Should I Wait for Lower Mortgage Interest Rates?

Seb FreyBlog, Buyers, Mortgage

Historically low mortgage rates are a big motivator for homebuyers right now. In 2020 alone, rates hit new record-lows 16 times, and the trend continued into the early part of this year. Many hopeful homebuyers are now wondering if they should put their plans on hold and wait for the lowest rates imaginable. However, the reality is, acting sooner rather than later may be the actual win if you’re ready to buy a home. According to Greg McBride, Chief Financial Analyst for Bankrate: “As vaccines become more widely available and a return to normal starts to come into view, we’ll see mortgage rates bounce off the record lows.” While only a slight increase in mortgage rates is projected for 2021, some experts believe they will start to rise. Over the past week, for example, the average mortgage rate ticked up slightly, reaching 2.79%. This is still incredibly low compared to the trends we’ve seen over time. According to Freddie Mac: “Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.” Here’s why. As mortgage rates rise, the increase impacts the overall cost of purchasing a home. The higher the rate, the higher your monthly mortgage payment, especially as home prices rise too. Sam Khater, Chief Economist at Freddie Mac, says: “The forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline … Read More

Things to Avoid after Applying for a Mortgage [INFOGRAPHIC]

Seb FreyBlog, Mortgage

Some Highlights There are a few key things to make sure you avoid after applying for a mortgage to help make sure you still qualify for your loan at the closing table. Along the way, be sure to discuss any changes in income, assets, or credit with your lender, so you don’t unintentionally jeopardize your application. The best plan is to fully disclose your intentions with your lender before you do anything financial in nature.

COVID-19 Mortgage Forbearance

sebfreyDistressed Owners, Mortgage

Mortgage Forbearance

With the global COVID-19 pandemic, many people have suffered reduced income – for many, income has gone down to zero. The response from the U.S. Government has been substantial, and the CARES Act, enacted in March of 2020, provides relief for many taxpayers. The CARES Act also provides for COVID-19 mortgage forbearance for many borrowers, and we will explore how that works in this article. Please bear in mind that this is a very fluid situation. COVID-19 mortgage forbearance is new, and it’s rapidly evolving. What is true today may not be true tomorrow. Update May 19, 2020: the rules have changed in favor of those receiving forbearance. This article (and video) mention that conventional loan borrowers need 12 months in a row without a missed or late payment. The new guidelines say that if you have been in forbearance but have made at least 3 on-time payments since exiting forbearance, you can then refinance your mortgage or get a new one. See this article on CNBC. COVID-19 Mortgage Forbearance Presentation Video What is Mortgage Forbearance? Mortgage Forbearance is a temporary freeze on your mortgage payments. Your Loan Servicer Must Agree to the Forbearance. A Servicer is the Bank/Lender/Company that collects loan payments. What does Forbearance mean under the CARES Act? Borrowers are entitled to a temporary freeze of mortgage payments up to 180 Days – if you say have been impacted by COVID-19. No documentation is required to prove you have been impacted. Please know that many servicers will only initially offer you 90 days … Read More

What Donald Trump’s Victory Means for Your Home’s Value

sebfreyCommentary, Mortgage

Donald Trump's Hair

Given the media coverage and all the polling predicting a narrow but solid victory for Hillary Clinton, many in California were surprised – some horrified, appalled, and outraged – when Donald Trump won enough states to claim an Electoral College victory and has been named President-Elect of the United States. However you may feel about The Donald and what it says about and means for America, the question that concerns me at the moment is what Donald Trump’s victory means for your home’s value? It’s an important question, of course, because so much of our net worth is tied up in our home values. If a Trump presidency turns out to mean even higher home prices, that’s good news for folks who already own homes, or who buy them, quick. On the other hand, might Trump’s administration result in a global trade war, total economic collapse, plummeting home prices and waves of foreclosures – again? The thing about the real estate market is that it is comparatively slow to react to changes in the economic landscape. The results of changes to fiscal or monetary policy can take months – or often times years – to work their way through the real estate market. Other markets, though, are much quicker to react. You may have heard that bond prices took a dive immediately after Trump’s victory. This is because the bond market believes that a Trump administration means sharply increased government borrowing and a rise in inflation. When bond prices take a dive, the inverse of that … Read More

