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Joe Metzler

Think you know your credit score? You are wrong!

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Minneapolis / St Paul, MN:  These days, everyone seems to know their “credit score”.  Many people subscribe to one or all  3 credit services, or get a score from a place like CreditKarma.com.

Before you get too excited about that credit score, understand that the score numbers you just received most likely was based on the “Advantage Score” model. While that IS a credit score, that is NOT the same scoring model mortgage companies use.

Mortgage Credit Score
Mortgage Credit Score

There are many different ‘types’ of credit scores.

Mortgage lenders care about how you handle mortgages, credit card companies care about how you handle credit cards. The reports these industries pull tend to be weighted towards their industry.  The Advantage score you get when you look at your score, or from your credit card statement simply is NOT the same scoring model lenders use.

Another way to look at is is think about buying a car. You tell someone you bought a new Ford. Great, but what model Ford? Did you get a Ford Focus, or was in a new Ford Truck?

Getting your credit score somewhere?? Great, what scoring model is is based on? They are generally all FICO scores, but what scoring model is it based on?? Advantage score, Beacon Score?   Typically the Advantage Score is noticeably higher than your mortgage score.

If the credit score you are looking at is from a mortgage company, then that should be accurate if any other mortgage company pulls your credit…  Or at least until something changes, and credit scores can potentially change everyday.  I’ll save that for another article…

Ultimately, the ONLY credit score that matters is the credit score your Loan Officer obtains on the day you start your mortgage application!

For most people, the score you see and get on your own, or through your credit card statement are close, and give you a ballpark idea of your lender score, but don’t be surprised when we tell you a different number.

FHA flipping rule – 90-day flip waiver eliminated

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Bought a house and want to flip it?

The temporary waiver of FHA’s regulation that prohibits the use of new FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition expired on December 31, 2014.

What this means is that NO FHA lender can accept any purchase agreement dated less than 90-days from the last RECORDED title transfers,

UNLESS:

  • Properties acquired by an employer or relocation agency in connection with the relocation of an employee;
  • Re-sales by HUD itself under its Real Estate Owned (REO) program;
  • Sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies;
  • Sales or properties by nonprofits approved to purchase HUD-owned single family properties at a discount with resale restrictions;
  • Sales of properties that are acquired by the seller by inheritance;
  • Sales of properties by state and federally-chartered financial institutions and government sponsored enterprises (Fannie Mae, Freddie Mac is the owner)
  • Sales of properties by local and state government agencies; and
  • Sales of properties within Presidentially Declared Disaster Areas.

So if you bought a home, fixed it up, and now want to sell it, understand that NO FHA buyer is able to enter into a purchase agreement until YOU have owned the house for at least 90-days.

They can not even sign a purchase agreement until day 91 of YOUR ownership.This isn’t a big deal in many cases, as it take a good 3-months to turn around many fixer-uppers, but just be aware of the rule.

Homeowners Insurance and Your Mortgage

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Insurance helps people Obtain Credit and Home Loans

Being able to obtain credit is essential if our economy is to flourish. Without credit, most people couldn’t buy homes or cars or make other major purchases, and without demand for those products, our economic engine would stall. Without credit, most businesses couldn’t start—much less expand—their operations, and many jobs simply wouldn’t be created. homeownersWithout jobs, people wouldn’t have the money to buy goods and services. Credit improves the quality of life and makes it possible for people to obtain many goods and services sooner than would be possible if they had to pay cash for them.

How does insurance fit into the mortgage and credit system? An example will help explain. Let’s say you want to buy a house. The home costs $150,000. You only have $5,000, so you borrow $145,000 from a bank. The $145,000 loan gives the bank a financial interest in your house (called a mortgage). That is, in order to help ensure that you can pay back the $145,000, the bank wants to make sure that nothing happens to your house. What if your house burned down? The bank would lose $145,000!

When it lends you the money, then, the bank will require you to insure your house. The policy will be written so that if the house is destroyed, the bank will be paid the amount of its financial interest in the house, which will decrease as you make payments on your loan. You will receive the balance of the benefits. The insurance policy protects both you and the bank against loss. The same principle works to help people get car loans and to help businesses get money to expand. Insurance works hand in hand with credit to maintain our nation’s prosperity and standard of living.

