Dan's Mortgage & Real Estate Blog

2010-10-08T07:42:00.001-04:00

TGIF - nice weather this weekend, enjoy some time with your family and loved ones =)

2010-09-21T19:48:00.001-04:00

What goes up, must come down. Mortgage rates took a nice move for the good today. Working on tons of deals, thanks for all your patience =)

2010-09-19T11:20:00.001-04:00

Do today what nobody else will, so you can do tomorrow what nobody else can. Have a blessed Sunday. Live, love, laugh. God bless!

2010-09-17T22:34:00.001-04:00

Busy week at the office. Mortgage rates have started to move up. Looking forward to spending time w/the family. Have a great weekend!

2010-09-07T11:34:00.001-04:00

Short but busy week ahead. Mortgage rates are still great. Great time to refinance if you haven't done so already. www.danmoralez.com

2010-09-06T10:56:00.001-04:00

Rainy day off is better than no day off =). Happy Labor Day! Mortgage rate's are still great. Back at it tomorrow =)

2010-08-19T15:10:00.001-04:00

Mortgage rates are killer http://ping.fm/Dlygn Thanks for all the support, calling everyone back as fast as I can =)

2010-07-28T17:13:00.001-04:00

Mortgage rates - incredible! Crazy busy, thanks for your patience if I owe you a call or email. www.danmoralez.com for info!

2010-07-21T20:10:00.001-04:00

Snapshot of current rates if you are looking to purchase a new home http://ping.fm/f36y3 Refinance rates may be slightly higher

2010-07-21T20:08:00.001-04:00

Crazy busy week already! Calling everyone back as fast as I can, thanks to everyone for all their patience. http://ping.fm/OQlqU

2010-07-16T12:29:00.001-04:00

Crazy busy as mortgage rates are at record lows! Even if you don't have equity, you can likely refinance. Hit my website www.danmoralez.com

2010-07-13T13:49:00.001-04:00

Mortgage rates still strong today. However, under pressure. If you haven't locked in yet, I would not wait! Message or call me for info.

2010-07-12T12:35:00.001-04:00

Mortgage rate's start the week at or near 50yr record lows! 15yr Fixed rate's as low as 3.99%! Don't miss out, call or message me for info!

2010-07-10T02:25:00.001-04:00

A quick update on mortgage rates and refinancing. Feel free to message or call me with any questions. Have a great weekend! http://ping.fm/vAo3D

2010-07-09T10:25:00.001-04:00

Mortgage Rates are great today! 30yr Fixed as low as 4.49% and 15yr Fixed as low as 3.99% for well qualified borrowers. Call me for details

Federal Homebuyer Tax Credit Extended and Expanded!

2009-11-06T10:25:00.004-05:00

BREAKING NEWS!

Lawmakers have passed the extension of the first time homebuyer federal tax credit and have expanded it to make it available to non-first time homebuyers as well. The National Association of Realtors has a fantastic website with a lot of information on the expanded tax credit. Here is a link to their webpage:

National Association of Realtors Website

I am excited about this recently passed piece of legislation as I believe it will provide a great opportunity for those who are not only First Time Buyers but those who are Non-First Time Buyers.

Congress Set to Expand Homebuyer Tax Credit

2009-11-05T12:28:00.002-05:00

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer

WASHINGTON – Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.
The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break — for companies with revenues of $15 million or less — in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

"It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns," said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

The bill is H.R. 3548.

How FHA Loans Work

2009-07-24T20:08:00.004-04:00

I came across this video on FHA loans online. I thought it did a nice job explaining the program. As always, we are able to assist you with any questions or concerns you may have.

Expanded Refinance Options

2009-07-01T22:36:00.002-04:00

A day late and almost a dollar short, Fannie Mae and Freddie Mac both opened up the refinance opportunities for homeowners who have little to no equity in their home. Previous refinance options limited the new mortgage balance to no more than 105% of what the home is worth. New options will now allow you to borrow up to 125% of what the home is worth. The new loan cannot be used to payoff or refinance any existing second mortgage or home equity loans. But for borrowers who had little to nothing down, this may now open the window of opportunity to refinance.

This was just announced today. There are several moving parts and details yet to be determined. I will keep you posted as more information and the program becomes available formally.

What Happened To Mortgage Rates?

2009-05-27T19:42:00.003-04:00

Since Thursday May 21, mortgage rates have seen a steady move in the wrong direction. On Wednesday May 27 we saw one of the largest upward moves in rates for the last 12 months. In less than a week mortgage rates have managed to go up nearly a full percentage point. That's right what was 5% is now 6%.

So one has to ask, what is causing this? Several factors have come into play. A huge increase in the amount of debt issued by the US Treasury, higher oil prices, stronger than expected consumer confidence numbers and fears of inflation all had a part in today's strong increase in rates. In addition, the looming GM bankruptcy and rumors that the Fed may slow down it's purchasing of mortgage paper have all contributed to the negative situation in the bond market.

For those who are sitting on the sidelines wondering if now is the time to buy, the market is telling you YES! Many expect prices to bottom out soon if they haven't already. The signs that cheap money is all but gone coupled with a First Time Buyer tax credit that is set to expire on December 1 are all great indicators that the perfect buying opportunity may soon be going away.

For those of you who want to take advantage of lower rates by refinancing, the window may have closed for the time being. Lenders are struggling to close a huge pipeline of loans that are already in process and cannot keep up with the inquiries for new loans. Pressure on mortgage rates will slow refinance applications and bring loan processing times down. Lenders have been struggling to keep up with demand. As demand dries up, look for lenders to be more responsive to inquiries.

Long story made short, one thing is for certain, things will change again :)

Refinancing to Combine Mortgages or Pull Cash/Equity Out

2009-03-29T14:53:00.004-04:00

If you are looking to consolidate mortgages or pull equity (cash) out of your home here are some of the options that are available to you:

Conventional Mortgage
On a conventional mortgage you can finance up to 80% of the current homes value. The loan proceeds can be used to payoff any outstanding mortgage and/or home equity loans as well as taking equity for consolidating other debts, tuition, vacations, etc. Loans are available up to $417,000.

Terms available on a Conventional mortgage will vary depending on the amount of equity you have and your credit score.

FHA Mortgage
The maximum advance on an FHA mortgage can vary depending on the characteristics of your loan. Loans are limited to $271,050. Here are the general guidelines:

If you are strictly combining a first and second mortgage (home equity loan) and the second mortgage has been in place for at least 12 months. You are able to refinance the two loans and roll in your closing cost up to a total of 97.75% of your homes current value (some restrictions may apply). You cannot combine both loans and take cash/equity out of the home and go to 97.75%.

If you are combining loans and/or taking cash/equity out of the home you are able to do so provided you do not exceed 85% of the homes current value. The loan proceeds can be used for anything you would like.

FHA mortgages require Mortgage Insurance as well as an escrow account for taxes and insurance.

If you would like to refinance and are not looking to borrow additional cash/equity and/or combine mortgages, you may be better suited for the options provided by President Obama's Homeowner Affordability plan. Please click here for details on those options.

New Refinance Options Available!

2009-03-28T16:11:00.009-04:00

The media has had much to say about President Obama's Homeowner Affordability Plan. I wanted to try and provide a brief yet understandable summary of how this plan may benefit you.

These loans are NOT for borrowers looking to combine a first and second mortgage or borrow equity to consolidate other debts. If you are looking to combine your loans or pull equity out please click here

Here are some of the key bullet points that you should be aware of:

If when you took your original mortgage you had 20% equity and No PMI (Private Mortgage Insurance), you are able to refinance your new mortgage for up to 105% of what your home is currently worth with no need for PMI. However, most lenders may require that you now escrow for taxes and insurance if you don't currently.
If you had less than 20% equity you likely had PMI of some type. Keep in mind that many loans that were sold as "NO PMI" in exchange for a slightly higher rate did have what was known as Lender Paid Mortgage Insurance. You are also eligible to refinance your mortgage without the need for a new PMI policy (the existing policy is carried over to the new loan, with a slight modification of terms in some cases) provided that the new mortgage balance does not exceed 105% of the home's current value.
If you took a first and second mortgage to purchase your home and avoid PMI insurance you are not able to combine the loans into one new loan. The second mortgage must stay how it is currently. Depending on who holds your second mortgage you may have difficulty in refinancing as the second mortgage holder must agree to remain in a second position behind your new mortgage. You are eligible to refinance your mortgage with a second mortgage in place provided your new mortgage balance does not exceed 105% of the homes value. There is no limit on the total of both loans combined
If you took out a second mortgage after you purchased your home, you are not able to combine both loans into one new loan. The current second mortgage holder must agree to remain in a second position or you would not be able to refinance. Your first mortgage can be for up to 105% of the homes value. There is no limit on the total of both loans combined.
As a reminder "Home Equity Loans" and "Home Equity Lines of Credit" are second mortgages as they are secured by a second lien against your home.

The terms and options available to you will depend on who the owner of your mortgage is. Because most mortgages are owned by Fannie Mae and Freddie Mac, the owner of your mortgage can make a difference.

If you are currently making your mortgage payments to First Place/Franklin Bank we are able to assist you with your options as we deal directly with Fannie Mae and Freddie Mac on all loans that we service. This gives us a tremendous amount of flexibility in assisting you.
If you are NOT currently making your payment to First Place/Franklin Bank and you need the flexibility provided by this new program, we are only able to assist you if your loan was sold to Fannie Mae and your original mortgage balance was for 80% or less of the sales price/appraised value when you took your mortgage.
If your loan was sold to Freddie Mac and you desire to take advantage of this new program and it's flexibility you must go back to your current loan servicer. Unless First Place/Franklin Bank is your current loan servicer we would not be able to assist you.
If you would like to refinance and do not need the flexibility provided by this program we are able to assist you irregardless of who your current mortgage holder is and look forward to the opportunity to serve you.

To check and see if Fannie Mae or Freddie Mac owns your mortgage please use the following two links. When entering an address, please try multiple time. If your address is 123 Main Street. You will want to input:

123 Main Street
123 Main ST
123 Main

Believe it or not, a simple ST at the end of the address can make a difference in determining whether or not a loan is held by Fannie or Freddie.

Fannie Mae Loan Look Up - Freddie Mac Loan Look Up

Additional information about the Presidents plan can also be found by visiting the Making Home Affordable website.

If you are not eligible for one of these refinance options and you are in danger of losing your home because of a loss of income and/or a decrease in income, options may be available to assist you in keeping your home. Please contact your current mortgage servicer as soon as possible. The sooner you contact your lender the sooner they can assist you in trying to keep your home.

My team and I are available to assist you. Because of the large influx of applications recently. Please be patient as we do our best to reach every client who has made an inquiry about refinancing.

Please don't hesitate to contact us with any questions. Please make sure to include both a daytime and evening telephone number for us to reach you back at.

