Buy a House – Get a Raise!

September 13, 2011 by Leave a Comment

mortgages caryHave you filled out your taxes yet?  Are you getting a refund?  NO?!?!  You might need to buy a house!

Many times we talk to homebuyers (especially first time home buyers) who tell us that they “want to keep their payments around where they are now.”  Meaning that if they are paying $1200 a month in rent – they feel confident that they can afford a house payment of $1200… And that’s very logical – except – they’re comparing Apples to Oranges.

When you buy a house – it helps the economy – and UNCLE SAM gives you a TAX Advantage – which equals to a RAISE!

So, the good news is – if you’re in a 30% tax bracket – you can probably “keep your payments around where they are now” with a new house payment of $1450!

If you are considering a home purchase, and need a Mortgage Loan in Raleigh, please calll Steve and Eleanor Thorne at 919-649-5058.  We work with many First Time Home Buyers, and have the best mortgage rates available!

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Fannie and Freddie Fees Drive Mortgage Rates Higher 2011

January 17, 2011 by Leave a Comment

Mortgage Giants Fannie Mae and Freddie Mac announced that they are expecting more revenue from mortgage loan production in 2011 to cover their costs. Where is that money coming from? The 2011 Consumer.  The additional fees they will begin charging in April are marked as Risk Based, however they will affect ALL borrowers – no matter what the downpayment or credit scores are.

In a Dec. 23 memo to lenders in its network, Fannie announced that it had decided to impose a new schedule of higher add-on fees, similar to what Freddie Mac — the other huge congressionally chartered mortgage investor — rolled out to jeers from the real estate industry just before Thanksgiving.

The new fees come as no surprise, I guess considering that each month the taxpayers are dumping billions of dollars into the Agencies to keep them afloat.  Even though the Congress made enormous changes with the Dodd Frank Banking and Consumer Protection laws last summer, Fannie and Freddie were left out of the legislation.  Later this month, the Obama administration plans to submit long-promised proposals to Congress on what to do with the two — phase them out, restructure them, privatize one or both of them…  or maybe they will come up with some other out of the box solution.

It’s important to remember that Fannie and Freddie still have their hand in over 2/3 of ALL new mortgage lending done in the United States.

The new fees scheduled to start this spring,  don’t appear likely to make financing a home any easier. Some potential buyers who have high credit scores and hefty down payments may be surprised that even they are being targeted for higher “risk-based” fees.

Consider these examples of how Fannie’s revised list of loan add-ons will affect borrowers:

$300,000 mortgage, above 800 Middle Credit Score, cash down payment of just less than 25%

With the changes in April you will be hit with a $750 fee equal to 1/4% of the loan that we don’t currently charge.

$300,000 mortgage loan, credit score of 679, down payment less than 20%

Fannie will soon begin hitting you up for 2.75% in add-on fees — a staggering $8,250 solely attributable to your FICO and LTV ratio.

That’s $1,500 more than what you are currently being charged.

But these fees are just the start of the multilayered, cumulative risk-based pricing system that both Fannie and Freddie employ. Every perceived risk factor in a loan transaction receives its own separate add-on fee, all of which get totaled up for your final loan charges.

We’ve been telling folks to lock into a mortgage loan NOW… and we still think this is the BEST advice we can give you!

If you, your family or your friends are considering a mortgage loan for a home purchase or a refinance – please call Steve and Eleanor Thorne, 919-649-5058

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Mortgage Update 10-05-2010 (L-O-W)

October 5, 2010 by Leave a Comment

As you might know, I work with my husband, Steve.  Occasionally, I sit in his office waiting to talk to him – while he’s on the phone with a customer.  Today, I listened as he explained where mortgage interest rates are, and what the best interest rate was for the customer on the other end.

Have you ever bought tires?  Well, you know how when you are looking for tires there’s all these ads that say that tires are $25 each?  When you get in the tire shop, and the guy starts adding for valve stems, alignment, balancing… rebuilding tire pressure sensors and pretty soon the tires for YOUR car are $45 a piece.

Well, that’s kinda’ how I look at mortgage rates today. In general, rates are around 4.25%. You can get lower with a little more cost – or you can get a little higher rate with fewer costs.”

I thought that was pretty clever! It made me wonder though, how low COULD I really get a mortgage loan? Let’s say the seller is willing to pay closing costs, and I can pay a 1% origination fee and .25% in a discount fee.  If that was the case – what could I do??

On a conventional loan you could get a 30 year fixed rate today at 3.875% (with great credit and a 20% equity gap an APR of 4.064 refinance or purchase)

A 15 year mortgage interest rate is even lower!

On a Government loan (FHA or VA) you could get a 4.0% mortgage loan (4.562 APR) 30 year fixed rate!

If you get that 3.875% rate – does that mean you are getting the lowest possible rate? Someone said, getting the best mortgage rate takes research and LUCK.  I believe that’s true.  Mortgage interest rates don’t just change daily – they change by the HOUR, sometimes 2 or 3 times within 30 minutes!  You could research rates right now, and call back in the morning – and find a difference of an 1/8th or more!

The real purpose in researching all of this is (especially if you are shopping for a refinance) finding a loan officer that has YOUR best interest at heart.  You want to work with someone who is going to ask you important questions, like:

  • How long do you expect to live in your home?
  • Do you have a second mortgage or an equity line on the home?
  • What are the financial changes your family is going to experience in the next 3 – 5 years? (do you have children going to college, someone getting married, expect to have new children in your family/)
  • What is your debt and spending situation?  Have you been saving for retirement?

