Monthly Archive: April 2012

Apr 29

FHA Changes Have little Impact

The recent changes to FHA’s mortgage insurance premiums have had little impact locally.  The largest change, an increase to the Up Front MI, nearly double the previous factor, has not slowed the number of FHA applications.  In fact, the number seems to be on the upswing. 

I do not have access to all of the stats in our market but my government applications have picked up the pace considerably.  As a percentage in the first quarter FHA slipped a little in my pipeline but only because of a spike in conventional applications.  The number of both types of loans saw a huge increase. 

Earlier this week a Realtor told me they will not allow their clients to use an FHA mortgage to finance a purchase.  My first thought was, “Good luck with that.” 

That’s half of my pipeline! 

My second thought was something I learned 30 plus years ago from Warren G. Harding, author of the book, “Trade Secrets of Exchanging.”  Warren asked me, “What is the value of a life preserver?  If you are drowning in the middle of the ocean it is worth a lot more than it was in the store.”

FHA is still one of the most affordable options available to homebuyers.    



Apr 24

Conventional Loan Apps Jump Up

For the past couple of years my FHA loan applications have outnumbered conventional loan apps two or three to one.  This month they are equal, a big jump forward on the conventional side. 

All of the Realtors that refer their clients to me are much busier than last month and last month was very good.  Interest rates are just a little above the level they were in January, still very low.  If the demand continues to increase there will be upward pressure on rates.  It is a good time to move before the rates move.

I was in La Grange this afternoon, saw several new homes going up.  Good to see some new construction.  I have had more calls about end loans for new construction this month than the entire previous year combined.  Still not back to the levels long ago, but a definite improvement.


Apr 23

Down Payment Assistance In Kentucky

Ever had a loan officer GIVE you money? I am not talking about a $100 knocked off of the closing cost but cold hard cash ranging from $4,500 to $10,000 for down payment!

We had another training session this morning regarding Kentucky Housing Corp (KHC) loans, this time a DE Underwriter helped with the presentation.  In addition to being a Direct Endorsement Underwriter for FHA she is also delegated to sign on behalf of KHC.  That can speed up the timeline in our shop by as much as a week compared to other lenders.

We talked a great deal about the different combinations using an FHA/KHC first mortgage with down payment assistance (DAP).  The DAP’s are in the form of a second mortgages, some forgivable over time and one that must be repaid.    Kentucky Housing DAP’s range from $4,500 to $6,000. 

This is how it works.

The first mortgage is an FHA/KHC loan for 96.5% of the purchase price.

The DAP is a second mortgage for 3.5% of the purchase price. 

The seller can pay all of the closing cost and pre-paids.

The borrower only needs to pay for an appraisal (unless the seller pays for that too). 

Inside scoop for you, I spoke to my source in Louisville Metro last week, they are expecting funding for their DAP program in July.  Last year it was $10,000 a pop plus another $2,000 for closing costs.  This program requires FHA home ownership classes so sign up soon if you want to grab this round.


Need Assistance with a Down Payment?

Visit my online application site or print and use this simple form to get started. If you prefer we can do it over the phone, call my direct line during normal office hours, (502) 753-4127.


Apr 21

Mortgage Interest Rates Update

Mortgage rates for Kentucky continued to be ranged bound this week ending about where they started.  Not much good news for the economy kept them in check.  Even the mess in Europe had little impact.  The latest update on my Rate Sheet was almost identical to Monday’s posting.

I had a couple of interesting conversations on this topic with people that were inquiring about getting a loan this week.  The first person asked if I thought rates would go a lot lower.  My response was the same as it has been for almost a year now, “How much lower CAN they go?  There are more numbers above the current rate than there are below it.”

Jim’s Rules Regarding Rates:

Rule #1:  What goes up must come down, what goes down must come up.

Rule #2:  Every day you don’t lock a low rate is one day you are closer to locking a higher rate.

Rule #3:  The current rate is either going to get better, stay the same or get worse.  Count on it.

