Jeremiah Phillips of First Mutual Corp

Are you paying too high of interest rate for your FHA Loan?

What is an FHA Streamline?  Here are some of the bullet points when looking to see if you qualify for an FHA Streamline:

• Your Mortgage Must Already Be an FHA Mortgage (any term ok)
• The Streamline Refinance is to Result in the lowering of your overall interest payments (either monthly or the term of your mortgage) ie. Going from a 30 year to a 15 year.
• In a Streamline there can be no cash out but a standard FHA Refinance can.

Here are 6 Direct Benefits to the Streamline Refinance

1. Little or No Out-Of-Pocket Costs
2. Very Little Paperwork
3. Appraisal Usually Not Required
4. No Credit Check, Income Verification, Employee Verification with your employment.
5. These Refinances can from start to finish can close in the matter of 7 business days.
6. Take Advantage of Today’s Low Interest Rates

Please contact me today to see how much money you can save now!

Here are 6 tips to help get your application approved sooner rather than later.
 

Tip #1. Do Your Legwork Ahead Of Time - Understand the basics of refinancing and what various terms mean before you apply.  You should also know what the prevailing rates are and whether you want to pay points to “buy down” your rate to a lower level.  Once you have that information, decide whether you want a fixed-rate loan, an adjustable or some type of modified product (which remains fixed for three to seven years before becoming adjustable).  If you decide on a fixed-rate, determine whether you want a 15-, 20-, 25- or 30- year loan.  Keep in mind, the shorter the loan, the faster you build equity and the less overall interest you pay.
 

Tip #2. Don’t Try To Figure Out Where The “Interest Rate” Curve Will Go - For one thing, it’s impossible. Nobody knows in advance how low interest rates might go, or when they’ll start to climb. Rather than trying to predict the unpredictable, just get locked in a program that works for you.
 Besides, waiting for rates to fall is usually counterproductive.  Not only might rates rise, your indecision is a sign that you’re not really serious about refinancing.  This could drop your application back to the bottom of the pile.

 Tip #3. Are There Really Any Shortcuts - Many lenders have an incentive to get your loan approved sooner.  So ask your current and prospective lenders if they have any programs to get you to the finish line quicker.  Among the possibilities:
     
 ·         Loan modification - These programs basically lower the rate on your existing loan without changing the length of the loan. Loan modifications aren’t available to most borrowers, since their loans have already been sold on the secondary market and can’t be changed.  But it never hurts to ask your current lender if such a program is available.
 ·         Streamlining - Some lenders offer a quick refinancing for current customers.  You typically pay a slightly higher rate for the convenience and speed.
 Tip #4. Use A Mortgage Professional - If you have troubled credit, an unusual financial situation or are just overwhelmed by the process, it can pay to have an advocate who knows the system to help you sort through your options.  That’s the role a good mortgage professional can play.
 Mortgage professionals do business with many different lenders and often have an inside track that can help speed up the process.  In addition, mortgage professionals can offer more personalized service and are there through the entire loan process. To find one, ask your friends and neighbors for a referral.
 Tip #5. Have Your Paperwork Ready - Here’s what most lenders will ask for when refinancing your home.
 One month of pay stubs
Your most recent W-2 forms
Last year’s tax return (or tax returns for the past two years if self-employed or employed at your current job for less than 2 years)
Bank and brokerage statements for the last month
Mortgage statement
Statements for any home equity loans or lines of credit
Homeowners insurance statement
Past commission statement(s) if you’re in sales
Smart borrowers will provide even more information, particularly if they’re self-employed or have any kinks in their finances. For example, instead of one year’s worth of tax returns, you should provide 1040s for two or three years, as well as pay stubs for two months and statements from your 401(k) and other retirement accounts.
  Tip #6. Follow Up And Follow Through - If you really want to expedite the process, you should fax, overnight or hand-carry any paperwork that’s requested.  Don’t wait for the regular mail and don’t delay responding to a request for more information.  Even short delays will send the wrong message to the underwriter.  If you don’t return your documents for a week, it conveys to the lender you’re not as excited about this loan as somebody who gets their documents back the next day.
 Keep the heat on by calling or e-mailing your loan officer every few days until your loan is approved.  Be polite and friendly, but make it clear you want the process to go as quickly as possible - remember, the squeaky wheel that gets the grease.
 
