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Rates this week for our POV* Home Loan are UP again with Conforming ($417K max) at 5.37% and Jumbo Conforming (up to $729,750.00) at 5.875%. Super Jumbos (up to 2 Million)are at a 5 year fixed rate are at 6.25%, as always feel free to shoot your questions or scenarios to me at lololoans@yahoo.com.
Mortgage 101 and Tips of the week:
Want to ReFi but can't figure out just what the value of your home is? If you have a friend or acquaintance that is a Realtor the best bet is to have them search the Comps on their MLS access. Other than that you can use www.zillow.com or www.homegain.com. They each draw from recent Comps and the public Data Bases. Take the lower end of each of the value ranges and then find a number in between those. Better to be conservative on your estimate even though you DID put that swanky fountian in the front yard and called it "landscaping".
Love to Shop? Don't we all! But do your shopping before you commit to a Lender. Walking away from a Loan Application that is already in process is not only bad Karma but you've now burned that bridge in case you need to go back. With a Realtor you do sign a contract, nothing like then when getting your loan processed..... so play nice kids!
How much should I put down for my home? Well the answer of course is the more the merrier for 2 reasons, a) you have a lower loan balance and hence less interest accruing, and b) you stand to get a better rate. For example, (citing today's rate sheet from a major Wholesale Lender) with 20% down (or 80% loan-to-value ratio) your POV rate is 5.37%. Now going 5% down or 95% LTV and the Lender imposes a "hit" or a cost of .75pt. SO, you either absorb that by paying that amount to the Broker or settling for a rate of 5.75%. The difference adds up to a LOT over 5 years or more. And of course financing a home MORE than 80% LTV requires Private Mortgage Insurance so that gets piled on top of your existing monthly payment.
So there is a trade-off..for the cash-strapped you can go as little as 3.5% down on an FHA Loan..but be prepared to pay not only the Mortgage Insurance every month, but there is an "up-front" Premium due at Signing ( for example 1.75% of the loan amount in Contra Costa County) that either has to be a) paid at Close of Escrow or b) lumped into your principal balance.
As in the words of my Alma Mater (Faber College) "Knowledge is good"!
*POV = Plain, Old, Vanilla Home Loan: 30yr fixed, fully amortized, Single Family Residence, Rate and Term Refinance or Purchase only, never, ever, ever wearing one of those half A's half Giants hats.
For more info: Email me at lololoans@yahoo.com
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