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Monday Morning Mortgages>
Monday Morning Mortgages
March 1, 2010
0.5% Down Payment in Sonoma County
The CHF Access Program provides a 3% loan to be coupled with an FHA 96.5% loan to be used for buying an owner occupied loan in Sonoma County. The 0.5% down payment from the buyer can come from a family gift, a 401k loan or from a downpayment assistance program like the City of Santa Rosa’s ADDI program. There is an income limit of $96,240 of qualifying income for Sonoma County. The terms of the second loan are 15 years fully amortizing at 8.25% rate. On a $300,000 home purchase, the minimum down would be $1,500! Total payment would be $2,142 including PITIMI&2ndP&I.
Here’s the sizzle and rub.
SIZZLE
The minimum down payment of 0.5.% can come from a relative or 401k loan.
May own other property
High income limit of $96,240
SFR, PUD, FHA approved condos (FHA condo look-up https://entp.hud.gov/idapp/html/condlook.cfm )
RUB
Owner occupied only
FHA rate on first will be higher than normal market rate by about ½%
Single unit homes only
Max DTI 43%
No non-occupant co-borrowers allowed
Have you borrower call to qualify. 48 hour pre-approvals.
Fannie Mae 5% Down in Sonoma County is Back!
95% LTV loans are now insurable in Sonoma County without an income limit. Mortgage insurance companies are now insuring these for our County, a good sign that values are not expected to decline further. Minimum FICO 620 and 2 months of reserves are required.
Interest Only going the way of Stated Income
Freddie Mac will be eliminating its Interest Only product. At that time the company announced that on or about September 1, it will cease purchasing and securitizing IO mortgages, including Freddie Mac Initial Interest fixed-rate and adjustable-rate mortgages. As agents and brokers know, what Fannie or Freddie do, the other usually follows, and with them, most investors. This will leave portfolio and hard money lenders as the only entities possibly offering IO products by late summer.
Rates
Are we heading for lower rates, or higher rates? Certainly there is no inflationary pressure (which would result in higher rates initiated by the Fed), although GDP for the fourth quarter was revised slightly higher, and was the strongest quarter of economic growth in more than six years. But National Existing Home Sales decreased over 7% in January and was much weaker than expected. At over 3 million units available for sale, at the current pace this is almost an eight month supply. And for the sales in January, 38% were "distressed" sales which include foreclosures.
Also on Friday we had the Chicago Purchasing Managers Index show a little increase in February, but the Michigan Consumer Sentiment Index dropping slightly from January's levels. But continued faith in U.S. economy could fade quickly (resulting in lower rates) without signs that Congress is crafting plans to address the very large deficit in which we find ourselves - Bernanke believes that deficits need to be brought down to 2.5% to 3% of the nation's gross domestic product to be sustainable.
Rate-wise, dealers and investors become a little nervous about mortgages. Looking ahead to March, however, we have some uncertainty about the Fannie & Freddie buyout impact, consumer concern over the employment situation and we have the employment number this Friday, scheduled termination of the Fed MBS purchase program, an FOMC meeting mid-month, the usual 2 rounds of treasury auctions, and shaky equity and currency market. This keeps volatility throughout March in the daily rates we see.
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