On November 21, 2011 I wrote a blog on the reduction of the VA Funding fee that went into effect on November 18, 2011.  The Department of Veteran Affairs issued a statement on November 22, rescinding that loan reduction.  See below:

“Purpose. On November 21, 2011, the President signed H.R. 674. Section 265 of the law raises funding fees to the pre-November 18, 2011 levels. The fees specified in Section 265 are valid through September 30, 2016”.

So the reduction in funding fees lasted only four days before they were brought back to the pre-November 18 levels. 

Here is a link to the circular:  http://www.benefits.va.gov/homeloans/circulars/26_11_19.pdf

Mortgage programs are changing constantly so be sure you have a very good loan officer to advise you on changes in programs.  If you need some names of excellent lenders, let me know and I will be happy to give you input. 

The Federal Housing Finance Agency together with Fannie Mae and Freddie Mac announced a change in the refinance program available for homeowners that are more than 125% LTV on their fixed rate mortgages.  The program is trying to reach homeowners that are current on their mortgage loans but are upside down on their loan to value of their homes.  Many of these homeowners have been unable to refinance their homes at the current lower interest rates that are available. 

Here is an excerpt from the announcement:

 The new program enhancements address several other key aspects of HARP including:

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

Borrower Eligibility

  • The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET)https://ww3.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)
  • The program will continue to be available for loans with LTVs above 80 percent.
  • Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months.
  • Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.

For additional information please see the full news release at:  http://fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf

The details will be given to the lenders and servicers by mid November.  It will most likely be the beginning of the new year before the program amendments are available to the consumer.

Why is it so important as a buyer to be pre-approved by a lender prior to looking for homes? 

One of the biggest reasons is that you want to make sure that you are looking in the proper price range for your home.  You may have a price set in your head that is too high or too low based on your debt to income ratio and the interest rates.   Get the facts ahead of time so you are not disappointed when you are ready to make an offer. 

 Another reason to get pre-approved is that you may not get the home you want if you cannot put your offer in quickly!  In this market, short sale properties and bank owned properties require a pre-approval letter with offer submission.  If you are ready to look for a home, you need to be pre-approved.  The banks require it.  You don’t want to have another offer come in at the same time with a pre-approval letter and beat your offer out. 

Is it hard to get pre-approved for a loan?  NO!  That is what is so great.  You can talk to most lenders on the phone and complete a telephone application or an online application.  They will analyze your information and pre-approve subject to submission of documents ( in most cases you will get a pre-approval letter while you are gathering your documents).  The lender will also typically pull your credit so they can get a clear picture of your debt to income ratio as well as your credit score.  This will tell them what kind of interest rate they can offer so you can make a decision on the price range of homes to look at.  The counseling session with your loan officer will help you work together so that you are looking at homes that fit in your budget and loans that are the best fit for you and your situation.

If you are thinking about purchasing a home and do not have a lender, let me know and I will send you some names.  A good loan officer will walk you through this process quickly and efficiently.

Be a confident pre-approved buyer and be ready to make an offer on the home you want!