We have a months worth of data to share after the March 19th HARP 2.0 changes were introduced.
♦ It was speculated that the Loan to Value (LTV) would have no cap, the reality is that you can now finance up to 150% of the value of your home. This is an increase from the previous cap of 125%.
- Keep in mind that there are some factors that effect Condominiums and Adjustable Rate Mortgages (ARMs).
♦ If you have a 2nd mortgage, don’t worry! We have lenders that do NOT care about the total overall LTV.
♦ 80% of the applications we have run though the Automated Underwriting process have NOT required an Appraisal.
♦ Investment properties are now eligible for the HARP program.
Like most government initiated programs, there is a difference between the initial concept and the reality. However the positives significantly outweigh the negatives in this program.
We also continue to hear stories of other banks taking months to get loans closed. The refinance process is now taking us about 45 days from start to finish.
Please forward or share this to anyone you know who may benefit from this information, and give us a call so we can walk you through it and answer any questions!
Posts tagged APPRAISAL
HARP 2.0 Improvements!!!!
Larger EMD = Offer Accepted!
We are seeing a number of Pre-Approved buyers who placed offers losing out to competition. Here are the some of the tactics that buyers and agents were considering when placing an offer.
1) Conventional Loans are more appealing than FHA ► This is not the case. The house is either in good shape or it is not, and sellers are more concerned with the cash needed to close.
2) Large down payments must be an advantage ► This may be percived to be true, but a 20% down payment from a buyer only offering to put $100 up for the Earnest Money Deposit (EMD) smells funny to me.
3) Pre-Approval detailing they can qualify for more than the offer price ► This also is not advantageous considering it only takes about 5 minutes to get a pre-approval letter from a loan officer.
Offer price is the most important piece to the seller and listing agent. The buyer’s credibility and seriousness can be clearly stated by the EMD they put up with the offer.
For example, let us look at two offers on a home.
1) $180,000 offer with a conventional loan, 5% down payment and $1,000 EMD.
2) $180,000 offer with a FHA loan, 3.5% down payment and $6000 EMD.Offer 2 indicates a much more serious buyer with the higher EMD and cash needed to close will be less of a concern.
We’d love to hear your thoughts on this so PLEASE comment below!
Big Banks VS Mortgage Brokers
We have got a lot of calls recently from customers trying to get a lower rate through the banks they pay their mortgage to, and frustration is setting in. We find that most people call their current lender first because they do not know who else to call. Then they get the idea that they deserve special treatment as a result of their established payment history, thus making the process quick and painless.
Their current lender also piles it on, implying that because they have their current mortgage, the entire process will be easy. They claim there is limited documentation and the appraisal will not be required.
But this simply is not the case. Maybe this was true back when the Big Banks kept the mortgages on their books, but now everyone sells them to Fannie Mae or Freddie Mac so we all play by the same rules.
The striking part is the gap between our rates and the big banks has never been greater. Simply put, the banks are charging higher rates simply because they can.
Eventually, there is some point in the process that expectations set by their current lender to not get met and the troubles begin.
Most people are calling us because past clients have done a wonderful job in referring and we greatly appreciate that. You will continue to hear these stories from friends and family because the rates are so low. So call us to get the truth quickly as it could take forever with your current mortgage company. We are here to help!
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