Here are some other blog post on refinancing you may find helpful:
Refinancing Questions and Answers (Audio Broadcast)
Refinancing Questions and Answers
What Are Mortgage Rates
Refinancing to Combine Mortgages or Take Cash Out

Buying or Selling a Home - Q&A Broadcast

2009-03-11T09:51:00.002-04:00

Here are two recent interviews I did with Rebecca Perkins from Five Star Real Estate. One interview is on Selling Your Home and the other is for First Time Buyers. Please feel free to call with any questions or concerns. Enjoy!

Will Mortgage Rates Hold?

2009-03-05T13:03:00.002-05:00

Provided compliments of Market Alert:

Another day - same old story. The direction of mortgage interest rates is being dictated by trading action in the stock markets. Since Friday, February 20th I have been writing in this space about a stock market plunge and the resulting support for the prospects of steady to fractionally lower mortgage interest rates it would create. In my judgment we are currently in the "sweet-spot" in terms of the amount of support mortgage interest rates can expect as a result of the swoon in global stock markets. Before the month is over I believe the worst of the sell-off in the stock markets will have passed

As you undoubtedly know, markets are made up of both buyers and sellers. No matter how strong the desire to sell or buy may be -- the transaction can not be completed without the opposing party directly participating in the transaction. The "so what" factor here is extremely important. Consider this, once all the sellers have been indentified and satisfied, that only leaves one component in the market place. Active and aggressive buyers . who suddenly realize they have the opportunity to acquire stocks at the low point in the market cycle. This market dynamic has never failed before . and it will not fail this time around.

Against this backdrop the Treasury department will be looking to issue a river of $2.5 trillion of debt. Without the "flight-to-quality" support of capital fleeing the volatility of the stock markets for the relative save harbor of the Treasury market - treasury yields will rise and drag mortgage interest rates higher as they go.

My sincere hope is that an increasing number of your clients will come to see the greatest mortgage financing opportunity in a generation is now available. There is an old Chinese proverb that says, "Ever banquet must come to an end." The same can be said for cycles favoring lower mortgage interest rates.

Finally Some Good News - Homeowner Affordability/Stability Plan

2009-03-05T00:15:00.002-05:00

Finally some good news for homeowners. Under President Obama's Homeowner Affordability and Stability plan many American households may no longer be trapped in their current mortgage.

The President's plan features two options:

Option 1:
Homeowners who are current on their mortgage payments but may be trapped in their current mortgage because of a lack of equity due to falling home prices may now have the ability to refinance their home even if they have little to no equity. This is true even if you have an existing second mortgage.

Option 2:
The other option is for homeowners who are past due or are in danger of becoming past due (yes, there is a test and you do have to prove you are in danger of becoming past due). These homeowners may be eligible to have their existing home modified to assist them in preserving their homeownership. This program is not for those who are making payments on time and have the ability to repay the loan. Only borrowers with a true legitimate bonafide hardship will be eligible for a modification (yes, you must prove a bonafide hardship).

These programs are only available to homeowners who have a first mortgage that is owned by Fannie Mae or Freddie Mac. The majority of home mortgages in the U.S are owned by Fannie or Freddie. The program does NOT apply to those who have Sub Prime, FHA/VA or other programs. However, it is expected that most Government programs (FHA/VA/Rural Housing) will make similar changes as well.

So the question is who qualifies and what are the details? The truth is the options and guidelines available to you depend on the investor for your mortgage (Freddie, Fannie or other) and a number of other factors. The truth is both Freddie and Fannie have slightly different guidelines between them.

I will be posting a new Q&A audio broadcast within the next couple of days. Please check back soon for additional information as the details of the program were just released on 3/4/09 and it will not be available for new loans to close until 4/1/09. Because the program was just released there are still questions on some of the guidelines. We will be posting a detailed audio cast within the next couple of days that will cover the most common questions.

My practice is able to help you determine your options. However, please be patient as this new program has generated substantial interest and our ability to respond to every inquiry quickly is slightly impaired.

Might I ad that now is not the time to trust your mortgage to an amateur. Truth be told most lenders are not familiar or competent to handle these new transactions. This will create frustration and lost opportunity for you.

With over 18 years experience, I have been recognized as an expert in my field and have been featured in and written for various trade magazines. At the end of the day, we have the expertise to insure you have the best options available to preserve your home and help insure you save money.

Mortgage Rescue Eligibility Still Being Finalized

2009-02-23T13:04:00.003-05:00

The recent announcement by President Obama has created a substantial amount of interest from clients.

At this point the details of the proposed program are few and far inbetween. We will be posting information to the blog and a voice broadcast once all of the details are made available to us.

Here is an article from the Washington Post as well as the official Government provided Q&A. In addition, please read some of my recent post for more information. Stay tuned, more to follow.

Washington Post Article

Official Government Q&A

Obama Unveils Homeowner Affordability and Stability Plan

2009-02-21T16:14:00.004-05:00

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes.

The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. In addition, the plan includes a third initiative to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac.

Many of the plan’s details are still being worked out and will not be announced until March 4, here is an overview of the plan’s main components.

Refinancing Initiative
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. Therefore, the refinancing initiative in the new plan provides refinancing help for homeowners with less than 20% equity in their homes or who owe more than their home is worth. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.

According to the plan, “credit-worthy” or “responsible” homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date—including what, if any, credit score requirements will be included.

Stability Initiative
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.

The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels.” To accomplish this, lenders are encouraged to lower homeowners' payments to 31 percent of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.

Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. This initiative also includes a number of additional elements and incentives that benefit homeowners and lenders alike, including:

Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Reaching Borrowers Early: To keep lenders focused on reaching borrowers who are trying their best to stay current on their mortgages, an incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.

Supporting Low Mortgage Rates
As part of the Homeowner Affordability and Stability Plan, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market and to help maintain mortgage affordability. This portion of the plan will use using funds already authorized in 2008 by Congress for this purpose.

The increased funding will enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners, and provide forward-looking confidence in the mortgage market.

Again, the government plans to unveil the final details of the plan on March 4, 2009. For now, you can download a sheet of common Questions and Answers produced by the government at:
www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

I will continue monitoring the plan as new information becomes available. Please visit my website and blog for the latest details. We will make information available as soon as we have it.

Homebuyer Tax Credit now $8,000!

2009-02-19T10:46:00.007-05:00

First time homebuyers can now take advantage of a Federal Tax credit of up to $8,000 when they purchase a new home. Here are some of the details of the program

Limited to First Time Homebuyers (someone who has not owned a house in the last 3 years)
Single borrowers can have up to $75,000 in income and qualify for the entire credit (up to $95,000 with a reduced credit)
Married borrowers can have up to $150,000 in income and qualify for the entire credit (up to $170,000 with a reduced credit)
Buyer's can now take advantage of the tax credit as well as special programs offered by The Michigan State Housing Development Authority.
Buyers can also claim the credit as part of their 2008 Federal Tax Return even if the home was purchased in 2009!

Want to know more about the Federal Housing Tax Credit? The National Association of Home Builders has a great website www.federalhousingtaxcredit.com. As always, make sure to consult a qualified tax consultant for all the details.

Governments Role in Mortgage Rates

2009-01-27T14:14:00.005-05:00

Mortgage pricing is off of the lows from early January. The reason for this is simple, as the global economic downturn worsens more countries are issuing debt. This is forcing the TBILL investors to raise their yield requirement at auctions to keep the demand for our debt sufficient.

The U.S. government’s promise to purchase $500 billion of MBS by the end the 2nd quarter is the ONLY thing keeping mortgage rates down as evidenced by most institutions selling their current mortgage production immediately. This is a sign that the risk vs. return at current mortgage rates is not sufficient. Treasury is financing the MBS purchases with TBILL issuance so the rise in the yield of TBILLs (particularly the 10yr) is forcing the Treasury and GSEs to raise the yield at which they are purchasing mortgages, resulting in higher rates.

The two questions a potential borrower should consider are:
Will treasuries rally back to the record low yield levels we saw in early January?
Will the global economic slowdown turn around in the next 6 months?

If neither of these occur, then it is likely mortgage pricing will continue to slowly get worse. If you haven't done so, now is a great time to look at getting locked in.

Existing Home Sales - Rate Update

2009-01-26T14:01:00.003-05:00

Good news is existing home sales were reported higher today than what previous was expected. This means many buyers who were on the fence decided to take advantage of lower rates and favorable home prices. This is definitely a step in the right direction.

Mortgage rates saw an uptick the end of last week. Rates for well qualified borrowers still remain in the low 5's on a 30 year fixed rate. The Federal Reserve will wrap up it's meeting this week. Most expect little to no movement in mortgage rates as a result.

Housing Still Sliding

2009-01-22T11:54:00.001-05:00

Housing still sliding
But economists say mid-2009 will be the trough
By Steve Kerch, MarketWatch
Last Update: 3:45 PM ET 1/20/09

LAS VEGAS (MarketWatch) -- Housing will not look much better at the end of this year than it does now, but "we do expect '09 will be the bottom," the chief economist for the National Association of Home Builders said Tuesday.

David Crowe, speaking at the International Builders Show here, said housing starts are expected to fall nearly another 30% in 2009 and new-home sales will drop 14%. But he said he expects the trough of the market to occur sometime in the middle of the year.

"We should come out of 2009 on an upswing. It won't be strong, and we will still have home-price declines throughout the year, but it will be an upswing," he said.

Weighing heavily on housing market forecasts is the continued decline in employment. Frank Nothaft, chief economist for mortgage agency Freddie Mac, said he expects unemployment will jump to 8.7% by the end of 2009, up from 7.2% today. And that in turn will push mortgage delinquencies and foreclosures higher, adding to an already bloated supply of homes on the market.

"The single most important trigger event for delinquencies is unemployment," Nothaft said. "Clearly there will be more significant job losses over 2009 and that will contribute to delinquencies on loans of all types." Particularly troubling, he said, is that even prime borrowers with conventional, conforming fixed-rate loans are defaulting in higher numbers.

The job picture also dims consumer confidence, which is at or near historic lows, "making them afraid to go out and buy anything durable, and that certainly includes a home," Crowe said. That is making it difficult to work off the excess inventory of homes for sale.

Crowe estimates that 6.2 million homes are vacant and on the market, with about one-third of those homes being new construction. He said that represents about 1.5 million units above what would be an equilibrium rate for housing.

"And adding to that static supply is the continued number of homes going into foreclosure," he said.

Builders are making an effort to clear that supply, Crowe said, both by trimming housing starts and by cranking up incentives to move empty houses. A recent builder survey that asks about concessions being made found just 12% across the country saying they were offering nothing in the way of perks versus 50% who in 2003 said that.

Those concessions include price reductions and the addition of amenities at no cost. "Virtually all builders are doing something extra to move houses," he said.

Home prices will continue their slide in 2009 and may well keep falling into 2010, said David Berson, chief economist for mortgage insurer PMI Corp. The company's winter forecast shows that of the top 50 U.S. metropolitan areas more than half have a 50% or greater risk of seeing lower home prices two years from now as they do today. In some hard hit markets such as Las Vegas, that risk is about 90%, he said.