**Rates Have Dipped!  If you are thinking of refinancing call us today for a free rate quote.
  If you do not have time to speak with me today please feel free to fill out this Secure Online Mortgage Application to help jump start your loan process…  
    

Here is some priceless knowledge from www.myfico.com in regards to running your credit multiple times while shopping for a mortgage. 

What to know about “rate shopping.” 

Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though youre only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score. 

You’ve probably heard that the government is going to be sending rebate checks to most Americans in an effort to stimulate the economy. Here is a brief explanation of, among other items, who gets rebates, how they are calculated, how higher income can reduce or eliminate a rebate, and what, if anything extra, you’ll need to do to get one.

Who gets rebates?

Only individuals get rebates. Business entities don’t get them. Nor do estates and trusts. But there are other new tax breaks for businesses. Not all individuals, however, get rebates. You don’t get one if you are or can be claimed as someone else’s dependent. Also, nonresident aliens and illegal immigrants don’t get rebates.

Does that mean all other individuals get rebates?

No, to get a rebate, in general, from 2007, you must either (1) owe tax as computed in a special way or (2) have at least $3,000 of qualifying income—earned income generally, social security benefits, and veterans’ disability payments (including payments to survivors of disabled veterans).

How much do you get?

A single person with no qualifying children gets a maximum rebate of $600 or a minimum rebate of $300. A married couple filing jointly with no qualifying children gets a maximum rebate of $1,200 or a minimum rebate of $600. To get the maximum, your 2007 tax (figured in a special way) must be $600 or more for a single person and $1,200 or more for a married couple filing jointly. To get the minimum, you must have at least $3,000 of qualifying income (explained above) or owe tax (figured in a special way) of at least $1. Your rebate amount will fall in between the minimum and maximum if your tax is more than $300 but less than the maximum rebate for your filing status. In that case, your rebate will be equal to your tax. For example, you are single and your tax is $500. You will get a rebate of $500.

Increased amounts for those with one or more qualifying children?

Anyone who qualifies for a rebate in any amount gets an additional $300 for each qualifying child. To qualify, a child must be under the age of 17, live with you for more than half of the year, and be your son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, or descendant of any such individual. In addition, the child must not have provided more than half of his or her own support. Thus, for example, a married couple filing jointly with two qualifying children could be eligible for a maximum rebate of $1,800.

How does higher income affect a potential rebate?

The amount of the rebate (both the basic and the child’s amount) is reduced by 5% of a taxpayer’s adjusted gross income (AGI) above $75,000 ($150,000 for joint returns). For example, a married couple filing jointly with no children has AGI of $160,000, and net tax liability of over $1,200. Their rebate is $700: [$1,200 basic rebate − $500 phase-out (i.e., 5% × ($160,000 − $150,000)].

What do I have to do to get the rebate check?

Nothing. The IRS will automatically figure your rebate based on your 2007 tax return that is due April 15, 2008. It will start sending rebate checks out in May for those who file before then.

FHA Mortgage Limits go through the roof!! If you have been waiting they are here!!!

Here are the New Jersey Limits as of today:

The one thing that sticks out to everyone is Falling Interest Rates… With all the termoil in the mortage industry rates are doing very well.  A lot of people are now qualifying for rates in the 5’s…  That includes some FHA canidates.

With the changes in the mortgage industry there are currently things that affect the rate you will receive that have not been around before.  Credit score hits are the #1 thing that are determining you to get the lowest rate, but not the only thing.  If your rate is over 6.5% or an adjustable now is the time to see what you qualify for to get that mortgage payment down to a rate and payment you will not have to touch for a very long time…

When people hear the Fed is dropping the prime rate people automatically assume the Fed is lowering rates on regular 30 year fixed mortgage rates.  Well in partial that may be true but the Prime Rate affects other types of loans such as a Home Equity Line of Credit that you may have on your home as a second mortgage that you can draw against.  

 30 year fixed rates are directly affected to the 10yr T-Bill.  That is your best barometer of whether or not rates that day are going to be getting better or worse.  This only really comes into play when you will be closing on a mortgage in the next 30 days.  That is the standard time a rate is locked for.  So if you are still looking for a home to purchase and do not have a closing date scheduled then that would not be the time to watch every click on the 10 year T-Bill changing.  

