Locking In Rates


 

Locking In Rates

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When is it appropriate to ‘lock in’ our interest rate?

 

May 17, 2004

Good question. And, as with the answer to so many things, it depends. Some say:

1. It is considered a fool’s game to try to time the bottom of the market.
2. If you can’t afford to lose, you can’t afford to gamble.
3. Interest rates can, and do, go up…as much as 3/4% or more in one week.

Although we certainly have not seen evidence of it lately, interest rates can rise and fall often and rapidly. The Wall Streetmoney market” is manipulated by so many factors, it is extremely difficult to predict. Everyone is guessing what might happen, but no one really knows. If you want to be safe, you lock in as soon as your lender will allow it.

Sometimes you need a tough hide to “float” and ride along with the market fluctuations. If you do this, you believe interest rates will fall during the period of your mortgage processing, and you must be prepared to take the consequences if they do not.

Before you decide which way to go, be sure you understand your lender’s rules. Some allow you to lock in at the time of application, generally without cost for 15 to 30 days; some only let you lock in after you are approved for the loan and, in a busy environment, this can take a few weeks. Some will let you lock in for extended periods of time for a fee, often payable upfront and nonrefundable. Some will allow you a “float down” option that provides you with a lower rate if rates go down, typically for a cost.

As you can tell by some of my comments, I would suggest you lock in your rate as soon as you can…then forget about it. You will sleep better. There are not many people who can stand the uncertainty of gambling with this big commitment.

Discuss the options with your loan officer, be sure you understand whether you are getting a “lock” with the lender making the loan and what period it covers. I have heard horror stories of “locks” made for short periods when everyone is so busy, and the timeline for closing is just about impossible. That’s a promise that is useless. Be sure you understand what kind of company you are dealing with, whether you have a true commitment on your rate and fee, one that really be trusted and accomplished.

Good luck.

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Can You Afford to Buy a House?


Can You Afford to Buy a House?.

Be sure to factor in all the costs

By Michelle Dawson | Realtor.com

Although the thought of paying a mortgage is more enticing than paying rent, it’s important to understand all the costs involved in buying and owning a home as you determine whether you can afford to join the ranks of homeowners.

Potential buyers sometimes forget to factor in the down payment, homeowners insurance and the possibility of depreciation, as well as the costs associated with closing the transaction, moving, purchasing major appliances, and home, landscape and pool maintenance, not to mention furnishings and design accessories once you move in.
The days of calling up the landlord to fix your problems come to an abrupt halt when you’re a homeowner. You’ll be responsible for everything from malfunctioning appliances to leaky faucets to broken heating and air conditioning units and everything in between. And if you buy an older home, you’ll probably eventually encounter costly repairs, such as replacing the roof or windows.
To determine whether you can afford to buy a home, you should do the following:
1. Determine the property value of homes that interest you. The property value (what the home is worth) is determined by comparing the prices of homes recently sold of similar size in the same neighborhood. Your real estate agent will be able to provide this information to you.
2. Review different mortgage loan types and compare their required down payment amounts to the money you have available. Down payments, based on a percentage of the value of the property and determined by the type of mortgage you select, typically range from three to 20 percent of the property value. Don’t forget to factor in private mortgage insurance, a policy that allows mortgage lenders to recover part of their financial losses if a borrower fails to full re-pay a loan. Mortgage insurance makes it possible to buy a home with as little as 3 percent down. Usually, the lower the down payment, the higher the PMI, which typically will cost somewhere between $40 and $125 a month.
3. Get an estimate of your closing costs, including points (the dollar amount paid to a lender for obtaining a lower interest rate on a loan—one point is one percent of the loan amount), taxes, recording, inspections, prepaid loan interest, title insurance (a policy that insures a home buyer against errors in the title search; cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller) and financing costs from your mortgage lender or a real estate professional. These will generally add up to between 2 and 7 percent of the property value. You’ll receive an estimate of these costs from your lender after you apply for a mortgage.
4. Add the down payment requirements and the closing costs together to determine the amount of money you’ll need right off the bat. But you’re not done yet.
5. Think about the actual move. Will you hire a moving company or rent a truck? Either way will cost you. The more stuff you have, the more it will cost.
6. Property taxes. Many lenders will require an impound account in which monthly payments for property tax (and often insurance) are paid together with the monthly mortgage payment. You can figure your average annual tax rate will be about 1.5 percent of the purchase price of your home.
7. Next, budget for maintenance and repairs. HouseMaster, a home inspection company with 300 franchises nationwide, said that based on a study that evaluated 2,000 inspection reports, the typical costs of major repairs are:
  • Roofing: $1,500 to $5,000
  • Electrical systems: $20 to $1,500
  • Plumbing systems: $300 to $5,000
  • Central cooling: $800 to $2,500
  • Central heating: $1,500 to $3,000
  • Insulation: $800 to $1,500
  • Structural systems: $3,000 to $1,500
  • Water seepage: $600 to $5,000
Once you crunch the numbers and find you come up a bit short, investigate ways to reduce or creatively fund your down payment—it can come from a variety of sources. Check with your realtor or lender to find out what’s available.
You’ll also need to factor in the cost of homeowners insurance. In addition to the type of construction, age of the home, your credit history and past insurance history, new issues like litigating costly toxic mold cases are raising homeowners insurance rates.
In fact, the National Association of Insurance Commissioners reports that homeowners will spent an average of $822 on homeowners insurance in 2007, the last year data was available.
In your final analysis of whether you can afford to buy a home, you’ll want to weigh the costs with the financial benefits—a consistent mortgage payment (unlike rent, which can increase), the tax benefits (you can deduct, in most cases, mortgage interest, closing costs, and property taxes), and the all-important appreciation factor—the rate of increase in a home’s value.
And of course, you’ll want to weigh perhaps the biggest benefit of all—having a place to call your own.