Good mortgage rates, if you can get them

If there is any good news for housing, it comes from mortgage rates, which are at historic lows and not expected to move up. But mortgage credit is not nearly as available as it was in the housing boom as lenders tightened underwriting standards throughout the last year, Nothaft said.

"If you have a down payment or home equity, a good credit score, full-doc underwriting and a conforming loan balance [meaning it is under the Fannie Mae and Freddie Mac limit of $417,000 or $615,000 in high-cost areas] - if you meet those four criteria then you have no problem getting mortgage credit," he said. "But if you only meet three out of four, your mortgage is going to be much more expensive, if you can get a loan at all."

Freddie Mac Average Rates

2009-01-15T12:25:00.003-05:00

If your like me, you are sick of seeing all of the online advertising offering interest rates that practically nobody can qualify for. A legitimate source for info on average rates in the country can be found at www.freddiemac.com.

Freddie Mac is one of the biggest buyers of home loans in the country with Fannie Mae. They publish a weekly survey that shows what the average rate was in the country and the points associated with it.

This is a legitimate source of information, unlike others that allow any advertiser willing to pay to publish any crazy, inaccurate rate they want (in particular bankrate.com)

Unemployment Report - Rates Unchanged

2009-01-09T12:55:00.002-05:00

While jobless rates have continued to climb, this mornings jobless report was as expected. This means mortgage rates remain unchanged from yesterday. Rates are great. Waiting for even lower rates may result in a missed opportunity. Have a great weekend!

Market Remains Attractive

2009-01-08T11:22:00.002-05:00

Mortgage bond pricing remains attractive with rates at all time lows. Check out the audio section below for answers to common questions about refinancing. If you haven't done so already, now is a great time to get your application in as soon as possible.

Thanks for your patience as we work thru the large influx of recent applications.

New Audio Broadcast - Your Questions Answered

2009-01-08T01:07:00.002-05:00

It's no surprise, lenders in the mortgage business are extremely busy and are working thru a large influx of mortgage applications. In an attempt to get information to you quickly and to answer many questions you might have, I have put together the following voice broadcast for you. I hope this information is helpful to you. Don't hesitate to let us know if you have any questions or concerns.

Mortgage Rates Still Favorable

2009-01-07T13:16:00.000-05:00

Mortgage rates looked slightly better today thanks to the fact that the Fed starting buying mortgage backed securities yesterday. Yesterdays bond market saw a strong rally pushing mortgage rates lower than yesterday. As with most rallies, they can be short lived. Today mortgage bonds are flat to down slightly for the day.

Rates continue to look good, now is a great time to look at refinancing before rates change. If you haven't done so already, I suggest you get your application in as soon as possible.

On a related note, several lenders have started to increase rates even though the market has moved favorably. Simply put, the slower housing market caused many lenders to cut staff and they are now under staffed to deal with the large influx.

While we did not decrease our staff, like other lenders we are struggling to return inquiries as timely as possible. I appreciate your patience and encourage you to complete an online application to aid us in quickly processing your loan.

Fed Starts Buying Mortgage Bonds

2009-01-06T14:48:00.002-05:00

Today the New York Federal Reserve Bank started buying mortgage backed paper. This translates favorably for consumers as it helped to push bond prices up which translates into lower mortgage rates. In addition, minutes from the recent Federal Reserve meeting show the Fed is still concerned about the economy and is dilligently working to fight off a depression.

All of todays news translates into mortgage pricing looking better. Rallies like this have been short lived. If you haven't done so already, now is a good time to get your application in so we can get moving for you.

If you have an application already in, we are dilligently working to touch base with everyone as quickly as possible. We appreciate your patience and look forward to speaking with you soon.

Wishy Washy Mortgage Rates

2008-12-24T11:20:00.002-05:00

Mortgage backed securities finished the day yesterday with a slight improvement over Monday. For the day today (Wednesday) mortgage pricing is showing a slight rebound as bond pricing is up slightly.

I read this article earlier today: My comments have been added in red.

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Fixed-rate mortgages continue to fall
Rates on 30-year fixed-rate mortgage at lowest since 1971: Freddie Mac
By Amy Hoak, MarketWatch
Last Update: 10:42 AM ET 12/24/08

CHICAGO (MarketWatch) -- Fixed-rate mortgage rates fell again this week, with the 30-year fixed-rate mortgage setting another record low, at least since Freddie Mac began doing its weekly survey in the early 1970s. (Current rates are slightly higher than this weeks past lows)

The 30-year averaged 5.14% for the week ending Dec. 24, down from last week's 5.19% average, according to the survey, released on Wednesday. It was more than a full percentage point below its 6.17% average a year ago, and hasn't been lower since Freddie started doing its rate survey in 1971.

Fifteen-year fixed-rate mortgages averaged 4.91% this week, down from 4.92% last week and 5.79% a year ago. The mortgage hasn't been lower since April 1, 2004, when it averaged 4.84%.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.49% this week, down from 5.60% last week and 5.90% a year ago. One-year Treasury-indexed ARMs averaged 4.95%, up slightly from 4.94% last week yet still down from 5.53% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.8 point (in other words, if you wanted a loan with 0 points and standard closing cost, the average rate would have been almost .25% higher than the rates shown above), the 15-year fixed-rate mortgage required an average 0.7 point and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

"Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac's survey began in 1971," said Frank Nothaft, Freddie Mac chief economist, in a news release. This is true. However, like the stock market we have seen movements both up and down with current rates higher than this last weeks lows, but still at record low levels, just not as favorable as this past weeks low point.

"Real GDP growth fell 0.5% in the third quarter of the year, pulled down by the largest drop in consumer spending since the second quarter of 1980. The market consensus calls for an even larger decline in the last three months of the year," he said. And the housing market continues to contract, Nothaft added.

"Existing home sales (excluding condominiums and co-ops) fell 8.6% in November to 4.0 million houses (annualized) in November, representing the slowest pace since July 1997. Moreover, the median sales price fell 12.8% from November 2007, the largest 12-month decline since records began in January 1968, according to the National Association of Realtors," he said in his comments. Read more on the decline in home sales and fall in home prices.

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My point is most people will look at the headline and a rate and will stop there. The average client does not understand the the average rate includes points. Point buy you a better rate and are not common in our market. In addition, you have cost to take into the equation. Far too often clients look at rate only and do not look at the total cost of a transaction.

In rare cases, does it make sense to pay points. In situations where one is refinancing more often than not you are better off not paying closing cost and taking a slightly higher rate. As always we will work the numbers for clients both ways to help them figure the option that is best for them. If you are looking strictly at rate, more often then not you will select the option that is the worst one for you.

I wish you a great Christmas holiday and hope you take time to enjoy your family.

God Bless!

Merry Christmas From The Bond Market?????

2008-12-23T09:03:00.003-05:00

In time to ruin the Christmas cheer, the bond market has decided to play Scrooge. Mortgage rates saw a record 40yr low last week with pricing being extremely attractive. This record low was brought on by the Federal Reserve promising to become an active buyer of mortgage paper. It was NOT a result of the Fed's rate cut.

Over the last couple of days, mortgage backed securities have seen losses resulting in rates moving upward from last weeks historic lows. As with the stock market, we are seeing volatility in both directions. Rates will look attractive one day only to look less attractive the next. Trying to time the bottom of the market is like trying to predict a stock price, almost impossible to do.

I have been advising clients that a good deal that makes sense is worth pursuing. There is a fine line between good and greedy. Borrowers who try to time the bottom of the market generally end up getting a worse deal.

We are continuing to work diligently on responding to all phone calls and e-mails. I appreciate your patience as we work thru our back log of inquiries.

The Best Rate on The Wrong Loan Is Still A Bad Deal

2008-12-22T10:06:00.004-05:00

It is a cold Monday morning along the lake shore and I am definitely looking forward to the Christmas Holiday this week. Before I have too much fun with the family, I do still have a job to do. In the spirit of Christmas, I wanted to write a post giving you some insight on why the best rate on the wrong loan structure is still a bad deal.

Over the last week, I have had several clients call me only to be disappointed to find out that rates in the "real" world are not as good as those advertised on TV or the Internet or even those mentioned by the media. Allow me to share some insight with you on the rates and rate quotes.

First of all, each rate quote is custom. The fact that you are reading a rate on a website does NOT mean you qualify for that rate. This is especially true if your credit score is less than 720 and you have less than 20% equity. Please read the What Are Rates post for more info.

I like to explain rate quotes like a teeter-totter. The higher the cost the lower the rate, the lower the cost the higher the rate. The perfect rate is generally the one that balances your cost with your rate in an option that works for you.

So how do you determine what that option is? That is where I come in, my clients get the benefit of multiple options with assistance in determining which option is best for them, not the bank.

Too often, clients assume the lowest rate is always the best deal. That is what companies like Quicken, Rock Financial and even some local lenders are banking on. By advertising a really low rate, they got you in the door. Most people would say "So what, I got a great deal". That would be true if you looked only at the rate. Once you take the cost into account and figured what your money really cost you, plus the missed opportunity cost, at the end of the day, you actually got a worse deal.

If you want expert advice and guidance from a professional we look forward to working with you. All lenders who are good are extremely busy. Please be patient as we do our best to serve every client with attention to detail. You can get your application started online at our website http://www.danmoralez.com/.

If you just care about rates and find no value in professional expert advice and guidance, please continue your search elsewhere as we are not the lender for you.

As of Monday the 22nd, the bond market continued to give back recent gains which is continuing to put pressure on mortgage rates. At the time of this post we are down around 22bps from the close on Friday. This will continue to add pressure to mortgage rates. The sweet spot for mortgage pricing may have come and went.

I wish everyone a Happy Holiday Season!

Snow Is Falling Faster Than Rates

2008-12-19T09:54:00.002-05:00

It is a cold and snowy morning here along the lake shore. Looking out my office window I am reminded of how beautiful the white stuff can be when I look at it from inside. My appreciation for it goes down significantly when I am behind my snow blower or the wheel of my car.

I wanted to give you a quick update. The last two days have seen mortgage pricing deteriorate nearly 70bps. That offset a large part of the recent drop we saw. While rates are still attractive, 30 year fixed rate money is no longer in the high 4's without points or high closing cost. Rates are still very favorable. Like I mentioned in my blog post a couple of days ago, I thought that the extremely low rates were a blip on the screen. Based on the last couple of days that appears to be the case.

We are working diligently to return all calls and e-mail. Thanks for your patience as we are working through a large back log.

Please review the blog as you will find answers to several questions about refinancing. Here are just some of my recent post:

What Are Rates?
Refinancing Q&A
Fed Cuts Rates By .25%, What Does It Matter To You?

As always, my team and I are here to assist you. Please be patient as we are working hard to give each client the time and attention they deserve.

Have a great weekend and drive safe!

So Where Are Rates?

2008-12-17T20:37:00.002-05:00

Today brought continued volatility to the world of mortgages. Over the last couple of days mortgage rates showed a nice decrease on the heels of the Fed's announcement that they would be purchasing Mortgage Backed Securities (MBS) in an attempt to narrow the spread between MBS and Treasuries. This announcement fueled a big rally in mortgage bonds and helped to bring rates lower.

