Idaho VA Home Loan Refinancing For Eligible Homeowners

Idaho VA Home loans allow you to refinance your home to take advantage of lower interest rates that can ultimately save you sizable sums of money in both the long-run and the short-run by lowering your monthly payment.

 

If you currently have a Idaho conventional loan, you can refinance into an Idaho VA Home loan if you are an eligible veteran or member of the armed services. Transferring from a Idaho conventional mortgage to an Idaho VA Home Loan is known as a “Idaho Conventional to Idaho VA Refinance Loan” and is a very straightforward process.

 

The “Conventional to VA Refinance Loan” process is described in detail in our article Can I Qualify For An Idaho VA Refinance If I Currently Have An Idaho Conventional Loan?

 

A common question related to VA refinancing is whether or not you can get a refinance on a VA loan if you are currently upside down on your mortgage. The answer is…you can!

 

Just to be clear, being “upside down” on a mortgage is when you owe more on your mortgage than the current value of your home. This is a highly unfortunate situation that many American home owners are facing today.

 

In 2008 a law titled the “Veteran Benefits Improvement Act” was passed to assist veterans who were upside down on their mortgage. This law created the opportunity for eligible veterans to get an Idaho VA refinance and improve their financial circumstances.

 

The enhancements made to the VA home loan program are described in our article Can I Refinance My VA Loan If I Am Upside Down On My Mortgage?

 

Of course, you are also allowed to refinance your home if you currently have an Idaho VA mortgage. An Interest Rate Reduction Refinancing Loan (IRRRL) is considered a Idaho VA Streamline Refinance.  This is a quick and easy way to either lower your monthly mortgage payment or take money out of your home with minimal work, at no cost to you!

 

Some of the additional benefits of an Idaho VA Streamline Refinance or IRRRL include:

  • In some cases, you may not need to have an appraisal of your home.
  • Limited income verification.
  • An extremely low VA Funding Fee – only 0.5%

Frequently Asked Idaho VA Loan Questions:

 

Q: What is a VA Guaranteed Home Loan?

A: VA guaranteed home loans are loans made to eligible veterans for the purchase of a home as their primary residence. The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

 

Q: Does my entitlement guarantee that I will get a home loan?

A: No VA cannot compel a lender to make a loan that would violate their lender policies.

 

Q: How much is my entitlement?

A: Your basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the Idaho VA county loan limit for a single family home may be available .  This means that qualified veterans could get a no down payment purchase loan for those amounts.

 

Q: How do I apply for a VA guaranteed loan?

A: You can apply for a VA loan with my company who is a mortgage lender that participates in the VA home loan program. At some point you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.

 

Q: How do I get a Certificate of Eligibility?

A:  Complete a VA Form 26-1880, Request for a Certificate of Eligibility. You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request for a Certificate of Eligibility for Home Loan Benefits, to the Winston-Salem Eligibility Center, along with proof of military service.

 

Q: Can my lender get my Certificate of Eligibility for me?

A: Yes, it’s called Web LGY. Most lenders have access to the Web LGY system. This internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through Web LGY – only those for which VA has sufficient data in our records.

 

Q: What is acceptable proof of military service?

A: If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which identifies you and your social security number, and provides your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from regular active duuty after January 1, 1950 a copy of DD Form 214, Certificate of Release or Discharge From Active Dutyshould be included with your VA Form 26-1880. If you were discharged after October 1, 1979, DD Form 214 copy 4 should be included.

If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which shows your date of entry on your current active duty period and the duration of any time lost.

If you were discharged from the Selected Reserves or the National Guard, you must include copies of adequate documentation of at least  6 years of honorable service. If you were discharged from the Army or Air Force national Guard, you may sumit NGB Form 22, Report of Separation and Record of Service, or Reserve, you may submit a copy of your latest annual points statement and evidence of honorable service. Unfortunately, there is no single form used bythe Reserves or National Guard similar to the DD Form 214. It is your responsibility to furnish adequate documentation of at least 6 years of honorable service.

