The Top 8 FAQ’s About PMI

09.08.16 by

The Top 8 FAQ’s About PMI

What is PMI? Private mortgage insurance protects the lender if you stop making mortgage payments.

  1. What are the different types?
    Mortgage insurance premiums (MIP) for government loans.
    Private mortgage insurance (PMI) for conventional loans.
  2. Who needs PMI? FHA borrowers and anyone putting down less than 20%.
  3. How much does it cost? Your rate will depend on you credit score, the amount of down payment and the insurer. A typical premium ranges from $30-$70/month for every $100k borrowed.
  4. When do I pay PMI premiums?  Monthly with mortgage payments or as a lump sum at closing.
  5. Why do I need a policy? To buy a home without waiting to save 20% for a down payment.
  6. How long do I needs PMI? Until you have a 20% equity stake in the property for a conventional loan. Forever for an FHA loan.
  7. Can I avoid paying PMI?  Yes. By putting down 20% or more, or ask your lender about portfolio loans that do not require PMI.
  8. When does mortgage insurance “fall off” the loan? It doesn’t. You have to contact your lender. Once 20% equity has been built, you can request to cancel PMI.

To help shed some light on the world of Private Mortgage Insurance, we’ve created this helpful infographic to break down the most frequently asked questions about PMI.

PMI-FAQs

Re-posted courtesy of Gateless

How to Finance A New Home Before Selling Your Present Home

07.18.16 by

How to Finance A New Home Before Selling Your Present Home

financing

Obtaining financing while owning a home can be tricky; however, there are some options to consider before simply giving up and potentially losing a chance at your new dream home. Stuart, FL (and other area) buyers have several options for balancing the sale and purchase of a home and understanding how those options might help you seal the deal.

Open a Home Equity Line

Tapping the equity in a currently owned home can be a fast and inexpensive way to gather the funds needed for a new purchase.

HELOC (Home Equity Line of Credit) benefits can include:

  • Interest only payments for the amount borrowed.
  • Competitive HELOC rates with good credit.
  • Nominal fee (sometimes free) to open the line.
  • Typically no penalty for closing a line early when the property is sold.

Buyers will need to qualify for a new mortgage with the total debt of the existing mortgages and proposed mortgage payment.

Borrowing from a 401K

Borrowing a down payment from a 401k can be a great way to obtain financing; however, while it’s acceptable to make mention of a 401k loan, its best to suggest speaking with a financial expert and HR representative about the advantages and disadvantages of self-financed down payments.

Apply for a Bridge Loan

Bridge loans bridge the gap between the current home and the purchase of a new home. The loan allows home buyers to tap equity for use as a down payment.

Some bridge loan facts:

  • The cost for a bridge financing is more expensive than a line of credit.
  • Applicants must qualify for both mortgages.
  • Payments may not be required for several months; however, interest will continue to accrue.

Lending guidelines will vary from lender to lender and it’s best to point your clients in the direction of a knowledgeable mortgage professional who can determine the most appropriate financial option.  If you’re looking for options here in Martin County, give me a call and I can recommend some potential folks that can help you.

 

Retirees Rethink Retirement – of Their Stuart Mortgage!

05.26.15 by

Retirees Rethink Retirement – of Their Stuart Mortgage!

 Loan-Paid

Last week, The Wall Street Journal ran an article about personal finances that many Florida mortgage payers who are at or near retirement age should find thought-provoking. It centered on the idea that today’s retirees are often making a decision that differs from what past generations have chosen.

The basis is twofold. First, it’s undeniable that the 60- or 65-year-olds of today rightly expect a future that’s likely to stretch one or more decades longer than was the case for their grandparents. Improved health care and health awareness have combined to extend life expectancies considerably. The WSJ didn’t mention it, but some quick research reveals that while a baby boomer’s parents (assuming they were born in the 1920s) had a longevity expectation at birth of only about 55 years, the CDC says that today’s average 65-year-old male can expect to live another 18 years—with ladies even out-surviving them by another 2½ years.

Such a radical advance combines with a second development—today’s low mortgage interest rates—to create a shift in thinking by many as they hit retirement age. Experts believe that previous generations tended to feel “they were in the last inning” of life, and thus needed to pick a safe path regarding their residences. Paying off their home’s mortgage was given very high priority—one that was almost universally unquestioned. Home ownership unencumbered by a mortgage was taken to be a sound part of a worry-free old age.

But today’s Florida retirees are significantly less defensive in their thinking. According to The Journal, “Maybe their parents paid off the house before retiring, but many baby boomers say it makes more sense to carry a mortgage.” Instead of surrendering their cash or investments, the 21st Century trend is for mature Americans to take advantage of today’s low interest rates. The long time run-up in the stock market has also made the choice that much more appealing.

Florida seniors may also be departing from the way previous generations behaved. A Merrill Lynch/Age Wave study in August found that 30% of relocating retirees were moving to larger homes! And let’s face it: the whole notion of retiring is undergoing a transformation as more and more of the 60+ set realize they don’t want (or can’t afford) to quit working altogether. With so many good years before them, many are embarking on new careers—often elatedly following pursuits they’d “never had time for.”

