Tacoma's #1 Mortgage Expert

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
     
     
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
     
     
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
     
     
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

With interest rates at historic lows, many homeowners are considering refinancing. One question that seems to come up often is, should I pay closing costs or not? Here is a list of options to consider when looking at refinancing. Each option has it's benefits, so there's no one size fits all answer.

Interest Rate Points/Origination Fee
4.25% .875%
4.50% -.875% *
4.875% (-1.50%)*
* indicates a payment to your lender or broker - known as a "premium"

1. No Closing Cost Refinance - 4.875% with a 1.50% Premium Paid To Your Lender or Broker: Like the title says, it means you do not pay closing costs. The next question is who is paying them? Indirectly you are. By taking an interest rate higher than the market rate, the lender or broker can use the "Premium" in the interest rate to pay all your costs. For the purposes of this example, let's take a look at how this no cost refinance works.

Your lender or broker will be paid 1.50% of $400,000 * 1.5% = $6,000. They will then use this money and pay all your closing costs of approximately $2,500. Leaving them $3,500 in gross revenue, before their office expenses and overhead.

2. Low Closing Cost - 4.50% with a .875% Premium Paid To Your Lender or Broker: This is a combination of the No Closing Cost & Full Closing Cost Option. The lender or broker is paid their origination fees, and you are paying 3rd party costs, like title, escrow fee, credit reports, appraisal etc. In the above example your lender is being paid 400,000 * .875% = $3,500 gross revenue before their office expenses and overhead. You are responsible for the third party costs of $2,500.

3. Full Closing Costs - 4.25% with a .875% Loan Fee: In this example, you will pay the origination fee plus the 3rd party closing costs. That means you pay $3,500 loan fee + $2,500 in 3rd party fees or $6,000 total closing costs.

Now look at the monthly payments:

$400,000 Loan Amount * payments exclude taxes and insurance

4.25% = 1,967 Cost: $6,000
4.50% = 2,026 Cost: $2,500
4.875% = 2,116 Cost: $ 0.00

Compare: 4.25% v 4.875%
monthly savings: 2,116 - 1967 = 149 lower payment by selecting the 4.25% rate. Now look at the total costs divided by the savings: $6,000/149 = 40.26 months or 3.35 years to break even. That means after 3.35 years, the lower rate and paying the closing cost would have paid off.

Compare 4.875% v 4.50%
monthly savings: 2116 - 2026 = 90 lower payment by selecting the 4.50% rate. Now look at the total costs divided by the savings: $2,500/90 = 27.78 months or or 2.3 years to break even. That means after 2.3 years, the lower rate and paying the closing cost would have paid off.

Compare 4.50% v 4.25%
monthly savings: 2026 - 1967 = 59 lower payment by selecting the 4.25% rate. Now look at the total costs divided by the savings: $3,500/59 = 59.32 months or or 4.9 years to break even. That means after 4.90 years, the lower rate and paying the closing cost would have paid off.

A few other factors to consider is the loan to value ratio of the new loan to your home's value. If for example, adding closing costs to your loan puts you into a higher loan to value bracket, you may opt to go with the lower closing cost or no cost option. Or if you have to pay private mortgage insurance by adding in closings cost, you may opt to go with the low or no closing cost option.

For additional refinancing question, feel free to contact me directly at (253) 472-1500. Ask for Kevin or visit us online at www.mortgageratesgigharbor.com

New FHA Short Sale Rule - December 16, 2009

Q: How do I apply for a VA guaranteed loan?

A: You can apply for a VA loan with any mortgage lender that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.

Q: How do I get a Certificate of Eligibility?

A: Complete a VA Form 26-1880, Request for a Certificate of Eligibility: You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to the Winston-Salem Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it's best to provide such evidence.

Q: Can my lender get my Certificate of Eligibility for me?

A: Yes, it's called Web LGY. Most lenders have access to the Web LGY system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through Web LGY - only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate.

Q: What is acceptable proof of military service?

A: If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which identifies you and your social security number, and provides your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from regular active duty after January 1, 1950, a copy of DD Form 214, Certificate of Release or Discharge From Active Duty should be included with your VA Form 26-1880. If you were discharged after October 1, 1979, DD Form 214 copy 4 should be included. A PHOTOCOPY OF DD214 WILL SUFFICE.....DO NOT SUBMIT AN ORIGINAL DOCUMENT.

