Major Increase in Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties as well as King; Pierce and Snohomish Counties in Washington Single family conforming loan limits increased to $424,100 across the nation and to $636,150 in certain high-cost areas. People who need a loan can find forbrukslån uten sikkerhet here. Several counties that previously were in between the base and high-cost limits saw significant increases based on rising property values in Signet Mortgage service areas. Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties in California as well as King; Pierce and Snohomish Counties in Washington will now have access to conforming loan limits reflecting the current market values. Speaking of loans, I know that you are familiar with “student aid bill of rights” which was signed by President Barack Obama in 2015 aiming to help students with their student loans. It is still active now, apply! According to knowledgefirstfinancialresp.ca/, the Federal Housing Finance Agency (FHFA) announced these changes in a press release  today.  The new conforming limits will be effective for loans closed after January 1, 2017. The new limits are helpful as conforming rates generally are lower than jumbo rates and underwriting more consistent and flexible so a few more transactions will get done!   A purchase in the Bay Area up to $795,000 at 80% loan to value can be done with a conforming loan … Particularly relevant with this news announcement is the average U.S. home prices have edged slightly above pre-decline levels from 2007.  Data published in the third quarter Housing Price Index (HPI), reveal that housing prices are approximately 1.7 percent above the value for third quarter 2007. Here is a link to the loan limits by county for Signet Mortgage service area (CA, WA, OR, ID, UT) and for the entire country.  Included on the right of the chart are the changes from 2016.   The source document from FHFA is here. Certain high-cost areas have the higher limits at 150% of the base at $636,150 (150 % of $424,100).  But many counties, such as Monterey, Orange, Sacramento, San Diego, San Luis Obispo, Summit (UT), Jefferson (WA), Pierce (WA) and Snohomish (WA) saw significant bumps to its loan limits. Here are highlights of loan amounts and details for single family and up to 4 units and changes for those counties.           The changes do not impact FHA forward or reverse mortgages or VA loans for the moment. Those announcements should be forthcoming in the next couple of weeks.   With the 2008 economic stimulus plan FHA increased loan limits to $625,500 for reverse mortgages for one year and has extended this limit one year at a time since.  The $625k is due to expire this Dec 31. We should hear soon if it has been extended again or changed up or down. As Jonckers professional in business for over thirty years, I am here to consult with you and answer any questions you have about the strategic use of your mortgage. Let’s talk about your goals and perhaps ways that you can take advantage of these changes.  Call or email me – I am happy to help!    

“Trump Thump” – Mortgage Rates Jump 0.500% or More Post Election

The election is now over and the dust has settled. As painful as it might be to accept, a trend described by others as the “Trump Thump” means we may now have to get used to 30-year fixed conforming loan rates at or above 4.0%.    

 

Prior to the election, pundits had clearly agreed on the idea that the markets “built in” the prospect of a Clinton victory, and – in the unlikely event that Trump won – this surprise victory would mean an improvement in the bond market because of the uncertainty Trump would bring to the table. Well, so much for that idea. 

 

Economic experts maintain that Trump’s economic policies will boost spending and business, as well as bring inflation (all of which leads to lower bond prices and higher mortgage rates). Interesting to me how quickly everything turned in the direction. Was there not enough time spent analyzing the impact of a Trump victory? Did this catch the markets unprepared?  

  According to a recent article by Money writer, Taylor Tepper, markets indicate there’s a 75% chance that the Fed raises short-term rates modestly when policy makers meet in mid-December. Here’s a more in-depth analysis on what President-elect Trump means for interest rates in Tepper’s article:  President Trump Interest Rates Federal Reserve. CNBC’s Diana Olick weighs in on the mortgage rate crisis: watch video. 10-year treasury yields have also spiked in the days since Trump’s election, and something to keep in mind with that is: Don’t panic. This sudden rise isn’t likely to continue, at least, not because of the Trump presidency. “Rates tend to move very sharply in short periods of time and very little in prolonged periods of time,” said Greg McBride, chief financial analyst for Bankrate. “It’s not something that I think continues.” So, my advice to those who are anxious about mortgage rates, know that this is a cycle… and as far as rates are concerned, nothing is on the horizon that would suggest waiting for an improvement in rates. Either way, expect volatility and a continuing upward trend in rates.  