With mortgage rates in Stuart continuing to roost down in the bargain basement, today’s seniors aren’t alone in recognizing that this spring represents a rare home buying opportunity. If you are coming to the same conclusion, I hope you will give me a call to chat about today’s many Stuart offerings!

Stuart FL Mortgage Credit Easing Expectations Follow U.S. Thaw

05.12.15 by

Stuart FL Mortgage Credit Easing Expectations Follow U.S. Thaw

 mortgage credit

How easy or hard it is for Stuart home buyers to secure a mortgage with attractive terms is a key element in the local real estate picture. Our national mortgage credit provides the oil that keeps residential home sales moving smoothly; that, or it becomes a damper (or even something close to an emergency brake!).

The current Florida mortgage credit situation is largely a reflection of what’s going on in the greater financial world, where the corporate banking interests, world economic conditions, and political realities converge. It is in that greater arena where the counterproductive effects of tightening mortgage credit availability have been acknowledged for some time. At first, it seemed to be little more than talk, but recently, changes have been stirring. The resulting tinkering seems to be taking effect.

“U.S. consumers are finding it easier to get a mortgage,” was last Thursday’s finding by CNBC in their Reality Check. The commentary was headlined “A CREDIT THAW IS OFFERING MORE MORTGAGE OPTIONS.” In fact, it fairly bristled with refrigeration metaphors. Following “years of near frozen credit following the financial crisis” there was now “heat behind the credit thaw.” If you expected that the source of the heat was the springtime improvement in Stuart’s weather, you were mistaken. It was “simple clarification.”

Clarification Clarification.

The simple clarification lies in a chain of repercussions that requires some clarification of their own. It has to do with the usual suspects: Fannie and Freddie. Fannie Mae and Freddie Mac (the guarantors behind the majority of mortgage credit in Florida and throughout the country) had sued lenders left and right following the subprime mortgage market mess. It cost the banks and mortgage companies billions through lawsuits and loan buybacks. Lenders, who like many of us don’t like to lose billions, became understandably gun-shy. They demanded near-pristine credit from borrowers, because they didn’t want Fannie and Freddie (and sometimes their Uncle, Sam) to come after them again.

Bait-and-Goodbye

Rates may have been terrific, but for way too many Stuart would-be borrowers, those rates were attached to loans that weren’t being offered. It wasn’t exactly Bait-and-Switch; more like Bait-and-Goodbye. But new rules that clarify which loans are considered safe by the semi-governmental concerns have done away with a considerable degree of lender concern. Added to the nationwide increase in activity (the Mortgage Bankers Association registered a single month increase of 17% in new home applications in March), it seems likely that the defrosting described by CNBC should continue well past cherry blossom time.

Today’s Florida mortgage credit landscape is something that directly affects most buyer-applicants as well as Stuart home sellers, so that’s welcome news—and a good reason why now is a good time to give me a call!

Florida has money for foreclosed owners but few apply

01.17.13 by

Florida has money for foreclosed owners but few apply

TALLAHASSEE, Fla. – Jan. 17, 2013 – With a Jan. 18, 2013, deadline looming, Florida Attorney General Pam Bondi’s office, working with Rust Consulting, Inc., has started picking up the phone in a last-ditch effort to contact Floridians who may be eligible for cash payments under the national mortgage settlement.

People who went through the foreclosure process between Jan. 1, 2008, and Dec. 31, 2011, are eligible for money if they had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase or Wells Fargo.

“It’s difficult to reach homeowners who lost their property, because there isn’t always a clear trail once they’ve moved,” says Florida Realtors Senior Vice President of Public Policy John Sebree. “Some foreclosed owners moved to hotels; some moved out of state; some may even be homeless. Attorney General Bondi’s office has made a good faith effort to find these deserving homeowners, but not enough people know about the money.”

Bondi’s office says that claims received after Jan. 18 may be considered, but payment to those claimants isn’t guaranteed. To date, only 44 percent of eligible claimants have submitted the proper forms.

Payment checks will be mailed in mid-2013, according to Bondi. A valid claimant can expect at least $840 and probably more.

This $25 billion settlement between the nation’s five largest mortgage servicers, federal government, 49 states and the District of Columbia earmarked about $1.5 billion in payments for 2 million borrowers. In Florida, approximately $170 million will be used for the claimants. All available funds will be distributed, Bondi’s office says – none will be returned to the banks or used for any other purpose.

For more information about eligibility and filing a claim:

• Visit the master claim website: NationalMortgageSettlement.com

• Email: administrator@nationalmortgagesettlement.com

• Call toll-free: 1-866-430-8358 (hearing impaired: 1-866-494-8281). The line is staffed Monday through Friday 7 a.m. to 7 p.m. Central.

© 2013 Florida Realtors®

Should I Pay off My Mortgage?

05.06.11 by

Should I Pay off My Mortgage?

Martin County homeowners may dream of the day they can pay off their mortgage. Financial advisers across the country say they are hearing questions all the time about the wisdom of retiring the mortgage early.

