Have You Heard?

You probably haven't heard, but Fannie Mae and Freddie Mac have done it again. The are making it way more expensive for 75% of your clients and mine to buy or refinance with conventional loans. They have taken risk based pricing to new lows. For example if your client has an 800 score and has a higher loan to value than 75% they will pay a quarter point more (that doesn't sound like much by it adds up to a thousand dollars on a $400,000 loan). If they have a 679 score and a 79% LTV it is 2.75 points. I have trouble even counting that high.


These agencies are bleeding red ink with all the foreclosures, but guess what, if you don't have income you will never reverse the losses. And the loans of the last couple of years have to be performing well. The whole idea of risk based pricing is supposed to charge those with the higher risk more and reward those with low risk. It is not supposed to penalize almost everyone. Almost every conventional loan with a loan to value over 70% had the hit go up, some as much as a half point.


At a time when our industries need all the help we can get we get this. It just delayed our recovery some more. It is bound to push some folks into renting instead of buying. I say lets look at FHA every time we can, because these hits combined with the higher PMI rates are not pretty. Let me help you with the best loan type for your client. Also, contact your represenatives. They have said they want to get the government out of mortgage financing, but their actions are pushing us in the wrong direction.


You can reach me at 615-777-4663 or text me at 615-481-5626 or via email at George.Margrave@MIGonline.com

Is Now the Time to Sell?

Is now the time to sell? I am going to mention mostly financial angles to consider when making this decision. And certainly, these are not the only considerations.

Many of you may have put off a move that you wanted to make. One reason may be that you have no equity in your home or may even be upside down. In that case you might not have a choice. However, if you have some money set aside, you may be able to pull it off.

That means you will have to put some money into the transaction to get to the closing table. We’re seeing this in many cases and are even refinancing some homes where borrowers are having to put some money into the deal to get a great interest rate. A short sale can be considered, but in most cases that means you will not be able to buy again for several years.

Again you have to consider the cash required to buy the new house. You will probably be able to move to the next house at a great price and at a great interest rate. If you are a Veteran or buy in a rural area you may be able to buy with no cash. If you don’t fit one of those categories you may want to go FHA which is 3.5% down. The cost on any of these can be paid by the seller or by the lender. (Ask me how)

If you would like to take a look at some numbers for yourself, give me a call at 615-777-4663 and we can take a look at it for you.