All things that go up must come down. The sharp run up in bond prices may have been a blip on the computer screen. Mortgage bonds on Wednesday saw wild price swings and finished the day in negative territory. So clients who heard rates were falling might meet with a little disappointment as the lowest rates of the day were to be had early today. With the afternoon's price erosion, mortgage rates saw a tick upward.

Did the recent Fed cut in interest rates benefit those of you who are in the market for a mortgage? While the Fed did cut rates, it does NOT have a direct effect on mortgage rates. For a complete explanation click here on why Fed rate cuts DON'T equal lower mortgage rates.

The rally we saw in the market was driven by the Fed's announcement that they will be purchasing MBS securities. It was NOT the result of the Fed rate cut. Like with other strong favorable moves, they tend to be short lived. We have already started to see the recent price improvement start to fade away.

For well qualified borrowers paying all closing cost, with an escrow account and no other unique loan characteristics rates were at a low point of 4.99% for a 30 year fixed rate and ended the day closer to 5.25%.

IMPORTANT!
Any lender who quotes you rates or cost without an application or review of your financial position is leaving you open to risk. Simply put, there are too many factors to quote generic rates and terms. The day's of one size fit's all mortgage rates are long gone. Want to understand more on the world of Mortgage Rates? click here.

We are diligently working through the backlog of phone calls and e-mails. Thank you for your patience. Please continue to check back often as I will continue to try and update this blog with market information.

Fed Cuts Rates By Another .25%

2008-12-16T14:48:00.003-05:00

This afternoon the Federal Reserve cut rates by another .25%. This has led to a nice rally in the bond market this afternoon. Market rates have drifted lower as of recent. This has lead to a substantial increase in inquiries from borrowers looking to refinance their existing mortgages.

We are working diligently to get back to all clients as soon as possible. Please review my blog for information about refinancing, including common questions and explanations as to how the process works.

To expedite your application process, please complete your application online at my website. In addition, please review our refinancing Q&A for answers to common questions.

As always, we will do our best to take care of our clients. Please be patient as we are diligently working thru the backlog of applications. Thanks for your patience and understanding. We will work diligently to insure as prompt service as possible.

Refinancing Q&A

2008-12-15T10:40:00.003-05:00

When is it worth it for me to refinance?
Determining when refinancing makes sense can depend on a number of factors. The two most important are what your closing costs are and what your payment savings are. I have always advised clients that ideally you want to have a break even point of 12 months or less. If you take your cost to refinance and divide it by your monthly savings, you want the breakeven period to be 12 months or less. Remember, the more you owe, the lower the change in rate necessary to make it advantageous to refinance. The less you owe, the higher the change in rates necessary to make it worthwhile. For loans over $200,000 a change as low as .25% is typically worthwhile.

Why do I have closing cost on a refinance?
Unfortunately, some, not all of the documentation has to be done over again. This results in costs as part of the transaction. Some items can be used over depending on when you purchased your home and the type of transaction you did. We will review your individual file to save you as much money as possible.In addition, many clients are opting for our no closing cost mortgage. This option has a slightly higher interest rate; however, there are no closing costs. This allows you to save money without spending money. In addition, should rates drop even lower, you can refinance a second time with no closing costs again!

Can I lock in my interest rate?
On a refinance transaction, before you can lock in your interest rate, we require that your loan application be submitted before locking you in. In addition, we will collect an application deposit from you to lock in your interest rate and start the application process. When your loan closes, the application deposit is refunded to you. Should your loan be declined, it is refunded to you less any appraisal cost. Should your loan be approved and you elect not to close, the application deposit is non-refundable. To help expedite this process, the following is a check-list of documentation that we will need to insure a fast approval process:

1. Updated mortgage application (easiest if done at my website http://www.danmoralez.com/)
2. Copies of your last two paystubs
3. Copies of your two most recent bank and/or investment account statement(s) (all pages, front & back)
4. Copies of your most recent retirement account statement(s) (all pages, front & back)
5. Your signed application disclosures returned (provided after formal application is made)
6. Copy of your current homeowners insurance policy or your agent’s name and phone number

When rates are dropping, the faster we can get your paperwork the quicker we can get your closing completed.

What if I lock and interest rates go lower than what I locked at?
An interest rate lock is just that, a lock. By locking in, you are guaranteed the rate you lock in at, whether or not market rates go up or down, you get what you locked in at. This is one more reason why I suggest our no closing cost mortgage. You can lock in and close with no closing cost. Should the market continue to move in your favor, you would close on your mortgage application and then would have the ability to refinance a second time at no closing cost. Keep in mind, when you lock we do collect an application deposit. Should you not close your transaction at the terms you have locked into, you could forfeit your application deposit. In cases of extreme market movements (rates moving by more than .375%) the bank may allow you to renegotiate your lock terms.

Do you offer a no closing or reduced closing cost option?
Absolutely, these have become some of our most popular refinance options.

No closing cost options allow you to refinance with no cost or fees. The best part is you can lock in a lower rate now and close without having to worry about closing cost. If rates go even lower, you can do it again with no cost or fees. So what's the catch? Depending on your loan size, your rate may be slightly higher than the average market rate. However, if you are saving money even at the slightly higher rate, it makes complete sense to refinance for no closing cost.

Many clients will opt for reduced closing cost option. Generally speaking, this option has costs of $500 to $800 and will allow you to get an aggressive rate. Depending on your loan size, the cost to take advantage of this option may vary. We will show you all cost and rate options, whether it be paying all cost, some cost or no cost, we will help you review each option and the cost associated with them to insure you have the option that is best for your financial picture.

As a reminder, an application deposit is collected on all applications whether or not you choose a no or reduced closing cost option. That deposit is refunded to you at the time of closing (see above for additional details).Will paying closing cost get me a better rate?Yes, paying closing cost will get you a better rate. However, it may not make sense to pay $1200 to $1800 in closing cost if the difference in rate is small. This is because it may take you longer to make back your cost. In addition, if rates were to drop further, you could be out the investment of closing cost. Our recommendation in today’s market is to look at both options and make sure you pick the option that is best for you. We will help you do the math to make sure you understand both options and have selected what is the best deal for you.

Rate's are going lower, I am going to wait.
While it is your option to wait, you need to be aware of the risk in waiting. Here are some thoughts about waiting for rates to go even lower:

1. Mortgage money comes from Wall Street and the bond market in particular. The dynamics of how mortgages are priced are extremely complex. While we may think rates will continue to drop, the truth is any number of events can cause rates to go against us. Keep in mind we live in a global economy and now more than ever we are seeing foreign markets affect what is happening in the US. In addition, investments in US housing loans have been hurt by the recent housing crisis. While you can wait for rates to drop lower, remember, you are playing with fire and can get burnt. This adds more strength to the no closing cost options as you can close with no closing cost and secure a lower rate today and do it again if warranted.

2. Mortgage guidelines are changing. Your ability to refinance can be affected by the change in mortgage guidelines. This is especially true if you financed 95 to 100% of what your home was worth when you purchased it. In addition, if you had a loan that had PMI, several of the PMI companies are increasing rates, which would reduce substantially your savings on your mortgage.

3. Property values can affect your ability to refinance. If you purchased a home and had 15 to 20% down and were able to avoid PMI, you need to be concerned about whether or not your property has decreased in value. A decrease in value can lead to PMI where you may not have had it previously.If you financed 95 to 100% of what the house was worth when you purchased it, you may be unable to refinance all together if your property value has decreased. Bottom line, there is a fine line between good and greedy. You can get a good deal with no cost or you can get greedy and play with fire (not recommended)

What are mortgage rates?
I am often asked why we don’t post rates on the internet like other lenders do. The truth is each rate quote is custom. So why do other lenders post rates and we don’t if each rate is custom? In my opinion, it is misleading to almost every client. Some clients may qualify for rates better than on the website because of their loan characteristics and others for rates worse. So what factors go into determining your rate? Here is just an abbreviated list:

Credit Score
Equity – Down Payment
Property Type
Loan Type
Loan Term
Number of Units
Occupancy
Debt Ratios
Closing Cost
Escrow Accounts
Second Mortgages
Mortgage Insurance

I have to be honest, that is a very short list of the many factors that can have an impact on your mortgage rate. It is important to remember that each characteristic can and will have an impact on your cost of mortgage money. In order to accurately price your mortgage, it is important that we have all a complete mortgage application so that we can give you detailed accurate figures. Lenders who quote a rate sight unseen don’t know your credit score, equity position, debt ratios or any other pertinent factors. Quoting rates like that is like a doctor who gives a diagnosis to you even though they have never met you and don’t know what your symptoms are.

How do I get started?
The fastest way to start is by submitting an updated mortgage application on our website http://www.danmoralez.com/. As soon as we receive your application, we will confirm it and contact you to quickly review the details and your options.

We will also need your supporting documentation (see above). Please forward that information as soon as possible to us. This will help to insure a quick closing and the best rates possible for you.

Can I ask you a favor? If you have a friend or family member who could benefit from our services, would you be so kind as to pass along their contact information to us or to refer them to our mortgage practice. Our success is dependent on the referrals of our clients. Please don’t keep us a secret. Thanks again for making The Dan Moralez Mortgage Team your choice for home financing.

What are rates?

2008-12-06T08:50:00.006-05:00

As a mortgage banker since 1991, I have been asked that question thousands of times. In the past, it was a relatively easy question to answer. In the good old days of mortgage banking rates were one size fits all. In other words, if you met the criteria to be approved for a mortgage you would get the same rate whether you had perfect credit or just barely were able to obtain your mortgage approval. In addition, back in those days, your equity (down payment) and type of transaction didn’t matter like they do now days.

If you are searching the web, there is no doubt that there are hundreds if not thousands of mortgage lenders available. Often times these lenders quote unbelievable rates and terms. The truth is they are unbelievable because they are intentionally designed to mislead you into thinking you are obtaining a loan that is better than what it really is.

I have learned that the golden rule holds true no matter what business or profession we are in. As a consumer, I want honest, straight forward answers with all pertinent details upfront. In addition, I want the best deal possible. Our clients expect and deserve the same as well. Often times, clients in a desire to get the cheapest and lowest rate will fail to review all of the details to insure that the mortgage option they get is truly the best option for them.

Clients will often tell me a 30yr fixed rate is the same no matter where you go, so price is the only difference. I can assure you that price, while an important component is not the only component of a successful mortgage transaction. The truth is there are several factors that can lead to one loan being more expensive than another. This is especially true when a borrower has a down payment of less than 20%, as there is generally more than one way to structure your loan and an unskilled lender may choose to structure your loan with the option that was most expensive to you, not knowing better.

Costs are often overlooked by borrowers and are seldom discussed by lenders who are charging excessive fees in order to make rates look better. For example, Ditech.com advertises heavily on the internet as well as on television. One ad will advertise an incredible low fixed rate the next ad will offer a flat $395 closing fee. Who would not want the super low rate with low closing cost? What they fail to make obvious in their advertisement is that the two do not go hand in hand. In other words, the incredibly low rate comes with incredibly high closing cost. In addition, the incredibly low closing cost comes with an incredibly high rate. This same strategy is employed by lenders on bankrate.com as well as other companies such as Quicken loans. Yes, even some banks are guilty of misleading advertising as well.

