Mortgage Interest Rates Newport Beach Ca: Mortgage Industry Changes Coming Time To Be Aware

Mortgage Industry Changes Coming Time To Be Aware

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More Mortgage Industry Changes

Time to be aware that you will start seeing yet another, group of changes in the mortgage industry.

Starting this fall with Fannie & Freddie, lowering of the conforming loan amounts. Orange County & LA County, word has it, will have a maximum of $625,500 no longer the $729,750 loan amount. Underwriting income ratios for Freddie (to date, Fannie may follow) are going to tighten. This will make it more difficult to qualify the debt borrowers carry. Good reason to be aware of mortgage industry changes.

The good news is that the MI (mortgage insurance) Companies will take on higher loan to values. Not so good news is that the cost factors for MI are high, which a borrower will have to pay on a monthly basis either by way of an additional cost added to the loan amount or they can choose to take a higher interest rate (called LPMI, Lender Paid Mortgage Insurance). In some cases choosing the higher rate will be a lower total monthly mortgage payment, believe it or not. Another reason to be aware of mortgage industry changes

One thing to remember is that if you can STILL qualify with adding the MI to the monthly payment it will eventually drop off, once your home value increases and the loan to value will be 80% or less. How soon that will happen nobody knows, but from the looks of it we would be safe in a 5 year or 7 year or 10 year fixed loans. These come with very attractive rates starting at about 2.75% for a 5 year fixed with a 1 year arm through the 30th year.

All and all we can thank the Dodd - Frank Act for keeping us all scrambling and tightening our budgets on a daily basis. At least it keeps us thinking and performing math calculations as we never have before. Remember there is good reason to be aware of the mortgage industry changes for this will effect not only qualifying borrowers but it could be the last time you can make a sale to that buyer in a certain price range due to the mortgage loan limits changes coming this fall.     

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    Patty Rowan

   California Mortgage Banker/Broker/Orange County  

     949 689 4465

     Newport Beach, Ca 92660

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Comment balloon 3 commentsPatty Rowan • July 19 2011 08:32PM

Comments

very interesting and informative blog... thank you for sharing.. have a great afternoon. 

Please keep me in mind for Northern California Real Estate..

Hosai Nasir

Hosai@c21mm.com

Posted by Hosai Nasir (Century 21 M & M and Associates ) almost 8 years ago

I guess everyone is thinking "FHA' and it is hard to convience buyers to look at MI and conventional right now because of the difference in downpayment.  The higher costs with FHA and the changes will make that change in the future.  Thanks for sharing this information.

Posted by Mary Macy, Top Agents Atlanta Metro (Top Agents Atlanta Metro) almost 8 years ago

Thanks for the comment.  In different parts of the US FHA loans are more popular.   MI is less of an issue when it is included in the rate.  More times than not it is less of a monthly payment for the borrower and obviously tolerated better when the borrower is shown a comparison.  You may want to ask your mortgage professional if they have LPMI, lender paid mortgage insurance, loan programs.

Posted by Patty Rowan, Mortgage Interest Rates, Mortgage loans, Low Interest Rates, (Mortgage Interest Rates) almost 8 years ago

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