortgage bond investors, overwhelmed by the continual expansion of government programs, would begin pricing in such a risk, demand more yield and thus making home loans more expensive in the future.

“The new HARP only just began in March. It’s also important to recognize that implementing a new program would delay the HARP 2.0 boom that is not yet underway,” Papagianis said.

Zandi stressed throughout the hearing that something should be done soon while the Federal Reserve, which happens to be largest investor in mortgage bonds, is keeping rates low.

In 2003, when fixed-rate mortgages were between 5.5% and 6%, mortgages refinanced at an annualized rate of more than $4 trillion, Zandi said in his written testimony. The current level is roughly a fourth of that.

“I would not try to not complicate this in anyway, unless it is clear that it would make it better, because it would slow things down and you will lose your window,” Zandi told Menendez. “We are very, very close to more refinancing.”

 

The author of this article is: Jon Prior

 See the original post at: http://www.housingwire.com/news/senate-republicans-may-be-board-harp-30

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

         Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.


If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at:
manager@gayrealestate.com

Posted on May 28, 2012 in Refinancing

HUD: 3 bills will complete Obama refinancing initiative

Obama smiles

Three bills intended to increase homeowner refinancing were introduced this week by Democratic senators — bills that HUD Secretary Shaun Donovan said are “a win, win, win and something that we think can gain real bipartisan support very quickly and get passed.”

The bills, if passed, would complete President Barack Obama’s plan for refinancing, which he outlined in the State of the Union Address.

In 2009, the Administration announced the Home Affordable Refinance Program to assist responsible homeowners refinance their mortgages. In its first two years it helped nearly 1 million homeowners refinance. However, eligibility regulations and costs associated with the program kept it from having a wider impact.

As a result, in October the President announced that Fannie Mae and Freddie Mac would work with lenders to remove barriers, allowing more families to benefit from refinancing their mortgages at historically low rates.

Speaking on a conference call Friday, Donovan heralded a bill introduced this week by Dianne Feinstein, D-Calif., that encourages homebuyers who don’t have a Fannie Mae, Freddie Mac or Federal Housing Administration-backed loans to refinance.

“There are about 3.5 million families who are doing the right thing by paying their bills, current on their mortgages, but because they’re underwater and have a private-label securities loan, they have been locked out of refinancing,” Donovan said. “We want to expand refinancing to those families.”

And in an attempt to accelerate the rebuilding of homeowner equity, Senator Jeff Merkley, D-Ore., advanced a bill in which Fannie and Freddie cover the closing costs for some homeowners who are current on their mortgage and seeking to refinance into a 20-year loan term or shorter through HARP. It will save homeowners an average of $3,000 a year.

“One of the great powers of low interest rates isn’t that they can just help boost consumer spending, it also means that most homeowners can take savings from lower interest rates and plow it back into paying back their mortgage,” Donovan said. “They can keep their payments the same, but accelerate the amount of principal they’re paying every month and get back above water much faster.”

Mortgage applications are surging from the refinancing boom.

Refinancing activity edged up 1.3% for the week as the conventional refinance index rose 1.8% and the government refinance index fell 2.3%, according to the Mortgage Bankers Association. Refinancing activity made up approximately 72.1% of all mortgage activity for the week, mostly flat from 72.6% the week before.

Donovan also touted a bill introduced this week by Sens. Robert Menendez, D-N.J., and Barbara Boxer, D-Calif., that removes a minimum requirement for mortgage LTV through HARP.

“What we have here is a series of ‘We can’t wait’ actions that the President has taken under his own authority that has seen real early success,” Donovan said. “And there’s now evidence in an enormous jump in refinancing as a result of the actions the president took last fall.”

Ed Canaday, an global banking & markets analyst at the Royal Bank of Scotland ($6.95 0.16%) said in an email the Menendez-Boxer bill is unlikely to pass Congress.

However, if successful, investors should be aware of its potential impact on prepayments and valuation of HARP pools.

“Clearly, extending the HARP cut-off date allowing for “re-HARPing” could have a great impact on prepayments for certain coupons,” he said. The “re-HARPing” effect may result in worse convexity and lower dollar prices for some MHA and CQ/U6 pools.”

“Meanwhile, this could discourage many lenders from actively participating in the HARP program,” he added, “as HARP business could become less lucrative if rising prepayments lead to lower prices for pools backed by HARP collateral.”

On Friday in Reno, Nev., President Obama discussed the impact of his refinancing changes announced in October.

 

The author of this article is: Justin T. Hilley

 See the original post at: http://www.housingwire.com/news/hud-three-bills-will-complete-obamas-refinancing-initiative

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

         Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.


If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at:
manager@gayrealestate.com

Posted on May 15, 2012 in Refinancing

HUD expected to increase fraud claims with FHA refi changes

homes

Changes to the Federal Housing Administration streamlined refinance process is expected to benefit homeowners with a mortgage originated before June 2009.

However, an analyst at the Royal Bank of Scotland warns that the Department of Housing and Urban Development will likely increase its indemnification demands for lenders that, it feels, wrongfully wrote the new mortgage.

“We expect HUD to be more active in seeking claims for fraud,” said mortgage securities analyst Jeana Curro in an email to clients, “while HUD has always had indemnification rules in place, it has made few claims in the past.”

Curro adds the statute of limitations for indemnification is five years, and it generally takes around one year for the insurance claim to get paid after a foreclosure. Consequently, lenders could be dis-incentivized to refi anything originated before 2008, since doing so would “restart the clock” on the statue of limitations.

“HUD strengthened and standardized its lender indemnification requirements, effective Feb. 24, 2012,” Curro adds. “Specifically HUD will demand indemnification for an insurance claim if the mortgagee lender “knew or should have known” that fraud or misrepresentation was involved and lenders will no longer be able to negotiate claims.

Curro concludes that refinancings will be concentrated in mortgages originated between the two mentioned timeframes, after 2007 and before June 2009. Therefore, prepayment risk will changes for those mortgages wrapped into Ginnie Mae bonds.

“We expect 2008 to 2009 higher coupons to be the most negatively impacted, while lower coupons and post June-2009 endorsements may actually benefit,” from the changes, Curro said.

The changes to the FHA streamline allow the borrower to pay 55 basis points in annual mortgage insurance premium on the refinancing down from the 120 to 150 bps. The upfront mortgage insurance premium is also nearly eliminate for mortgages that qualify.

The author of this article is: Jason Gaffney

 See the original post at: http://www.housingwire.com/article/hud-expected-increase-fraud-claims-fha-refi-changes

At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.

         Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.


If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at:
manager@gayrealestate.com

 

Posted on March 14, 2012 in Refinancing