So what is a client to do? How do you sift thru the options to insure you get the best deal possible? Simply put, if you are reading this you are already headed in the right direction. I have prided myself on being honest and have from time to time told a client to take the other deal because it was something we just couldn’t beat. Not to sound self serving, that doesn’t happen often. Over the years, I have found giving clients the best price and loan structure while showing them all of their options allows them to pick the option that is best suited for them. I just believe providing great service combined with a great price and expert advice make for a rare combination in a world filled with less than ethical business practices.

I am also asked why we don’t post rates on the internet like several lenders do. The truth is each rate quote is custom. So why do other lenders post rates and we don’t if each rate is custom? In my opinion, it is misleading to almost every client. Some clients may qualify for rates better than on the website because of their loan characteristics and others for rates worse. So what factors go into determining your rate? Here is just an abbreviated list:

Credit Score
Equity – Down Payment
Property Type
Loan Type
Loan Term
Number of Units
Occupancy
Debt Ratios
Closing Cost
Escrow Accounts
Second Mortgages
Mortgage Insurance

I have to be honest, that is a very short list of the many factors that can have an impact on your mortgage rate. It is important to remember that each characteristic can and will have an impact on your cost of mortgage money. In order to accurately price your mortgage, it is important that we have a complete mortgage application so that we can give you detailed and accurate figures. Lenders who quote a rate sight unseen don’t know your credit score, equity position, debt ratios or any other pertinent factors. Quoting rates like that is like a Doctor who gives a diagnosis to you even though they have never met you and don’t know what your symptoms are.

In addition, remember a local lender uses local vendors who know the local market. Lenders from outside of the area don’t know this market and its dynamics. In addition, often times large lenders are staffed by newbie’s who don’t know the mortgage business. These newbie’s don’t have the skill set necessary to help you make the best mortgage decision possible. A successful mortgage transaction requires the experience and advice of a true specialist with years of experience. These years of experience translate into a successful mortgage transaction for you.

Long story made short, what makes up a mortgage rate can vary from one client to another and the days of the good old one size fits all mortgage rates have long since gone away. We will give you detailed and accurate figures with all of your options explained in depth to insure the mortgage you select is the best one for you, not the best one for the bank.

Thanks again for giving The Dan Moralez Mortgage Group the opportunity to serve you!

4.50% Mortgage Money???????

2008-12-05T14:59:00.000-05:00

Recently there has been a lot of chatter about a plan by the US Treasury Department to use the influence of Fannie Mae and Freddie Mac to lower mortgage rates down to 4.5% for home purchases. The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages in order to attempt to stimulate the housing market.

The plan remains in discussion and may not be made final before the Bush administration's term ends in January. President-elect Barack Obama has said repeatedly that his administration would do more than the current one to help struggling homeowners but he has not offered specifics.

The Treasury views this plan as potentially halting the slide in home prices by enabling borrowers to afford bigger loans, thus increasing demand and pushing up home values. The lower interest rates would be available only to borrowers who are buying a home, not those refinancing a mortgage.

The plan is very similar to an idea floated in October by R. Glenn Hubbard and Christopher Mayer, academics at Columbia University's Business School. "I think a program to substantially bring down rates for homebuyers would be an incredibly valuable program, and I think it captures a real part of solving what has been an incredibly challenging dislocation in the credit markets," Mr. Mayer said in an interview. He estimated the idea under consideration could quickly help 1.5 million to 2.5 million people buy homes, giving a major boost to the housing market and broader economy.

Normally, the rates lenders charge consumers, including home buyers, are determined by the secondary market, in which investors buy mortgages or mortgage-backed securities. But Treasury Secretary Henry Paulson views lowering mortgage rates as key to fixing the housing crisis; hence the mortgage-security-buying program announced last week.
Here is an article with details of the plan - http://money.cnn.com/2008/12/03/news/economy/treasury_mortgage_rates/index.htm

So, can you expect 4.5% interest rates? I say don't hold your breath.

Let's review the proposed government plans that have failed so far this year:

-FHA Secure - this program was aimed at helping homeowners faced with foreclosure to save their homes, it bombed and never really got off the ground.

-Hope for Homeowners - this plan was supposed to replace FHA Secure, and to date it has bombed, with very few lenders participating.

-$700 billion bailout - this was supposed to be used to purchase mortgage related assets of banks, but quickly changed to the Federal Government investing in banks to provide them with much needed liquidity; while the final implementation of the plan should be successful, the original intention was abandoned.

The only successful government intervention thus far was last weeks announcement by the Federal Reserve that they will purchase $800 billion in mortgage backed securities from Fannie Mae and Freddie Mac- this announcement lead to an immediate decrease in interest rates by .5%

The government realizes that until housing bottoms, the economy overall will lag. Stabilizing housing is the first step in economic recovery, much like housing is usually the first sector of the economy to show signs of struggle when we are headed into a recession. Jim Cooper of Business Week wrote a great article about it here - http://www.businessweek.com/magazine/content/08_49/b4111014822796.htm

The government is trying to solve the problem, and this program might prove me wrong, but I am not going to count on it…….But lets just say that it did get implemented. This is the effect that you could see:

Interest Rate and Corresponding Principal & Interest Payment
Loan Amount 4.50% 5.00% 5.50% 6.00%
$ 100,000 $506.69 $536.82 $567.79 $599.55
$ 125,000 $633.36 $671.03 $709.74 $749.44
$ 150,000 $760.03 $805.23 $851.68 $899.33
$ 175,000 $886.70 $939.44 $993.63 $1,049.21
$ 200,000 $1,013.37 $1,073.64 $1,135.58 $1,199.10
$ 225,000 $1,140.04 $1,207.85 $1,277.53 $1,348.99
$ 250,000 $1,266.71 $1,342.05 $1,419.47 $1,498.88
$ 275,000 $1,393.38 $1,476.26 $1,561.42 $1,648.76
$ 300,000 $1,520.06 $1,610.46 $1,703.37 $1,798.65
$ 325,000 $1,646.73 $1,744.67 $1,845.31 $1,948.54
$ 350,000 $1,773.40 $1,878.88 $1,987.26 $2,098.43
$ 375,000 $1,900.07 $2,013.08 $2,129.21 $2,248.31
$ 400,000 $2,026.74 $2,147.29 $2,271.16 $2,398.20
$ 417,000 $2,112.88 $2,238.55 $2,367.68 $2,500.13

In essence, buyers could qualify for anywhere from $30,000-$80,000 more in loan amount, which could boost the housing market.

Again, it is important to remember that this is strictly in the developmental stage. Just the perception that it could happen could trigger more interest in purchasing and selling and as we know in these times, perception is very important.

As your trusted mortgage advisor- we will continue to keep you update in these events. In the meantime, when we can be of assistance give us a call.

Market Softness

2008-12-02T12:10:00.002-05:00

The market showed wild fluctations toward the end of the day yesterday. At one point the market was up favorably (good for mortgage rates) only to come back the other way sharply. This mornings trading shows mortgage bonds losing some ground as rates ticked closer to 5.875% for a 30 year fixed with a borrower who is paying all cost, good credit, escrows, etc.

The market continues to show volatility. I will continue to update the blog to give you an update on market conditions. We are working thru a large backlog of calls and e-mails. I appreciate your patience and understanding as we do our best to contact all of our clients as soon as possible.

Have a great and prosperous day. Feel free to call us with any questions or concerns.

Market Goes Up, Market Goes Down

2008-12-01T15:05:00.003-05:00

Mortgage bonds continue to rip saw higher and lower. As with the stock market, we continue to see volatility. Mortgage bonds have been up as much as 72bps today (that would normally mean a decrease in rates of .125% to .25%). However, since the highs of the day, mortgage bonds are back to being up 19bps (essentially making rates unchanged from Friday).

For borrowers who are paying their own closing cost, with excellent credit, equity and an escrow account, the 30yr fixed rate conventional mortgage is approximately 5.75%. Borrowers who are not paying closing cost can expect rates slightly higher than that.

I will continue to update the blog. With the sudden drop in rates we have had a large influx in e-mail and phone calls. We are doing our best to return calls and e-mail as quickly as possible. Thanks for your patience. I can assure you we will do our best to serve every client as quickly as possible.

Happy Thanksgiving!

2008-11-26T13:23:00.002-05:00

I would like to start this post by just reminding everyone how truly blessed and thankful we should be. While the world and life is full of unique challenges, I am also reminded of all of the blessings that I truly take forgranted day in and day out. Whether it be a healthy and loving child, a spouse or a job, we all have plenty to be thankful for. Be sure to take some time to reflect on the good in life.

The market opened today flat to yesterdays softer closing. In early afternoon trading, mortgage bonds have shown some positive moves. However, not enough to change rates from yesterdays close. I suspect the rest of this week will bring little news in the way of mortgage rates given the Thanksgiving holiday. Look for next week to be the true indicator of where the market may ultimately move to.

We have received a number of calls and inquiries. We are doing our best to contact all clients as soon as possible. For some clients the move in rates just isn't enough to make it worth while. We will continue to watch rates and the market and will keep this site updated.

Once again, Happy Thanksgiving!

Mortgage Rates Take a Crazy Ride

2008-11-25T19:24:00.000-05:00

Wow, what a day for mortgage rates.

Today the market opened up strong on news that the Fed would be purchasing Mortgage Backed Securities in an attempt to help stimulate the housing market. Needless to say, the Fed's action caused a significant rally in the bond market which led to mortgage rates taking a serious nose dive. Rates for clients with the best credit, equity, an escrow account for taxes and insurance and standard closing cost (approximately $1500) were as low as 5.375%. The end of the day brought a sharp turn around and we saw mortgage rates finish the day in the neighborhood of 5.750% for clients who meet all of the criteria shown above.

Like the stock market as of recent, we are seeing an incredible amount of volatility. The rip saw effect of today's mortgage rates goes to show how in one day rates can drop significantly, only to turn right back around and go the other way. While the end of the day rate is a nice improvement over yesterday, it is a significant increase over the days lows.

I suspect given the holiday we will see little movement on Wednesday and Friday. Next week will likely give us the best indication on where rates are headed. We truly are in a unique time in history. For clients where it makes sense to do a no closing cost refinance, we are recommending doing so. If rates drop again, you can always refinance again with no to low cost. Keep in mind that a no closing cost refinance results in rates slightly higher than the general market depending on credit, loan size, equity and other loan characteristics.

Make sure to bookmark this page and check back often as I will keep it updated with market developments.

Mortgage rates plummet, but borrowers beware

2008-09-11T09:37:00.002-04:00

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Mortgage rates have plummeted, but that hasn't made getting a home loan any easier for most borrowers.