If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which shows your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from the Selected Reserves or the National Guard, you must include copies of adequate documentation of at least 6 years of honorable service. If you were discharged from the Army or Air Force National Guard, you may submit NGB Form 22, Report of Separation and Record of Service, or NGB Form 23, Retirement Points Accounting, or it's equivalent. If you were discharged from the Selected Reserve, you may submit a copy of your latest annual points statement and evidence of honorable service. Unfortunately, there is no single form used by the Reserves or National Guard similar to the DD Form 214. It is your responsibility to furnish adequate documentation of at least 6 years of honorable service.

If you are still serving in the Selected Reserves or the National Guard, you must include an original statement of service signed by, or by the direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing the length of time that you have been a member of the Selected Reserves. Again, at least 6 years of honorable service must be documented.

Q: How can I obtain proof of military service?

A: Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA. Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.

Q: I have already obtained one VA loan. Can I get another one?

A: Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property. In either case, to obtain restoration of eligibility, the veteran must send a completed VA Form 26-1880 to our Winston-Salem Eligibility Center. To prevent delays in processing, it is also advisable to include evidence that the prior loan has been paid in full and, if applicable, the property disposed of. This evidence can be in the form of a paid-in-full statement from the former lender, or a copy of the HUD-1 settlement statement completed in connection with a sale of the property or refinance of the prior loan.

Q: I sold the property I obtained with my prior VA loan on an assumption. Can I get my eligibility restored to use for a new loan?

A: In this case the veteran's eligibility can be restored only if the qualified assumer is also an eligible veteran who is willing to substitute his or her available eligibility for that of the original veteran. Otherwise, the original veteran cannot have eligibility restored until the assumer has paid off the VA loan.

Q: My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the lender. VA said it wasn't my fault and waived the debt. Now I need a new VA loan but I am told that my used eligibility can not be restored. Why?

Or,

Q: My prior loan was foreclosed on, or I gave a deed in lieu of foreclosure, or the VA paid a compromise (partial) claim. Although I was released from liability on the loan and/or the debt was waived, I am told that I cannot have my used eligibility restored. Why?

A: In either case, although the veteran's debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteran's eligibility to be restored until the loss has been repaid in full.

Q: Only a portion of my eligibility is available at this time because my prior loan has not been paid in full even though I don't own the property anymore. Can I still obtain a VA guaranteed home loan?

A: Yes, depending on the circumstances. If a veteran has already used a portion of his or her eligibility and the used portion cannot yet be restored, any partial remaining eligibility would be available for use. The veteran would have to discuss with a lender whether the remaining balance would be sufficient for the loan amount sought and whether any down payment would be required.

Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

A: The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. If you wish to make application for the home loan benefit as a surviving spouse, contact our Winston-Salem Eligibility Center. In addition, a surviving spouse who obtained a VA home loan with the veteran prior to his or her death (regardless of the cause of death), may obtain a VA guaranteed interest rate reduction refinance loan. For more information, contact our Winston-Salem Eligibility Center.

[NOTE: Also, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible for the home loan benefit. However, a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must apply no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 16, 2003 that are received after December 15, 2004.]

Q: Are the children of a living or deceased veteran eligible for the home loan benefit?

A: No, the children of an eligible veteran are not eligible for the home loan benefit.

for more information on VA Mortgage & Home Loans call the VA Mortgage Experts at (253) 472-1500 Locally based in the Northwest serving homeowners since 1986  - Kevin Tinsley - All Tech Mortgage Inc. http://www.alltechmortgage.com

With property values declining in most areas, the ability to do a VA Refinance above 90% of the appraised value can be a challenge.  Most major lenders limit the maximun loan to value ratio at 90%.  All Tech Mortgage Inc, still has access to lenders that offer the VA Cash Out Refinance program up to 100% of the appraised value.

Just this week we have been able to refinance a young couple out of 80/20 ARM loan into fully amortizing 30 year fixed rate loans at 5.00% (5.088 apr).

