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When rates dipped many folks took the opportunity to refinance their homes.  A few weeks back we saw underwriting departments desperately trying to come up for air as more files were piled on their desk. 

Some Banks had underwriting turn-times of 20 DAYS for a refinance loan file.  This means once you submitted your loan for review, it would take their underwriting department 20 days to look at the file! Normally it is no more than 10 days and that was your worst case scenario. 

Although Banks put a purchase loan transaction as a priority to a refinance, the sheer volume of loan files has buried understaffed Banks.  Remember that not only have Banks been shutting their doors, but they have been laying off staff for the last couple of years. So when the flood gates opened, it is near to impossible to keep up.

What should you expect?? Funding delays!! Sometimes as much as two to three weeks (yep, I said weeks).  For the most part this wont be the issue however, I caution you not to be surprised if it happens. 

In addition to being understaffed, many of these Banks are underfunded.  There is only so much funding line capacity!  If there was a more liquid credit market, these lines could easily be increased to handle this bulge.  However, we do not have that luxury at this time. 

A smart mortgage professional locked their loans for as long as the Bank would allow. But I am sure there are still folks who think that 30 days is enough. I would suspect those "mortgage professionals" are sweating bullets at this point, since their client's loan is stuck in the funding department with only a couple days left on their interest rate lock.

Luckily, we are seeing Banks be forgiving and offering rate extensions for free since it is their staff holding up the show.

You may not be impacted at all by this flood of business to our market.  But just in case it comes up, I wanted you to be prepared for it!

This blog by:

Team Newington
Sacramento Mortgage Planners
(916) 687-6868
www.SuperiorLoanTeam.com

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Has Fannie Mae pulled their head out of their... sand box?

What if I told you Fannie Mae is offering special financing if you buy one of their bank owned homes?  Would you believe me?  Well you should because it is true!

Why does this benefit you?  Well frankly... the terms of their offered financing is pretty darn sweet!

The benefits of their HomePath program include:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance
• No appraisal fees
• FREE home warranty is included with the purchase.

I recently wrote a blog about another local Sacramento Agency that is offering a similar incentive if you buy one of their bank owned homes.  Read the blog now >> 

BUT the catch is they only have 2 or so homes available in the Sacramento Area to purchase.

Here is the best part about this program... There are over 250 homes available in the Sacramento area right now that qualify for this program!

Here are some other homes available in the Sacramento Area:

Elk Grove... 46 homes available!
Citrus Heights... 21 homes available
Rancho Cordova... 16 homes available!
Fair Oaks... 4 homes available
Carnichael... 14 homes available!
and so on...

Here is some more specific information about their guidelines:

97% (3% down) for owner occupied financing with NO MORTGAGE INSURANCE!

Why is this such a big deal?
A typical FHA loan with an equivalent down payment (3.5% down) would require 1.75% of the loan amount to be paid upfront for a mortgage insurance premium. Then on top of your monthly payment (PITI), you would be charged .55% (of the loan amount) every year for ongoing mortgage insurance.

Let me break this down so I don't throw too much loan lingo your way.. Here is an example mortgage insurance fees for an FHA loan of $200,000...

$200,000 x 1.75 = $3500 You would be charged this amount at closing or you could roll this into a loan on a traditional FHA loan program for the upfront mortgage insurance premium.

$200,000 x .55 / 12 months = $91.67 This means $91.67 would be added to your payment every month for mortgage insurance.

With this special financing offered by Fannie Mae you could put .5% LESS down than a FHA loan and you do no pay ANY MORTGAGE INSURANCE!  This really is a sweet deal!

Do you feel like a little more sugar today? Wait until you see what they will do for an investor!

90% (10% down) for non owner occupied properties with NO MORTGAGE INSURANCE!
If you are looking for an investment home in Sacramento, you know that you will get a better return on your investment if you have less money in the deal.  Right now with typical financing (actually offered by Fannie Mae for non-Fannie Mae owned homes), you should expect to put down at least 25%.

Wow! So for example if you purchased a home for $150,000 (not owned by Fannie Mae), you would need to put down $37,500 plus closing costs.  If you buy a home owned by Fannie Mae, you only have to put $15,000 plus closing costs. If that does not help you"sharpen your pencil" I am not sure what will!  This is a really big deal!

They even offer a renovation program that allows you to finance light renovations upfront and add it to the loan amount.  So if you find a Sacramento Fannie Mae owned home that maybe has some vandalism issues (which many do), you can probably get a discount for the home and finance in the repairs that are needed to bring it back to livable condition!

It is so nice to be able to report some good news to folks.  It really has been a drag having to shovel through the bad news to try and find something good to report as far as guideline changes go!

Here is a link to search for homes in your area >>

We can offer this special loan program... so just give us a call and we can discuss this opportunity further!

Happy Hunting!

This blog by:

Team Newington
Sacramento Mortgage Planners
(916) 687-6868
www.SuperiorLoanTeam.com

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