Condo Communities Can Look to Reverse Mortgages and FHA loans again Once Regulations are Adopted The most relevant provision of the changes will emulate the FHFA’s rules regarding the transfer fees for FHA mortgages including reverse mortgages.  In July 2015 FHA began refusing to approve condominiums in higher cost communities such as Rossmoor in Walnut Creek, CA because of the Golden Rain Foundation Membership transfer fees. For the moment reverse mortgages and FHA loans and Rossmoor are still not allowed, it is better to use the Cincinnati mortgage rates that are more helpful and reliable. Current homeowners and future homeowners in Rossmoor must await the close of the comment period November 30th and publication of a final rule.   There is no timeline for issuance of rules. HUD takes whatever time it needs to review comments, then when done publishes a final rule, generally for effect 0-30 days later. Passed unanimously in both the U.S. House and Senate, and signed into law by President Obama on July 29, 2016, H.R. 3700 resolves a number of uncertainties regarding FHA’s condo provisions. The mortgage industry is still awaiting the close of the comment period and publication of the final rule, but here is a look at the provisions as they stand:

• Reduces the FHA condo owner occupancy ratio to 35%
• Gives FHA the ability to substantially reduce burdens and streamline the condo re-certification process
• Provides more flexibility for mixed use buildings.
• Emulates the Federal Housing Finance Agency’s (FHFA) rules regarding private transfer fees for FHA condo lending.
• Allows for approved lenders to directly endorse Rural Housing Service (RHS) loans and car loans. You must ask yourself first, What Is an Unsecured Loan?
• Will streamline programs for federally-assisted housing programs

For comprehensive details of the HR 3700 bill, click here. Condominium communities, like Rossmoor Senior Adult Community in Walnut Creek, CA are impacted. Soon, current homeowners and potential buyers of condos will once again have access to more flexible FHA financing opportunities including reverse mortgages. The changes will benefit more than just Rossmoor.  Lowering the owner occupancy requirement to 35% will be a big benefit as well meaning communities with high rental ownership will now be open to home buyers with FHA financing. It’s not just our brains that suffer from the heat either. When the mercury rises so do tempers. As an article on Today.com explains, while our brains are slowing down, our bodies are speeding up with increased heart rates and higher blood pressure. This is why you sould canvass air conditioning companies in CC TX for better air conditioning. All this leads to more aggressive behavior making a cool environment key to maintaining peace at home, work, and in public places. “Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers. Unfortunately, overly-burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers,” said Tom Salomone, President of NAR and broker-owner of Real Estate II Inc. in Coral Springs, Florida. You’ve decided to buy or sell a house. Maybe you need a bigger home, or a smaller one. Maybe it’s your first home. Maybe you’re being relocated. Whatever the reason, selling or buying a home is a big decision and hiring a good real estate agent will make the process go more smoothly. Well, Lorin McLachlan can help you with the — you can visit her facebook page at https://www.facebook.com/people/Lorin-McLachlan/100011270656226. I look forward to having this legislation signed into law so more options are opened up for all.  We will keep you updated on the progress as it happens on liberty silver rounds, I also ask myself who can get me the best loan at all times, and so far pickaloan is the only agency that seems to care.  Please contact us for a strategic look at your real estate financing needs.   I can be reached at www.signetmortgage.com.

