Considering an FHA loans to purchase or refinance your home.  Contact your Loan Officer prior to October 4th.  We’ve been talking about, The new hidden price on FHA loans that is equal to a rise in the mortgage interest  rate of one-third of one percent.  This may make the difference on whether someone will be able to qualify to purchase a home or not purchase a home.  It will also make the payment on FHA refinances higher:

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Upfront Premiums (Case Numbers Issued 10/04/2010 and later):

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October 4, 2010, for FHA traditional purchase and refinance products, the upfront premium, shown in basis points below, will be charged for all amortization terms.

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Mortgage Type Upfront Premium Requirement
Purchase Money Mortgages and Full-Credit

Qualifying Refinances

10013PS
Streamline Refinances (all types) 100 BPS

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Annual Premiums

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Effective for FHA loans for which the case number is assigned on or after

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October 4, 2010, FHA will increase the annual premiums collected on a monthly basis. For FHA traditional purchase and refinance products, the annual premium, shown in basis points below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length ol’the mortgage according to the following schedule:

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LTV Annual Premiums for Loans > 15 Years
= or < 95 percent 85 BPS
>95 percent 90 BPS

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The annual premium for amortization terms equal to or less than 15 years remains unchanged and is collected according to the following schedule.

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LTV Annual Premiums for Loans = or < 15 Years
= or < 90 percent -None
>90 percent 25 131’S

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Cancellation of FHA’s Annual Mortgage Insurance Premiums

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The cancellation policies defined in Mortgagee Letters 2000-38 and 2000-46 remain unchanged.

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Closing Costs Soar.

Aug 19, 2010

Consumer protection regulations and more stringent underwriting have driven the average closing costs on loans up by 36.6% according to a recent survey.    The average closing costs on a $200,000 loan rose to $3,741, which represents a 36.6% increase from a year ago.  This is another example of things designed to help the consumer have an opposite outcome.

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Yes many home owners who owe more on their homes than the value of their homes are able to refinance at today’s low mortgage rates.  FHA streamline refinances are available without requiring an appraisal and without documenting income (employment is verified).  Also Fannie Mae is allowing many of the loans it holds to refinance without a new appraisal through the Fannie Mae Refi Plus program.

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Go ahead check into it while rates remain low.

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www.paulcantor.info

e-mail Paul

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Low Mortgage Rates  Now Available to Those with Depreciated Home Values.


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“Making Home Affordable Program,” which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

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One of the initiatives in this program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

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.Who is eligible?

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You may be eligible if:

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  • You own and currently occupy a one- to four-unit home.
  • Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
  • You are current on your mortgage payments.
  • The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
  • And, you have a stable income sufficient to support the new mortgage payments.

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How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?

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Simply call or email me. I’ll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

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I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?

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Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less, you may qualify. The current value of your property will be determined after you apply to refinance.

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If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?

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No. But the good news is, you may qualify for the Modification Initiative. Contact me to discuss your situation and review your options.

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I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?

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As long as the amount due on the first mortgage is less than 125% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

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Will refinancing lower my payments?

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That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.

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However, if you are paying interest only on your mortgage, you may not see your payment go down. BUT… you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

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What are the terms of the refinance and what will the interest rate be?

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All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate.

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The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

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Will refinancing reduce the amount that I owe on my loan?

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No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

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Can I get cash out to pay other debts?

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No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

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How do I apply for the Refinance Initiative?

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Call or email me today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately.

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As part of the discussion, we may need to look at the following information:

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  • Recent pay stubs to help determine your gross (before tax) household income.
  • Your most recent income tax return.
  • Information about any second mortgage on your house.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all other debts.

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A similar program is Available for those with FHA mortgages (Streamline Refinance).

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Contact Paul  for more information

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www.PaulCantor.info

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20 Year Fixed Rate Mortgages are becoming the popular choice for many home owners.  Most home buyers and home owners only think fix rate mortgages come in two varieties:  30 year fixed and 15 year fixed.  Actually fixed rate home loan notes are written in many other terms including 4o year fixed, 25 year fixed, 20 year fixed and 10 year fixed rate mortgages.

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Many want a fifteen year loan as the rate is lower that that of a thirty year loan but do not like the payment.  The solution is often the unknown twenty year mortgage.  20 year fixed rate mortgages split the difference between the 30 year and 15 year options for those who can afford to spend more money on their monthly housing payment.

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www.PaulCantor.info

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Fed Buying Mortgages

Only a few months after the Fed stopped its $1.25 trillion program of purchasing mortgage backed securities, the Wall Street Journal reports Bernanke and Co. may start buying mortgaged backed securities again.  This is not adding any additional capital to the program but re-investing proceeds from mortaring mortgage backs it currently owns.  Previously it was thought that the funds from maturing bonds would not be re-invested in more mortgage backed securities.

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With rates as low as they are many are refinancing loans at higher rates and the fed is re-cooping some if its investment sooner than expected.  This is taken by many as a sign that the Fed is concerned about the lackluster recovery and possibly a double dip recession.  However this may mean we could enjoy these super low rates a little longer, hopefully fuelling the housing market.  Advice is not to wait for rates to drop further but to take advantage of historic low rates through refinancing or buying a new home.

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www.Paulcantor.info

(804) 433-1510

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APR calculations have lost their uniformity.  With the introduction of the new Good Faith Estimate this year the industry has developed and adopted different ways of calculating APR.  The new GFE was supposed to make shopping and comparing loan programs easier.  In many ways it has simplified thing, most notably by requiring all lender fees to be summed up in the adjusted origination charge.  For mortgage originators who do no intend to service the loan the yield spread premium (YSP), costs paid by the lender for the borrower, is sometimes not included in the APR calculation.  When this is the case, the APR is higher for the non-serving lender (broker) versus that of a servicing lender, even though the actual cost to the borrower are the same, Since over disclosure has been accepted by the industry, our processing and closing staff routinely re-disclose TIL statements, as the method for calculating the APR seems to vary by date / document preparer.  We want to make sure there are no hick-ups on your loan that will hold-up closing and sent you a TIL with an APR calculated not including the negative fee being paid for you (YSP).

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The new GFE regulations were created with intentions to help the consumer, but in practice have actually made things more confusing.

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www.paulcantor.info

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Why a Mortgage

Jul 18, 2010

A mortgage is a debt that is secured by real estate. Mortgages play a large role in the financial markets. When used properly mortgages go beyond the role of providing a way to achieve the American Dream of home ownership: They provide a means of wealth creation, a low cost method of reducing cash outflows, among a host of other benefits.

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Mortgages help people manage their lives more effectively. It is important to make sure on has the best mortgage to fit his/her situation. A mortgage is one of the largest debts taken out by households, and choosing the the wrong mortgage program may cost hundreds of thousands of dollars. It is more important to choose the best mortgage for ones needs than to get the absolute lowest rate on the wrong loan product.

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Is your mortgage right for you?  Will it be right for where you want to be?  Happy to discuss if anyone’s listening.

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