When obtaining your new home mortgage loan, be sure to speak with a qualified independent insurance agent in MN who can shop various homeowners insurance companies to get you the best deal on the best coverage for your home and auto insurance needs.

FHA Mortgage Insurance Lowered!

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FHA will cut its mortgage insurance premiums to 0.85 percent, a 0.5 percentage point reduction (down from 1.35%)
President Obama was expected to make the announcement on Thursday in a scheduled speech on the housing market, but the White House made it official following initial media reports.
FHA loans had seen significantly increased costs for in PMI (mortgage insurance) after the housing bust. The increased cost seriously hampered housing, keeping many out of the housing market. The reduction in costs should help creditworthy first time homebuyers re-enter the housing market.
Full details to follow as they come out, but this is great news that I wanted to get out ASAP.

 

USDA property eligibility map to change for 2015

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USDA loan property eligibility map changing for 2015

The very popular no down payment home loan for rural areas of the country is changing slightly for 2015 throughout the country.

usda-future-eligibility-map“USDA Announcement (posted 12-22-14) indicates President Barack Obama signed the Consolidated and Further Continuing Appropriations Act of 2015 (omnibus spending bill) into law last Tuesday.

While it is long and boring to read, the most important aspect is that USDA loans will implement new property location eligibility maps on February 2nd, 2015. 

The changes will be those already published on the ‘Future Eligible Areas’ maps posted on the USDA eligibility website (USDA Future Eligible Maps), which had be previously announced to go into effect, but had been delayed multiple times.

When checking property eligibility for a USDA loan, be sure to click the future eligibility link, as only applications completed and submitted to the USDA on or before Feb 2nd, 2015 are eligible under the current eligible areas.

Completed applications submitted by your mortgage lender to  USDA after Feb 2nd will be subject to the new ‘Future Eligible Areas’.”

Another reminder about USDA loans is that you can apply with any participating USDA loan lender. You do not need to find or use an actual USDA office. We provide USDA loans in MN, WI, or SD

3% down payment mortgage loans back

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Minneapolis, MN:  Fannie Mae and Freddie Mac have recently announced they are bringing back 3% down payment options.ff

Currently, most conventional conforming loans require a minimum down payment of 5%, while FHA Loans still allows for just a 3.50% down payment.

FHA VS CONFORMING CONVENTIONAL Loans

FHA used to be the low down payment champion, but changes to the program made after the housing market meltdown have really taken a lot of steam out of the program.  The two biggest changes being the huge increase in the cost of FHA mortgage insurance, and that with a small down payment, the homeowner would have FHA mortgage insurance for the life of the loan!

If you have good credit, and could come up with a little more down payment, a conforming conventional loan would be much better.

CONFORMING CONVENTIONAL NOT ALWAYS BETTER

There are many differences between the two programs.

FHA loans are more liberal in terms of lower credit scores, and weaker borrower profiles.  It also has a shorter waiting period after major negative events, like a foreclosure or bankruptcy. FHA interest rates are pretty much the same for everyone. But you pay for this with the high cost of mortgage insurance.

Conventional loans are almost always better if you have good credit scores, but can be nearly as costly for those with weaker credit. Conventional mortgage interest rates and mortgage insurance costs both climb significantly as your credit scores go down.

NEW 3% DOWN PAYMENT MORTGAGE GUIDELINES

Understand, Fannie Mae and Freddie Mac DO NOT DO LOANS. They buy loans from lenders after the fact. Therefore lenders can, and very often do, add additional rules and restrictions to the guidelines of what Fannie and Freddie say they will buy.  Always check with your mortgage lender for your specific qualifications:

Fannie Mae Rules:
 ⇒ Effective Date: December 13, 2014
⇒ One person must be a first time homebuyer
⇒ MyCommumity Mortgage Purchase Transactions — must undergo prepurchase housing counseling
⇒ Standard purchase and limited cash out refinances of existing Fannie Mae loans.
⇒ Fixed rate loans only — no adjustable
⇒ No high balance loans
Freddie Mac Rules:

⇒ Effective Date: March 23, 2015.
⇒ Called Home Possible Advantage Program
⇒ Manually underwritten mortgages–660 minimum score purchase/680 refinances with maximum 43% back ratio.
⇒ Owner occupied purchase and no cash out refinances.
⇒ Maximum income limitations for all mortgages.
⇒ Fixed rate loans only — no adjustable

2014 Minnesota Loan Officer of the Year

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Cambria Mortgage’s Loan Officer Joe Metzler, out of their St. Paul, MN Office, was awarded 2014 Minnesota Mortgage Association’s Loan Officer of the Year.