In the wake of the government's takeover of Fannie Mae and Freddie Mac last weekend, the 30-year fixed rate has dropped from 6.26% last Friday to 5.79%. But only buyers with a credit score of 740 of above - and a 20% down payment - can qualify for such a low rate. During the boom, borrowers only needed scores of 640 to land the lowest rates available. Even a 580 score would get them very close to the best rate.

During the credit crisis, Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) have become virtually the only source of funding for banks and other home lenders looking to make home loans. Their ability to lend is crucial to the housing market. To that end, the Treasury will buy mortgage-backed securities from the two firms, and lend them money if necessary, all in an effort to make credit more available to home buyers.

But that doesn't mean that lenders won't continue to subject borrowers to strict criteria, according to Keith Gumbinger of HSH Associates, a tracker of mortgage loan information. The aim is to make mortgages more available, but only to the most qualified borrowers.

"All the emphasis on credit scores is not going to go away," he said.

High score, low rate

As the housing market has imploded, lenders have battened down the hatches on mortgage underwriting, consistently raising the credit scores necessary to qualify for the most favorable terms, and adding to borrowing costs to compensate for any extra risk factors they find. That's not going to change.

"Credit score affects your rate more than they ever have before," said Steve Habetz, a mortgage broker with Threshold Mortgage in Connecticut who has more than 20 years experience in the business.

An individual's credit history is scored between 300 to 850, with 300 very low and 850 perfect. The median score, in which half of the borrowers have a lower score and half have a higher one, is about 720. Only those with very high credit scores are getting the best mortgage deals.

And Fannie and Freddie have raised fees for borrowers with lower credit scores as the housing crisis worsened - they've increased twice this year alone. The lower the score, the larger the fee.

For example, Fannie charges a 1% up-front fee (raised from 0.75% this summer) for borrowers with a credit scores of 680, even when they're paying 20% down on their homes.

Even people with the very favorable scores, between 720 and 740, pay a small fee equal to an up-front charge of a quarter point. That's a big change from the past. Habetz had a client recently with a 735 credit score putting down 20% -a very solid applicant -and the client still didn't qualify for the best rate.

"You tell people with 730 credit scores paying 20% down that you have to charge them a quarter point extra and they look at you like you're crazy," he said. That comes to an extra $30 a month on a $200,000 loan.

Borrowers with scores below 600 may have to pay a fee of a full percentage point or more, adding $120 to the monthly costs of the average loan.

Nervous investors

Investors in mortgage-based securities are simply demanding that they be compensated for any extra risk that a borrower represents, according to Jon Kaempfer, a loan officer with Vitek Mortgage Group in Sacramento, Calif.

Kaempfer had a client with a 635 credit score recently who wanted to do a cash-out refinancing, a deal in which an existing homeowner takes out a loan for more than the mortgage is worth. The homeowner gets a bundle of cash, which this client wanted to use to pay for some home improvements.

The lender wanted to charge 1.5% of the mortgage principal up front simply because it was a cash-out deal, plus 2.5% more because of the home owner's modest credit score. Those fees, folded back into the mortgage, added about a percentage point to the client's interest rate.

"You have to be golden, have at least a 680 score or a 720 if you're making a smaller down payment, to qualify for the best rates," said Kaempfer.

Gumbinger expects lending standards to remain tight for the foreseeable future, as long as home prices continue to fall. The risk of foreclosure is of course much higher in a falling market, and lenders need to shield themselves.

If and when prices do improve, says Gumbinger, borrowers with less than perfect credit scores may get some breathing room.

FHA - $100 Moves You In - Limited Time Offer!

2008-07-06T10:07:00.004-04:00

FHA recently announced an enhancement to their FHA program that allows buyers who purchase a HUD foreclosed home to purchase that home with just $100 down. But wait, there's more, HUD will also give the home buyer up to $2,500 to be used toward closing cost, repairs or to pay the mortgage balance down. Click here to search HUD's available properties in Michigan.

Before you go house hunting, I strongly recommend you contact my office so we can connect you with an experienced Realtor that works the area in which you are looking. HUD foreclosure homes require a special bidding process that not every Realtor is familiar with. We will work closely with you and an experienced Realtor to insure you get the best deal possible.

FHA mortgages have flexible qualifying guidelines that allow for lower credit scores and higher debt ratios. This is a limited opportunity that is available for a limited time. Only homes in Michigan and Ohio are eligible for this special program.Call us for all the details or apply online at my website http://www.danmoralez.com/.

New Rules For Down Payments?

2008-06-04T20:24:00.002-04:00

Recently Fannie Mae announced a new minimum down payment requirement of 3% for all owner occupied new home purchase transactions. Fannie Mae had begun to require a 5% down payment on properties it considered to be in a declining market. The majority of Western Michigan fell into this category.

Many were excited to see the new lower down payment requirements from Fannie Mae as this would open up the opportunity for more individuals to become homeowners. While the news on the surface is good, it unfortunately has little effect on those looking to buy a home in West Michigan.

All conventional mortgages with a down payment of less than 15 to 20% require some form of PMI insurance. For the most part, most of the PMI companies are unwilling to follow Fannie Mae's lead and allow for down payments as low as 3%. Most require a minimum of a 5% down payment and have changed their guidelines significantly.

So what's a potential home buyer with a limited down payment to do? Fortunately, the governments FHA home loan program is alive and well. At First Place, we are a delegated FHA lender and are able to approve all of our FHA loans locally in our office. This means we have the experience and team available to close your loan quickly.

To find out if you qualify for an FHA loan, give us a call, we would be honored to assist you.

Fed Rate Cut - Good News?

2008-03-18T20:42:00.004-04:00

WHY DON'T MORTGAGE RATES DROP WHEN THE FED CUTS?
This is a question I get time and time again. Clients will call our office excited about the recent rate cuts by the Fed only to find out that it had little to no impact on mortgage rates. In some cases, they are even surprised to learn that mortgage rates can actually increase when the Fed cuts rates. That's right, mortgage rates can and often do increase when the Fed makes a rate cut like those they have done recently.

To really understand how all of this plays out, take a few minutes to read this post. You may be surprised at the complexity of the financial markets and what role Wall Street plays in our everyday lives.

FED FUNDS RATE vs. MORTGAGE BACKED SECURITIES
It is important to realize that the Fed Funds rate and Mortgage Backed Securities are two totally different instruments. When the Fed cuts the Fed Funds rate they are essentially cutting the overnight lending rate that banks charge each other. This has absolutely nothing to do with home mortgage rates.

Home mortgage rates are set by the price Mortgage Backed Securities are able to get on Wall Street. In other words, Wall Street sells bonds to investors, the price investors are willing to pay for these bonds can fluctuate drastically like a stock price. The price investors pay will also dictate the required yield. In other words, the price an investor is willing to buy these bonds at will determine the rate you and I will pay for our mortgage. Again, this has nothing to do with the Fed funds rate.

SO WHAT DOES THE FED FUNDS RATE EFFECT?
The Fed Funds rate effects loans that are tied to a banks prime lending rate. As a banks cost of money decreases, so does the cost of money for it's customers who are borrowing under variable rate lending agreeements. The prime lending rate is often used for credit cards and home equity lines of credit. Clients with a home equity line of credit and/or credit card debt will notice that their interest rates will often times decrease with the prime lending rate. Clients with these types of debts will see an immediate impact from a Fed rate cut. Again, this has nothing to do with home mortgage rates.

DO MORTGAGE RATES DROP BEFORE A RATE CUT OR AFTER A RATE CUT?
The truth is that the market will trade in anticipation of what the market thinks the Fed is likely going to do with rates in general. Generally speaking, if the market feels that the economy is weak and that the Fed is likely to cut rates, we will see mortgage rates drift down in anticipation of a Fed rate cut. Not when the Fed cuts, but before it cuts.

Think of it this way, if you own stock in a company that is going to go bankrupt. Do you sell that stock before it announces it is going bankrupt or do you wait for them to go bankrupt? Like most people, you will sell before the news breaks. If you wait for them to go bankrupt, your investment is worth nothing. The same is true with bonds, should Wall Street expect a move down by the Fed, the market will price the likelihood of that move down into the rates and terms investors are willing to pay. In other words, the market prices based on what they anticipate happening.

In cases like today, the market for mortgage rates had already been moving down since the end of last week and the beginning of this week. When the Fed made it's announcement at 2:15 today, the market got a .75% rate cut when it was looking for a 1.0% rate cut. This was lower than what many had hoped for. Most importantly, the bond market stayed flat for around 30 minutes before bond yields (rates) shot up dramatically.

Mortgage rates started the day low. By 3pm, most lenders increased rates sharply due to the fact that Mortgage Backed Securities got hammered by afternoon selling. In other words, most lenders increased their mortgage rates by .25% in the course of less than 30 minutes after the Fed cut rates.

WHY DO MORTGAGE RATES GO UP AFTER A FED RATE CUT?
To answer that question today is simple, investors don't like the idea that inflation is still a factor. At the end of the day, inflation is bad for their bond investments and makes them worth even less. In those cases, investors pull back from mortgage bonds and the yield (rate) required to attract their money goes up. This means the rate you and I pay goes up as well.

SUPPLY AND DEMAND
The other area that has been a major issue for the market lately is supply vs. demand. There is a glut of mortgage paper on the market. There are few buyers of Mortgage Backed Securities as of recent. This has put supply and demand out of balance. Because investors are cautious about US Mortgage Backed Securities, they have been hesitant to invest in them. The best example of this is home prices.

In Michigan, we have seen home prices drop significantly. This has been the case as the number of buyers has decreased and the number of sellers has increased. This has caused prices to fall. The same is true with Mortgage Backed Securitites. Prices have fallen because the number of buyers is significantly lower than in the past. In order to attract bond buyers, the rates the bond pays must go up. This means the rate you and I pay must go up to attract the money.

SUMMARY
In the nearly 17 years I have done this for a living, I have never seen volatility in the market like we are seeing today. Mortgage rates saw a nice drop over the last two days only to rip saw back up by the end of the day today. We knew mortgage rates would see a short lived rally this morning and we were right on the money, it was indeed short lived.

It is important to understand that the Fed funds rate does not directly drive mortgage rates. More than one client has thought so, only to wait to lock their rate in and miss their window of opportunity all together. While I deal with mortgage backed securities on a daily basis and watch their prices in real time, even I would not begin to attempt to speculate on the direction of rates. Two things are for sure, rates will go up and they will go down. The question is when.

We will keep an eye on the market and post updates as warranted. We appreciate the support of all our clients. It is my hope that post such as these will help you to understand the complexity of the market.

One of America's Top 200 Lenders!

2008-03-16T23:24:00.003-04:00

I wanted to take a moment to thank all of our clients and business partners for making me one of the Top 200 Mortgage Lenders in the US as ranked by Mortgage Originator Magazine. We were recognized for our market leading production for 2007 and this is the second time we have been featured on Mortgage Originator Magazine's Top 200 list.

I am grateful for your support and referrals that led to this honor. Without you our valued clients and business partners we never could have obtained such success.

Thank you for your support. I am grateful to serve such a wonderful group of people!

