Single Payment or ALL Up Front PMI – No Monthly PMI

FHA requires an “Up Front MI” payment of 1% no matter what, as we mentioned yesterday. You cannot, however, pay extra Up Front MI to avoid Monthly MI with FHA. For Conventional Loans, however, you can pay ALL of your PMI (“Private Mortgage Insurance”) in a single upfront payment. This is a great alternative for […]Read More

FHA Requires MI No Matter What for 30 Year Loans

We have a buyer putting down 30% on a $400,000 purchase, and she can ONLY get FHA financing, and she still has to pay for MI (both the monthly rate of 1.10% divided by 12, and the Up Front fee of 1%). And, she has to keep MI for 5 years. This illustrates two points: […]Read More

3% Down Conventional – Alternative to FHA; Single Payment PMI

Several of our lenders are touting their 3% down alternative to FHA. The Monthly PMI rate for these 3% down loans is 1.15% (same as FHA’s), but there is NO up front PMI (FHA has a 1% Up Front MI fee). In addition, the down payment requirement is lower by 1/2 of a percent, and […]Read More

FHA MI is UP Monday; When Condo Litigation is OK

This is the last day to give us addresses so we can order FHA Case Numbers in order to preserve FHA’s LOWER MI rate of 0.90%. MI jumps to 1.15% on Monday. Buyers with pending short sales that may not close for months (or ever) should still give us addresses so we can order FHA […]Read More

PMI and Removing PMI

We are now doing far more loans with Private Mortgage Insurance (PMI) for people who want to avoid FHA loans, and b/c “Piggy Back” 2nd mortgages are no longer available for LTVs over 80%. PMI financing has a few advantages over FHA financing, including the ability to get out of it a lot faster, and […]Read More

Automated Approval Does NOT Mean “PMI” Approval

It is important to remember that PMI underwrites to tighter guidelines than does Fannie Mae. PMI companies are stricter with debt ratios in most cases. Therefore, for Conventional Borrowers putting down less than 20%, just getting an “Automated Approval” from Fannie Mae is often not enough to guarantee a complete approval. Borrowers need to make […]Read More

FHA vs. Conventional? FHA Often Has Lower Rates

FHA Interest Rates are often lower than Conventional Interest Rates, and we often have borrowers ask us which type of financing is better. FHA’s benefits over Conventional Financing: (1) Lower Rates Sometimes; (2) More Flexible Credit Standards; (3) FAR Lower Down Payment Requirements – saves liquidity; (4) FHA Loans are Assumable – a great feature […]Read More

Private Mortgage Insurance vs. FHA (again)

The ridiculously tight underwriting standards that so grate on all of us have the upside benefit of making mortgages more appealing to investors, and thus keeping rates down. We were asked again about the upside of Private Mortgage Insurance (PMI) financing vs. FHA financing. PMI has NO “Up Front” fee at all, while FHA has […]Read More

PMI (Mortgage Insurance) Is Back for The Better!

Mortgage Insurance is back. MGIC, our favorite provider of mortgage insurance, recently lowered all of their rates, and they increased their Maximum LTVs. This is extremely good news, as PMI is a welcome alternative to FHA. The reasons are two-fold: (1) PMI has NO UP FRONT Mortgage Insurance (while FHA currently requires 2.25% of loan […]Read More

FHA Mortgage Ins. for 5 Years; Up Front MI Goes Up To 2.25%

Remember that FHA Monthly Mortgage Insurance must remain in place for at least 5 years (even if the LTV is 50%), but borrowers can eliminate MI after 5 years IF they can prove they have 22% Equity (their LTV is 78% or lower). Remember too that FHA’s “Up-Front-Mortgage-Insurance” jumps up to 2.25% (of the loan […]Read More

Rates Off a Bit; FLIP Rules Explained Again

We are still getting FLIP questions. We have both FHA and Conventional lenders that allow for FLIP Transactions. A FLIP is a property getting re-sold by a party (other than a bank) that took possession in the last 90 days. Our FHA FLIP lenders typically request two appraisals to ensure the value is there and […]Read More

Rates Will Shoot Up No Matter What the Fed Does

Our continued reminder to our clients is that rates will increase, and increase sharply, no matter what the Fed does. The Fed does NOT have 100% control over market interest rates. The Fed’s limited tools are not enough to control the interest rates in the way many think they can. What will spike rates: (1) […]Read More

Why Buy Now?

We have a first time buyer who has been making offers continually for over 18 months. His problem is not a lack of inventory; his problem, we think, is that he is too obsessed with getting a “good deal” and he underbids time and time time again. We tell him to bid more aggressively and […]Read More

Debt Ratios To 60% OK; New Regulations Not a Concern

We had two purchases come to us in the last week that were denied at other lenders because of High Debt ratios. Remember that different lenders have different debt ratio ceilings, and relying on a single lender is risky. Most of our lenders cap ratios (per Fannie Mae guides) at 45%, but Met Life goes […]Read More

Options With Less Than 20% Down; No More 2nds; MI Is Best if Borrower Is Very Strong

If a buyer has less than 20% of the Purchase Price for a Down Payment, there are far fewer options than there were two years ago. Concurrently funded 2nd mortgages and/or equity lines no longer exist. The only options now are Mortgage Insurance or FHA Financing. For well qualified borrowers, Mortgage Insurance is still the […]Read More

Investors Can Own Ten Properties with Mortgages; CAL STRS Loans

With respect to gold prices, even though near-record gold prices in excess of $1,000 per ounce make people nervous, keep in mind that gold prices would have to exceed $2,300 in “inflation- adjusted” dollars to equal the highs we hit in the early 1980s. So, don’t panic until you see gold prices above $2,000 per […]Read More

Google Enters the Mortgage Arena – Industry Too Complex Now

The New York Times announced that Google will soon enter the mortgage arena by offering rate quotes. Lending Tree, a company that also offers on-line quotes, is upset about this because Google will be using the same supposedly exclusive technology that Lending Tree uses. Here at JVM we could not be more bemused by all […]Read More

Two Schools of Thought – Inflation School Winning; Other Lender Had Purchase Since February!

Right now there is a “tug of war” between two schools of thought. On the one hand, the economy remains weak, and the government is buying huge portions of mortgage backed securities in an effort to keep rates low. The economy remains weak enough that there is no threat of inflation. Mr. Bernanke, our Fed […]Read More

Huge Rate Variance Among Lenders

The market appears to believe a recovery is in the works, so money continues to leave Bonds (and mortgage backed securities) for the Stock Market, which has improved almost 34% since March lows. Because higher rates will put a damper on the expected recovery, many analysts expect one or more dips in rates before the […]Read More

Traders Focus on Excess Debt; Financing Ten Investment Properties; Inventory Absorbed

Rates edged up as the market appears to be concerned again about the record levels of debt that will be coming to market this year. Traders are uncertain that the market can absorb all the debt. Housing inventory in California is now at only 6.5 months’ supply, down from 15.3 months a year ago. This […]Read More