MN 2014 Mortgage Loan Officer of the YearHe was presented with the award at the MMA Annual Holiday Event on December 9th, 2014.

This is a huge accomplishment for both Joe, as there are over 100 companies included in the MN Mortgage Association.  Joe Metzler has been a top producing Loan Officer for Cambria Mortgage since 2000, and has over 20-years industry experience.  Joe has received other awards in recent years in recognition of his outstanding service and dedication to the mortgage industry, including:

  • 2011 – Top 40 Most Influential Mortgage Professions to Watch
  • 2010 – Top 150 Loan Officers in the Nation by Dollar Volume

He is a certified MMS (Minnesota Mortgage Specialist). Less than 1% of Mortgage Loan Officers in Minnesota have completed the requirements to earn this designation. This is just one of many ways that shows Joe’s dedication to his career.  His track record is exceptional by any standard. He believes in doing the job right the first time and providing a service you can depend on.

If you’d like to have Joe as your Loan Officer, he is licensed in MN, WI, IA, ND, SD. He can be reached at (651) 552-3681, or you can apply on his web site.

Home sales, listings down for November 2014

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Home sales, listings down for November 2014

While still touting a housing market recovery, area real estate associations are mindful that the market is still recovering, with the fits and starts that all that entails.

Data for November bear this out, with the area Associations of Realtors reporting November decreases in pending sales, closed sales and new listings.

Pending sales, or the number of signed purchase agreements, fell 7.5 percent in November compared with last year. New listings decreased 12.8 percent. November closed sales ended down 17 percent to 3,213 sales, versus last year’s 3,873 sales.

The median sales price rose 5.1 percent to $205,000, marking 33 consecutive months of year-over-year median price gains. However, this figure was down from an October median of $209,000.

As has been the case in recent years, the year-on-year uptick in prices indicates fewer distressed properties on the market; these properties, foreclosures and short sales, are where the home sells for less than is owed on the mortgage, and typically drag down median prices.

Minnesota mortgage ratesThe Minneapolis, St Paul, Twin Cities housing market is clearly continuing the process of recovery. Sales prices are up, but on fewer overall sales. Fewer distressed sales (foreclosures and short-sales) are certainly a welcome sign for homeowners and Realtors alike.

The Minneapolis Association of Realtors cited increased condo activity for the rise in prices. The median price of new construction condominium sales rose 65.2 percent in November to a new high of $366,242, it said.

Mortgage interest rates continue to hold just slightly above historic lows, making homes very affordable.  You can check current MN, WI, IA, ND, SD interest rates here.

NEW MN FHA Loan Limits for 2015

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HUD has announced their NEW MN FHA Loan Limits for 2015.

Federal Housing Administration (FHA) Announces 2015 Maximum Loan Limits

FHA’s Office of Single Family Housing published Mortgagee Letter 2014-25, which provides FHA’s single family housing loan limits for Title II Forward Mortgages and Home Equity Conversion Mortgages (HECMs), and provides loan limit instructions for streamline refinance transactions without an appraisal.

The loan limits published in this Mortgagee Letter are effective for case numbers assigned on or after January 1, 2015, and remain in effect through December 31, 2015.

Minnesota
Area   
Single Family
Duplex
Tri-Plex
Quad
Metro
$322,000
$412,200
$498,250
$619,250
Out-State
$271,050
$347,000
$419,425
$521,250

The maximum FHA loan limit “ceiling” for most areas remains at the 2014 level of $625,500 for a one-unit property. The minimum FHA loan limit “floor” for all areas remains at the 2014 level of $271,050 for a one-unit property.