If you are searching online for VA lenders who offer the VA Cash Out program, you may want to check the maximum loan to value ratio(LTV) their program allows.  If you are close to the 90% limit you may want to check out these resources to estimate the value of your home:

www.zillow.com and search the comparable sales for your home

www.JohnLScott.com - Search under sold listings to see what's been selling in your neighborhood

For more information about VA Home Loans in Tacoma, feel free to call Kevin Tinsley - Tacoma's #1 VA Mortgage Expert at (253) 472-1500 or toll free at (800) 339-7059.  For current VA Mortgage Rates, visit us online at http://www.VAMortgageTacoma.com  

Time is running out to refinance your Puyallup FHA Mortgage under the old FHA guidelines for Streamline Refinances. The ability to finance in closing costs without an appraisal will be ending on Jan 1, 2010 making it difficult to refinance if your property value has fallen.

We are also doing a lot of No Closing Cost FHA Streamline's. Instead of adding $10,000 onto your existing loan balance, let us pay your closing costs with the lender's money. You typically won't find these options at Bank of America, Chase or Citibank.

As of 10/1/20009, interest rates are near the lowest point of the year, take advantage before rates go back up or the FHA Streamline Refinance Program changes. For more information, call (253) 472-1500 or visit us online at www.fhamortgagepuyallup.com

Kevin, Joel & I would like to say thank you with all of your help with our refinance. We appreciated your honesty and willingness to answer all of our questions. You were very patient and made the process smooth and painless. Sincerely, Kristin & Joel

Effective for all case numbers assigned on or after January 1, 2010, the validity period for all appraisals on existing and proposed and under construction properties will be 120 days. This change aligns FHA's requirements pertaining to the validity of an appraisal with current industry practices.

This is a change from the current validity periods of six months for an appraisal of an existing property that is complete, and 12 months for proposed and under construction properties.

FHA Home Loans Tacoma | FHA Mortgage Rate Tacoma | FHA Mortgage Information

http://www.fhamortgagetacoma.com

All Tech Mortgage Inc. is your gateway to great mortgage products from Washington State's top mortgage lenders. Locally based in Tacoma, we shop, compare rates & fees and connect you with the best mortgage lenders in the Northwest. The interest rates we quote are typically .25% - .50% lower than most national mortgage companies. Plus our fees are some of the lowest in the industry. 

We Specialize in No Cost and Low Closing Cost Purchase & Refinance Home Loans.  All Tech Mortgage offers true wholesale pricing from our lending partners.  At All Tech Mortgage, we never expect your business, but hope to earn it with our aggressive pricing, speed, and overall efficiency. 

Does Fannie Mae own my mortgage?  Why would you even care who owns your mortgage? Well if you have been considering refinancing your home loan, but real estate values in your area have declined, you may want to know who owns your mortgage...Knowledge is Power...

Fannie Mae's program DU Refi Plus allows homeowners to refinance even though the value of their home may have dropped.  One of the biggest benefits of the program is, if you were not required to carry mortgage insurance in the past, chances are you will not have to carry it when you refinance.  This alone could save $50-300 per month.  Or if you did have mortgage insurance on your previous loan, you can continue paying at the same rate - which is usually less than what's available today.  For more information about the DU Refi Plus program, call Kevin Tinsley - All Tech Mortgage (253) 472-1500. Locally based in Tacoma, WA Serving the entire Puget Sound Region.  www.alltechmortgage.com

All Tech Mortgage Inc. is your gateway to great mortgage products from Washington State's top mortgage lenders. Locally based in Tacoma, we shop, compare rates & fees and connect you with the best mortgage lenders in the Northwest. The interest rates we quote are typically .25% - .50% lower than most national mortgage companies. Plus our fees are some of the lowest in the industry. 

www.VAHomeLoansTacoma.com or www.VAHomeLoansSeattle.com

General Rules for Eligibility

Military Service Requirements for VA Loan Eligibility:

Note:  Applications involving other than honorable discharges will usually require further development by VA.  This is necessary to determine if the service was under other than dishonorable conditions.

Wartime - Service During:

• WWII: 9/16/1940 to 7/25/1947
• Korean: 6/27/1950 to 1/31/1955
• Vietnam: 8/5/1964 to 5/7/1975

You must have at least 90 days on active duty and been discharged under other than dishonorable conditions.  If you served less than 90 days, you may be eligible if discharged for a service connected disability.