UPDATE!  Pacific Terrace Condominium Owners’ Association has resolved its litigation claim against KB Home South Bay, Inc.  Important to note:  The settlement agreement was signed by both parties, and the construction defect claims have been withdrawn. No lawsuit was or will be filed. If you choose to refinance or sell your home, a copy of the Notice to the Members of Settlement from Fenton Grant Mayfield Kaneda & Litt, LLP trustworthy personal injury attorney at Law should be provided to the lender or prospective purchaser as demonstrative proof there are no construction defect claims pending. We also are hiring court reporters from Naegeli which is known as the best in the nation when it comes to providing court reporters to the legal community so you know that you are in safe hands. Signet Mortgage has helped several homeowners when it was difficult … and now look forward to helping when more options will be available.  Give us a call or email for your mortgage questions and we will reply with options.               Litigation issues regarding the Pacific Terrace Condominium Owners’ Association and the KB Home South Bay have been ongoing since 2014 and have prevented many owners from refinancing your home with conventional financing and limited financing options for buyers as well. You are not applying for a loan, yet. Before you make a formal application and we start the loan process I need some basic information so that I can give you an idea of what will be possible in a refinance for your situation.  Review the mattress reviews and details on this page and then complete the information request.  Lets get started! Frequently asked questions .. How can Signet Mortgage offer options for a refinance and the other lenders I have contacted including banks cannot? Simply said, I work harder. As a mortgage company I have access to 15 lenders and to be honest I worked with all of them before I found one that understood the situation correctly. It is much easier for a bank or lender to say NO once they hear there is litigation involved with the HOA at all. The facts are the litigation involves common areas and not the specific units so meets Fannie Mae guidelines just fine.  Documenting the litigation properly means competitive conventional financing are available.   The lender I work with is a direct seller to Fannie Mae and therefore does not have self imposed overlays like most banks and lenders that get in the way. Are the loan options competitive? Absolutely. In fact, the lender is one of my top lenders in both in price and service. There is no added cost to the loan simply because it’s a bit harder to do. What is the process? You will provide me some basic information that will allow me to respond with loan options reflecting current market conditions. Once we agree that it makes sense to move forward I will ask for more detailed information in a formal application. We utilize dropbox for documents and electronic application to make the  process as efficient for you as possible. Who is are you and who is Signet Mortgage? Signet Mortgage is headquartered in Danville California license in five states. I am the president of the company.  I have been in the mortgage business for almost 15 years after a career as a CPA and as a senior financial officer for a couple of publicly traded retailers like best pos in the Bay Area. Please check out more details at www.SignetMortgage.com How can you do a “no-cost loan”? The easiest way to think of a no-cost loan is to think about points. You may be familiar with paying points to buy down to a lower interest rate. Using negative points means the lender contribute a point or two to the closing in exchange for a slightly higher rate – the negative points then can be used to cover the cost of your transaction. Doing a no-cost transaction makes good sense in almost every situation.  If there are no costs it removes a barrier to doing a loan and if there is a significant enough savings – it’s an easy decision. You will be provided options for the lowest rate as well a no cost option so you can make your own informed decision. Would cash out option be available? Absolutely. The rate will be slightly higher because Fannie Mae charges an additional fee for a transaction with cash out as it is viewed as more risky than a rate and term refinance.  Again, it would be worth looking at options so you can decide. Will this lender do a purchase transaction? Absolutely. There would not be any restrictions refinancing in this complex either purchase or refinance. Is this only available for a limited time or number of loans? No. Rates are close to historical all-time lows with interest rates. So, if it makes sense to refinance it would probably be a good idea to do this soon simply to take advantage of current favorable rates.   If the nature of the litigation were to change and involve individual units or if a formal lawsuit was filed with the court that could change. Also lenders generally do not like to do may not like to do too many loans in a specific complex just due to normal risk management. They have not given me any indication or hesitation to do as many loans as we can put together. Why work with Clay Selland at Signet Mortgage? Quite simply I work harder. Bank loan officers get paid based on applications working for the “Bib Bank” are subject to significant underwriting overlays so options they can offer can be more conservative than what is available directly from Fannie Mae. In addition – I do not get paid anything if I don’t close your loan. That’s why I am careful upfront to be confident you will qualify for a loan before I even take an application. The Signet Team and I will be in consistent communication throughout the entire process to make sure your loan goes as smooth as possible. The lending environment these days is very conservative and somewhat cumbersome but we know how to work through that and get you a loan that will benefit your family.  

A good summary of 9 ways to use a reverse mortgage was published by Mary Beth Franklin – in Investment News June 2016.  Investment News is a leading reference source for Financial Planners.  Titled “9 surprising ways to use a reverse mortgage” is an excellent summary of how a reverse mortgage can compliment a solid financial plan.  