There are no jurisdictions with a decrease in loan limits from the 2014 levels. To enable Mortgagees to easily identify areas with loan limit increases, FHA has published a separate list of counties with loan limit increases.
Refer to Mortgagee Letter 2014-25 for complete loan limit information.

US Home prices rise in Oct 2014

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U.S. home prices rose at a faster year-over-year pace in October than in September, snapping a seven-month slowdown.

Real estate data provider CoreLogic said Tuesday that prices increased 6.1% in October compared with 12 months earlier. That was up from September’s year over- year increase of 5.6%.

Still, home values are rising more slowly than they were earlier this year, when 12-month gains were averaging nearly double their current pace.

Previous price increases led investors to pull back from the home market, and firsttime buyers have yet to fill the void created by their departure.

Price growth will likely remain mild as a result, Core-Logic said. The firm projects that home values will rise 5.1% over the next 12 months. Roughly half the country’s homes will match or surpass their pre-recession prices by mid-2015, it predicts.

Twin Cities Home Prices Rise

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The Twin Cities real estate market continues to defy the traditional assumptions of supply and demand as year-on-year home prices rise while supply also increases.

worth_balanceOne reason for this is that so-called distressed properties, short sales and foreclosures, continue to disappear from a market they once dominated. These properties — where the mortgage balance due exceeds the home’s value — artificially depressed home prices. Now, it’s the resurgence of so-called traditional sales that is inflating prices.

St. Paul and Minneapolis Realtors’ associations reported recently that the local median sales price rose 7.2 percent, year-on-year, to $209,000 in October. Inventory rose 4.3 percent. The median was$205,000 in September.

The local trade associations also noted a decline in deal activity, with pending sales down 1.3 percent from last year. This also can result in higher inventory. New listings decreased 2.3 percent.

Traditional new listings rose 6.7 percent, while foreclosure and short-sale new listings were down 42.4 and 31.3 percent, respectively.

Months’ supply of inventory was up 10.8 percent to 4.1 months. Days on market is down 4 percent to 72 days.

Both associations counted the developments as a positive, citing greater inventory for buyers, with better prices for traditional home sellers, super low Minnesota mortgage rates, and plenty of loan programs for first time home buyers.

Percentage of First time home buyers drop

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First- time home buyers aren’t buying homes like they used to.

rent-versus-buyThe share of houses bought by first-time owners is at its lowest level in nearly three decades and down sharply from 2013, according to a survey out Monday from the National Association of Realtors.

Just 33 percent of home purchases this year have been by first-time buyers, the trade group said, down from 38 percent last year and well below the long- term average of 40 percent, the trade group said.

According to NAR chief economist Lawrence Yun, would-be buyers are struggling with higher prices, tight lending procedures and a still unsteady job market. Their absence, however, is slowing the overall recovery. NAR predicts home sales will fall this year for the first time since 2010.

As a Loan Officer here in Minnesota, I cry foul… Yes, maybe the percentage of first time home buyers is down, but it appears the home buyer market reality doesn’t match the perception.  Home prices are incredibly affordable all across MN, WI, IA, ND, SD. Mortgage programs and lending may require a few more documents, but it is not really difficult at all (unless you have bad credit).

I heard again this morning on a national news program that you need 20% down payment.  Really?  Since when?  There are many first time home buyer programs in MN that can be combined with down payment assistance programs, so you only need a small amount for down payment.  FHA loans are only 3.5% down payment, and Fannie Mae just announced they are coming out with a 3% down program shortly.

I keep reading many articles about student loans keeping people from buying homes, yet I approve people all day long with student loans.vaflag2

Maybe there is a changing market, but the reality is that a home of your own is still the American Dream, and there is no reason for most people not to buy a home.

Mortgage rates have dropped. Should I refinance?

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Mortgage rates in MN, WI, IA, ND, SD have dropped recently to their lowest level in sometime.  Mortgage company telephones, which had been fairly quiet the past few months are ringing like crazy as homeowner call to check mortgage rates, and decide should I refi or not?

Refinancing is most often used to lower your current interest rate.