If you are still serving in the Selected Reserves or the National Guard, you must include an original statement of service signed by, or by the direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing length of time that you have been a member of the Selected Reserves. Again, at least 6 years of honorable service must be documented.

 

Q: How can I obtain proof of military service?

A: Standard Form 180, Request Pertaining to Military Records, is usd to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is not processed by VA. Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.

 

Q: I have already obtained one VA loan. Can I get another one?

A: Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property you can have your used eligibility restored for additional use. Also, on a one-time only basis, you my hae your eligibility restored if your prior VA loan has been paid in full but you still own the property.

 

Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

A: The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. In addition, a surviving spouse who obtained a VA home loan with the veteran prior to his or her death (regardless of the cause of the death), may obtain a VA guaranteed interest rate reduction refinance loan.

 

If you have any questions about a VA home loan feel free to contact us.

 

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

Benefits and Drawbacks of a Boise Idaho Short Sale

There are many benefits to an Boise Idaho Short Sale versus a Boise Idaho Foreclosure, but there also many drawbacks to a short sale that need to be considered before deciding on the best course of action. A short sale is a great option for home owners who need to sell their home and owe more than their property is worth, but a short sale is not for everybody.

Benefits of a Short Sale

  • A short sale will not drop the FICO score as much as a foreclosure. It is estimated a foreclosure will decrease a FICO score by as much as 250 points. The estimated decreased for a short sale is 150 points.
  • The seller will be able to more quickly turn around and purchase another home after a short sale. Fannie Mae announced that effective July 1, 2010, short sellers can purchase a home with a Fannie Mae loan at 80% loan to value only two years after the short sale, and at 90% only four years after the short sale. With extenuating circumstances, Fannie Mae will allow a purchase at 90% loan to value only 2 years after the short sale. FHA requires a three year wait after a short sale, but will lender to 96.5% loan to value
  • A short sale preserves some dignity for the seller. The seller will not have a “Notice of Trustee Sale” posted on their home while they still live in the neighborhood.
  • Working out a short sale may allow the seller to avoid bankruptcy. It is important to work with someone with experience with short sales who knows how to negotiate with the lender (or lenders if there is subordinate debt as well) for Full Satisfaction of all debts.

Drawbacks of a Short Sale

  • Short sales are not exactly “quick”, although this can vary depending on the lender or lenders being paid off. Waiting for the banks to respond can be a very frustrating process.
  • There is no guaranty the bank will accept an offer. Last second maneuvers by the bank are not out of the norm. More frustration.
  • The bank will want to see income and asset documentation from the seller to verify there is a true reason for the short sale. If the seller has significant assets, the bank may go after those assets or prevent the short sale from going through.

Figuring our whether a short sale is the best solution will take research. When a home owner finds themselves in a difficult situation, whether it be because of a job less, decrease in pay, or illness, combined with a drop in property value and even worse, an increase in mortgage payments, it is important to gather as much knowledge as possible. Talk to local real estate experts who offer guidance in how to deal with the many options. The home owner should consult with their trusted attorney, accountant, real estate agent, and loan officer. Consider all options carefully, but most importantly, don’t “do nothing”.

 

For more information regarding short sales and foreclosures feel free to contact me.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

 

Top 10 Boise Idaho Refinancing Mortgage Links/Articles/Questions

1. Making Home Affordable Program
2. FHA Streamline Refinance in Boise, Idaho
3. Idaho FHA Reverse Mortgage
4. Boise Idaho Home Mortgage Refinance Loan For Home Owners Facing Declining House Prices
5. Applying For A Boise Idaho Mortgage – Required Documents
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

article is a syndicated column from Tim Storm

What Do Idaho Appraisers Look For When Determining A Property’s Value?

Most people are surprised to learn what Idaho appraisers actually look at when determining the value of a real estate property.

 

A common misconception Boise Idaho homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection.

 

However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

 

The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property.

 

While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling.