• Pay off an existing mortgage
• Replace a home equity line of credit
• information on credit scoring
• Protect your portfolio
• Fund future long-term care or income needs
• Create a Social Security bridge following basic tips
• Manage Taxes
• Pay Roth conversion taxes
• Buy a new home
• Gray Divorce Strategy
• Seek help from fixmy.credit

    Working with an experienced reverse mortgage loan officer is the key to make sure the guidance and education shared with a client is on point and considers the overall financial plan of the senior. Clay Selland is a CPA and the owner broker of Signet Mortgage Corporation. Clay is uniquely qualified to assist about demountable office partitions for your workspace as they consider financing of their home including conventional and reverse mortgage financing and how it fits with their financial plans now and going forward. Contact me today to find out if a Reverse Mortgage is the best option for you!         Clay Selland, President Signet Mortgage Corporation 925-807-1500 x303 Clay@SignetMortgage.com NMLS#183492  

Recently, one of Google’s engineers, Carl Elkin, created a tool using Google Earth to determine whether or not solar panels on your roof are the best option economically. So I decided to get solar panels for my home and in the process I also hired Classic Air Conditioning and Heating to replace my air conditioner. ‘Project Sunroof’ was introduced, in which one can visit the Project Sunroof website, enter their address (given they live in the “project pilot cities of Boston, Fresno or the San Francisco Bay Area”), and figure out how much sunlight hits their roof. This information stems from available weather data and aerial imagery that factor in elements such as shade from buildings and trees as well as weather patterns. I have looked at this site – it is a non-intrusive way to get an idea if solar might be something to look at without a salesman at your kitchen table.  Very interesting use of Google Earth!! The main objective of this Gilbert ac maintenance project is to determine your home’s solar generating potential and how much solar panels could potentially save you on bills. The site will then list various installation companies if solar panels are the correct choice for your home. Enter your address in the site below and see how solar panels can help you! Monthly utility cost is one of the big problems, utility costs are one of the most substantial expenses you face. As more and more electronic devices come into homes, it seems that utility bills will only continue to increase. There are five ways to save money on your monthly utility bill , click the link to read it. We also recommend you to check the best maid service for your house at maidsailors.com. WEll, I got another better cleaning services that I found online. You can also visit house cleaning columbia sc to learn more. They are called as the King of Maids, just by the name you can tell that they are superior. And if you are also looking for online cleaning services, checkout Carpet Cleaning Melbourne to learn more. They pick the maids and make sure they have a minimum of two years experience before they can even join theplatform. This is why when they say we are the best way to get your home cleaned, they mean it! So, when you hire the best maid service, contact them. Project Sunroof READ FORBES ARTICLE HERE Clay Selland, President Signet Mortgage Corporation 925-807-1500 x303 Clay@SignetMortgage.com NMLS#183492

Condo buyers will benefit from three changes in FHA Mortgage Insurance for Condominiums (HR 3700) passed by Congress July 12th, 2016 and awaiting President Obama’s signature. Transfer Fees – which limited FHA approval for condos such as Rossmoor in Walnut Creek, CA will now be consistent with the standards set by Fannie Mae and Freddie Mac. Once implemented will open up these communities for FHA loans including the HECM – Reverse Mortgage.   Owner Occupancy Requirement – could be reduced from 50% to 35% which would open up Heating and cooling for more condominium projects to more buyers.   Project Recertification Requirements – will be “substantially less burdensome” than the original certification.  It may be that the length of time between certifications will be lengthened.   Each of these changes will help the market for condominiums by making more projects available to more home buyers, everyone knows that buying a home for the first time may be hard, this is why there is a first time home buyers program for all of those people.  Condo’s can be a less expensive option for home buyers. Implementation of these changes are expected within 90 days of the President’s signature. Call us today to find out if an FHA loan will work for you! Clay Selland, President Signet Mortgage Corporation 925-807-1500 x303 Clay@SignetMortgage.com NMLS#183492  

