Posts Tagged ‘lending Utah’

I do write about mortgages, you know.  I don’t do it here all that often, which is a thing in the process of changing (eventually), but I do it, and I do it a lot.

In case you’re interested, which seems unlikely but is possible, I have a couple of posts about the foreclosure mess on Zillow’s Mortgages Unzipped blog.  The first one is here, and I’ll link to the second one if they ever put it up.  I also have a piece on where I think rates are headed for the next six months, which you might find useful.

In other news, I have an article in the November issue of The Niche Report, which is the second of the mortgage-industry publications to want my stuff, after the Scotsman Guide, for which I’ve written several articles.  I’m still waiting for a paying gig, but in the meantime it’s nice to have people interested in printing and reprinting the things I write.

You know how you get to the start of a week, and  you get everything planned out, get your to-do lists together, and you hit the week running with a ton of energy and purpose?

That was this week.

And you know how some weeks the things you mean to do and the things you have to do collide so violently that even though you are working constantly, knocking things off the to-do list with abandon, and seeing real (even some times miraculous) progress, you get to the end of the week and you realize that you accomplished almost none of the things you meant to?

That was this week, too.

Mortgages being what they are, the opportunities to do really significant good for people don’t come along every day.  When they do, you often have extremely short windows to get things moving.  That’s what happened this week, as rates dived a bit and some potential streamline refinances came into play that honestly I never thought would happen.  But you have to strike while the iron is hot, even if that puts a lot of other things – worthwhile things, even necessary things – on the back burner.  That’s what I tried to do this week, and maybe I even succeeded.  We will finish the week with more business in process than we’ve had in a year, and the immediate prospect of cutting $1450/mo in interest out of the payments of our clients, a not-insubstantial sum.

So, a good week.  I sent a son to college, set up a company, closed a purchase for a really exceptional young lady, learned to love the Tenth Doctor (but not as much as the Ninth), read Drive, by Daniel Pink (two thumbs waaaaay up), blogged a couple of times and exchanged Twitter messages with Chris Brogan.  I discovered that the most durable brand in all of business is Notre Dame football.  I debated the sociology of rites of passage with the wonderful and amazing Pastor Chuck Lovelady.  I drank homemade grape juice and took a beautiful girl to the football game.  Wrote more of my book and an article on lending in Utah.  There was some stuff I didn’t do.  But I promise not to mention any of it, if you won’t.

Go have a great weekend.  You deserve it.  Really, you do.

Welcome to RateWatch for Thursday, August 05, 2010.  Here’s what’s happening:

Employment again is the news of the day, with new claims up another 20,000 or so to 479,000.  Continuing claims were down, though, to 453,700.  That was not as far down as the markets were expecting, however, and that’s meant that bonds have stayed strong.

Not too strong, though.  There really is no upside here.  Unless we get a truly shocking number tomorrow from the unemployment people, showing unemployment at, say 10.5%, there just isn’t any confidence in the bond market to cause a buying wave.

What that means for rates: nothing.  We’re down 6bps, which might just as well be flat.  There is no upside without huge news, and no downside because what news there is is bad.  So we’re hanging out with rates in the 4.5% range.

Anything else?: yep.  Sure is.  The big news today comes out of Washington, surprise surprise, with the Senate passing a bill that changes FHA fees.  Up-front MI will move from the current 2.25% down to 1%, a positive change, but more than made up for by the increase in monthly MI from an annual .55% to .9%, and the FHA gets authority to go all the way to 1.5%.

Bottom line: on a $200,000 loan, you are paying right now $4500 in UFMIP and $91.66/mo in monthly MI.  When these changes take effect, you’ll be paying $2000 UFMIP but $150/mo in MI.  For more commentary on that, see the blog at thechrisjonesgroup.com.

I’m Chris Jones, aka Agent Zero.  That’s RateWatch for today.  Until next time, we’ll be watching the rates.

Economic times are tough.  There are layoffs and threatened branch closings, all sorts of unrest in the labor markets.  The “recovery” hasn’t shown up at your door yet, and you’re considering going to work with your brother and opening that new office selling the supercool widgets he makes.

It might be a great idea.  Can I offer one thing, as a lender in Utah (and the rules are the same everywhere), for you to think about before you go?

If you’re going to refinance or buy a house, do it before you leave your job – before you even mention to anyone that you’re thinking of doing so.  Underwriters are unkind to the self-employed (and even more unkind to those whose verifications of employment come back with “we don’t think he’s staying here very much longer”).  There are no more stated-income loans (well, essentially), so you’re going to have to document all your income, and not with bank statements, either.  It will be tax returns. And those will be verified by an IRS transcript.

You’re going to want to have a long chat with your accountant.  She’ll probably have some suggestions for ways that you can minimize your tax liability while maximizing your adjusted gross income (AGI), and you definitely want to do that.  Underwriting is going to look hard at your AGI, and there are also add-backs for depreciation and amortization, so you can get some tax relief there without hurting your qualifying income.

But the big thing is that if you are self-employed, you have to have two years of tax returns showing this before you can be qualified for a loan under FNMA/FHLMC (Fannie/Freddie) guidelines.  So it’s going to be at least 24 months, and possibly longer, before you’ll qualify, once you leave.  And don’t try to claim that you’re not self-employed just because you get a W2.  If you own more than 25% of the business, you’re self-employed no matter how you get paid.

I’m not saying you shouldn’t do it.  I love self-employment.  I’ve been self-employed for a decade.  Small businesses are the heartbeat of the economy.  But before you go, get your house in order.  Literally.

Welcome to RateWatch for Thursday July 29, I’m your host, Chris Jones, and here’s what’s happening:

Today’s market: The benchmark bond is up 12bps today.  We’re trading in a very narrow channel.  Economic news today was all about employment, as in, there isn’t much of it.  Unemployment benefits have been extended, so continuing claims were up, which did not surprise anyone.  New claims were down, but not very much.  The recovery continues to fail to do the one thing that would really get the economy moving again – create jobs.

What that means to you: rates are holding steady.  It’s generally acknowledged that banks would like to raise rates, but competition is making that very difficult.  Remember, they don’t make money unless they lend it out to people.  Rates are therefore critical to attracting business.  There’s no central rate-making authority in mortgages.  The banks take their cues from the bond market and from each other.  So today’s rates are in the 4.5% range on conventional and FHA, with 15-year rates in the 4% range.

At some point, obviously, this is going to change.  We’ll have a terrorist attack (which would be mixed for bonds) or we’ll have IBM invent cold fusion (which would be very, very bad for bonds), and the market will break out of this channel and start moving, almost certainly upward.  We are trading right now at the bottom of the historical range, as in, it’s never been this good.  Ever.  So it isn’t as if there is a lot farther down we can go.

How long will it last? That’s the billion-dollar question.  Here’s the answer: NO ONE KNOWS.  Only one thing is certain: rates in this range will go away.  Do not wait to talk to a professional.  You can call us.  That’s what we’re here for.

That’s RateWatch for July 29, I’m your host, Chris Jones.  You can find us at thechrisjonesgroup.com or text us at 801-850-378.