Gov’t to target 4.5% for mortgages

[Coronita]

Dumb question for folks in the know (HLS specifically, RE agents,etc)

What sort of rates are seeing for non- owner occupied homes, conforming. Also, do these lower rates proposed by the gov apply to non-owner occupied homes?

(….If not, perhaps thinking about playing the “musical chairs” on a primary….)

[HLS]

FLU,
It’s a long answer to what should be a simple question…

First of all, FNMA guidelines now say that if you do not have at least 30% equity in your primary home, to be able to finance a non-owner purchase you will not get credit for any rental income from subject property.

You need to qualify, full doc, for both property loans, + taxes, ins, HOA etc.If you DO have 30% equity, you get credit for 75% of gross rental income….

This is to keep people from “buying and bailing”
They figure if you have 30% equity in your primary, you won’t walk away.

Per FNMA, you can buy a non-owner with 20% down, but you get better pricing with 25% down.

Assuming 25% down, Rate with 1pt today is 6.625%, but the buy-down options are VERY low…

By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.

What this means is that people who are getting no cost loans OR who don’t buy-down the rate are getting screwed royally in the long run, (assuming that they keep the loan)

Last thing is financing CONDOS primary OR non owner can be very difficult today..
Many associations are in huge financial trouble.

For a loan submission, it can cost upwards of $100-$200 up front just to get the documents that the lender wants to review regarding the association financials etc. Then the loan gets denied.

As always, rates subject to change 🙂

There is NO GOVT program at 4.5% today.
If it actually happens,
From what has leaked that I know, it will NOT apply to non owner or refi’s….only purchases.

HLS

[HLS]

FLU,
It’s a long answer to what should be a simple question…

First of all, FNMA guidelines now say that if you do not have at least 30% equity in your primary home, to be able to finance a non-owner purchase you will not get credit for any rental income from subject property.

You need to qualify, full doc, for both property loans, + taxes, ins, HOA etc.If you DO have 30% equity, you get credit for 75% of gross rental income….

This is to keep people from “buying and bailing”
They figure if you have 30% equity in your primary, you won’t walk away.

Per FNMA, you can buy a non-owner with 20% down, but you get better pricing with 25% down.

Assuming 25% down, Rate with 1pt today is 6.625%, but the buy-down options are VERY low…

By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.

What this means is that people who are getting no cost loans OR who don’t buy-down the rate are getting screwed royally in the long run, (assuming that they keep the loan)

Last thing is financing CONDOS primary OR non owner can be very difficult today..
Many associations are in huge financial trouble.

For a loan submission, it can cost upwards of $100-$200 up front just to get the documents that the lender wants to review regarding the association financials etc. Then the loan gets denied.

As always, rates subject to change 🙂

There is NO GOVT program at 4.5% today.
If it actually happens,
From what has leaked that I know, it will NOT apply to non owner or refi’s….only purchases.

HLS

[HLS]

FLU,
It’s a long answer to what should be a simple question…

First of all, FNMA guidelines now say that if you do not have at least 30% equity in your primary home, to be able to finance a non-owner purchase you will not get credit for any rental income from subject property.

You need to qualify, full doc, for both property loans, + taxes, ins, HOA etc.If you DO have 30% equity, you get credit for 75% of gross rental income….

This is to keep people from “buying and bailing”
They figure if you have 30% equity in your primary, you won’t walk away.

Per FNMA, you can buy a non-owner with 20% down, but you get better pricing with 25% down.

Assuming 25% down, Rate with 1pt today is 6.625%, but the buy-down options are VERY low…

By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.

What this means is that people who are getting no cost loans OR who don’t buy-down the rate are getting screwed royally in the long run, (assuming that they keep the loan)

Last thing is financing CONDOS primary OR non owner can be very difficult today..
Many associations are in huge financial trouble.

For a loan submission, it can cost upwards of $100-$200 up front just to get the documents that the lender wants to review regarding the association financials etc. Then the loan gets denied.

As always, rates subject to change 🙂

There is NO GOVT program at 4.5% today.
If it actually happens,
From what has leaked that I know, it will NOT apply to non owner or refi’s….only purchases.

HLS

[HLS]

FLU,
It’s a long answer to what should be a simple question…

First of all, FNMA guidelines now say that if you do not have at least 30% equity in your primary home, to be able to finance a non-owner purchase you will not get credit for any rental income from subject property.

You need to qualify, full doc, for both property loans, + taxes, ins, HOA etc.If you DO have 30% equity, you get credit for 75% of gross rental income….

This is to keep people from “buying and bailing”
They figure if you have 30% equity in your primary, you won’t walk away.

Per FNMA, you can buy a non-owner with 20% down, but you get better pricing with 25% down.

Assuming 25% down, Rate with 1pt today is 6.625%, but the buy-down options are VERY low…

By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.

