Mortgages Made Simple with Rick Gundzik

Thursday, July 30, 2009
Bridge loans and APR - July 30, 2009
We had 2 listener questions this past week. The first was "How do bridge loans work?" and "What is par pricing and APR. Mortgages Made Simple logo

Bridge loans are simply a temporary loan when a person is buying a new home and hasn't sold their old home yet, that enables them to get a loan on the equity in their current home to use as the down payment on their new home. These loans were never popular due to their risky nature and barely exist now.

Par just means there are no points being charged to the borrower. APR is, of course, the annual percentage rate. You'll see this quoted all the time alongside the interest rate, and it is supposed to allow you to compare rates from different lenders. The theory being that APR takes into account the fees being charged on the loan. A 5% loan with 1 point will have a lower APR than a 5% loan with a 2 point cost.






If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 10:00 AM   0 comments
Tuesday, July 28, 2009
What's up with the Economy - July 28, 2009
Recently several banks released their earnings, and while on one hand they were all showing billions of dollars in profits, on the other hand they Mortgages Made Simple logo were cautioning that they had potentially 5 times as much in credit card defaults. So their losses are being held back in order to show high earnings now.

I also came upon one analyst's 3 indicators to signal housing has reached a bottom in price, housing starts, months supply of homes for sale and the home affordability index. When housing starts bottom and start to rise and months supply tops and begins to decrease home prices start to stabilize and rise within 12 months. And The home affordability index is the best it has been in 40 years. This is due to low home prices and low interest rates.

While it may be a good time to buy your first home, in my opinion we'll see low home prices for many years. Only buy if you plan on living in your new home for 10-15 years, this is not a time to speculate on housing prices rising. Be careful out there.




If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 10:00 AM   0 comments
Thursday, July 23, 2009
Making Home Affordable, is it working? - July 23, 2009
We received a good question this past week...."What do you think about the Obama administration and their latest expansion of the "home affordable" refinance program that was recently outlined. Mortgages Made Simple logo Will it help those tens of thousands of owners whose houses are seriously "underwater"?

Unfortunately, it's not working fast enough. Instead of requiring an appraisal and having the borrower qualify for the refinance loan, they should have copied the FHA Streamline program. An FHA Streamline does not require the borrower to qualify or an appraisal. This would allow millions of homeowners to lower their monthly house payment quickly and easily.





To find out if your loan is eligible visit
MakingHomeAffordable.gov
Fannie Mae Lookup
Freddie Mac Lookup
or email us and we'll help you out.

If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 10:00 AM   0 comments
Tuesday, July 21, 2009
125 LTV Refi Plus - July 21 , 2009
Fannie Mae announced on July 1, 2009 that the Refi Plus program was being expanded to allow a homeowner to refinance up to 125% of their home's value. Mortgages Made Simple logo





To find out if your loan is eligible visit
MakingHomeAffordable.gov
Fannie Mae Lookup
Freddie Mac Lookup
or email us and we'll help you out.

If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 10:00 AM   0 comments
Thursday, July 16, 2009
Purchasing a Home, Appraisals - July 16, 2009
In Part 3 of our "Purchasing a Home" series we're going to discuss the latest Appraisal issues arising from the new HVCC or Home Valuation Code of Conduct law. Mortgages Made Simple logo

As of May of this year the HVCC law , which was passed to eliminate pushing values artificially high on appraisals, has created a little bit of a stir in the real estate industry. The 2 biggest issues are delays in receiving appraisals and appraised values coming in too low.

The delays are being caused because the appraisal must be ordered by the lender doing your loan. So your appraisal isn't being ordered until your loan officer decides where to send your loan. Then the lender orders the appraisal after your loan is reviewed by the lender's underwriter. Also, the people ordering the appraisal are doing too many jobs and the remaining appraisers are backed up, so with all of these obstacles now in place the appraisal can take up to 2-3 weeks to get.

The second issue is values are coming in low because appraisers unfamiliar with the areas are being used.

So be aware your appraisal may take a couple weeks to get and the value may be lower than expected. Hopefully your real estate agent did their homework and has the ability to help out the appraiser.





If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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Tuesday, July 14, 2009
Stated income and low down payments - July 14, 2009
We had two listener's questions this past week. The first question was "Are there any loans that allow only 5% down?" Mortgages Made Simple logo

FHA loans allow only 3.5% down, so that is the best option for a low down payment loan.

The second question was "If I am putting 25% down, can I do a stated income loan?" Stated income loans, where you don't need to verify your income essentially disappeared in the last 2 years. There are some private investors that offer stated income loans, but the interest rates are extremely high. The best option might be an FHA loan with a co-borrower.




If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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Thursday, July 9, 2009
Purchasing a Home, Credit Scores - July 9, 2009
In Part 2 of our "Purchasing a Home" series we're going to discuss credit score requirements. Mortgages Made Simple logo

The good news is FHA loans don't require much of a credit score at all. However, the major lenders require a 620 credit score. So keep that number in mind. You'll have more options available if your credit score is above 620. On a conventional loan you can also go as low as 620, BUT, it's a big but, your interest rate will be higher if your credit score is lower than 720. So if your credit score has got the blues, think FHA.

Also, if you have a bankruptcy or foreclosure they must be 4 years old. And a short-sale counts as a foreclosure with most lenders.

Collection accounts and charge-offs can sometimes create problems and may need to be paid off if they're not already taken care of.

When it comes to credit it's pretty straight forward. But if you need help reviewing it we're here to help.

Join us in our next "Purchasing a home" series for Appraisals, what's up with those.




If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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Thursday, July 2, 2009
Purchasing a Home - July 2, 2009
We're making a few changes to our blog to better serve all of you. We're going to be moving toward a more text based blog. And we'll also be increasing the number of weekly posts as we're getting a new sponsor. Mortgages Made Simple logo

Today we are starting a "Purchasing a Home" series and what things to consider now that so many things have changed in the real estate industry. We'll cover qualifying for a loan with the new guidelines, appraisal issues, credit score requirements and many other issues.

The podcast version will contain much more wit but if you find it more convenient to read our blog you'll receive all the main points we want you to grasp to navigate your way through the mortgage market.

The first major change over the past year has been the elimination of "stated income" loans or "liar loans" as people not familiar with the mortgage industry call them. When these loans first became available that I remember was in the early 1990's, they served a useful purpose; they allowed people with excellent credit to obtain a loan quickly and easily. There was no need to get tax returns, w2's and paystubs. We asked the borrower how much money they made and we believed them. We didn't increase their income if it was too low, we simply told them to buy a cheaper house they could qualify for. Unfortunately, the subprime industry changed that mindset.

Now if you're self employed and write-off a lot of your income, you will have a hard time getting a loan today. So if you're planning to buy a home in the future, you must claim your income on your tax returns.

To qualify for a loan make sure your house payment is no more that 1/3 of your income. The house payment includes your taxes and homeowner's insurance or HOA dues if you're buying a condo. This is a real conservative rule-of-thumb but it's easy to calculate quickly. If you find that this qualifies you for too small of a loan, give us a call and we can fully pre-approve you for a loan. Here is a handy calculator to help you out.

Join us next time in our "Purchasing a Home" series for credit score requirements.




If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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