There has been so many changes in the mortgage industry nationally and in Colorado over the last few months it's tough to keep track. Our business has been constantly changing for the last 3 years, but over the last few months we have seen big changes that will affect you trying to obtain a loan. Below I have listed the big changes and how they will affect you.
Qualifying debt-income ratio has been lowered by most companies to 45% from 50%. The tougher guidelines decrease your purchase ability. If you household income is $4,000/month your purchase power has been decreased by over $30,000.
When FHA increases their fees this spring (upfront and monthly mortgage insurance) you will not only be paying more you will also be buying less.
CHAC in Colorado has recently changed their guidelines AGAIN, but this time it's to the home buyer's benefit. CHAC will once again provide down payment assistance to most home owners in Colorado. They do not lend in all cities and counties so for more information please contact us.
The new GFE which was instituted at the beginning of this year, doesn't do much but create a new headache and more paperwork. If you not seen this form you will get a good laugh once you receive it.
It's important that you understand how much the process and guidelines have changed before you begin the process of refinancing or purchasing a new home. Please call with any questions or advice. Or you can visit our website www.colomortgages.com
Friday, February 26, 2010
Wednesday, February 17, 2010
There is Not Much Time Left
No I'm not talking about the tax credit. While the home buyer tax credit has received the most attention, the government's mortgage backed security (MBS) program has done more for the real estate market and may have a bigger impact when it's over.
The federal government allocated $1.25 TRILLION to purchase MBS to keep mortgage backed rates. In fact, they have become the ONLY player in the MBS market. The MBS purchase program is set to expire at the end of March. Once the government leaves we will see rates increase, the question is how much? Some experts believe we will see an increase of at least 1% immediately and possibly 2%-3% higher by the end of the year.
What does this mean in dollars? If you have a $200,000 loan currently you could receive an interest rate of 5% which would give you a payment of $1,073. If rates increase to 6% your payment will increase to $1,199. The difference of $125/month or $1,500/month or $45,000 over the life of the loan.
If you thought of refinancing, have a rate above 6%, have an adjustable rate, or purchasing a new home, do it now. Go to www.colomortgages.com and apply online for free.
The federal government allocated $1.25 TRILLION to purchase MBS to keep mortgage backed rates. In fact, they have become the ONLY player in the MBS market. The MBS purchase program is set to expire at the end of March. Once the government leaves we will see rates increase, the question is how much? Some experts believe we will see an increase of at least 1% immediately and possibly 2%-3% higher by the end of the year.
What does this mean in dollars? If you have a $200,000 loan currently you could receive an interest rate of 5% which would give you a payment of $1,073. If rates increase to 6% your payment will increase to $1,199. The difference of $125/month or $1,500/month or $45,000 over the life of the loan.
If you thought of refinancing, have a rate above 6%, have an adjustable rate, or purchasing a new home, do it now. Go to www.colomortgages.com and apply online for free.
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