The Key Components Addressed In An Appraisal

 

The Site:

Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…

 

Design:

Quality of construction, finish work, fixed appliances and any defining features

 

Condition:

Age, deterioration, renovations, upgrades, added features

 

Health & Safety:

Structural integrity, code compliance

 

Size:

Above grade and below grade improvements

 

Neighborhood:

Is the property conforming to the neighborhood?

 

Functional Utility:

Is the property functional as built – style and use?

 

Parking:

Garages, Carports, Shops, etc..

 

Other:

Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home.

When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items.

Be sure to have all carbon monoxide and smoke detectors in working condition.

 

Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing.

 

If you’re interested in what specifically appraisers are looking for, here is a copy of the blank 1040 URAR form that is used by every appraiser in the country.

 

Related Update on HVCC:

 

Appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither you nor your lender has the flexibility of deciding which appraiser will inspect your home.

 

This recent change was brought on with the Home Valuation Code of Conduct HVCC, and is effective with conventional loans originated on or after May 1, 2009.

 

If you have any questions about the article above please feel free to contact us.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Appraisal Articles:

Top 10 Boise Idaho Reverse Mortgage Links/Articles/Questions

1. How Does the Idaho HECM Reverse Mortgage Loan Work?
2. Idaho FHA Reverse Mortgage
3. What Is a HECM Loan ?
4. Idaho FHA Reverse Mortgage Home Loans For Seniors
5. Common Idaho FHA (HECM) Reverse Mortgage Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Where Does My Earnest Money Go When Purchasing Boise Idaho Real Estate?

Hey, I gave my Boise Idaho real estate agent a $5000 Earnest Money Deposit check… Where does that money go?

 

A basic and very obvious question that most Idaho First-Time home Buyers ask once their purchase contract gets accepted.

 

According to Wikipedia:

Earnest Money – an earnest payment (sometimes called earnest money or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious (earnest) about wanting to complete the purchase.

When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.

 

An Earnest Money Deposit (EMD) is simply held by a third-party escrow company according to the terms of the executed purchase contract.

 

For example, there may be a contingency period for appraisal, loan approval, property inspection or approval of HOA documents.

 

In most cases, the Earnest Money held by the escrow company is credited towards the home buyer’s down payment and/or closing costs.

 

*It’s important to keep in mind that the EMD may actually be cashed at the time escrow is opened, so make sure your funds are from the proper sources.

 

The Process:

  1. Earnest Money is submitted to an escrow company with the accepted purchase contract
  2. At the close of escrow, the EMD is credited towards the down payment and / or closing costs
  3. If there are no closing costs or down payment, the EMD is refunded back to the buyer

 

Who Doesn’t Get Your Earnest Money:

  • Selling Real Estate Agent – A conflict of interest
  • Sellers – Too risky
  • Buying Agent – They shouldn’t have your money in their account

 

If you have any questions about the above article please feel free to contact us.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Articles – Closing Process / Costs

Top 10 Boise Idaho First Time Home Buyer Mortgage Links/Articles/Questions

1. 3 Great Idaho First-Time Home Buyer Loans
2. Idaho Housing and Finance Association Zero Down 100% Financing for First-Time Home Buyers
3. Idaho USDA Rural Development (RD) Zero Down 100% Financing First Time Home Buyer Loan
4. Idaho VA 100% Home Financing Loans
5. Idaho First-Time Home Buyer Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Renting vs Buying A Home In Boise Idaho

Buying a home in Boise Idaho versus renting is a big decision that takes careful consideration.

While there are several biased sources that can make arguments for or against owning a home, we’ve found that most home buyers base their ultimate decision on emotion.

Yes, there are some tax advantages of owning real estate, as well as the potential to earn equity or pay a mortgage note off after several years.

However, let’s address some of the more obvious topics of discussion first.

Benefits Of Renting:

 

Lower Acquisition Cost –

Unless you’re able to qualify for a mortgage loan with zero down and have your closing costs paid for by the seller, a typical investment to purchase a home is around 3.5% – 7% of the purchase price for down payment and closing costs on an FHA mortgage, and an average of 13% – 23% for a home secured by conventional financing.

Compared to the cost of about 1-3 month’s rent payment, it’s obvious that renting a home makes financial sense in the short-term.