If rates have dropped since you last financed your home, you may want to consider refinancing. Other common reasons to refinance include paying off a balloon payment, converting an adjustable rate loan to a fixed rate loan, or to take cash out. A few reasons for cashing out include: home improvement, an education fund, and consolidating debt.

Just imagine what you could do with an extra $100, $300 or more each and every month.

You might decide to apply the savings toward your balance and build equity faster. Or maybe you just might want to put the money in your savings account or portfolio and watch it GROW! The best thing is – you’re in control . You decide what is best for your family!

DROP PMI (Private Mortgage Insurance)

Many homes can take double advantage of today’s interest rates.  Obviously the lower mortgage rate, but many homes have also seen a significant increase in value. You may now have a loan-to-value lower than 80%, which means you can also drop your mortgage insurance, increasing the refinance savings even more!

In order to refinance your existing home, or to simply help you decide if refinancing makes sense, just call or click. A quick application tells us what we need to know, and let’s us “run the numbers”.

 MN, WI, SD – REFINANCE APPLICATION   (651) 552-3681

A standard refinance will require an application, appraisal, and a verification of your income and assets, as well as most of the same paperwork required when you originally financed your home. Adequate property insurance and new title insurance is necessary.

STREAMLINE REFINANCE – MN, WI, SD

A streamline refinance is available for many home owners. As the name implies, the process is streamlined, and generally does NOT require an appraisal. Available for both existing FHA Loans, and VA loans.

HARP REFINANCE – MN, SD, WI

A HARP refinance is for existing Fannie Mae or Freddie Mac loans, that were closed prior to June 1, 2009.  Usually no appraisal is required, and you could have lost some value, or even be significantly underwater on your existing loan and still be able to refinance.

 

Benefits:
  • Reduce Your Interest Rate
  • Cash Out Equity for Home Improvements
  • Consolidate Debt
  • Lower Monthly Payments

To Refinance You’ll Need:

Equity gained – just 10% of homes still underwater

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U.S. homeowners gained or regained more than $1 trillion in equity over the year that ended on June 30, 2014.  Less homes underwater according to Core-Logic’s 2nd quarter 2014 analysis, 44 million homes in the country now have positive equity, a gain of 950,000 homes during the quarter.

The number homes which are still “upside-down” or “underwater,” that is the owner owes more on the mortgage than the market value of the home, is now 5.3 million or 10 percent of all homes with a mortgage.  In Minnesota, just 7.8% of homes, and  Wisconsin 10.9%.

In the preceding quarter (Q1) there was a negative equity share of 12.7 percent or 6.3 million homes and in the second quarter of 2013 there were 7.2 million homes or 14.9 percent that were underwater.  This is a year-over-year decline of 1,962,435 or 4.2 percent.

Regaining equity is very important, as it allows many more people to list and sell their existing homes, moving up (or down) to something else, and others to refinance and save on their current homes loans – especially those who want to refinance, but did not qualify for programs like a  HARP Refinance.

READ the FULL STORY

Misconceptions sideline new home buyers

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Misconceptions sideline first time home buyers

Lack of knowledge and misinformation may be discouraging Americans from buying a home according to a recent survey sponsored by Wells Fargo.  The survey, conducted in June by Ipsos Public Affairs, found that many prospective homebuyers do not take the plunge because of uncertainty about their ability to qualify for a mortgage or about navigating the homebuying process.

The survey, “How America Views Homeownership,” found that many Americans say their financial houses are in order, but serious misconceptions keep them sitting on the side lines.

Read the full story here.

 

Tired of paying rent?

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Tired of paying rent?  Want to finally own a home of your own?

Below is a chart of the most common reasons people continue to rent versus buying a house. Many of the most common reasons make sense, but the number one reason, a lack of a large down payment, is easy to get around.

From true no down payment loans (like VA loans, and USDA Rural Development Loans), to down payment assistance loans, we can often help most people become homeowners.

If you have OK credit, which means a middle credit score of 620 or higher, and at least $1,000 in the bank to spend on a home, you should call a first time home buyer program expect to discuss your options.

For homes in MN, WI, or SD, call (651) 552-3681, or visit a dedicated first time home buyer program web site for more information.

rent-vs-buy