Loan Modification Video

sebfreyDistressed Owners, Mortgage

Loan Modification

Watch this informative loan modification video and learn how you can get your bank to give you a loan modification. While many people who do seek to get a loan modification are denied, a lot of people are successful getting their loan balance reduced, interest rate lowered, the loan recast, get a forbearance agreement, and a variety of other positive outcomes. In this video, mortgage expert Chick Donaldson explains the loan modification process. Watch this 7 Minute Loan Modification Video Mr. Donaldson begins the interview by explaining that a key to a successful loan modification is a good hardship letter, explaining to the bank why you can no longer afford to make payments on your loan.  You’ll also need to show though how much you are able to pay – if you have no income whatsoever, or insufficient income, a bank will be unable to modify your loan on terms acceptable to them and will likely encourage you to do a short sale. If you are interested in pursuing a loan modification, you can download our Loan Modification Guidebook or our Short Sale Guidebook in the Homeowner Resources section of our web site.

Revised Mortgage Disclosure Documents


Mortgage Application

Mortgage disclosure documents have gone through tremendous change recently with the new TRID forms. There have always been several disclosure forms when applying for a mortgage, and it could be overwhelming. Many of these forms were mandated by various laws over time. In some cases, they overlapped, disclosing essentially the same thing, but in different ways, and could be confusing. The newly revised mortgage disclosure documents have addresses some of this. The New Loan Estimate Disclosure The new TRID loan estimate document combines items from the old Truth-in-Lending (TIL) and Good Faith Estimate (GFE) disclosures. This document gives a better understanding of the features of a mortgage, fees charged, estimated monthly payments, and any risks that come with it. This can be helpful when comparing specific loan alternatives either from one mortgage company or from multiple lenders (because when getting a mortgage loan, it’s good to shop around). Lenders will generate this document within 3 business days of your application submission. The New Closing Disclosure (CD) Form The closing disclosure (CD) form includes the particular costs involved with the mortgage. It combines information normally detailed in the settlement form and Truth-in-Lending disclosure. There are ordinarily many different costs. To organize the figures, they are lumped into specific categories such as origination charges, recording fees, and escrow deposits. This document is generated later in the transaction – no later than 3 business days before closing. Revised Mortgage Disclosure Documents These forms launched October 3, 2015, but this change does not apply to reverse mortgages and home equity loans. No matter which disclosures … Read More

San Jose, CA FHA Mortgage Limits 2016

sebfreyMortgage, Silicon Valley Real Estate


The Federal Housing Administration (FHA) reviews their mortgage limits on an annual basis. If you’re buying a home in 2016 and intend to use a FHA mortgage, it’s useful to be aware of what they are and when they can change. For 2016, in many regions, the limits have risen to reflect the improving market. Many home owners who are interested in refinancing this year to take advantage of today’s low rates will want to at least check into a FHA loan, as for many borrowers, it’s the perfect loan product. Understanding FHA Mortgage Limits Mortgage limits reflect the most that can be borrowed on a FHA mortgage. The mortgage amount is lower than the purchase price. For example, if you buy a property for $ 575,000.00 and you have a down payment of 3.5 percent , then your mortgage amount will be $ 554,875. How Are FHA Mortgage Limits Calculated FHA mortgage limits vary by county and city. Median home sale prices are analyzed against the national conforming mortgage limits. Conforming mortgages are those that comply with the Freddie Mac and Fannie Mae guidelines and may be sold to the secondary mortgage market. FHA calculates 65% of the limit for conforming mortgages to set their floor for low cost markets. Low cost markets are towns where 115% of the median home price is lower than 65% of the conforming limit. For high end markets, the limit goes as high as 150% of the national conforming mortgage limit. High cost areas are those where 115% of the median real estate … Read More