For all purchase and refinance FHA loans with a term greater than 15 years, approved borrowers will see a .5% MIP reduction. In plain terms, the reduction in MIP is similar to lowering your mortgage interest rate by half of a percent.
Current FHA loan holders may benefit by considering a streamline refinance to gain monthly and annual savings with the reduced MIP, while rates remain at an all time low. With a streamline refinance, borrowers are not required to appraise their home or verify income.
How You Can Save With a Streamline Refinance today
Below is an example of the savings that an average current FHA loan holder may expect to see with a streamline refinance and an MIP reduction.
|Your Current FHA Loan||Streamline Refinance After 1/26/15|
|Principal & Insurance||$1061.55||$942.44|
|Total Monthly Payment||$1,609.97||$1,407.92|
Total Monthly Savings with Streamline Refinance: $202.05
5 Things to Know About the FHA Mortgage Insurance Reduction:
- For all FHA loans the insurance premium will be reduced by 50 basis points (0.5%) on both purchase and refinance transactions.
- Applies to all purchase or refinance FHA loans with terms greater than 15 years.
- There is no change in premium for loans with a term of 15 years or less. The reduction affects all loan types with the exception of FHA streamline refinances made before May 31, 2009. There is no change to the 1.75% upfront mortgage insurance premium.
- With a streamline refinance, there is no appraisal or income verification required.
Primary Residential Mortgage, Inc., one of the premier mortgage lenders in the country, announces the grand opening of a new branch in Newport, Rhode Island. The Grand Opening and ribbon cutting ceremony will be held in partnership with the Newport Chamber of Commerce, on Wednesday, October 22, from 4-6pm. Business professionals and the public are welcome to attend (RSVP required).
Branch Manager Richard Brandariz is a born and raised native of Aquidneck Island, and is actively involved in the community of Portsmouth. Brandariz currently sits on the Portsmouth Pop Warner Football Board, as well as the Portsmouth Youth Basketball Board. He has also coached Pop Warner football, and Portsmouth basketball and baseball for the last five years. Rich also finds time to volunteer and be a part of the Portsmouth Rotary Club and Newport’s “Rebuilding Together” project which annually rehabilitates a home for community members who do not have the funds to upkeep their residence. Finally, Rich is a member of the United Congregational Church in Middletown, RI.
Utilizing in-house processing and underwriting, Brandariz and his team with Primary Residential Mortgage will assist home buyers with the purchase or refinance of a home using programs such as the new first time buyer tax credit, FHA, VA, USDA, 203k or conventional mortgages.
Anyone interested in attending Grand Opening for the new office of Primary Residential Mortgage on October 22nd should RSVP to Sara Bagwell at firstname.lastname@example.org or call 401-490-7112 for more information.
About Primary Residential Mortgage, Inc.: Founded in 2001, Primary Residential Mortgage, Inc. is the premier lender in the mortgage industry. With over 275 branches across the US and with unsurpassed service and dedication to their borrowers, the company has been able to steadily elevate as a leader in residential mortgage lending. Rhode Island Licensed Lender, Department of Business Regulation Division of Banking, Licensed as PRMI, INC. Lender 20041715LL. Equal Opportunity Lender. Branch NMLS#1234030. PRMI NMLS# 3094.
“I’m going to wait until the interest rates and housing prices go down before I buy a house”
“It’s just not the right time”
“I don’t think I can afford it”
We’ve heard it all before. Excuse after excuse as to why people wait to achieve the dream of home ownership. We know the idea of buying a home can be intimidating, but the fact is the cost of waiting to buy could potentially be costing you thousands of dollars. To demonstrate our point, the chart below shows a 10% increase in Rhode Island housing prices, with the interest rate rising about 1% over the past year.
As you can see, the cost of waiting only one year will increase your monthly payment by $205.35. That’s $73,926 over 30 years! With this trend continuing (and economists and industry experts believe it will), interest rates and housing prices will rise through 2015.What does this mean to the potential home buyer? Waiting to buy doesn’t just cost you dollars and cents. It costs you the opportunity for a better home and may even prevent you from qualifying for a loan for suitable housing. It’s not all bad, though. The real estate market is forecasted to retain healthy gains in 2014, despite steady increases of home prices and interest rates. So, whether you’re a first time home buyer or just looking for a new place to call home, the time to buy is now.