Refinance Q&A

2008-01-22T09:34:00.000-05:00

In this post I will cover common questions about refinancing. Enjoy!

1. When is it worth it for me to refinance?
Determining when it is worth it to refinance can depend on a number of factors. The two most important are what your closing cost are and what your payment savings are. I have always said to clients that ideally you want to have a break even point of 12 months or less. If you take your cost to refinance and divide it by your monthly savings, you want the breakeven period to be 12 months or less.

Remember, the more you owe, the lower the change in rate necessary to make it advantageous to refinance. The less you owe, the higher the change in rates will be necessary to make it worthwhile. For loans over $200,000 a change as low as .25% is typically worthwhile

2. Why do I have closing cost on a refinance?
Unfortunately, some, not all of the documentation has to be done over again. This results in cost as part of the transaction. Some items can be used over depending on when you purchased your home and the type of transaction you did. We will review your individual file to save you as money as possible.

In addition, many clients are opting for our No closing cost mortgage. This option has a slightly higher interest rate. However, there are no closing cost. This allows you to save money without spending money. In addition, should rates drop even lower, you can refinance a second time with no closing cost again!

3. Can I lock in my interest rate?
On a refinance transaction, before you can lock in your interest rate, we require that your loan application be submitted before locking you in. In addition, we may collect from you an application deposit to lock in your interest rate. When your loan closes, the application deposit is refunded to you. Should your loan be declined, it is refunded to you less any appraisal cost. Should your loan be approved and you elect not to close, the application deposit is not refundable.

To help expedite this process the following is a check list of documentation that we will need to insure a fast approval process:

> Updated mortgage application (easiest if done at my website www.danmoralez.com)
> Copies of your last two paystubs
> Copies of your most recent bank and/or investment account statement(s) (all pages)
> Copies of your most recent retirement account statement(s) (all pages)
> Your signed application disclosures returned
> Copy of your current homeowners insurance policy or your agents name and phone number

When rates are dropping, the faster we can get your paperwork the quicker we can get your closing completed.

4. What if I lock and interest rates go lower than what I locked at?
An interest rate lock is just that, a lock. By locking in, you are guaranteed the rate you lock in at, whether or not market rates go up or down, you get what you locked in at. This is one more reason why I suggest our no closing cost mortgage. You can lock in and close with no closing cost. Should the market continue to move in your favor, you would close on your mortgage application and then would have the ability to refinance a second time at no closing cost.

Keep in mind, when you lock we do collect an application deposit. Should you not close your transaction at the terms you have locked into, you could forfeit your application deposit. In cases of extreme market movements (rates moving by more than .25%) the bank may allow you to renegotiate the terms of your lock on a case by case basis.

5. Do you offer a no closing cost refinance option?
Absolutely, this has become one of our most popular refinance options. The no closing cost option allows you to refinace with $0 fee's. The best part is you can lock in a lower rate now and close. If rates go even further, you can do it again with $0 cost. So what's the catch? Depending on your loan size, your rate may be slightly higher than the average market rate. However, if you are saving money even at the slightly higher rate, it makes complete sense to refinance for no closing cost.

6. Will paying closing cost get me a better rate?
Yes, paying closing cost will get you a better rate. However, it may not make sense to pay $1200 to $1500 in closing cost if the difference in rate is small. This is because it may take you longer to make back your cost. In addition, if rates were to drop further you could be out the investment of closing cost. Are recommendation in todays market is to look at both options and make sure you pick the option that is best for you. We will help you do the math to make sure you understand both options and have selected what is the best deal for you.

7. Rate's are going lower I am going to wait
While it is your option to wait. You need to be aware of the risk in waiting. Here are some thoughts about waiting for rates to go even lower:

1. Mortgage money comes from Wall Street and the bond market in particular. The dynamics of how mortgages are priced are extremely complex. While we may think rates will continue to drop, the truth is any number of events can cause rates to go against us. Keep in mind we live in a global economy and now more than ever we are seeing foreign markets effect what is happening in the US. In addition, investments in US housing loans have been hurt by the recent subprime mortgage crisis. While you can wait for rates to drop lower, remember, you are playing with fire and can get burnt. This adds more strength to the no closing cost option as you can close with $0 cost and secure a lower rate today and do it again at no cost if rates drop further.

2. Mortgage guidelines are changing. Your ability to refinance can be effected by the change in mortgage guidelines. This is especially true if you financed 95 to 100% of what your home was worth when you purchased it. In addition, if you had a loan that had PMI. Several of the PMI companies are increasing rates which would reduce substantially your savings on your mortgage.
3. Property values can effect your ability to refinance. If you purchased a home and had 15 to 20 down and were able to avoid PMI, you need to be concerned about whether or not your property has decreased in value. A decrease in value can lead to PMI where you may not have had it previously.

If you financed 95 to 100 percent of what the house was worth when you purchased it, you may be unable to refinance all together if your property value has decreased. In addition, your cost of PMI may be higher as well due to the new rates being charged by most PMI companies.

Again, you could have missed your window of opportunity. The Fed decreases rates to help stimulate the economy. A bad economy only adds fire to lower home prices. Lower home prices = a lower appraisal on your home. This could create an issue for you if you look to refinance your home.

Bottom line, there is a fine line between good and greedy. You can get a good deal with no cost or you can get greedy and play with fire (not recommended :)

8. How do I get started?
The fastest way to start is by submitting an updated mortgage application on our website (www.danmoralez.com). As soon as we receive your application we will confirm it. We will also need your supporting documentation. See question number 3 for what we will need from you. Please forward that information as soon as possible to us. This will help to insure a quick closing and the best rates possible for you.

Stay tuned to the blog as more information will be added. Remember, you can also subscribe to the blog via RSS. This way you can get my latest post in your favorite RSS reader.

Thanks again for making The Dan Moralez Mortgage Team your choice for home financing.

Time to Refinance Your Mortgage?

2008-01-22T08:49:00.000-05:00

This mornings Fed rate cut has added fuel to the rush to refinance by many consumers. With rates on the way down, now may be a great time to refinance your mortgage and save some money.

Today's cut by the Federal Reserve of .75% has sparked a rally in the mortgage bond market. However, it has not necessarily meant a substantial decrease in interest rates. The market was expecting the Fed to cut .50% at it's meeting next week. Rate's had already taken into account the .50% cut. What caught the market off guard was the fact the Fed cut by .25% more than what was expected a week before it was expected.

This has led the market to believe the economy may be worst off then expected. The Feds action was spurred by large losses in overseas stock markets on Monday as the US market was closed for the Martin Luther King Jr. Holiday.

So what does all this mean for you. It appears as though we are in a market where rates are likely to continue to drop until we see signs that the economy is moving back up and the housing market is starting to be more stable. Read my next post on common refinance questions.

What's my rate?

2008-01-18T01:13:00.000-05:00

If your like most people who shop for a mortgage the first question that you will normally ask is what is my interest rate. Within the last several years the mortgage industry has really evolved to what we in the business call risk based pricing. This means, your rate and terms are based on the risk involved with your transaction.

So how does it effect you? Recently, Fannie Mae and Freddie Mac, the two largest purchasers of home mortgage's implemented a sliding schedule of fees based on your credit score. If you and a another person are applying for a mortgage together, the credit score for loan purposes is the lower of the two borrowers. This unfortunately for many borrowers will result in an increase in the cost of borrowing.

If your down payment is less than 20% and your mortgage requires PMI insurance, your credit score can make a significant difference in the cost of mortgage insurance and whether or not you can qualify for a mortgage.

With the market and guidelines changing as fast as they are, now more than ever, you need to make sure you have an experienced lender representing you on your mortgage. For an honest mortgage quote with no strings attached, please contact me. We are here to help you thru the ever changing mortgage process.

The Ever Changing Mortgage Market

2007-12-27T14:04:00.001-05:00

As I look forward to 2008, I wanted to take a moment and reflect on 2007. It has been an incredible ride in the mortgage industry. The changes have been fast and furious. Not only has the housing market seen an erosion, the mortgage industry itself has seen an erosion.

Unlike many of my of my counterparts, I for one think it is a good thing. It is my personal opinion that the problems plaguing the Mortgage Finance industry for the most part were brought on by the industry. Over the last several years we have seen mortgage guidelines stretch and stretch. To the point where almost anyone could purchase a home. While that made homeowners out of many, it also set the stage for what we now see today.

Lenders and their investors (the money behind these mortgages) came up with newer and more flexible guidelines and options. Many of these options didn't require a down payment, verification of income or a decent credit history. While many were able to qualify to purchase a home, many lacked the income, ability or history of repaying their debts. These combinations of risk have layed the foundation for the foreclosure crisis we are now seeing.

Lenders and their investors often times wrote mortgages that realistically could not be repaid for the long haul. Our industry like many, has it's fair share of bad apples who are driven by excessive greed and lack of integrity. This is just one more reason to know who you are doing business with and why.

Today's mortgage guidelines are far more restrictive. This underscores the importance of working with a lender who knows what they are doing. The easy to obtain mortgages of yesterday are now the past. While obtaining a mortgage is now more difficult. I can assure you that plenty of money is available to lend for those who are able to qualify. There are a number of ways to qualify, that is where an experienced lender comes in. It can cost you thousands of dollars if your loan is structured incorrectly.

2008 appears to be more of what we saw in 2007. Check back often as the blog will be updated. Look for a new podcast in 2008 with industry insiders as well as the addition of a lot of video to my website (http://www.danmoralez.c0m/).

As always, I appreciate your referrals of friends and family. They are the highest compliment one of our clients can pay us.

Have a safe and blessed New Year!

$100 Moves You In - A gift from FHA

2007-12-14T21:07:00.001-05:00

FHA recently announced an enhancement to their FHA program that allows buyers who purchase a HUD foreclosed home to purchase that home with just $100 down. But wait, there's more, HUD will also give the home buyer up to $2,500 to be used toward closing cost, repairs or to pay the mortgage balance down. Click here to search HUD's available properties in Michigan.

Before you go house hunting, I strongly recommend you contact my office so we can connect you with an experienced Realtor that works the area in which you are looking. HUD foreclosure homes require a special bidding process that not every Realtor is familiar with. We will work closely with you and an experienced Realtor to insure you get the best deal possible.

FHA mortgages have flexible qualifying guidelines that allow for lower credit scores and higher debt ratios. This is a limited opportunity that is available for a limited time. Only homes in Michigan and Ohio are eligible for this special program.

Call us for all the details or apply online at my website http://www.danmoralez.com/.

Fed Rate Cut - Should You Refinance?

2007-12-11T15:22:00.000-05:00

Today the Federal Reserve cut rates .25%. While this doesn't necessarily translate into lower mortgage rates, it will reduce rates on most home equity lines of credit and credit cards.

Generally speaking, most Fed rate cuts put pressure on mortgage rates and can actually lead to higher rates. So why did mortgage rates react favorably to today's news of the fed cut? Mortgage rates reacted favorably because the market was expecting a .50% cut not the .25% cut that it received. Because this is lower than what was expected, mortgage backed securities (how mortgage rates are set) have seen a nice rally this afternoon.

