Monthly Archives: June 2016

//June
28 06, 2016

Jumbo Loans 101

June 28th, 2016|Blog, Buying a home, Home Finances, Mortgage 101|

Rhinebeck, NY, USA - November 5, 2007: Elegant private residence located in Rhinebeck; This area is in the Hudson Valley area of Upstate New York.

Since this is a 101 about jumbo loans and when you should use one, let’s start with the basics. A jumbo loan can also be referred to as a non-conforming mortgage. This is a loan that does not conform to the guidelines of Frannie Mae and Freddie Mac. Created by Congress in 1938 and 1970 respectively, Frannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, giving lenders liquidity to make more mortgages.

Frannie Mae and Freddie Mac only buy mortgages meeting their guidelines for down payment, credit score, post-closing reserves and loan amount. As of 2016, the conforming loan size limit for a one-unity home is $417,000 with exceptions as high as $625,500 in certain high-priced markets.

When should you use a jumbo mortgage?

You would use a jumbo mortgage when you are seeking a loan amount that is greater than the conforming loan limit in your area. In most of the country, that means you will take out a jumbo loan if the amount of the loan is greater than $417,000. In certain areas that are deemed high cost, the conforming loan limit goes above $417,000. You can look up your area’s loan limited here: http://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx.

Qualifying for a Jumbo Mortgage

Jumbo mortgages have the same overall qualifying methodology as a conforming loan. Lenders will look at your credit score, down payment size,  total monthly debt obligations relative to income (called your debt-to-income ratio), and money left over after closing.

  • Credit score requirements are about the same for conforming and jumbo.
  • Money left after closing – This is often called reserves or […]
17 06, 2016

Smart Moves for First-Time Home Buyers

June 17th, 2016|Home Finances, Mortgage 101, Tips & Advice|

Shot of a couple moving into their new homehttp://195.154.178.81/DATA/i_collage/pu/shoots/805830.jpg

First-time home buyers, are you ready to buy? It is a seller’s market right now so we are here to prepare you with tips before entering the market. Your biggest challenge is that you are probably bringing less cash to the table, which makes it harder to compete with more season buyers. What YOU do have is flexibility-you’re not counting on selling your current place to fund the deal. Which means that you are a perfect answer for sellers who want to stay put until they land their next place.

  1. Lock up your financials. It is time to clean up your credit and save for a bigger down payment so that you’ll qualify for a better mortgage rate and avoid costly fees. Start paying down credit cards so your balance is less than 30% of the limit and avoid late payments. It is so important to pay your bills on time, even student loan payments. Student loans will not hinder your chance of getting a loan, as long as you are making the payments on time. Next, 20% is the golden number for down payments. Putting down 20% helps you avoid costly private mortgage insurance and can help you to beat competing offers. If you aren’t there yet, either change your spending habits to save up more or start looking at cheaper homes.
  2. Check Alternative Mortgage Options. If you can’t get close to that 20% down payment or your credit score is not where you would like it to be, that is okay too! FHA loans (read more about them here) let you put just 3.5% down, and offer better rates for those with less-than-pristine credit. It is important to know the tradeoff though, […]
10 06, 2016

Mortgage Rates Update

June 10th, 2016|Blog, Latest News|

Chalk graph

Unfortunately May brought a disappointing jobs report for the U.S. and a speech by the Federal Reserve Chair Janet Yellen that seemed to take a June rate hike by the Fed’s rate-setting committee off the table, for now. This created a worrisome week for the U.S economy which led to lower rates for home loans.

Here is where the mortgage rates stand this week:

  • The benchmark 30-year fixed-rate mortgage fell to 3.74% from 3.81%. The rate this week is 0.23 percentage points lower than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3% from 3.05%.
  • The benchmark 5/1 adjustable-rate mortgage fell to 3.13% from 3.22%.
  • The benchmark 30-year fixed-rate jumbo mortgage fell to 3.71% from 3.76%.

Timing of Fed hike is less clear

As a result of the speech on Monday, the timing of when the Federal Reserve will decide to raise rates is still not clear. Yellen said the Fed would probably need to raise the federal funds rate gradually over time. That appeared to retract what was said in the speech 3 days earlier in which she said it would probably be appropriate to raise the funds rate “in a couple months”. The Federal Reserve will raise rates after our current uncertainties unfold.

If you want to apply to either buy or refinance, start the application today! https://www.myloanform.com/?action=access.login&m=47

Load More Posts
APPLY NOW!