Baltimore Metro Real Estate

I often run into buyers who are spending a lot of time looking for lenders online; frankly they've often just been confused by the overwhelming amount of "information" out there, and frankly I generally find better deals at a local lender. 

Shopping for a mortgage online isn't for the weak or weary, but here are a few thoughts from a recent New York Times article that I think are helpful:

Shopping for a mortgage online can save borrowers a lot of time, and possibly money if they find the right deal. But working with these so-called online marketplaces can also be overwhelming for some people, especially as the various lender offers start pouring in.

If you are shopping for loan rates on sites like Bankrate.com or LendingTree, also be sure to read their “frequently asked questions” section, industry experts say — and recognize, too, that these sites are businesses that make money by working with lenders, via a pay-per-click formula or by generating leads.

If you provide personal information, including your credit score, find out how widely that material will be circulated.

CLICK HERE to read the full article at the New York Times

CLICK HERE FOR  CURRENT MARKET STATS
This is a great interactive look at what's going on in sales and prices!

RE/MAX CEO Margaret Kelly appeared on CNBC's Street Signs on March 14, 2012 to discuss the RE/MAX National Housing Report, which found that for the first time in 18 months, home prices rose year-over-year in February

 

Due to their ineptitude in handling foreclosure paperwork and illegally
foreclosing on homes, the five largest mortgage servicers in the US
have agreed to pay a $25 billion judgment to settle an investigation
into illegal foreclosures.  That would be Wells Fargo, Bank of America,
JPMorgan Chase & Company, Citigroup, Inc., and Ally Financial.

A few well-meaning points in the deal include:

-Principal Reduction for homeowners, in which loan servicers will
pay $17 billion to homeowners in the next three years.

 

-Refinancing for Underwater Homeowners Servicers will commit
$3 billion to refinance underwater mortgages.

-$2,000 for Borrowers who were Foreclosed On All homeowners
who were foreclosed on by the five banks from Jan. 1, 2008, to Dec. 31, 2011
are eligible for the cash award, not just to those who were illegally booted
from their homes.

 

-New Guidelines for Review and Processing of Troubled Loans To help
protect against improper foreclosure, banks must now offer a single point of
contact for borrowers and use new review and processing requirements.

 

Aren't you a bit wary?  The government has a woeful history of managing
huge sums of money, and the banks and loan servicers are even worse. 
Having dealt with the lenders in negotiating short sales and foreclosures,
I can tell you they have very poor systems in place to handle anything like
this, very poorly trained staff, and a very bad attitude.  This is $25 billion
that is going to be squandered, wasted, and misused.

 

HUD announced that mortgage insurance for FHA loans will increase April 1, 2012 and again June 1, 2012. Mortgage insurance protects the lender should a borrower become delinquent and go into foreclosure.

As FHA mortgage insurance exists today, there is an up-front mortgage insurance premium equal to of 1 percent of the loan’s amount. Upfront MIP can be added to closing costs, or borrowers can finance it by adding it to the loan amount.

There is also an annual MI premium that varies by loan type. For 30-year fixed rate mortgage, annual MIP is equal to 1.1% of your loan size for LTVs of 95% or lower. For everyone else, annual MIP is 1.15% of the loan size.

Annual MIP is paid monthly. The formula is (Loan Size) * (MIP Rate) / (12 Months) = Monthly MIP payment.

So what the does the FHA's new mortgage insurance rates mean to FHA mortgage applicants?

Starting April 1, 2012, Upfront MIP for loans raises from 1.000% to 1.750% of the loan size. Annual MIP fees change, too, climbing by 10 basis points, and by an additional 25 basis points for loans between $625,500 and $729,750.

If you're planning to buy soon, the best way to avoid the new FHA fees is to lock in your interest rate, and have your FHA Case Number assigned before the new FHA  premiums go into effect April 1, 2012.

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