So do you lock or refinance now? Based on the market this afternoon, chances are rates on Wednesday will look better than those on Tuesday. Keep in mind the rally may be short lived as we recently saw with rates taking a dip within the last couple of weeks only to make a strong move up the end of last week. While I expect rates will look better tomorrow, I am not sure we will get back all of what we lost the last couple of weeks. So what should you do? As always, my job is to help you understand the risk of locking vs. not locking. If your in the market for a mortgage now, whether you are buying or refinancing, now is the time to make sure you connect with our team.

In February, Fannie Mae and Freddie Mac are imposing a new set of fee's that will effect a large percentage of mortgage borrowers. If you close on your loan before February 15 you are not subject to the new fees. So now more than ever is a good time to take a serious look at your mortgage options.

As always my team and I offer a no-cost, no-obligation review of your current mortgage. If refinancing makes sense, we will show you how to get the best deal. If it doesn't, we will show you why you shouldn't do it now. If you have friends or family members looking to refinance now is a great time to get them in touch with us.

That's it for now, look for more regular updates soon.

Season of Change

2007-11-19T09:24:00.000-05:00

The beautiful fall colors and decreasing temperature remind us of the seasons change. The mortgage industry has entered it's own season of change over the last several months.

I have been in the mortgage business since 1991 and have seen plenty of change. However, the changes we have seen in the last several months are some of the biggest and fastest changes I have seen in my career.

If you know someone who is looking to buy a home and they have little to no down payment, less than perfect credit or a difficult time verifying their income, now is the time for them to buy. Mortgage options are being taken off the table almost daily.

While there are still plenty of options for those with great credit, a down payment and income that can be verified, the options for anyone else are changing quickly. To the point, where home ownership will be out of the reach for many less than perfect borrowers.

Now is a great time to have your friends, family or relatives call me. With the market changing, don't let them miss their window of opportunity.

Have a safe and blessed Thanksgiving.

Your Credit Report for Free

2007-10-22T22:42:00.001-04:00

We have all heard ad's for "Free" credit reports only to visit a website to find out that the "Free" credit report is not so free.

With changes to Federal Law, all of the three major credit reporting agencies are required to provide a free annual copy of your credit report. You can get a free copy of your credit report by visiting www.annualcreditreport.com.

At www.annualcreditreport.com you can request a copy from each of the three main credit bureau's once a year. Because you can only get one report a year, I suggest you rotate credit bureaus and request one from each of the credit bureau's every 4 months. This allows you to monitor your credit report every 120 days at no cost. By the time you have hit all 3 credit bureau's, a year would have elapsed and you can start the process all over again. This allows you to monitor your credit without the cost of a credit monitoring service.

Credit monitoring is a growing business as identity theft continues to be one of the fastest growing white collar crimes in the US. For help on protecting yourself from Identity Theft visit this link provided by the FDIC.

Look for additional post on Identity theft and credit monitoring.

If you have a question about credit, credit scores and/or identity theft, send me an e-mail at dan@danmoralez.com. I will do my best to answer your question in future post.

What Is My House Worth?

2007-10-10T22:54:00.000-04:00

Lately this is a question I have been getting a lot of. The truth is your home is worth what somebody is willing to pay for it. For some Homeowners, that is less than what they paid to purchase the property a couple of years ago.

The truth is the value of a property is dictated by what the market is willing to pay. The market price of a property can be greatly influenced by inventory. Economics 101 tells us supply and demand have a great impact on price.

In today's market, there is no shortage of inventory or options for home purchasers. What that means for home sellers is you have more competition for those potential buyers. If your home hits the market and is not priced accurately, you will sit and sit in hopes of selling your home. Homeowners who are quick to recognize the dynamics of the market and price appropriately are able to sell their home and move on to the next.

Nobody is excited to sell for less than what they paid for the property. However, the bright side is the new home you will purchase will cost you less. This means a smaller mortgage and a smaller mortgage payment.

If we were in a sellers market, you would be able to sell your home for more, faster. However, the flip side is true, you would pay more for your new home which would result in a larger mortgage and mortgage payment.

At the end of the day, even in today's market, it is still a great time to buy.

When the best rate isn't the best deal

2007-09-13T14:07:00.000-04:00

Many of us have been taught that the lowest interest rate must always be the best deal when it comes to borrowing for a home mortgage. However, in some cases, that may not be true. At this point you are probably thinking this has to be good. The truth is, it is.

Often times First Time Home Buyers will have a down payment of less than 20%. Typically this down payment would require PMI (Private Mortgage Insurance). This insurance has a cost which can increase the cost of the mortgage significantly. When you factor the cost of PMI insurance on top of the interest rate, your true cost of money could be significantly higher.

Compare that loan to a loan with just a slightly higher interest rate and NO PMI insurance. In most cases, the loan with NO PMI insurance will have a lower effective cost of money then the loan that had the lower rate with PMI insurance. This is all true because the interest rate you are generally quoted does not take into account the effective cost of money when PMI is figured into the calculation.

The other thing that clients can often overlook is what are the cost associated with the loan. A lender can offer substantially lower rates then most of their competition. However, in many cases the cost of the loan offsets the lower interest rate and makes for no big deal.

Navigating the shark infested mortgage waters is no easy task. You need to have the benefit of a seasoned mortgage professional who is truly looking out for your best interest.

I welcome the opportunity to show you your mortgage financing options. Give us a call if we can help.

$7,500 to buy a home may be yours!

2007-08-29T23:13:00.000-04:00

If your a First Time Home buyer you may qualify for up to $7,500 from the State of Michigan to be used toward your down payment and closing cost on a new home. Program eligibility is driven by your income and the price of the home you are buying. The requirements can vary from location to location depending on where the property is located.

Best of all, the down payment assistance is offered in conjunction with the State of Michigan's MSHDA home loan program. MSHDA loans compare favorably to a traditional conventional loan, in many cases they can be from .375% to .500% better than a traditional conventional mortgage. Best of all, you may be eligible for up to $7,500 from the State to purchase your new home.

So why doesn't every lender offer this program? The answer is two fold:

The program requires extra paperwork and the lender has to be willing to do the extra paperwork and understand exactly what needs to be done to insure you receive the maximum down payment assistance possible.
The MSHDA program often pays a decreased commission and generates less revenue for the lender then a similar conventional type of mortgage

The approach of our team has always been the same. We will always offer the best mortgage solution available in the market place. Irregardless of the compensation to be derived from the transaction. You can count on us to give you honest, straight forward recommendations.

If you or someone you know is getting ready to buy a home. Make sure they call us to see if they are eligible for this exciting down payment assistance program.

Fed Rate Cut - Good or Bad?

2007-08-21T23:13:00.001-04:00

As many of you are aware, just last week the Federal Reserve bank cut the rate on Federal Reserve window borrowing by .50%. This rate is the rate in which banks lend money to each other and is not the same as when the Fed cuts the discount rate.

When the Fed cuts the discount rate this translates into banks lowering their prime rate which in turn leads to lower borrowing cost on loans which are tied to the prime rate (generally home equity lines of credit).

Mortgage rates will generally drift down in anticipation of a Federal Reserve rate cut. In other words, if the Fed was to cut rates tomorrow, you generally would not see an immediate decrease in interest rates. This is because mortgage rates would have dropped in advance of the Fed cutting the discount rate. Mortgage rates react to the market and what it thinks the Fed will do.

If the market thinks the Fed is going to cut, rate's will decrease in anticipation of the rate cut (even before they actually make the cut). The same is true going the opposite direction. Rates will increase before the fed increases rates as the market will price in any potential increase in rates before they actually happen.

So what does all of this mean today? Based on the market, most traders are anticipating a cut of up to .50% within the next 30 to 90 days. That means that rates in the near future could look better. Please note the word "could". In today's global economy coupled with the mortgage and credit liquidity crisis, there is still significant volatility in the market.

As always, we will use all tools available to insure you receive the best possible pricing on your loan with the least amount of risk. As a Mortgage Professional, I subscribe to live mortgage pricing direct from Wall Street. This real time information insures that we are on top of any move in the market place.

You can trust me and my team for honest straight forward recommendations. In the end, a Federal Reserve cut of the discount rate will lead to cheaper money (at least for now).

Credit and Liquidity Crisis Has Local Victim

2007-08-19T10:37:00.000-04:00

Just this past week, Charter Funding was another victim of the ongoing credit and liquidity crisis. Charter Funding was part of the larger First Magnus mortgage lending operation. While the local offices are well run companies (I know many people at Charter Funding), the larger company as a whole was experiencing the same problems that many other lenders have.

In today's market it is becoming increasingly difficult for mortgage brokers to find sources of funds for their clients. Lenders continue to leave the market leaving brokers and their clients high and dry with no funds for their mortgage. This is especially painful for homeowners who are set to close on their new home only to find out that their source of money has dried up.

This past week Countrywide Home Loans drew $11.5 billion dollars on a line of credit to continue to fund their operations. Countrywide is the nations largest lender and one of the biggest buyers of home loans from brokers. Countrywide has consistently changed guidelines and rates over the last several months. This may signal trouble for homeowners/buyers who will be receiving mortgage financing from Countrywide. Keep in mind almost every broker has some type of relationship with Countrywide.

At First Place Bank, we are a full service bank with over $3+ billion in assets. We depend on the bank to fund our loans and not Countrywide or any other 3rd party company. At First Place you can bank on your money being there for your closing.

To be continued...........

Credit and Liquidity Crisis - Why it Matters

2007-08-15T23:14:00.000-04:00

There has been a lot of news lately about the credit and liquidity crisis that is now taking place in the mortgage market. I thought it would be nice to comment on what all of this means to those of us who don't live on Wall Street.

At the end of the day, the credit and liquidity crisis that we are currently experiencing is nothing more than the lack of funds being made available to lenders and homeowners. While this is an extremely generic explanation, it covers the harsh reality of what the market is currently experiencing.

Most home loans are ultimately sold to investors. Those investors are typically Fannie Mae/Freddie Mac or a host of other private investors. Generally speaking, loans that are purchased by Fannie Mae or Freddie Mac are those loans that are classified as "A" paper loans (loans to borrowers who can fully document their income who have good credit histories). Loans that meet the guidelines of Fannie Mae and Freddie Mac are still widely available in today's market place and account for the majority of the home loans that we have done traditionally.

Loans where the characteristics don't meet the criteria of what is purchased by Fannie Mae or Freddie Mac are known generally as non-conforming loans. They are often referred to as non-conforming, Alt A or subprime mortgages depending on the characteristics of the loan. The market for these loans has essentially disappeared. These types of loans have lost favor with investors world wide. While variations of some of these loans still exist, the terms and conditions in which they are still available are substantially worse then what they were all of even six months ago.

Check back soon as I will continue writing about the current Credit and Liquidity crisis. I wanted to give you some background information to get started.

First Place Bank is a $3+ billion dollar bank. Unlike lenders who are experiencing problems in the market today, we have our own money and resources to continue to fund loans while many lenders are struggling.

To be continued.............