There was actually a quarter point improvement in the Secondary Market Program at KHC which I find odd.  This is a relatively new program and allows borrowers that are not first time home buyers.  Historically KHC has only provided financing to first time home buyers.  Last week both programs were priced the same.

The second interesting conversation on this subject was with a lady that is currently has an adjustable rate mortgage (ARM) and was inquiring about refinancing to a fixed rate.  Her reluctance is that her current ARM rate is about a quarter point lower than the current fixed rate.  Her answers to my questions pointed out that her rate cap is almost 8 points higher than where she is now!

It took her breath when I told her the highest rate on her existing loan could be in the mid 11’s.  See Rules # 1 & 2 above.

HARP 2.0

Harp is helping a lot of home owners refinance that are currently upside down or do not have enough equity.  If you have been told that you do not qualify due to either of these reasons, ask about Harp 2.0.


Visit my online application site or print and use this simple formto get started. If you prefer we can do it over the phone, call my direct line during normal office hours, (502) 753-4127.


Apr 19

Mortgage Calculator Added in the Buyer’s Section

Over the years I have been asked about 100,000 times, “How much is the payment?”  Obviously that must be an important question if every client wants to know.  I added a mortgage calculator in the Buyer’s section.  The page contains a link to current interest rates and an online application for anyone that wants to apply or be pre-qualified for a mortgage.

We want to provide the very best resources for anyone buying, selling or refinancing a home in Kentucky. Please let us know if there is something you think should be added.  


Apr 17

New Pages Added to the Credit Report Section

The Credit Report Section continues to grow.  A couple of new pages added recently, What is a Credit Score and Why Are Credit Scores Important

Coming soon is a page dedicated to taking the information on these two pages and turning it into cold, hard cash!

As always, my position is, “It’s not how much you pay for a house, it’s how you pay for it that matters”. 



Apr 16

Interest Rates Remain Steady

The mortgage bond market opened up this morning and has remained on the plus side all day, a good sign for long-term mortgage rates.  Interest rates do the opposite of the price of bonds, if bonds go up, rates go down. So the price on interest rates improved slightly this morning.  That sounds funny doesn’t it? The price of interest rates, most people don’t think of it as buying money. 

The driving force seems to be the mess in Europe.

How much lower can rates go?

Not very much, there are fixed costs just to bring the money to the table.  The stock broker that sells the bonds must be paid, the investor that buys the bonds wants some return, the company that originates the mortgage needs a little to keep the lights on, the servicer that collects the payments and pays the bills gets a little bit.  Seems like I am missing something, oh yeah, the loan officer! 
Choose your own numbers assigned to all of that stuff and it becomes clear, they can’t go much lower. 

Rates are here.

Online Loan Application is here.

Apr 16

Credit Reports – New Section Added

We have added a new section to assist Kentucky residents understand credit reports.

Credit issues are becoming more frequent as the quality control measures of the underwriting process are tightening up.  We thought it would be helpful to explain the process and help everyone understand credit reports.

It contains a sample of a tri-merged credit report similar to what lenders use to process a loan application.

This section will be an ongoing project but it is off to a good start.

Apr 11

Mortgage Application Support Documents – New Page Added

We just added a new page to help home buyers with the support documents that are needed to process a mortgage loan.  Being prepared eliminates most of the stress with the home buying and financing process.  Knowing what to expect helps the buyer and makes the process much simpler.

The single largest delay in processing a mortgage application is trying to obtain missing documents or pages that are missing from the documents.  This checklist will help eliminate the problem for the buyer that wants a Quick and Easy Process.


Apr 10

New Facebook Page

Finally tying together The Mortgage Hub, Facebook and my Loan Application Site.  Working on an app that will publish the posts on The Mortgage Hub to my Facebook page.  Each site serves a specific purpose, all aimed at helping to serve my clients and referral partners.

Over the next few weeks I plan to add several pages to help both buyers and sellers with the process of buying, selling and financing homes in Kentucky.

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