 

Lower Qualifying Standards –

While the FHA and other government insured mortgage programs have more flexible credit / qualifying guidelines than most traditional home loan programs, there is certainly a lot less paperwork and personally invasive probing required by most landlords and property management companies.

Generally proof of employment / income and a decent credit history (or a good explanation) is needed to rent a home.

 

Freedom To Move –

It’s easy to find a home through a reputable property management company, move in that weekend and then leave a year later when the rental contract expires.  Not being tied down by a long-term mortgage liability is ideal for people new to a community, in a career that keeps them on the go or for parents with children that prefer a certain school district.

Plus, if you’re planning on moving in the next 3-5 years, then it may become cost-prohibitive due to the amount of equity you’ll have to gain in the short-run just to cover the cost of paying an agent, buyer closing costs, transfer taxes…. so that you can at least break even at closing.

 

Less Maintenance and Cost –

If something breaks, a simple call to the property management company will generally solve the issue in 48 hours or less.  Plus, renters don’t have to carry expensive homeowners insurance, pay property taxes or worry about interest rates adjusting.

Benefits of Owning:

 

Pets Are Allowed –

Well, according to the rules and regulations of your county or neighborhood HOA, you can pretty much have as many domestic and exotic pets without having to pay extra deposits.

It may seem like a funny benefit to mention first, but the millions of dog and cat lovers would definitely rank this towards the top of their list.

 

Pink and Purple Walls –

Yep, you can paint the inside of your house any color you choose. Depending on whether or not there is an HOA in place, you could probably do the same thing on the home’s exterior.  Landscaping, flooring, built-in shelving… it’s your property to renovate and rehab to your liking.

 

Peace-of-Mind and Security –

The only way you would be forced to move is if the bank forecloses on your property due to a default in mortgage payments.

So basically, you don’t have to worry about a landlord’s financial ability to make mortgage payments on time. Plus, you can stay in your own property as long as you wish.

 

Tax Benefits -

The US government has created certain tax incentives making it possible for many homeowners to exceed the standard yearly deduction.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

The following three components of your home mortgage may be tax deductible:

a) Interest on your home mortgage
b) Property Taxes
c) Origination / Discount Points

 

Stability -

Remaining in one neighborhood for several years lets you and your family establish lasting friendships, as well as offers your children the benefit of educational continuity.

 

Appreciation of Property -

Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.

 

Forced Saving -

The monthly payment helps in repayment of the principal amount. Also when you sell you can generally take up to $250,000 ($500,000 for married couple) as gain without owing any federal income tax.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

 

Increased Net Worth

Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

 

While the available tax advantages and potential for earned equity are generally highlighted by most industry professionals as the top reasons to own real estate, it’s important to remember that markets go through cycles.

 

However, owning real estate that appreciates more than the rate of inflation may help contribute towards your overall investment portfolio, provided your maintenance and mortgage costs are kept low.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

_________________________________

Related Articles – Home Buying Process:

Top 10 Boise Idaho First Time Home Buyer Mortgage Links/Articles/Questions

1. 3 Great Idaho First-Time Home Buyer Loans
2. Idaho Housing and Finance Association Zero Down 100% Financing for First-Time Home Buyers
3. Idaho USDA Rural Development (RD) Zero Down 100% Financing First Time Home Buyer Loan
4. Idaho VA 100% Home Financing Loans
5. Idaho First-Time Home Buyer Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

What Does My Idaho Title Insurance Protect Me From?

 

By including Idaho title insurance when purchasing property, your title insurer takes on accountability for legal expenses to defend your property title, should it ever be challenged.

 

Many different occurrences can come into play to warrant the need for title insurance.

 

The title company responsible will then take on the legal expenses to defend the property for as long as you are in possession of an interest in the property under the title.

 

If the defense is not successful, you will be reimbursed for any loss of value of the property.