Peacetime - Service during periods:

• 7/26/1947 to 6/26/1950
• 2/1/1955 to 8/4/1964
• 5/8/1975 to 9/7/1980 (Enlisted)
• 5/8/1975 to 10/16/1981 (Officer)

You must have served at least 181 days of continuous active duty and been discharged under other than dishonorable conditions.  If you served less than 181 days, you may be eligible if discharged for a service connected disability.

Service after 9/7/1980 (enlisted) or 10/16/1981 (officer)

If you were separated from service which began after these dates, you must have:

• Completed 24 months of continuous active duty or the full period (at least 181 days) for which you were ordered or called to active duty and been discharged under conditions other than dishonorable, or
• Completed at least 181 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1171 (Early Out), or have been determined to have a compensable service-connected disability;
• Been discharged with less than 181 days of service for a service-connected disability.  Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances for the convenience of the Government.

Gulf War - Service during period 8/2/1990 to date yet to be determined

If you served on active duty during the Gulf War, you must have:

• Completed 24 months of continuous active duty or the full period (at least 90 days) for which you were called or ordered to active duty, and been discharged under conditions other than dishonorable, or
• Completed at least 90 days of active duty and been discharged under the specific authority of 10 USC 1173 (Hardship), or 10 USC 1173 (Early Out), or have been determined to have a compensable service-connected disability, or
• Been discharged with less than 90 days of service for a service-connected disability.  Individuals may also be eligible if they were released from active duty due to an involuntary reduction in force, certain medical conditions, or, in some instances, for the convenience of the Government.

Active Duty Service Personnel

If you are now on regular duty (not active duty for training), you are eligible after having served 181 days (90 days during the Gulf War) unless discharged or separated from a previous qualifying period of active duty service.

Selected Reserves or National Guard

If you are not otherwise eligible and you have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and

• Were discharged with an honorable discharge, or
• Were placed on the retired list, or
• Were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable service, or
• Continue to serve in the Selected Reserves

Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability.

You May also be determined eligible if you:

• Are an unremarried spouse of a veteran who died while in service or from a service connected disability, or
• Are a spouse of a serviceperson missing in action or a prisoner of war

Note:  Also, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible for the home loan benefit.  However, a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must apply no later than December 15, 2004, to establish home loan eligibility.  VA must deny applications from surviving spouses who remarried before December 6, 2003 that are received after December 15, 2004.

Eligibility may also be established for:

• Certain United States citizens who served in the armed forces of a government allied with the United States in WW II.
• Individuals with service as members in certain organizations, such as Public Health Service officers, cadets at the United States Military, Air Force, or Coast Guard Academy, midshipmen at the United States Naval Academy, officers of National Oceanic & Atmospheric Administration, merchant seaman with WW II service, and others.

For additional information on VA Home Loans, Call Kevin Tinsley (253) 472-1500 www.alltechmortgage.com

www.FHAHOMELOANSTACOMA.COM

Financing a home with a FHA mortgage in Tacoma can be a challenge if the seller has recently acquired the property.  Due to the large number of foreclosures and short sales, you may come across homes where the owner of the property has only owned the home for a short time.  In this case, if you are planning to finance the purchase with an FHA LOAN, you will have to wait 90 days before you can enter into a purchase and sale agreement to purchase the property. 

Hud has recently made some exemptions to this 90 Day rule.  Below are the exceptions:

* HUD Repo's
* Owned by Federal, State or Local Governments Agencies
* Owned by State of Federally Charted Financial Institutions
* GSE owned Fannie and Freddie Mac
* Inherited Properties
* Employer owned from employee transfers
* Non-Profits on HUD's approved list to purchase REOs at a discount
* Properties in a designated federal disaster area
* Builder selling newly built home
* Foreclosed, or Mortgagee (Lender) "acquired" properties

**Any title change to the property in the proceeding 90 days will trigger the 90 day rule.  Examples:  Seller transfer the property to a LLC, Seller creating a revocable living trust, Seller transferring the property to a living trust, and quit claim deed transfers. 

TIP:  Request a copy of the ownership record, preliminary title, or any other document to show how long the owner has owned the property before making a offer to purchase the property.

If you do have to wait for the 90 day period to expire, keep in mind you may be subject to higher interest rates in the future and may no longer qualify for the home.

For more information on this topic, Call Tacoma's #1 Mortgage Expert - Kevin Tinsley at (253) 472-1500 or visit us on-line at www.alltechmortgage.com or www.fhaloanstacoma.com