To keep you on top of your credit while you prepare to refinance or purchase a home, you should be aware of the five factors that determine credit score.
- Payment history is a large factor and the one that first comes to mind when thinking about credit scores. Your payment history is the number one thing that will be evaluated for a credit score which determines whether or not you are capable of repaying debt.
- Outstanding debt is almost as heavily weighted in the credit score calculation as payment history. Outstanding debt is not only based on how many credit cards and how much debt you have, but also whether or not you’ve reached your credit limits. For example, person “A” has maxed out a $500 limit credit card. Person “B” has a $20,000 balance with a $50,000 limit. Though person “B” physically has more financial debt, person “A” will have a lower credit score based on his/her ability to manage available credit.
- Duration of credit, or the amount of time you’ve had a credit card or loan, is also an element in determining your credit score. Keeping your accounts open and active is important in building credit. Most importantly, closing credit card accounts can adversely affect your credit score because it shortens the length of your credit history.
- Frequent inquiries for new credit card accounts in a short period of time can also have a negative impact on your credit score.
- Type of credit is the final main factor in determining a credit score. While all credit may seem the same, a the use of a store credit card (i.e. Macy’s) is weighted differently than installment debt (student loan, vehicle loan or mortgage) because an installment loan has a defined end date, unlike a credit card.
Everyone knows that Christmas is the time for giving. Maybe so much so that many of us get so wrapped up in buying the most lavish gift or spending more than we planned. Whether you stood in line for hours on Black Friday for a cheap Xbox for your kids or a new flat screen for your hubby, the mindset among Christmas shoppers is always the same: get a great gift to make someone you love happy. But what about a perfect stranger?
I really felt the power of the Christmas spirit when my office, Primary Residential Mortgage, raised $2,200 in just two days to “adopt” a needy family of six and another family of two through the Comprehensive Community Action Program in Cranston.
But the one thing that was more astonishing than the generosity of my co-workers was the actual wants and needs of the children and mothers of these families. Before sending over the Christmas wish lists, one of the program employees explained to me that the children already understood that they had simply made “wish” lists, and that they would not likely receive everything on their list.
As I quickly skimmed the lists, I was surprised to never come across the words “Ipod” or “Wii” like I would with my nieces and nephews. I gazed through them again, intently looking for “Xbox” or “Iphone”. But none of those words were present on those short lists. What I did see was that each child had checked boxes including coats and underwear, bedding and pajamas. The biggest “big- ticket item” out of all of the children was a train set- a wish
list item bordering extinction from today’s high-tech gadgets. For these families, love and happiness was counted in hats and gloves rather than Xbox games or flat screen TVs.
Sometimes Christmas is not just about the ones we love, but also the ones who need love. Our company is honored to be participating in the Adopt A Family program at the Comprehensive Community Action Program, and each of our employees became a little more grounded while reading through the family wish lists.
If you would like to join us or stay in the loop for any of our upcoming fundraisers and charitable partnerships, please feel free to contact me at Sbagwell@primeres.com.
If you have kids in their mid teens or even younger, you’ve probably thought more than you wanted about their plans after high school. If you fall into this category you may also know the hot topic is that federal student loan rates have doubled in the past few months making it even more expensive for your children to get a college education. Private student loan rates are even higher.
Double rates mean that most loans will actually cost more than 4 times more to pay them back. Unless your child is of the lucky few to receive a full boat to college, there’s a pretty good chance they’ll be acquiring some type of student loan debt to get their diploma. And now it costs considerably more. Yikes.
If you are a homeowner, one alternative you can look into is utilizing the equity in your home to provide funding for your children’s college education. Using your home as an asset to execute a cash-out refinance is a forward thinking way of negotiating your present family housing obligations with your children’s future education obligations.
A cash-out refinance is when you borrow money above and beyond what your mortgage balance is now, and that money is yours to do anything you’d like with. In general terms, you can borrow up to 80% of the value of your home less your first mortgage balance. If your house appraises at $250,000, 80% of that is $200,000. If the balance of your existing mortgage is $150,000, you get $50,000 back in cash from your closing and you can earmark this for your children’s education.