Happy Holidays!

It’s getting to be that time where everyone is starting to think about the Holidays… Before the holidays arrive it’s always a good idea to check your mortgage to make sure there won’t be any surprises in the new year.

In the year 2008 there will be over $1 trillion adjustable rates coming due in America.  And with the current raise in interest rates over the past few years we can assume they aren’t going to be going down.  Every month you get your mortgage statement and you send in the payment.

If everyone takes a minute to analyze this statement - look for the following (if it’s not on your statement then pull out your mortgage information from your closing)

• Adjustable Rate Mortgage
• Interest Only - If you haven’t paid your balance down at all since you’ve had your mortgage.
• Interest Rate over 6.5%

If you have any of these types of mortgages it is worth the 15 minute phone call for an evaluation to see if it makes sense to take advantage of the lower rates.  I can be reached toll free at 888-331-6300 Ext. 566 or on my 24 hour hotline 609-760-9234.  You can also fill in your information below to send me a question-

Qualifying for a mortgage: Debt to income

Today everyone is hearing the words DTI- Debt to Income.  What does this mean you ask?
This is a part of how the mortgage industry qualifies someone to see if they can afford the mortgage they are applying for.

How it works:
You divide your Monthly Gross Income (Gross Income is before taxes are taken out) by your new housing payment plus all installment/revolving and legal (child support/alimony) debts. You then take that result and multiple by 100 to get the DTI Ratio.

Example: If you make $60,000 a year that is $5000 a month.  If your new house payment is $1500 (this includes taxes, homeowners insurance and PMI if applicable) + $400 (car payments, credit card minimum payments) it would look like this:
$1900 / $5000 = .38 Multiple by 100 = 38%. (GOOD RATIO TO HAVE)

A good ratio to have to qualify for your standard mortgage with out any other factors being considered should be below 42%.  When you start going above that other factors could result in getting approved for the mortgage or not. 

The easiest way to see if you qualify is to give me a call at 888-331-6300 Ext. 566 and in about 10 minutes and going through your information I will be able to tell you what you qualify for to purchase or refinance a home.

How does one get out of a mortgage that is adjusting to a payment you can not afford?

The answer is FHASecure Iniaitive! 

This new plan to help nearly 250,000 people save their home from adjustable rate mortgages that reset too high.

Here are the highlights of the FHASecure Initiative:

1. The mortgage being refinanced must be a non-FHA ARM that has reset.   Your loan must have adjusted already to be eligible.

2. The mortgagor’s payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments.  You can be late on your mortgage but you must prove that you were not late prior to the reset and that the reset is the only reason why you have lates now. 

3. If there is sufficient equity in the home, under additional eligibility instructions provided below, FHA will insure mortgages that include missed mortgage payments.  If you are on a plan with missed mortgage payments that need to be paid, they can be rolled into your new loan, so long as you have enough equity.

4. Under certain conditions explained below, FHA will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2), the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing.  

Let’s say you owe $300,000 on your home but its only worth $270,000 today.  You can get a new FHASecure loan for $261,900 and a new loan for $38,100 from your new lender or the current holder of your mortgage if they will go for it.   This new note terms and payments have to be factored into your qualifying ratios but if they are deferred for 36 months, they don’t have to be.    These combined loans can exceed 100% and can exceed the FHA loan limit in your area.

5. Lenders must determine, as part of the underwriting process, that the reset of the non-FHA ARM monthly payments caused the mortgagor’s inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.

The bottom line is this is not a free pass.  If you are late only because your ARM adjusted and you can prove it, this program is the best way to save your home and your credit.

However, this is a terrific new program and once again demonstrates why FHA has been with us for decades. 

Today a lot of people woke up to finding out that Greenpoint Mortgage along with others have gone out of business. 

In the past few weeks I have met with, had conference calls and read articles on all the changes and how it is going to affect YOU the end consumer in getting loans. 