What this means is that people who are getting no cost loans OR who don’t buy-down the rate are getting screwed royally in the long run, (assuming that they keep the loan)

Last thing is financing CONDOS primary OR non owner can be very difficult today..
Many associations are in huge financial trouble.

For a loan submission, it can cost upwards of $100-$200 up front just to get the documents that the lender wants to review regarding the association financials etc. Then the loan gets denied.

As always, rates subject to change 🙂

There is NO GOVT program at 4.5% today.
If it actually happens,
From what has leaked that I know, it will NOT apply to non owner or refi’s….only purchases.

HLS

[HLS]

FLU,
It’s a long answer to what should be a simple question…

First of all, FNMA guidelines now say that if you do not have at least 30% equity in your primary home, to be able to finance a non-owner purchase you will not get credit for any rental income from subject property.

You need to qualify, full doc, for both property loans, + taxes, ins, HOA etc.If you DO have 30% equity, you get credit for 75% of gross rental income….

This is to keep people from “buying and bailing”
They figure if you have 30% equity in your primary, you won’t walk away.

Per FNMA, you can buy a non-owner with 20% down, but you get better pricing with 25% down.

Assuming 25% down, Rate with 1pt today is 6.625%, but the buy-down options are VERY low…

By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.

What this means is that people who are getting no cost loans OR who don’t buy-down the rate are getting screwed royally in the long run, (assuming that they keep the loan)

Last thing is financing CONDOS primary OR non owner can be very difficult today..
Many associations are in huge financial trouble.

For a loan submission, it can cost upwards of $100-$200 up front just to get the documents that the lender wants to review regarding the association financials etc. Then the loan gets denied.

As always, rates subject to change 🙂

There is NO GOVT program at 4.5% today.
If it actually happens,
From what has leaked that I know, it will NOT apply to non owner or refi’s….only purchases.

HLS

[carlsbadworker]

[quote=HLS]By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.
[/quote]

Wow. That is the type of loan I think buy-down makes perfect sense. Is there some business economics that supports this kind of buy-down? Or lenders are just scrambling to get any immediate cash?

[carlsbadworker]

[quote=HLS]By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.
[/quote]

Wow. That is the type of loan I think buy-down makes perfect sense. Is there some business economics that supports this kind of buy-down? Or lenders are just scrambling to get any immediate cash?

[carlsbadworker]

[quote=HLS]By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.
[/quote]

Wow. That is the type of loan I think buy-down makes perfect sense. Is there some business economics that supports this kind of buy-down? Or lenders are just scrambling to get any immediate cash?

[carlsbadworker]

[quote=HLS]By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.
[/quote]

Wow. That is the type of loan I think buy-down makes perfect sense. Is there some business economics that supports this kind of buy-down? Or lenders are just scrambling to get any immediate cash?

[carlsbadworker]

[quote=HLS]By buying down with 1.7pts, you can save 1.375% in rate, down to 5.25%
OR
buying down with 2.3 pts saves you 1.63 in rate down to 4.99%

The buy-down takes you ahead after 15-16 months, previously unheard of on a 30 YR Fixed rate.
[/quote]

Wow. That is the type of loan I think buy-down makes perfect sense. Is there some business economics that supports this kind of buy-down? Or lenders are just scrambling to get any immediate cash?

[HLS]

CBW,

The previous example was for NON owner.

FNMA requires an additional 1.75% of loan amount for NON owner @ 75% at origination. (Not in rate)
(At 80% it is 3.00% !!!)

Assuming that you will keep the loan for a couple of years, you are better off paying cash to pay this rather than take a higher rate for 30 years.

The higher the rate goes the less it makes sense to do a no cost loan

Several years ago, subprime buydowns were all the same, pay 1 pt, save .50. Break even in 2 years.
No more…

Today, buydowns are completely willy nilly.

Buydowns aren’t usually that good for high credit, owner occupied, unless you have a low credit score. Then the buydowns are the exact same as non owner.

The lender that I may have with the best base rate has crappy buydowns…..
The lender with a crappy base rate has better buydowns…

There is no set buydown cost. Each 1/8th that I look at has a different cost.

Actual buydown costs right now: For each eighth..
5.375 to 5.25 cost .46
5.25 to 5.125 cost .14
5.125 to 5.00 cost .09
5.00 to 4.875 cost .38
4.875 to 4.75 cost .60

If you can figure it out, please explain it to me.

Another puzzle: One good lender raised rates from this morning and another lender dropped their rates.

Several lenders consistently have better rates. Anybody who goes to the others are typically paying .25% higher in rate for the life of the loan, they just don’t know it.
(Like when people use their friends for free loans that are actually costing them a small fortune)

I’m really anal about rates so I can offer ppl the lowest that I have access to. I’m constantly checking them online, they really can change at anytime. I usually try to lock ppl while I have them on the phone if they like the rate.