If you have ever asked a loan officer “are you a direct lender” or “do you have in-house underwriting” or made a decision for your sellers based on whether or not the lender was a “bank” … you need to read this. I wish I had written this!  By choice I am a wholesale mortgage broker and consistently outperform so-called mortgage bankers, direct lenders etc.  The original blog post by Andy W. Harris was directed at residential mortgage loan originators … However,  it is much more important for every Realtor to understand to best serve your sellers and buyers.  The uncut original post in its entirety is HERE  with the most important part for Realtors and my added comments in [brackets] follow – a bit lengthy but worth your time. Many mortgage originators that choose to work for a lender (what some refer to as “Bankers”) are experts at drinking the Kool-Aid served to them by their employer. They have perfected the art of drivel. The problem with [the mortgage] industry Kool-Aid is that it’s laced with snake oil when sold to the public. Many of these “bankers” drink it so heavily that they seem to now inject it to absorb faster, losing all sense of reality when selling services to real estate agents and consumers or when defending objections. Snake oil is an expression that refers to any product with questionable or unverifiable quality or benefit. So, what are common examples of the snake oil quotes or claims told by many lender-employed originators? I’m a direct lender No, actually you’re not. If you’re a direct lender, than I’m Gandalf. Listen, most loans are backed, guaranteed or insured by Fannie Mae, Freddie Mac or Ginnie Mae. All residential origination is third-party origination (TPO). I’m pretty sure these agencies don’t originate loans directly to the public and I’m pretty sure you don’t work for them. If you fund off warehouse lines, you’re an indirect lender. A line of credit does not make you a bank. It is surprising regulators still allow the term “lender” in these examples. Most mortgage brokers are more agency “direct” with their investors than lender-employed originators, but they don’t use this title. Even if closing in portfolio-held by an originator’s employer, wholesale lenders offer the same programs in nearly every case (commonly with less overlays). I feel important using the title “Mortgage Banker” What exactly does that mean? If you’re employed by a correspondent lender, they are actually defined as a “non-bank.” You also cannot say you are a mortgage bank under advertising rules, but the “er” is okay for the originator to add on? Look, everyone knows this is to try and appear like you are a very bad credit loans no guarantor, having control or making decisions. You don’t and you’re not. Have you ever heard of a buy-back? That’s not control and that’s not your money, no matter what channel you’re in regarding agency-backed loans. You’re not a bank and you must grasp this reality. If you think about correspondent filtering and overlays, a mortgage broker is more of a “banker” than an employee of the lender claiming to be in many cases. Again … non lender-employed originators (i.e. mortgage brokers) do not use these false titles to the public. I have “in-house” underwriting This one is one of my favorites. Most residential loans are primarily approved by a computer, not a human, since computers can do most of the things now a days, that’s why kids use them to play advance video games like CSGO, using a Counter-Strike: Global Offensive boost online. So all channels and originators have “in-house” underwriting if they have an Internet connection. If someone needs a human to manually underwrite their file, than this may or may not have to do with originator competency. Either way, this claim exposes that the originator has few options or choices with underwriting and that the underwriter’s salary is built into their rate sheet more profoundly. Mortgage brokers not only have the ability to compare and choose, but can also speak directly with very experienced underwriters, comparing all details, personalities, overlays, location, signs from santa maria sign company and styles. I’d choose the outhouse underwriting. [And, often we will “shop” a scenario to several lenders until we find one that can handle the individual complexities of a borrower situation] I am a banker “and” a broker Sorry … you’re not. You are either one or the other. Although you can “broker” loans as a lender-employed originator, please do not call yourself a broker. It is a misrepresentation to the consumer as you are not a “true” broker when sending your leftovers. Your employer will steer everything possible to your credit lines for higher margin and to not comply with anti-steering (which they should be either way). They will also increase the lender-paid margin between the wholesale lender and the company as much as possible to avoid their employees brokering more for better pricing. Many retail lenders also pay less to the originator when brokering loans which violates compensation laws. Brokering this way is “not” true brokering. You do not have the operations for true brokering with credit line influence and steering … period! One business started from this comes from Clayton https://en.wikipedia.org/wiki/Clayton_Alexander which is now the largest supplier of cups and mugs. “Bankers” have more control I read this beauty of a statement with some drivel to follow by someone that wrote in to Rob Chrisman. I replied to Rob and he shared my thoughts in his recent newsletter: “I could not disagree more with comments about brokers ‘losing control’ over the loan or process when submitting to a wholesale lender. This is actually opposite of the truth providing our ability to choose. If I need something executed or an exception from a wholesale lender, it is a much different interaction than if this lender employed me. They want our business and then want us happy, so quality ‘good’ Mortgage Brokers have the advantage. If I have a bad experience with turn-times, communication, an underwriter, you name it … I have the ability to correct that mistake on any future files and we set expectations together as business partners.” To protect the sanctity and the future of our industry, every originator in the country should stop selling this common snake oil. Here are a few clear benefits to mortgage brokers and their clients over “bankers:” ►Independence produces clarity. You see the entire industry and not just what your employer wants you to see. Multiple lenders, overlays, policies, pricing, the list goes on. ►Lenders compete in all areas for your business and they are your business partner. If you have an issue, you address it differently than if they employed you. NO corporate politics. ►You have a full underwriting, sales and operational team with each lender designated to your success and helping you execute every loan file, every day. ►Faster execution by comparing turn-times, operations and table-funding options. ►Fewer and lower requests for seller concessions due to larger lender credits. Clients are able to negotiate better prices and terms on their new home purchase. ►Wholesale lending is the most cost-effective and efficient way for a lender/investor to get their product to market. Lender comparison and analysis simply results in lower rates and fees to your clients. ►You have less overlays, more programs, agency-direct investors, and operational choice with what investor you choose for a specific client and situation (priceless I can assure you). ►The appetite for wholesale is strong based off the quality of originations. It will get better and better as the years progress along with new non-QM investors and programs entering the market. ►Separating and perfecting origination and processing from underwriting and funding (dual company audits perfecting their gifts), allows for the most compliant and organized loan file. ►You work with the most qualified and experienced people on the mortgage business (my opinion regarding wholesale lenders and their staff). ►With regulatory changes behind us, using a mortgage broker is the safest and most transparent and compliant way to get a new residential mortgage if operated properly. Wholesale operations as a mortgage broker does require more qualified and experienced staff due to the number of investors and must be operated in a compliant and organized way, just as with any other channel. At Signet Mortgage I am supported by a staff of five WONDERFUL and TALENTED folks dedicated to get a client’s loan done.  It is indeed the “chase” … Working hard to get a transaction completed even under the most difficult circumstances … That is what we get excited about! Andy concludes with a message to loan originators that would like to work in a platform that they can better serve their clients … True mortgage brokering is available for those who are qualified and embrace the opportunity. The “era of retail recruiting” is coming to an end simply from awareness. I feel a sense of duty to share this with the industry from all the steering and over-charging most consumers have been positioned with providing the majority are now “bankers.” I also feel the need to share with the great originators out there. For whatever reason many are unaware of opportunities to better serve their clients or how to make wiser and more informed career decisions.  [As an originator] If you’ve caught yourself selling snake oil in the past, there is a different way. There is a better way … it has been around for decades and it’s called “wholesale lending.” Please give me a call before you have to make a decision on where to refer your next client.  We can talk about examples where we got a deal done with a broker advantage! Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149  