Common Things Title Insurance Covers:

1. UNDISCLOSED HEIRS, FORGED DEEDS, MORTGAGE, WILLS, RELEASES AND OTHER DOCUMENTS

2. FALSE IMPRISONMENT OF THE TRUE LAND OWNER

3. DEEDS BY MINORS

4. DOCUMENTS EXECUTED BY A REVOKED OR EXPIRED POWER OF ATTORNEY

5. PROBATE MATTERS

6. FRAUD

7. DEEDS AND WILLS BY PERSON OF UNSOUND MIND

8. CONVEYANCES BY UNDISCLOSED DIVORCED SPOUSES

9. RIGHTS OF DIVORCED PARTIES

10. ADVERSE POSSESSION

11. DEFECTIVE ACKNOWLEDGEMENTS DUE TO IMPROPER OR EXPIRED NOTARIZATION

12. FORFEITURES OF REAL PROPERTY DUE TO CRIMINAL ACTS

13. MISTAKES AND OMISSIONS RESULTING IN IMPROPER ABSTRACTING

14. ERRORS IN TAX RECORDS

If you have any questions about this article please feel free to contact us.

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Articles – Closing Process / Costs

Top 10 Boise Idaho Mortgage Links/Articles/Questions

1. Idaho VA 100% Home Financing Loans for Boise and Mountain Home areas
2. How do I obtain an Idaho 100% VA Home Loan?
3. Idaho FHA And VA Manufactured Loan Programs For Refinancing And Purchasing Homes
4. Idaho VA 100% Home Financing Frequently Asked Questions
5. Idaho FHA Reverse Mortgage
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

How Much Of A Home Can I Afford In Boise Idaho?

How much Boise Idaho mortgage money can I qualify to borrow?

 

This is typically the number one question mortgage professionals are asked by new clients.

 

Of critical importance when considering mortgage financing: There is sometimes a difference between what a client ***can*** borrow and what they ***should*** borrow.

 

In other words, what makes for a comfortable long-term mortgage payment?

 

The Quick Answer:

If we’re simply considering the financial math, lenders will calculate your Debt-to-Income Ratio and generally allow for 28-31% of your gross income to be used for the new house payment with up to 43% of your gross income to be used for all consumer related debts combined.

Sample Mortgage Scenario:

Let’s use a gross monthly income of $3000 and a qualifying factor of 30% Debt-to-Income Ratio:

$3000 multiplied by .3 (30%) = $900 max monthly mortgage payment

This means that your mortgage payment (Principal, Interest, Taxes, Hazard Insurance) cannot exceed $900 a month.

 

“Ballparking” a Qualifying Loan Amount:

Simple step:  We use a safe average of $7 per month in payment for every $1000 in purchase price so…

Step 1)  $900 a month divided by $7 = $128.50

Step 2) $128.50 multiplied by 1000 = $128,500 loan amount.

Remember, these are average ratios and guidelines set by most lenders for common mortgage programs.

Keep in mind, while most consumer debts are listed on a credit report, there are some additional monthly liabilities that may contribute to the overall qualifying percentages as well.

Regardless of how your personal income and credit scenarios factor in, it is important to consider your overall budget when trying to determine how much of a mortgage you should qualify for.

 

Other items to consider in your monthly budget:

1. Confirm all debts are taken into account
2. Any private notes or family loans
3. Short-term expenses – medical, auto repairs, travel, emergencies
4. Plan on additional expenses for the home such as water, electric, maintenance, etc…
5. Keep a cushion for savings and financial planning

If you have any questions regarding how much of a home you can afford feel free to contact us.

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com____

 

_____________________________

Related Articles – Mortgage Approval Process:

Top 10 Boise Idaho First Time Home Buyer Mortgage Links/Articles/Questions

1. 3 Great Idaho First-Time Home Buyer Loans
2. Idaho Housing and Finance Association Zero Down 100% Financing for First-Time Home Buyers
3. Idaho USDA Rural Development (RD) Zero Down 100% Financing First Time Home Buyer Loan
4. Idaho VA 100% Home Financing Loans
5. Idaho First-Time Home Buyer Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

8 Questions Your Boise Idaho Lender Should Answer About Mortgage Rates

Boise Idaho home buyers, simply checking online for today’s posted interest rate may not lead to your expected outcome due to the many factors that can cause each individual rate and closing cost scenario to fluctuate.