Over the past 5 years the mortgage industry has been stretched out like a rubber band to the seams and having loan programs that would allow some pretty wild things to happen (I.E. Lower credit score’s, 100% Financing & Not verifying certain information such as income and even employment).  Well the changes we are enduring right now is the snap back from the rubber band and constricting to a point of not doing most of those loans we have been so accustom to doing with out batting an eye at. If you a consumer who fits into one of the above categories all I can say is let’s update those pre-approvals you have.  Don’t think that you just did it a week ago that everything is ok - right now the mortgage market is changing on a minute to minute basis.  

Have a great weekend!!!  I also want to roll out my HOT LINE # which is getting me where ever I am at please do not hesitate to call - 609-257-4456. 

 Jeremiah

I will be available at a NJ Open House hosted by Dan Bozza of RE/MAX Central this coming Sunday from 1pm til 3:30 pm. at 2 Crane Way in Toms River New Jersey. Stop by for your free Homebuyers Tool Kit!  I’ll be doing on the spot no obligation pre-approvals as well as answering any questions or concerns related to financing. See you there!

I got a call from a new client over the weekend and they had mentioned they don’t believe they can get 100% financing as a First Time Homebuyer.  First thing I said was where did you get that information - because it is a false statement.

As a First Time Homebuyer you qualify for some of the best programs at 100% that I’ve seen in a long time.  Perfect example a good friend of mine bought a house last month and I got him into without $1 dollar out of his pocket at closing.  Will that happen on every purchase no.  But with the seller concession and the 100% loan I gave him he got a great rate and still had the money he needed to buy new furniture. 

I have this loan as an 80/20 option as well to avoid mortgage insurance as well… Give me a call if you have any questions.  You don’t have to be a First Time Homebuyer to get this loan either.

This blog is generated today due to why choosing a Mortgage Banker over a Mortgage Broker can really effect more then you think.  I am a mortgage banker (I know I need to make that clear). 

Rates: This is the number 1 asked question:

The Banker gives out rates that the bank he/she works for gets direct from wall street.

A Broker get’s rates from a bank that deals directly with wall street.  Now can someone broker a loan with a bank? The answer is yes - this is where it becomes a little confusing.  For all in-tense and purposes a Banker get’s the best interest rates vs. a true mortgage broker.

Fee’s: Which is more or less?  The fee’s change from mortgage company to mortgage company naturally but one thing does stay constant when you are a broker you need to pay your staff and the mortgage company you are brokering the loan too.  Usually to you the borrower it means more money to close.

Now this is the biggest reason you want to use a Mortgage Banker vs. a Mortgage Broker:

CONTROL

I am a mortgage banker and one thing I can do with my loans is control the loan from the time we do your inital application all the way through closing!  This is important because if I have something you need to get me there is no red tape on where to send it to (your loan in underwriting and trying to clear for closing) the underwriter because this individual is in my office.  This also means I can walk your paperwork to the underwriter for quicker decisions in time crunch situations.

HIGHLIGHT OF THE MONTH (SO FAR): Me and my staff did a complete clear commitment inside 24 hours of the borrower calling me on my cell phone at night subject to the appraisal being completed - which happened the next morning.  Please don’t hesitate if you need anything short of a miracle to get your loan closed!

These late spring months are making it feel like summer is already here.  It’s another beautiful day to take the top down on those convertibles and let your hair down.  But what is happening to today’s interest rates? 

For the most part in the early part of this year rates weren’t moving to much staying in a general area and depending what you qualified for relatively low.   Things are changing - rates are starting to rise.  Not big jumps but definitely moving in the upward direction.  

What you need to do if you are in any of these situations: 

• If you had to take a higher interest rate due to credit at the time you purchased or cashed out on your property take a look if you can fit into a more conventional rate and do it quickly while you can still save a lot of money. 

• If you are in a Negative Amortization loan such as a COSI - COFI or any pick a payment loan.  If your long term plans are staying in the house - look into getting that rate fixed into a lower rate.  Most people don’t understand they might be making a payment from any where 1% - 4% but the actual rate of interest you are accruing is in the 8’s- call me and I will show you where to look on your mortgage documents.  I know because I just had one and by refinancing saved almost $1000 a month in negative amortization.  

• If you are in an Adjustable Rate Mortgage and the term for it is going to be coming up in the next 12 to 24 months.  When things start to go up it is better to be safe then sorry. 

Please feel free to call or email me if you are in these situations or maybe you want to just discuss your current options.  Stay cool it’s going to be a hot one today. 