Besides the best mortgage interest rate, you are looking for a realistic idea of what it will cost to refinance your mortgage loan. If one person quotes you title insurance of $300 and another quotes title insurance of $378… well ask the $378 guy why his is higher.  Chances are, he’s given you an EXACT number, and the $300 guy gave you a “guestimate” on the cost to refinance your mortgage loan.  If one person quoted you $700 for hazard insurance and you know yours is $633 a year, tell them!

The insurance, title, recording, attorney, taxes appraisal, credit fees are generally NOT fees a loan officer has ANY control over.

The bottom line here is this… work with the loan officer that has your best interest in mind. If one person charges you $700 in fees and saves you $115 a month in your mortgage payment when you are refinancing your mortgage loan, I’d be happy!

BUT… if the loan officer asks the RIGHT QUESTIONS, and saves you $280,000 with a refinance on your mortgage loan by giving you a shorter term, or pays off consumer debt… THAT’s something to stand up and dance for, do a Whoot! Whoot! and tell your friends about!

If you are considering a REFINANCE, or the purchase of a home - call Steve and Eleanor Thorne, 919-649-5058 we have the best mortgage interest rates and the lowest fees available! If rates were at ZERO, would that make you want to buy?

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Is It Time To Refinance?

September 18, 2010 by Leave a Comment

Many of the people we are talking with WANT to refinance – but they figure it’s probably not worth it. Generally those sentiments run from two different camps, either the homeowner is concerned that they have no equity in the home to refinance (and don’t want to pay closing costs out of pocket), or they just figure they have a pretty good rate now, and don’t see a big difference from 5.75 to “whatever the mortgage rates are down to now.”

So let’s talk about what you SHOULD consider with a refinance…

The most fundamental consideration in whether a homeowner should refinance an existing mortgage is the break-even point, which means how soon the cost of the refinance will be recaptured through lower monthly payments. In general, most homeowners are looking for a three year recapture period.  If you are not going to recouperate in that time period… it might not make sense. [Read more...]

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Have We Hit The Bottom On Mortgage Rates in NC?

August 4, 2010 by 2 Comments

I read a ton of Economic commentary and as such, I can sometimes come across as a “Debbie Downer.” The reason for this is simple.

I like low mortgage rates – I’m constantly looking to see if they are going lower… and in general, as mortgage interest rates move lower, it’s BECAUSE of BAD NEWS in the Economy.

Most people don’t want to read commentary from someone who is delivering more bad news, because they get enough of that from the media. So instead of pointing out that home sales are down, and consumer confidence is off, and the Economist that Obama most listens to (Mark Zandi) thinks we need more jobs to make markets move higher…

Let’s look at the Bright Side of Life!

  • Mortgage Rates are at an ALL TIME low.  I’m talking lower than World War II when our grandparents all bought houses.
  • Housing Prices are at an ALL TIME low. You’ve never been able to get a better deal on Real Estate.  That’s a fact I don’t think ANYONE can disagree on!

The question then becomes… are we at the Bottom?

I am a syndicated writer.  I write for Zillow and Lender 411, and I’ve been saying lately that”this is not my first rodeo” – meaning, I’ve seen at least 7 other Refinance Booms in my mortgage career.  They all follow a pretty predictable path (If you want to know if you should refinance now, click here).  Rates get low, they pop back up, they get a bit lower over a gradual period of time, and then one day – they don’t get any lower.

At some point, the banks are just not interested in buying mortgage loans, over a 30 year period, that have rates below a certain percent of profit.

It looks to me like we are there. (Can I Get A Refinance Under 4.25%, click here)  I think we are at the bottom of this cycle, and that means if you are waiting for a lower rate, you are wasting valuable time! In a few hours, the ADP jobs numbers will be released, and Friday, August 6th the NonFarm Payroll Numbers will be released.

These reports, if AT ALL positive will likely move mortgage rates higher.

If you want to PURCHASE, and, and, and the moon is right, and you have money to cover your closing costs, and your down payment - you might be able to work out a temporary buy down so that you would have payments starting at 2.5% the first year, 3.5% the next year and 4.5% (4.8 APR) for there on out.  But that will be the exception, not the rule. (click here for more info on a 2-1 Buy Down)

So, if you are considering a Home purchase in Raleigh or Cary, or you want to refinance a mortgage in NC – please don’t wait, call Steve and Eleanor Thorne 919-649-5058.  We’ve seen these situations before, and you need to act while rates are where you want them to be!

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Lowest Mortgage Rates Cary NC

January 21, 2008 by Leave a Comment

cary nc refinanceHere in Cary, NC we are lucky that we have a strong real estate market – yes there are many new homes “on sale” as New Home Builders have a large inventory – but overall we are LUCKY that we have APPRECIATING property values! Now we find that  Rates could go below 5%.

The Fed Reserve has lowered their lending rates – and it looks like mortgage interest rates in Cary could be the cheapest they have been in YEARS!  Home loan interest rates should be below 5.25% on a fixed rates mortgages before the end of the day!

We are talking to people who want to refinance their adjustable rate mortgages – and they want to know if this is a good time to refinance!  Our suggestion to folks in Cary, NC is that you apply now, have everything ready, and then wait and see if the Fed lowers one more time next week!

We also recommend that those refinancing look for the lowest mortgage rates in Cary, NC and the lowest COST of refinancing.   We offer our clients no cost refinances and feel that this option is best for most borrowers.  We will also discuss with you the opportunity to add equity to your home by reducing the TERM of your mortgage!

Please call us to help with your mortgage financing needs!

Steve and Eleanor Thorne, Senior Mortgage Loan Officers, 919-649-5058 at Mortgage Banker in Cary in Cary, NC.


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