• ODT Gun Show & Swap Meet - May 4, 2024! - Click here for info

Mortgage people - whats the deal with these new mortgage insurance rules and offers??

Could be that if you refi the new mortgage will be sold to another company. Your current mortgage is probably owned by the bank and it's probably one that they can't sell. Lots of banks are doing this now.
That makes sense. I wonder if I refinance if there will be some new hidden clauses that aren't in my current mortgage.
 
Hoping someone in the know has some information to share...

I've been getting inundated with advertisements to refinance my mortgage due to some new rules regarding pmi (mortgage insurance rates). Their claim is that if I refinance my mortgage, I will save money because I will not pay as much into the mortgage insurance. This sounds good since paying PMI sucks.

Another advertisement I have been hearing on the radio is that Quicken Loans is offering a loan where they will pay the "PMI." Sounds gimmicky, I haven't called them yet to find out what the deal is with that.

Anybody have any insight to any of this...

Thanks

FHA recently reduced the monthly MIP (FHA calls it MIP , conventional loans call it PMI) from 1.35% to .85% or 50 basis points. This is what you are currently hearing about on the radio. Quicken's Lender Paid PMI is a program that's been around for 15+ years. PMI can be paid in a lump sum so you either finance this lump sum into the loan or you receive a slightly higher rate and the lender pays your PMI, just like a lender can pay your closing costs if you accept a higher rate than market. Ther eis no such thing as a loan withthe loan amount greater than 80% without PMI. Even back in the early 2000's FNMA's No PMI loans had a higher rate, you will pay for the risk associated with your loan one way or another, no free lunches. :)


I've been wondering about this too. Why would my mortgage company hound me to pay them less interest ?

They are not hounding you about paying less interest as much as they are wanting you to refinance and stay with them. A loan with a lower interest rate is worth more to a lender than a loan with a higher rate. The loan with the lower rate is less likely to payoff early, lenders want you to make payments for a long time.

I've been in the mortgage business for 29 years. When you refinance it's a very different transaction that when you purchase the house. It's not simply a matter of the lowest rate wins. You have to look at several things and run comparisons over a timeline to determine what's the best financial move for you.

If you guys have general questions post them up and I'll do my best to provide a "lender" neutral answer. If you have specific questions about your mortgage, shoot me a PM, I'd be happy to help guide you regardless of where you are getting a mortgage.
 
Last edited:
That makes sense. I wonder if I refinance if there will be some new hidden clauses that aren't in my current mortgage.

Loans are standard now, the FED's changed everything back in 2011 when the Frank Dodd act was adopted. Lenders cannot have prepayments on traditional mortgages, lenders cannot put in any type of "gotcha" clauses. There are Non-traditional lenders getting back into the lending business. These loans are now known as Non QM loans, back in the day we called them Non-Conforming, Alt A, No Doc or B C loans. These lenders are few and far between and fill speciic niches that are no longer served in todays lending environment. Loans for foreign nationals, loans for non warrantible condo's, loans for SE borrowers without income verification etc.. These loans are based on equity and credit more than a borrowers ability to repay. These loans are not able to be sold to FNMA, FHLMC, VA or FHA. All traditional loans today are based on ability to repay and there are certain debt / income ratio limits that cannot be exceeded regardless of assets or equity.
 
FHA recently reduced the monthly MIP (FHA calls it MIP , conventional loans call it PMI) from 1.35% to .85% or 50 basis points. This is what you are currently hearing about on the radio. Quicken's Lender Paid PMI is a program that's been around for 15+ years. PMI can be paid in a lump sum so you either finance this lump sum into the loan or you receive a slightly higher rate and the lender pays your PMI, just like a lender can pay your closing costs if you accept a higher rate than market. Ther eis no such thing as a loan withthe loan amount greater than 80% without PMI. Even back in the early 2000's FNMA's No PMI loans had a higher rate, you will pay for the risk associated with your loan one way or another, no free lunches. :)




They are not hounding you about paying less interest as much as they are wanting you to refinance and stay with them. A loan with a lower interest rate is worth more to a lender than a loan with a higher rate. The loan with the lower rate is less likely to payoff early, lenders want you to make payments for a long time.

I've been in the mortgage business for 29 years. When you refinance it's a very different transaction that when you purchase the house. It's not simply a matter of the lowest rate wins. You have to look at several things and run comparisons over a timeline to determine what's the best financial move for you.

If you guys have general questions post them up and I'll do my best to provide a "lender" neutral answer. If you have specific questions about your mortgage, shoot me a PM, I'd be happy to help guide you regardless of where you are getting a mortgage.

Don't lenders also make a nice little sum on the closing costs you pay(or finance into the loan) when you refinance? Even if you lower your interest rates by a percent and save money on your payment, the lender is actually getting another thousand in "origination fee" or whatever it's called(I'm senile. lol) when you close on the loan. So even though they only get back an interest rate of 3.25% over 15 years if you amortized the origination fee into it as well it would add another full % to their return on your loan. Still a hell of a great deal for the borrower but the new refinance is paying off the previous origination fee and you are financing a second origination fee into the refi. So every time you refinance you are paying another origination fee thus compounding their return. It's not hurting you per se but it is helping them just as much as you. So they are more than happy to refinance you every chance they can.
 
PMI is a real rip-off. You pay the premiums and it pays the lender the outstanding value of your loan if you default, and the lender also gets your house since it was collateral on the loan. Such a deal.
 
You sound very knowledgeable. Please explain any new purchase mortgage options that exist if any, and thanks.

Yes we all sound like experts on the web right? I won't say I know it all but I've personally closed >4,000 loans and trained hundreds of Loan originators so I do know a good bit. HA!

I am going to assume you are not a veteran, veterans receive 100% financing.
There are Conventional Loans now with 3% downpayment, FHA is still 3.5% downpayment and there is a new downpayment grant program (grant=don't pay back) in GA that will give you between 3% and 5% of the loan amount to use towards your downpayment or closing costs. The grant program does have income limits (meaning if you make too much you can't have the grant) but the limit can be based on family income or just the specific borrowers income. The state has a down payment assistance program (GA dream) as well but those funds have to be paid back and the state program considers family income as well as any other working adults in the household when determining if your income is over the limit. The metro county (search Atlanta MSA) annual income limit for the grant program is $74K, the non metro county limit is $65K. You don't have to be a first time homebuyer either, the state program is for first time homebuyers. The grant program is an FHA loan so credit does not have to be perfect and you can have had a bankruptcy or foreclosure in the past.

Except for down payment assistance there isn't really anything that's special for purchases that I'm aware of. Since most people need help with the down payment that's what the typical "special" purchase mortgages offer.

You can also get a gift from a family member, significant other or close friend. I've done loans in the past where guys sold items on here for their down payment too. LOL
As long as we can establish a value and document the sale (yes BOS and a check is required) you can use the funds for a down payment.
One of the biggest forms of fraud is borrowed funds being used for the down payment (big no no). Folks can get really creative with this so when you sell something or are getting funds from someone else, there has to be a papertrail.

Not sure if I answered your question. Let me know if you have any more.
 
Back
Top Bottom