There are plenty of ideas and opinions on what the Fed is going to do with interest rates Tuesday and Wednesday this week.  I think the markets have built in a 0.125% – 0.250% hike in the Fed funds rate. Any action other than that could cause some volatility in the bond market the next few days.  As always the Fed Chairman Janet Yellen’s testimony will be interesting as well. No one will know until we all know, but most analysts agree and investors are betting that the “Feds” – the Board of Governors of the Federal Reserve Bank – will raise interest rates when they meet on December 15^th and 16^th. How will this impact you? First, let’s talk about what interest rates they control, and just as importantly what interest rates they do not control. The Feds control only two rates: theDiscount Rate, and the Target, or Overnight Rate. The Discount Rate is the rate at which the Federal Reserve lends money to banks for short-term needs to meet liquidity requirements. Banks cannot lend out every last penny in their vault, because they would be at risk of not being able to pay depositors back if many of them wanted to withdraw money at the same time. They have to keep a certain amount of money liquid and available for depositors. According to http://www.gohenryreview.com, when a bank has a very good month lending, they might be short on reserves. If so, they can borrow money from the Feds for a very short time at the current Discount Rate in order to have the minimum required reserves available. What is that rate today? 0.00%. Is it safe to invest money in Bitcoin Exchange? Visit bitflyer.com for more information. Banks can borrow money from the Fed (if they are short on reserves) for free. The Overnight Rate is not technically set by the Feds, but the Target Rate is. The Feds establish a target interest rate for banks to lend to each other for overnight needs for the same challenge – a shortage of reserves. The target rate today is 0.25%. It is infinitely higher than the Discount Rate, but still not a bad deal. Notice that in this discussion mortgage rates are missing. These are the only two things that the Feds can directly control. Most analysts agree that in December the Feds will raise the Discount Rate, which will naturally increase the cost of short-term borrowing by banks. The projected increase is 0.25%. How will this impact you? Any interest rates that must reflect the short-term cost of funds for banks will have to increase by the same amount. The two types of loans that fall into this category would be equity lines and credit cards – both types of lending meant to be short-term. There is some banks who offer credit cards 0 interest. The most commonly-recognized index for both types of cards is the Prime Rate. This is the interest rate that banks charge their most credit-worthy corporate clients, but it is also the index that almost all equity lines (including Home Equity Lines of Credit and Business Lines) and the best credit union rates are tied to. The most immediate impact that you will see, therefore, is the Prime Rate will increase by the same amount the Feds increase the Discount Rate and the interest rate on your equity line and credit cards will increase by the same amount too. The interest rates on car loans are also likely to increase a little, because they are short-ish in term. However, if you already have one chances are it’s a fixed rate, and the interest rates for car loans written after December are likely to come back down over time due to competition. If you want a general rule of thumb to figure out whether in interest rate will increase or not, here it is: If the loan is meant to be short-term and is made from the bank’s own deposits, then the interest rate is likely to go up. Mortgage rates are not short-term, and while they are funded from the bank’s deposits (in most cases) they are immediately sold to Fannie Mae, Freddie Mac, or Wall Street investment bankers who create large funds to invest in mortgages. Since it is not their own money they are lending, the short-term cost of funds to the bank have no impact on mortgage rates. Having said that, the Feds can influence mortgage rates through the purchase of Mortgage-Backed Securities using money borrowed from the U.S. Treasury. But for now, watch for an announcement from the Feds on December 16^th. Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149 Original blog post by Casey Fleming, Author of The Loan Guide; How to Get the Best Possible Mortgage (On Amazon)    