 

We can preach communication, service and education all day long, but it’s our ultimate goal to earn your trust so that you can be confident in our ability to successfully lead you through this complex mortgage process.

 

Since mortgage rates can change several times a day, the following questions will help determine whether or not your lender truly knows what to look for so that they can provide you with the best interest rate once you’re in a position to lock in your loan:

 

Who determines mortgage rates, and what are they tied to?

Mortgage interest rates are determined by the pricing of Mortgage Backed Securities or Mortgage Bonds. The media often implies mortgage rates are based off the 10-year Treasury Note, which is incorrect.

While the 10-year Treasury Note has been known to trend in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.

 

How often do mortgage rates change?

Mortgage rates may change throughout the day, however they only change on days when the Bond markets are trading securities since mortgage rates are based on Mortgage Bond prices.

Think of a Mortgage Bond’s sales price similar to that of a Stock that trades up and down during the course of a day.

For example – let’s assume the FNMA 30-Year 4.50% coupon is selling for $100.50. The price is 50 basis points lower from the previous day’s closing price of $101.00.

In simple terms, the borrower would have to pay an additional .50% of their loan amount to have the same rate today that they could have locked in the previous day.

 

What causes mortgage rates to change?

Mortgage Bonds are largely affected by various market forces that influence the changing demand for bonds within the market.  Some of the key economic factors that have the greatest impact are unemployment percentages, inflationary fears, economic strength and the overall movement of money in and out of the markets.

Like stocks, most fluctuation is caused by consumer and investor emotions.

 

When the Fed changes rates, why do mortgage rates move in the opposite direction?

It is a common misconception that when the Federal Reserve implements a rate cut it is immediately correlated to a reduction in mortgage rates.

The Federal Reserve policy influences short term rates known as the Fed Funds Rate (“FFR”). Lowering the FFR helps to stimulate the economy and increasing the FFR helps to slow the economy down. Effectively, cutting interest rates (FFR specifically) will cause the stock market to rally, driving money out of bonds and creating potential for inflation.

Mortgage Bond holders need to obtain a higher rate of return on their money if inflation is increasing, thus driving up mortgage rates. With the Federal Reserve Board meeting every six weeks, this is an important question to ask. If your lender does not have a firm understanding of this relationship, they may leave your rate unprotected costing you thousands of dollars over the life of your mortgage.

 

Do different programs have different interest rates?

Conventional, FHA and VA loans can all carry different rates on a 30-Year fixed mortgage. FHA and VA loans are insured by the Federal Government in the event of defaults. Conventional mortgages are insured by private mortgage insurance companies, if insurance is required.

Typically, FHA and VA loans carry a lower rate because the investor views the government backing as less of a risk. While rates are usually different for each program, it may be more important to compare the monthly and overall cost during the life of the loan to determine which program best suits your needs.

 

Why is an Adjustable Rate Mortgage (ARM) rate lower than a fixed rate mortgage?

An Adjustable Rate Mortgage (ARM) is usually fixed for a specific period of time. The period is typically 6 months, 1 year, 3 years, 5 years or 7 years. The shorter time period the rate is fixed, the lower the interest rate tends to be initially.

This is due to the borrower taking the future risk of increasing interest rates. The only instance where this would not be true is when there is an inverted yield curve where short-term rates are higher than long-term rates.

 

Why are rates higher for different property residence types?

Mortgage interest rates are based on risk-based pricing. Risk-based pricing allows adjustments to par pricing for risk factors such as; FICO scores, Loan-to-Value percentages, property type (SFR, Condo, 2-4 Units), occupancy (Primary, Vacation or Investment) and mortgage type (Interest Only, Adjustable Rate etc).

This allows the investors who lend their money for mortgages to receive additional compensation for taking additional risk.

If the borrower encounters a financial hardship, are they more likely to make the payment on the home they live in or the one they rent out?

If you have any questions about any information in this article please feel free to contact us.

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

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