Interest Rates and Down Payment
I often get asked, "Do I get a better interest rate if I put more money down?" First of all, it depends on credit scores. The higher the credit score, the better the interest rate. Let's assume a credit score of 760. (This is the best credit score bucket.) With a 5 – 19.99% down payment, the interest rates tend to be the same. If someone puts 20% down, the interest rate tends to be higher than if you put less down. HOW CAN THIS BE? The answer is easy. There is no mortgage insurance with a 20% down payment, so the investor has more risk than a loan with less down but has mortgage insurance. Therefore, the interest rate is higher with 20% down. The higher the risk, the more return the investor wants to have. This does change when 25% or more is placed as a down payment. The rate then drops to a rate as if there is less than 20% down. The moral of the story, if someone is going to make a large down payment, put 25% or more down to obtain a better interest rate.
For the best Albuquerque Mortgage Call Steve Sheldon. Don’t forget if you or any of your friends and family are interested in Albuquerque Mortgages, Santa Fe Mortgages, or any mortgage in New Mexico contact Steve Sheldon at Superior Mortgage Services, LLC.
Escrow Accounts, also known as Impound Accounts, are non-interest bearing trust accounts in which a mortgage company holds funds aside on a monthly basis from the mortgage payment in order to pay one's taxes and home owner's insurance when they come due during the year.
Did you know that there is an upcharge on Conventional Loans to waive your escrow accounts? With that said, interest rates are based on risk. The higher the risk, the higher the interest rate charged. Unpaid property taxes pose a risk to mortgage companies. If the property taxes go unpaid, the local governing body, i.e. county or district, can confiscate the property for unpaid taxes leaving the mortgage company at risk of losing it's collateral on their outstanding loan. Therefore, mortgage companies charge a higher interest rate to offset the risk of waiving escrow accounts.
FHA and VA Loans will not allow a borrower to waive the Escrow Accounts at all. Waiving of Escrow Accounts are also subject to some State's laws.
The Ugly Truth About Gift Funds
You think that it’s ok to accept money from friends or family for down payment after you’ve told your lender that you were going to get a gift. STOP RIGHT THERE!!!
Both FHA and Conventional guidelines are very specific about the conditions by which you can receive a gift and from whom. First of all, gifts should only be given by blood relatives or close relations, i.e. fiance or domestic partner. But even with the latter, proof of the relationship still must be proven via joint bank accounts or shared bills.
Steve Sheldon at Superior Mortgage Services tells all about “The Ugly Truth About Mortgages” and yes it’s true, there are some cases when cash can hurt your transaction. How is that you wonder? Well let’s just say…
Here is another case from the files of Steve Sheldon’s “The Ugly Truth About Mortgages”
One of the big green questions today is “Should I go solar or not”? As more companies emerge to help homeowners with solar energy projects, and the price of related equipment continues to drop, more and more people are considering making this environmentally friendly idea a reality. Jim Simcoe – founder and CEO of Simcoe Green Homes – proposed a few of the questions homeowners need to ask themselves, and some of the considerations that need to occur during that decision-making process. Maybe one of the questions you need to ask is, would upgrading to solar power be included in Superior Mortgage 203k Rehab Loan? Continue reading
NAR Member Survey Shows Rise in REALTOR® Income and Sales Volume from Steve Sheldon
Reflecting the 11.5% growth in home prices last year, income and sales volume jumped for the third year in a row, according to the 2014 National Association of REALTORS® (NAR) Member Profile. The survey also found an increase in new and younger members to NAR in 2013.
The survey’s results are representative of the nation’s REALTORS® members of NAR account for about half of the approximately 2 million active real estate licensees in the U.S. Many non-member licensees are inactive or part time. REALTORS® go beyond state licensing requirements by subscribing to NAR’s Code of Ethics and Standards of Practice and committing to continuing education. NAR members also have access to professional resources to better serve their clients’ needs.
Lawrence Yun, NAR chief economist, says recovery in the housing market since the downturn continues to improve the earnings of real estate professionals. “Fueled mostly by rising home sales and prices, the median gross income of a REALTOR® increased to $47,700 in 2013 from $43,500 in 2012, marking a 9.6% rise and a sharp gain from $34,900 in 2011,” he says. “Although the median number of transactions or commercial deals remained unchanged from last year at 12, this marked a continued return to pre-recession levels after bottoming out at seven transactions in 2008 and 2009.” Continue reading