[HLS]

CBW,

The previous example was for NON owner.

FNMA requires an additional 1.75% of loan amount for NON owner @ 75% at origination. (Not in rate)
(At 80% it is 3.00% !!!)

Assuming that you will keep the loan for a couple of years, you are better off paying cash to pay this rather than take a higher rate for 30 years.

The higher the rate goes the less it makes sense to do a no cost loan

Several years ago, subprime buydowns were all the same, pay 1 pt, save .50. Break even in 2 years.
No more…

Today, buydowns are completely willy nilly.

Buydowns aren’t usually that good for high credit, owner occupied, unless you have a low credit score. Then the buydowns are the exact same as non owner.

The lender that I may have with the best base rate has crappy buydowns…..
The lender with a crappy base rate has better buydowns…

There is no set buydown cost. Each 1/8th that I look at has a different cost.

Actual buydown costs right now: For each eighth..
5.375 to 5.25 cost .46
5.25 to 5.125 cost .14
5.125 to 5.00 cost .09
5.00 to 4.875 cost .38
4.875 to 4.75 cost .60

If you can figure it out, please explain it to me.

Another puzzle: One good lender raised rates from this morning and another lender dropped their rates.

Several lenders consistently have better rates. Anybody who goes to the others are typically paying .25% higher in rate for the life of the loan, they just don’t know it.
(Like when people use their friends for free loans that are actually costing them a small fortune)

I’m really anal about rates so I can offer ppl the lowest that I have access to. I’m constantly checking them online, they really can change at anytime. I usually try to lock ppl while I have them on the phone if they like the rate.

[HLS]

CBW,

The previous example was for NON owner.

FNMA requires an additional 1.75% of loan amount for NON owner @ 75% at origination. (Not in rate)
(At 80% it is 3.00% !!!)

Assuming that you will keep the loan for a couple of years, you are better off paying cash to pay this rather than take a higher rate for 30 years.

The higher the rate goes the less it makes sense to do a no cost loan

Several years ago, subprime buydowns were all the same, pay 1 pt, save .50. Break even in 2 years.
No more…

Today, buydowns are completely willy nilly.

Buydowns aren’t usually that good for high credit, owner occupied, unless you have a low credit score. Then the buydowns are the exact same as non owner.

The lender that I may have with the best base rate has crappy buydowns…..
The lender with a crappy base rate has better buydowns…

There is no set buydown cost. Each 1/8th that I look at has a different cost.

Actual buydown costs right now: For each eighth..
5.375 to 5.25 cost .46
5.25 to 5.125 cost .14
5.125 to 5.00 cost .09
5.00 to 4.875 cost .38
4.875 to 4.75 cost .60

If you can figure it out, please explain it to me.

Another puzzle: One good lender raised rates from this morning and another lender dropped their rates.

Several lenders consistently have better rates. Anybody who goes to the others are typically paying .25% higher in rate for the life of the loan, they just don’t know it.
(Like when people use their friends for free loans that are actually costing them a small fortune)

I’m really anal about rates so I can offer ppl the lowest that I have access to. I’m constantly checking them online, they really can change at anytime. I usually try to lock ppl while I have them on the phone if they like the rate.

[HLS]

CBW,

The previous example was for NON owner.

FNMA requires an additional 1.75% of loan amount for NON owner @ 75% at origination. (Not in rate)
(At 80% it is 3.00% !!!)

Assuming that you will keep the loan for a couple of years, you are better off paying cash to pay this rather than take a higher rate for 30 years.

The higher the rate goes the less it makes sense to do a no cost loan

Several years ago, subprime buydowns were all the same, pay 1 pt, save .50. Break even in 2 years.
No more…

Today, buydowns are completely willy nilly.

Buydowns aren’t usually that good for high credit, owner occupied, unless you have a low credit score. Then the buydowns are the exact same as non owner.

The lender that I may have with the best base rate has crappy buydowns…..
The lender with a crappy base rate has better buydowns…

There is no set buydown cost. Each 1/8th that I look at has a different cost.

Actual buydown costs right now: For each eighth..
5.375 to 5.25 cost .46
5.25 to 5.125 cost .14
5.125 to 5.00 cost .09
5.00 to 4.875 cost .38
4.875 to 4.75 cost .60

If you can figure it out, please explain it to me.

Another puzzle: One good lender raised rates from this morning and another lender dropped their rates.

Several lenders consistently have better rates. Anybody who goes to the others are typically paying .25% higher in rate for the life of the loan, they just don’t know it.
(Like when people use their friends for free loans that are actually costing them a small fortune)

I’m really anal about rates so I can offer ppl the lowest that I have access to. I’m constantly checking them online, they really can change at anytime. I usually try to lock ppl while I have them on the phone if they like the rate.

[Author]

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