Kentucky Rural Development Kentucky Guaranteed Housing Zero Down


 This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency

  

Kentucky Rural Development

Kentucky Guaranteed Housing

Home Financing Options for Lenders

Think Guaranteed First!

Do you have clients with no down payment?  Do you have clients with some cash but they do not wish to exhaust all of it to buy a home?   How many times have you pre-qualified an applicant only to realize that the mortgage insurance or higher interest rates keep them out of the price range needed to accommodate their family?   The Rural Development guarantee may be able to help!

  • Generous income limits
  • Flexible credit and qualifying ratios can help open up a new market of homebuyers.
  •  Competitive 30 year fixed rates – no monthly mortgage insurance allows you to offer affordable payments to all homebuyers.
  • No down payment and no cash reserve requirements help you qualify more clients.
  • No maximum purchase price or mortgage limit.
  • Become an expert in Guaranteed Rural Housing financing to gain more clients and close more loans in small communities and rural areas.

Rural Development assists thousands of clients annually to become homeowners.  This year we want you as our partner!

The advantages

  • Loan up to appraised value plus the guarantee fee.
  • No monthly mortgage insurance (MI).
  • Maximum loan amount is the appraised value plus a one time guarantee fee.
  • No cash contribution or cash reserves required from applicant.
  • Unrestricted gifts.
  • Non-traditional credit acceptable.
  • Streamlined credit documentation available – based upon credit.
  • No minimum credit score.
  • Repayment ratios are 29/41.  Ratio waivers are allowed with documented compensating factors.
  • Not limited to first-time home buyers.
  • Competitive market based fixed interest rates with 30 year term.
  • Available secondary markets: wholesale lenders as well as Fannie Mae, Freddie Mac, and Ginnie Mae.
  • Qualifies for Community Reinvestment Act (CRA)
  • Agency approved lenders underwrite the loan.
  • Any lender, or broker, may originate loans through an Agency approved lender.
  • Agency guarantee commitments are issued within 1-2 business days of receipt of the complete package – based on volume of loan requests.
  • Rural Development provides lender support for questions, training, and outreach assistance.

 Choose Rural Development as the first option

  • A competitive fixed rate combined with no mortgage insurance provides long term savings for the customer.
  •  Home buyers are able to retain their savings since there is no down payment requirement and closing costs can be financed up to the appraised value.
  • Lenders report an overwhelming preference for the Guaranteed Rural Housing loans for the great value it provides to their customers.  Choose the best program for your customers!

Applicant eligibility criteria: 

  • Occupy the property as your primary residence.
  • Be able and willing to occupy the property.
  • Be a U.S. citizen, a U.S. non-citizen national or a qualified alien.
  • Demonstrate an ability and willingness to meet obligations and debts as they become due.
  • Have a credit history that indicates a willingness to meet obligations as they become due.
  • Have an adjusted household income that is within Rural Development guidelines based on the number of persons who will occupy the home.
  • Purchase a residential property that is within a Rural Development eligible area.

