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Mortgage Fees may go up in 2012!

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Fannie and Freddie to Increase Fees…
But What Does It Mean?

Starting in 2012, Fannie Mae and Freddie Mac are expected to increase their fees, which could impact homebuyers depending on the risk of their loan or the location of their home.

Here’s what you need to know – including what’s really happening and what it means to homebuyers.

What fee is being increased?

First, it’s important to remember that Fannie Mae and Freddie Mac do not actually make home loans. Instead, they provide financing to lenders by purchasing mortgages from those lenders. Then, Fannie and Freddie either keep those mortgages on their books or they package them (in the form of securities) for sale to investors.

That means, Fannie and Freddie don’t actually charge direct fees to homebuyers. But they do charge fees to lenders when they purchase home loans from those lenders. The lenders, in turn, build those fees into the home loans they offer. So the bottom line is that any increase in the fee that Fannie and Freddie charge lenders will essentially be passed on to consumers.

However, the fees likely won’t be increased the same amount across the board. For example, Fannie and Freddie may charge higher fees when purchasing riskier loans or they may vary the fees based on which part of the country the home is located in (taking into account things like the foreclosure rate of the location).

Why is this happening?

Fannie and Freddie were seized by the government three years ago to help protect them from failing. That’s important because Fannie and Freddie (along with other government agencies) actually guarantee about 9 out of every 10 new home loans—and with the challenges that the housing market has seen recently, those guarantees have been extremely important. However, Fannie and Freddie have also cost the taxpayers more than $140 Billion.

So Fannie and Freddie will gradually increase their guarantee fees next year and reduce the size of the home loans they purchase in an effort to:

1. Save taxpayers money and
2. Reduce the amount of government involvement (by attracting more private funding to the mortgage market)

What does this mean to homebuyers?

As stated above, the fees likely won’t be increased exactly the same across the board—so the impact will vary depending on the location of the home, risk of the loan, etc.

But we can look at one example to get an idea of the potential impact. For example, as the Wall Street Journal reported, if we calculate an increase of 0.1 percentage point (which is a number the White House proposed), we can see that a home loan for $220,000 would be increased by about $15 per month.

So the increase may not be very noticeable for many homebuyers. And, if people purchase a home while affordability is still high and home loan rates are still historically low, they’ll still benefit significantly compared to other times throughout history.

What should people do?

The fees are expected to begin increasing in 2012 and gradually rising thereafter. If someone you know is thinking

Making Home Affordable Refinance Programs Have Been Extended

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The Home Affordable Refinance Program (HARP) has been extended until June 30, 2012. This is great news for anyone whose home has fallen in value and would like to take advantage of the current rates. Find out more about these programs below in our Blog.

Eligible Loans must close/fund/disburse on or before June 30, 2012

If  you have a Fannie Mae or Freddie Mac loan, you may qualify for HARP refinancing options. For more information, please contact us directly or request a FREE Online Rate Quote . We look forward to working with you. Visit us on the web:  http://www.refga.com

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Introducing New Refinancing Solutions

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Educate yourself about the new refinancing options available under the Home Affordable Refinance Program, or HARP. Launched by the federal government under the Homeowner Affordability and Stability Plan, HARP may help responsible homeowners refinance into more affordable payments by allowing borrowers who are current on their existing mortgage to refinance up to 105% LTV with no CLTV limitation when their home value has declined.

HARP options available through Real Estate Financial Inc:

Fannie Mae® DU Refi Plus
     > Available for borrowers who have not been more than 60 days late in the past 12 months
     > Reduced income/employment documentation requirements
     > Only loans currently owned by Fannie Mae are eligible
     > No limit on the number of financed properties owned by a borrower
     > Condominiums do not need to be recertified
     > Appraisal may not be needed for the refinance transaction
     > Primary residence, second home, and non owner occupied investment properties eligible

Freddie Mac Relief Refinance – Open Access
     > Available for borrowers who have not been more than 60 days late in the past 12 months
     > Reduced or no income/employment documentation
     > Only loans currently owned by Freddie Mac are eligible 
     > Primary residence, second home, and non owner occupied investment properties eligible

If  you have a Fannie Mae or Freddie Mac loan, you may qualify for HARP refinancing options. For more information, please contact us directly or request a FREE Online Rate Quote . We look forward to working with you. Visit us on the web:  http://www.refga.com

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Real Estate Financial Offers Customers More With Interest Abatement

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A 3 to 6 month interest abatement option on FHA and VA loans from Real Estate Financial is a simple way to help our customers increase their cash flow during the first few months of home ownership – when it’s needed the most.