The pros:

  • The obvious reason to do it: Paying off the home loan on your Martin County home could save tens of thousands of dollars in interest during the time you would make payments.
  • The second reason is the peace of mind you have from owning your Florida home free and clear.
  • Most experts recommend owning your home free and clear before you retire.
  • If you still have a higher interest mortgage, paying down your principal will make refinancing easier.
The cons:

  • Some financial needs should come first: Max out your 401(k) contributions. Pay off credit cards. Create a 6-month emergency cash fund.
  • Mortgages are cheap money. When you pay down your mortgage or pay more every month, you are probably hoping for those big dollar savings on interest.  But remember these are future dollars and they will be worth less 20 years from now.  Keep your higher value dollar today and pay the bank its lower value dollar in the future.
  • If you plan to move to another city or trade up or down in the future, it’s not wise to pay off the mortgage. You would tie up your money in a home you might not be able to sell very soon when you want to buy another one.
The mortgage interest tax deduction doesn’t help everyone.  If you are in a high tax bracket, it’s more valuable.  If you are retiring or in a lower tax bracket, it’s not worth as much.Check to see if the investment you could make with the payoff money would earn more interest than what you are presently paying on your home loan.  A 50/50 stock/bond portfolio has historically earned 8.2 percent in the long term, but might only make 6 percent now, according to Money magazine.

Their conclusion:

The Money experts say that if paying off the mortgage would give you great satisfaction and a sense of security, go ahead and do it.

Should I Pay off My Mortgage?

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!

What’s the Best Home Loan for You?

01.05.11 by

There are many different kinds of home loans, each with its own features and advantages. This section describes some of the major types.

Depending on your credit history, your income, how much you need to borrow, and what you plan to use the money for, you may find that you qualify for all of them or only a few of them. Chances are that whatever your circumstances, the experts at Group One Mortgage can help you find the financing you need.

Why talk to a mortgage expert?

The information you’ll find on our website – or anyone else’s website (or brochure or newspaper ad or billboard) – is based on averages. There’s no other way to report it.

But your situation is unique, and your mortgage should be, too. Call Claudine at Group One Mortgage now at 561-745-1205 for a thorough analysis of your circumstances and our recommendations for which home loans will work best for you.

Types of Home Mortgage Loan

Loan Type

Loan Description

Fixed Rate Refinance

Refinancing to a fixed-rate mortgage is a good idea if interest rates are significantly lower now…

Adjustable Rate Refinance

ARMs are attractive to some homeowners because they traditionally have a lower initial interest rate than fixed-rate loans.

FHA Refinance

The Federal Housing Administration offers a number of federally insured mortgage programs to American citizens wanting to purchase or refinance a home.

Cash Out Refinance

Cash-out refinance mortgages involve getting a new, larger mortgage to get extra cash to pay off debt…

No Closing Cost Refinance

No-Closing Cost Refinance loans usually require the borrower to pay less in upfront fees relative to the other refinancing options

DU Refi Plus™

DU Refi Plus™ was designed to reignite the mortgage industry by simplifying the refinance process for millions of Americans

Home Mortgage Loans

Loan Type

Loan Description

Fixed Rate Mortgage

A fixed-rate mortgage is a loan in which the interest rate on the note remains constant throughout the life of the loan…

FHA Mortgage Loans

FHA Mortgage programs are great options for those borrowers who can’t meet some of the strict lending criteria of conventional loans…

Jumbo Mortgage Loans

Cash-out refinance mortgages involve getting a new, larger mortgage to get extra cash to pay off debt…

Adjustable Rate Mortgage

An adjustable rate mortgage (ARM) has an interest rate that is fixed for the first several years of the loan…

*Information courtesy of Kim Davis and Claudine Porikos, Group One Mortgage, Jupiter Florida

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!

Tips for Applying for a Mortgage

12.10.10 by

Tips for Applying for a Mortgage

How To Apply

In recent years the loan application process has been greatly simplified, however, proper information from borrowers is still required. Most lenders today are looking for fully-documented loan applications. This may sound intimidating, however, it’s not a big deal. Just take these steps:

  • At least three months BEFORE you finance or refinance real estate get a copy of your credit report. The reason to do this is to check and see if there’s any information on your credit report which is factually incorrect or out-of-date (most negative items can stay on a credit report for seven years, 10 years for a bankruptcy). If you start looking at your credit report three months ahead you should have some time to correct errors. You can get a free credit report with no strings attached by going to AnnualCreditReport.com.
  • Get your paperwork in order. Have in hand your last three pay stubs, your last three tax returns, and statements for all savings and checking accounts, mutual funds, retirement accounts, credit cards, student loans, car loans, etc. Make a file and stick the paperwork in it. You want to show ALL income and you must show ALL debts. When in doubt add it to the file.
  • Ask some questions: Do you expect to receive “bonus” income now or in the future? Do you expect to receive “overtime” income now or in the future Will “other” income in addition to your salary continue at current levels? If you own your home and use it as a prime residence, what’s the estimated fair market value? What’s the value of all financing now secured by your current home if you’re refinancing?

Treasure Coast Florida Real Estate presented by
the Gabe Sanders real estate team

For more information, visit our website or call us at (772) 888-2885.
Our market reports are here!