 Checklists and web site links:

  What is the Rural Development “guarantee?

  • Lenders have less risk with the Rural Development guaranteed loans than with conventional loans covered by private mortgage insurance.

Thank you for visiting our web site.  We look forward to working with you as partners in providing affordable housing opportunities in rural areas.  Let us know how we can further serve you.

Apply today for Free Below:

 
Apply below for free–I am a USDA Expert and have done over 200 USDA loans in my lifetime in Kentucky

 

 

 

 

 

 

 

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What is P.I.T.I


What is P.I.T.I?.

 

What is P.I.T.I?

September 17, 2012

When you’re buying or selling a house, there are many terms that come up. Though your local REALTOR can guide you through much of the terminology, there are some terms that you should be familiar with, and PITI is one of them. You will see PITI associated with your loan documents and mortgage paperwork. The following is an explanation of the term and the meaning of each of its letters.

P is for Principal
The principal is the total base amount of money that you are borrowing to buy your home. The principal is generally the biggest portion of the PITI figure.

I is for Interest
Whenever you borrow money or pay on credit, you have to pay an interest charge. The interest is usually calculated as a percentage and appears as an amount on the PITI breakdown. Depending on the deal you have, the interest rate can stay fixed for the term of the loan or it can be variable.

 T is for Taxes
Taxation is one of the eternal certainties of life! Taxes involved with home ownership typically go to governments at the local level to pay for public services. The tax amounts are typically included with the monthly mortgage prorated. The lender pays the tax on your behalf to the local government.

The other I is for Insurance
Your home is one of the biggest investments you will make, and a homeowner’s insurance policy is vital for your financial well-being. There are various policies from which you can select, but the choices available to you depend on how much money you put down on your property. If you make a down payment of less than 20%, lenders require that you purchase private mortgage insurance (PMI).  This protects the lender in the event of loan default or foreclosure. Similar to the way it is with taxes, these payments are generally added into your total mortgage payment.

Private Mortgage Insurance or PMI for Kentucky Mortgages


Step by Step Guide to PrivateMI Cancellation

STEP 1

Answer these simple questions to see if you might qualify for PrivateMI cancellation:

  • Have I paid down my mortgage to 80% LTV?
  • Have I made structural improvements that will increase the value of my home?
  • Have homes in my neighborhood appreciated significantly in value?

If you answer ‘yes’ to any of these questions, you may be able to cancel your PrivateMI.

STEP 2

Gather basic information for your loan servicer:

  • Your name and Social Security number
  • Property address
  • Loan number

STEP 3

Contact your loan servicer using the information provided on your monthly coupon or invoice. Be sure to confirm the mailing address, email address or fax number and the contact person’s name for the letter.

STEP 4

Explain to your servicer that you’re interested in canceling your PrivateMI and request information on their cancellation requirements.

STEP 5

Meet any requirements provided by your servicer. These may include:

  • Supplying additional information on your home or loan
  • Having an Appraisal, BPO or CMA

Your servicer will arrange for this. If you do it yourself you may end up paying for two appraisals.

STEP 6

Send a request in writing for cancellation of PrivateMI.

STEP 7

Your servicer will notify you about the status of your PrivateMI cancellation.

Benefits of MI

Why should you consider a loan with Private MI?

  1. Affordable: In many cases, private MI is more affordable than other mortgage finance options. Private MI helps low- to moderate- income and first time homebuyers purchase a home with less than the traditional 20% down payment, with as low as a 3% to 5% down payment.
  2. Predictable: Private MI premiums are fixed and remain at predictable levels throughout the periodthe insurance is in force on the mortgage loan.
  3. Cancellable: A mortgage loan that carries private MI can be cancelled when the homeowner acquires 20% equity in the home.
  4. Alternative: A mortgage loan with private MI offers an attractive often less costly alternative to the government’s FHA program. Unlike FHA’s single family program, private MI programs offer a range of payment options keyed to the borrower’s needs and mortgage terms.

But don’t take our word for it. Read more about the benefits of PrivateMI, and use our tools to see if it’s the right choice for you.

VA Loans Louisville Kentucky


VA Loans Louisville Kentucky.

 

 

Louisville Ky FHA Mortgage Loans


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