There are several benefits for taking cash out of the equity in your house:
- Current mortgage rates are several percent lower than current student loan rates
- Primary mortgage interest is tax deductible to you as a homeowner
- Repayment terms go up to 30 years for a traditional mortgage
Many people don’t want to extend their mortgage term but the truth is your monthly cash flow is really the most important part of the equation. If your existing mortgage and housing obligation is tight to begin with and you have some equity in your property, taking cash out on a refinance could put the least amount of strain on your personal budget.
As many of you are aware, on April 1st of this year, the FHA made changes to their monthly mortgage insurance by raising the premium by 10 basis points. For instance, if you were only putting 3.5% down on a FHA loan before April, your monthly payment MIP (Mortgage Insurance Payment) would have been 1.25% and now it would be 1.35%.
What some of you may not be aware of is that there is another change on the horizon for FHA. As of June 3rd, 2013 FHA will change how long you will be required to keep the monthly MIP on your mortgage. If you are making less than a 10% down payment, you will be required to carry MIP for the life of your loan. As you can see in the chart below, this change will affect all FHA mortgages.
|≤ 15yrs||≤ 78||No annual MIP||11years|
|≤ 15yrs||>78 – 90.00||Cancelled at 78% LTV||11years|
|≤ 15yrs||>90.00||Cancelled at 78% LTV||Loan term|
|>15yrs||>78 – 90.00||Cancelled at 78% LTV &5yrs||11years|
|>15yrs||>90.00||Cancelled at 78% LTV &5yrs||Loan term|
Don’t worry, you don’t have to close by June 3rd. However, you will need to have an FHA case number locked in by a loan officer before June 3rd, so give us a call and let’s get the process started for you!
Note: This is the second piece in a two-part blog. Click here to see part one, “What Really Happens When I Apply for a Mortgage”
Obviously circumstances arise which legitimately prolong the mortgage approval process. Not every loan will close in 2-3 weeks no matter how capable all of the parties involved are. However, you can reasonably determine what you can expect for performance and timeline of your lender from the initial step of applying for your mortgage by asking the following questions to the person taking your application:
- How long does it take to close my type of loan (Fannie Mae, FHA, etc…)?
- When do you lock my rate and how long is it locked for (15-30 days is traditional, anything longer means higher rates)?
- Do YOU run my credit check and provide my quote or do you have to send it to another person or department to have that done?
- Are YOU my point of contact to get real time answers for any and all concerns I have throughout the process or do you have to pass my question on to another person?
- Do you process and underwrite your loans in house or do you have to ship my file to another location or another company for this?
Asking all of these questions will help you decipher how efficient the company you consider applying with is and should be a major determining factor in who you do business with. Nobody cares how long the process takes in the beginning but after 3-4 months of not closing, most borrowers would gladly pay an extra couple of dollars per month on their mortgage payment (which is generally the difference between one company and another) just to be able to talk with someone who has answers, let alone someone that could have gotten their loan closed in a quarter of the time.
I hope part one and part two of this blog post helps you out the next time you consider applying for a mortgage – nobody I know likes waiting for answers and service and hopefully after reading this, you won’t have to either.
Charles J. D’Arezzo, Sr. Loan Officer (NMLS# 29022)
(…and how to avoid it taking over your life for half a year)
Whether you’ve picked out your dream house and need a purchase loan or you continue to see mortgage rates advertised for much lower than what you have and decide it’s time to refinance, applying for a loan is your next step. You most likely get input from friends, family, real estate professionals, and advertisements as far as who to apply for your mortgage with. You do research online, talk to some mortgage professionals (make sure they’re licensed – type their name or NMLS# into http://nmlsconsumeraccess.org/ to verify credentials and licenses), and make the final decision of picking a few mortgage lenders or brokers. You call the mortgage companies of choice and tell them you want to apply.