  • For the first 3- to 6-months of your loan term, you’ll only pay the principal portion of your mortgage. The interest portion of your payment comes from abatement funds which are to be paid by the builder and/or seller on your behalf. No interest is tacked on to your loan!
  • The lower payment allows borrowers to use their extra cash for anything from moving expenses to new appliances or furniture, even to repay a secured loan used for downpayment.

For further information, contact us one of our professional loan consultants!

Please feel free to request a FREE Online Rate Quote or to Contact Us directly. We look forward to working with you. Visit us on the web:  http://www.refga.com

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Program for Disabled Children or Elderly Parents

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Real Estate Financial is pleased to announce our Program for Disabled Children and Elderly Parents . We know that not all situations are easy and we work hard to deliver the best programs and rates available to you.

Our Program for Disabled Children and Elderly Parents allows  parent-borrower or child-borrower transactions to be considered a primary residence for eligibility, regardless that parent-borrower / child-borrower will not occupy the property. Treating the transaction as a primary residence has many benefits including reduced down payment requirements and a higher limit on allowed seller contributions then if the home were purchased as investment property.

  • Parent-borrower transaction:
    • Parents may purchase or rate/term refinance housing for adult children who are physically or developmentally disabled who are unable to work or who have insufficient income to qualify on their own.
  • Child-borrower transaction:
    • Adult children may purchase or rate/term refinance housing for elderly parents who are unable to work or who have insufficient income to qualify on their own. For this program, elderly is defined as 62 or more years old.
  • Disabled child or elderly parent must occupy property as primary residence but are not required to be on the Note or Title if income or credit is not used to qualify.

Feel free to request a FREE Rate Quote or to Contact Us directly. We look forward to working with you.

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As Treasury yields go, so go mortgage rates

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Rates are heading back up, if you haven’t locked in a rate in the 4’s you are about to miss the boat. 

NEW YORK (CNNMoney) — Treasury yields have been climbing higher since fall 2010, as the economy begins to show signs of improvement. As a result, mortgage rates have been moving higher as well.

The national average interest for a 30-year, fixed-rate mortgage was 5.05% in the week ended Feb. 11 — marking the first time since May 2010 that the popular consumer borrowing rate topped the 5% barrier, according to Freddie Mac’s Primary Mortgage Market Survey. The data factors in an average of 0.8 points in fees that the average borrower paid to lower his or her rate.

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Buying HUD Foreclosures – REO Properties

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Finding a great deal may be easier than ever. For a limited time, FHA offers sales incentives on HUD homes (HUD Real Estate Owned properties) that will make these homes more affordable for homebuyers when purchasing a property using FHA-insured financing. The incentives VARY from State to State but may include: low down payments as little $100 down (aka HUD 100) and sales allowances that can be used to pay closing costs, make repairs, or pay down the mortgage amount.

The benefits of FHA financing are low down payments, competitive interest rates, and flexible credit qualifying. To find out if you qualify or to gather more information about this great product, contact us today!

To view current HUD home listings in your area, visit the HUD Home Store Website at http://hudhomestore.com/HudHome/Index.aspx

Feel free to request a FREE Rate Quote or to Contact Us directly. We look forward to working with you.

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Today’s average rates

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Avarage rates for Feb 10th: 30yr 4.875%, 20yr 4.75%, 15yr 4.250. Go to www.refga.com to calculate your savings!

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Mortgage rates are benefitting from trouble in Egypt

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On Friday, it was very clear that global investors shed risky assets like Stocks, and fled into the safe haven of the US Dollar and US Bond market, helping Bond prices improve.  The situation in Egypt is far from over, and it would not surprise us to see prices improve from current levels and remain above the 25-day Moving Average.  Mortgage rates are sure to benefit – atleast in the short term.

Mortgage Morning Outlook

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We will start the day carefully floating as prices are off their worst levels, but be ready to lock. The 25-day moving average resistance level has halted the mortgage bond’s gains over the past week. On a positive note, the a layer of support has helped Bonds remain near current levels. But get ready – should the Bond fall beneath the nearby support level, the price losses could be significant and very swift.

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Mortgage Rates