Easter Humor

Courtesy www.funkysmell.com

Until Next Time,

Craig Turley

Craig Turley is a 20 year veteran of the mortgage industry.  He won't judge you - contact Craig today to evaluate your current mortgage situation or to inquire about a pre qualification for a new home purchase in Arizona or California.

Pet Humor

Courtesy Bleach Humor

More homes return to positive equity in the United States

According to leading financial analytic company Corelogic (CLGX), more homes in the United States returned to positive equity in the fourth quarter of 2012.

Corelogic:

CoreLogic^® new analysis showing approximately 200,000 more residential properties returned to a state of positive equity during the fourth quarter of 2012. This brings the total number of properties that moved from negative to positive equity in 2012 to 1.7 million and the number of mortgaged residential properties with equity to 38.1 million. The analysis also shows that 10.4 million, or 21.5 percent of all residential properties with a mortgage, were still in negative equity at the end of the fourth quarter of 2012. This figure is down from 10.6 million* properties, or 22 percent, at the end of the third quarter of 2012.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

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If your home is underwater or above 80% loan to value, there may be refinance options available.  Please feel free to consult me to find out if you are eligible for a FHA streamline refinance or Harp 2.0 eligibility.

Regards,

Craig Turley

NMLS 80917

Mortgage Insurance - How it works.

One of the questions which I frequently answer is how does mortgage insurance work?

Mortgage insurance is an insurance policy required on loan amounts greater than 80% of the property value (or the sales price, whichever is lower).  The borrower pays for the insurance policy - (see below for more details).  The lender is the beneficiary of the policy if the borrower goes into foreclosure.  Mortgage insurance provides an important vehicle to home ownership - and assists in reducing the risk to lenders, opening up doors to more first time home buyers who may not have 20% down payment funds.

How are MI Rates Determined?

Conventional loans 
MI rates depend on a number of things including (but not limited to) loan size, credit score, down payment amount, property zip code, and term of loan.  Check Radian, a major private mortgage insurer, for additional homeowner resources.

FHA loans – MI rates only depend on the down payment and terms of the loan.  Click here to see FHA mortgage insurance tables.

What is PMI?
PMI is the acronym for Private Mortgage Insurance and is mortgage insurance from a private company. PMI is only used with conventional loans.  FHA loans have mortgage insurance, but it is paid to the federal government-yeah, those guys. There is no private mortgage insurance company involved. It is often mentioned as MI or MIP, not PMI.

When Does MI Go Away?

Conventional loans
PMI automatically goes away when the borrower has 22% equity in the property, based on the purchase price.  The borrower can get it removed earlier if they can prove they have 20% equity in the property, which requires an appraisal.  Most lenders require PMI to be paid for at least 1 year, regardless of the equity situation.  Consult your servicing agent for more guidelines specific to your loan.

FHA loans•
Existing FHA loans:  Automatically goes away when the borrower has 22% equity in the property, based on the purchase price. MI must be paid for 5 years, regardless of the equity in the property.  Borrower cannot get the MI removed early by proving they have sufficient equity.

New FHA MI guidelines go into effect April 1 and June 1, 2013.  (Click Here)

Lender-Paid MI
Some lenders offer loans which do not require. mortgage insurance.  This is true and not true.  The loans (conventional) really do have PMI, but the lender is buying it themselves. Interest rates are higher for no PMI loans.  The catch is the interest rate is for the life of the loan - and never goes down, regardless of the equity the borrower has in the property.  Consult with your mortgage banker to evaluate if this is a good option for your situation.

Miscellaneous tidbits:
VA loans you ask? They never require mortgage insurance, but may require a funding fee.
Can you avoid PMI?  Yes, you may  - ask me how.  More importantly, does it make sense for you?  Case by case and certain criteria/eligibility guidelines will apply.
Jumbo loans?  This is a whole other article.  Call with questions.

Until Next Time,

Craig Turley

Insure peace of mind by consulting with an experienced mortgage banker.  Contact Craig at 480-385-1422 for all your Arizona and California mortgage scenarios.  

Filibuster

filibuster - Informal term for any attempt to block or delay Senate action on a bill or other matter by debating it at length, by offering numerous procedural motions, or by any other delaying or obstructive actions.

Courtesy: Financial Times

Rand Paul - March 6, 2013

“I will speak until I can no longer speak,” Paul said as he began. “I will speak as long as it takes, until the alarm is sounded from coast to coast that our Constitution is important, that your rights to trial by jury are precious, that no American should be killed by a drone on American soil without first being charged with a crime, without first being found to be guilty by a court.”
(Washington Post)

Until Next Time,

Craig Turley

No filibuster necessary if you are looking to purchase or refinance a home in Arizona or California.  Contact me with any mortgage questions you may have.

China: "If you build it (housing), they will come."

There is a new housing crisis upon us.

Were the Chinese not paying attention to the global housing debacle which crushed the global economy over the last decade?  

And if they were paying attention, why do they think their housing supply won't come crashing down like (cough, cough) some other countries?  

Perhaps, it is...

"No nation has ever built so much so fast"

Excerpt from CBS News 60 Minutes:

Lesley Stahl: How important is real estate to the Chinese economy? Is it central?

Gillem Tulloch: Yes. It's the main driver of growth and has been for the last few years. Some estimates have it as high as 20 or 30 percent of the whole economy.

Lesley Stahl: But they're not just building housing. They're building cities.

Gillem Tulloch: Yes. That's right.

Lesley Stahl: Giant cities being built with people not coming to live here.

Gillem Tulloch: Yes. I think they're building somewhere between 12 and 24 new cities every single year.

Unlike our market driven economy, in China it's the government that has spent some $2 trillion to get these cities built - as a way of keeping the economy growing. The assumption is "if you build it, they'll come." But no one's coming.

(Watch)

If this massive bubble bursts in China, how may it impact you?  Good question.  

If you are in one of these nine U.S. cities selling the most goods and services to China, you may see the ripple effects.  Even if you are not in one of these nine cities, the ripple impact could be global, as large multinationals - which have made huge bets on China and institutional investors get caught holding the bag on enormous investments.   

It's wise to be aware.

Until Next Time,

Craig Turley

H/T:  24/7 Wall Street

You may not be planning to purchase a new home in Beijing, or refinancing a home in Shanghai - but if you live in Arizona or California - feel free to contact me for a professional mortgage consultation.