Shelter Six:  Mortgage Markets Have Stabilized

April 27, 2020 by · Leave a Comment 

There were no dramatic mortgage product changes last week and it feels like things have stabilized in the mortgage world.

Riskier programs have either been eliminated or tightened up significantly, but Conforming loans remains strong with few changes and a more streamlined process.

The Federal Reserve meets on Wednesday and investors will be closely tuned in to learn more about the Fed’s plan for future bond purchases.

A growing concern is furloughed or laid-off borrowers who won’t be able to qualify until they go back to work.

The longer self-employed and commissioned employees are out of work, the longer they will need to be back at work to show their income is consistent with pre-virus levels.

Thankfully, Fannie Mae and Freddie Mac announced they will buy loans that have entered into forbearance (except cash-out refinances).

Rate Update

The Fed continues to buy bonds stabilizing the market and keeping rates low. The benchmark Conforming 30-year fixed remains in the low-to-mid 3’s.

This Week

Investors will be watching for news about medical advances and government fiscal stimulus programs. First Quarter GDP will be released on Wednesday and ISM Manufacturing on Friday.

Shelter Six:  Good Mortgage Options Remain

April 20, 2020 by · Leave a Comment 

The economic data rolling out for March has not been good, but it has not been nearly as bad as the Unemployment and job loss figures suggest that it could have been.

Conventional Conforming programs remain as strong as ever with few changes and a more streamlined process allowed during the pandemic.

Jumbo options are limited right now with very strict underwriting guidelines. A great alternative is a Jumbo Blend combo loan which allows for less money down, lower credit scores, less strict underwriting guidelines, and lower rates.

A “Cash-Out” refinance could be a great option now for anyone looking to tap into their equity and improve their liquidity situation.

A growing concern is borrowers who might not qualify at this time due to a loss of income. Lenders can’t use income from someone furloughed or laid off until they are back at work.

Shelter continues to prioritize purchases and we are back on normal time frames for Appraisal and Financing Contingencies.

Rate Update

The Fed continues to buy bonds, which has kept rates remarkably stable over the last few weeks. The benchmark Conforming 30-year fixed remains in the mid-to-low 3’s.

This Week

Investors will continue to watch for news about new government programs. Existing Home Sales will be released on Tuesday, New Home Sales on Thursday, and both Durable Orders and Consumer Sentiment on Friday.

Shelter Six:  Still Plenty of Strong Conventional Programs Available

April 13, 2020 by · Leave a Comment 

On Thursday, the Fed announced $2.3 trillion of aid to help midsize companies and local municipalities (the initial round of aid was for individuals and small businesses).

Conforming lending is stronger and more streamlined than ever, but riskier programs with lower credit scores or higher LTV’s have either disappeared or tightened up greatly.

The perfect solution for today’s Jumbo market is a “Jumbo Blend” with a Conforming 1st mortgage maxed out at $510,400 combined with a HELOC 2nd mortgage.

The Jumbo Blend offers lower rates and payments, allows for as little as 10% down, and has significantly less strict underwriting standards.

Anyone with a rate of 4% or higher who plans on staying in home 3+ years should look into refinancing. Pulling out cash is also a great way to tap into home equity and increase liquidity.

In this environment, consider an Appraisal Contingency of 15-20 days and a Financing Contingency of 20-25 days. It is more important than ever to work with lenders prioritizing purchases.

Rate Update

Last week was a great week for the financial markets with the stock market posting massive gains, the bond market stabilizing, and mortgage rates trickling down near recent lows.

This Week

The coronavirus remains the primary focus, and investors will be watching for news about fiscal stimulus programs. Retail Sales are due out on Wednesday and Housing Starts on Thursday.

Shelter Six:  Jumbo Blend is Ideal Jumbo Solution

April 6, 2020 by · Leave a Comment 

Conforming remains as strong as ever with few changes, but FHA/VA has tightened up with a higher minimum credit score, lower max Debt Ratio, and 2 months of required payment reserves.

Most non-banks have lost Jumbo, and the banks still offering are doing so with extremely strict underwriting, such as 20% down, very high credit standards, and no exceptions.

Jumbo Blend is the perfect solution for today’s Jumbo customer. Max out a Conforming 1st mortgage at $510,400, and then tack on a 2nd mortgage HELOC up to 90% of the sales price.

Jumbo Blend allows for a lower down payment, lower credit scores, less strict underwriting standards, lower rates and payments, and an exterior-only appraisal.

Exterior-only “drive-by” appraisals are now allowed on virtually every type of loan (other than Jumbo).

Lenders are beginning to approve and offer virtual closings as well as a streamlined e-Closing process.

Rate Update

Mortgage rates finally stabilized last week, mostly due to the Fed buying unlimited bonds. For the first time in weeks, rates were less volatile holding steady in the mid 3’s.

This Week

Any news around the coronavirus will be the focus again this week. Weekly Jobless Claims are also due out on Thursday and CPI figures on Friday.