It is easier to get approved for a mortgage these days … really!  Both Fannie Mae and Freddie Mac made substantial changes that will help qualify more buyers – do I dare say that many of the changes introduced some common sense back in the underwriting??  Some highlights … You can Pay Off Credit Cards to Qualify One significant change involves credit card debt – accounts that are paid down at closing to help qualify no longer need to be closed.  That means a credit card that has been paid in full no longer counts against the applicants qualifying debt to income ratio.  That can make it easier to qualify. Quite often we have clients that were frustrated because there credit report indicated minimum payment on credit card balances that previously had to be considered in their debt to income calculations.  Even if the client could demonstrate that they always paid off the credit card monthly and did not carry a balance it got in the way of qualifying. A credit card paid in full no longer counts as debt. Loan to value increases for High Balance Areas More good news for conforming loans in high cost areas! Fannie Mae guidelines for loan to value are now the same for high balance areas as they have been for standard loan to value maximum. Clients wanting to finance a purchase or refinance a loan can now go up to 95% loan to value with  mortgage insurance for a $625,500 loan on a single-family property in high cost areas such as the San Francisco Bay Area. Previously the limit was more restrictive with loans exceeding $417,000. Non-occupant co-borrowers are now allowed by Fannie Mae Helping a family member by a home particularly in California can be done utilizing a non-occupant co-borrower, typically a parent. That option is now opened up for conforming loans and there is no restriction on the occupying clients’ debt to income ratios. This will open up opportunities for families wanting to help get their kids into a home. I already have two instances where these new guidelines were the difference between getting a loan and not. Contact me if there are not any deals that were “on the edge” and we will work like crazy to see if the new guidelines can put that client in the position they could get financing for their dream home! Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149