Most borrowers think obtaining a mortgage is a standardized act and that the process utilized by mortgage lenders and brokers are as interchangeable as going to the mall to buy a pair of pants. Just find the best value between all the stores and go to the register to pay – it’s a 2 minute job, right? Wrong. If you’ve applied for more than one mortgage in your lifetime you already know this isn’t the case. If you’re reading this and are going for your first mortgage, you’ll have to take my word for it.
Your initial focus in applying for your mortgage is to find out, in accurate terms, what you qualify for. This time frame taken by each mortgage professional you speak with to complete this process is the first step which differentiates one company from the others. The mortgage technology which is commonly available makes it possible for a mortgage professional to determine accurate terms for you in 30 minutes or less (provided you as the borrower have provided information required for a complete credit application). For many of the new refinancing programs such as the FHA Streamline, you can cut this time down to 5 minutes.
I talk to potential borrowers all the time who tell me that they are waiting for quotes from other lenders or brokers – it’s the normal thing for people to do. What strikes me as ridiculous is that potential borrowers will wait days and even weeks to receive a phone call back for that quote. As I mentioned above, an accurate quote or advancement of the qualifying conversation to get to an accurate quote can be delivered in 30 minutes or less, no exceptions. This should be roughly the same time it takes to order and have dinner served in a chain restaurant on a Tuesday night. Would you really sit at TGI Fridays for 11 days for your mozzarella sticks to come?
The funny thing is that almost everyone I speak with is ok with this. They think the mortgage originator has a team working round the clock on their magic quote which will be far and away the best financial solution for them. The reality is that the person who took your application and isn’t getting back to you doesn’t make lending decisions. Instead they’ve pawned your application off to the person who does, and that person has a stack of 273 applications in line before yours. If you’re someone who enjoys renewing their driver’s license at the DMV or going to Disney World on school vacation week, this system is perfect for you.
If you’re not ok with this you should be prepared to cut ties with any mortgage professional who cannot provide a quote, or worse yet, return your phone call in 24 hours or less. They’re either too busy to give your application the proper attention it deserves or they are a middleman to the lending decision maker. Rates and programs are roughly the same everywhere based on what you qualify for – the extra time isn’t getting you a better deal. For every day it takes for you to get your initial quote back, add 2 weeks to the overall process.
Who cares how long it takes, you say? If you’re buying a house, the sellers care as well as the Realtors involved in marketing the house and negotiating the sales price. If you’re refinancing your mortgage, you should care. Every day that goes by is an additional day of interest you are paying on a mortgage you are trying to get rid of in exchange for better terms.
Here’s a simple formula for determining if you should expect an efficient mortgage process – the less people involved in it, the faster it will go. Here’s what it looks like In a perfect world:
- You apply for your mortgage directly with a licensed mortgage originator who can provide an accurate quote as well as collect all your documents and sign disclosures.
- Your complete file is turned over to an in-house (same location as the originator) mortgage processor who completes all the verifications, orders mortgage payoffs and title searches, and prepares your application for underwriting (which is also done in-house).
- The underwriter approves your loan and works in tandem with the processor and mortgage originator to finalize the loan approval.
- The finalized loan is turned over to the closing department which draws up the final figures and closing forms and schedules your closing with the title attorney.
- The closed loan is given to the funding department which disburses the proceeds of the loan you obtained.
That’s it – 5 people who have direct communication to the person before and after them in the process. If you have more than one person handling Step 1 or find out the person you applied with doesn’t have access to communicating with the person in Step 2, you’re in for the long haul and all the phone calls you make and voice mails you leave won’t help your cause.
Charles D’Arezzo, Sr. Loan Officer (NMLS# 29022)
Don’t want to spend a pretty penny on a new photo? Well worry not, Primary Residential Mortgage | Primary Local has you covered! For just $15, you can have a new, beautiful and professional headshot by signing up for our special “New Year, New You Headshot Event”.
To register, all you have to do is drop us a line by emailing Sara Bagwell at email@example.com or call (401) 490-7112 to let us know you’re coming. The event will be held at our office located at 647 Oaklawn Avenue in Cranston, RI on Friday, February 1st.
Ready for your closeup now? Here are some tips on how to look great for your headshot!
Don’t miss out! RSVP to firstname.lastname@example.org to reserve your spot!