I received this great email and I know that this question comes across a lot… Please feel free to call me and ask me questions… Also keep in mind and go back to the handyman blog before this one - they both can be used together.

Hello Jeremiah. Hope you are doing well. I am hoping you can shed some light on some questions I have regarding loans for investment properties.How does one qualify for a second mortgage on an investment property? I hear that lenders rather have a property that is already rented to ensure cash flow or they require the real estate agent to write that the property has potential cash flow and that will be enough. Is this true? Can you just tell me what the general rule of thumb is to be a candidate for investment property loans?

A question I get a lot when working on mortgages is: Can I get more then I am purchasing the house for help do some renovations?  This question can be answered with a “YES”.  If you are looking at handy man specials or possibly tearing down a home and rebuilding it-  I have the loan for you.

 I have done a few of these for my friends from buying a row home in Philadelphia to a house in the South Jersey suburbs and they love it!  One of my friends was able to turn around and sell the house and profit over $30,000 and only having to make one mortgage payment out of his pocket before it was sold-  ASK ME HOW!

To get started the final value of the home is going to need to be valued higher then the totals of the initial cost and the renovations. Each situation is different and if you are going to be living in the house after the house is renovated we can give you a loan with less left over equity at the end of the day.

How is works?
1. At the time of closing we will do a mortgage for the cost of the house and the renovation costs. There will be draws against the renovation costs as you finish some of the work. A certified contractor will be needed to verify the work has been done.

2. After all the work is done depending if you are an investor or this is going to be your primary residence we will not have to close again or we will have to do a final closing based on the finished value of the home.

Note: If there is enough equity in the house the mortgage payments during the construction phase will actually be added into the mortgage: Meaning - NO CASH OUT OF YOUR POCKET, which I like!

We will have to get estimates from professionals in the fields of work that the renovations are going to be done. This does not mean they have to perform the work. If you are a skilled laborer and you are going to do some of the work yourself it could save you money as long as the work performed meets building code requirements.

As with any type of loan the applicant must qualify according to the loan qualification guidelines but considering one of the guidelines is a minimum 620 credit score it appears many will take advantage of becoming a first time home owner or consider investing in real estate.

If you would like to talk about this loan, how it works, and how to qualify for it give me a call at 609-760-9234 or email at jphillips@firstmutualcorp.com…. I am available weekends and evenings!

I am now back working at First Mutual Corporation.  Here is my new contact information:

Jeremiah Phillips
856-663-7800 Ext. 566
888-331-6300 Ext. 566 Toll Free
866-266-1966 EFax
609-760-9234 Cell
jphillips@firstmutualcorp.com
First Mutual Corp.

Seller Paid Closing costs is almost becoming commonplace on all new purchases.  Why is this trend picking up across the country?
There are a few reasons:

Over the last 4 years second mortgage rates have been so low that they were actually lower then the Mortgage Insurance alternative.  Currently the prime rate which affects the Home Equity Line of Credit (HELOC) rates which a lot of people have (myself included) is 8.25%.  Now depending on the margin you have on this HELOC could mean your rate can be between 7.75% - any where above.  If you were one of the lucky ones and got a Prime MINUS rate.  Then you are sitting around the 7.75% rate. 

Over the last 6 months to a year we have switched gears to fixed rate seconds.  Now in the last blog we were talking about the changes in the industry.  The second mortgage rates are also changing.  The second mortgage’s are also starting to have problems with people making the payments.  They are starting to raise the rates up so high that people just won’t take them.

 For Example - I had given a quote to someone at a rate of 9.75% second (this was a 100% loan - always a little higher) was kicking the competiton’s butt and then as of March 9th - that second mortgage program is not allowed for 100% financing and the next loan that allows 100% is a rate of 15%.  I then went back to my 100% one loan program and the overall payment with mortgage insurance saved this gentlemen - $200 a month over the popular 80/20 loan we have all known to love. 

If you are someone who has been pre-approved in the last 3 months and were looking at 100% financing - Please double check with your mortgage professional and have them double check that you are still in the  best program combination to suite your needs. 

If any one wants to get a second opinion please do not hesitate to reach out to me for some friendly advice… www.todayslendingrates.com

Have a great weekend!