NO CLOSING COST MORTGAGES - HARP - HAMP AND  HELP ON THE WAY!!!


Do you want to take advantage of the historic low interest rates, but can’t justify the high closing costs?  Maybe your current home has lost significant value and you don’t think you will qualify.  Read on, there just may be some new options available for you in our marketplace.

In a purchase, a popular option is one where the offer is written asking the seller to pay for the buyer’s closing costs.  While that seems like a great idea for the buyer, this strategy isn’t always so great for the seller and in some cases it can kill the deal completely.  In this constantly changing market, we can’t always justify a price increase to cover closing costs reaching in excess of 6%, putting additional pressure on a possibly limited appraisal value.  In a competitive offer situation our seller paid closing cost dependent buyer will lose to a competing buyer who doesn’t ask for the seller paid concessions, nearly every time.
 

LENDER PAID CLOSING COSTS…YES I SAID LENDER


Recently, I decided to refinance my own home.  Having some experience in mortgage pricing, I found a lender who would refinance my home and include my closing costs of $3600 in to my interest rate.  Not to be confused with adding the cost to my principal balance.

Here’s how it works.  You’ve likely heard about “buying down” an interest rate by paying additional points.   Usually a good “buy down” on a 30 year fixed rate mortgage is about 1/4% in interest rate  reduction for each 1% of your principal balance.  We call this a discount point.   

I shopped for a lender to do what I like to call an interest rate “buy up” .  In essence, the lender collects a premium for originating a mortgage with a higher interest rate.  With the “buy up” strategy, for every 1/4% in interest rate increase, the lender will assume about 1% of my closing costs.  

The concept works better on higher mortgage balances and purchases, as the note rate doesn’t have to rise very high to include the basic costs.  If you don’t plan to be in the home that you are refinancing or purchasing for several years, this is a better option as the old rule of thumb was that you had to stay in the property until you could recover all of the out of pocket costs.    In my case, I didn’t even drop one whole percent in rate, but I will save over $200 per month and it effectively cost me nothing!  I now have a 4.99% interest rate.  That ROCKS!!!

This type of loan may become very popular and even a necessity in our area of high closing costs, because rumor has it that  FHA may reduce the allowable seller paid closing costs from 6% to 3%, according to my lender sources.   


HOMES AFFORDABLE MODIFICATION PROGRAM  - NO APPRAISAL NEEDED?


I had received several letters from my previous lender encouraging me to “modify” my mortgage.  After an infuriating day on the phone with them it was determined that I didn’t qualify because I wasn’t in default and because I could qualify in all respects for a conventional refinance.  They then offered me a high market rate with exorbitant fees.  Their offer of help was really a come on for a high cost refinance!

In further research, I found a knowledgeable lender that was well versed in the Homes Affordable Modification Program (HAMP) and it’s sister program Homes Affordable Refinance Program (HARP).   Under the HARP program, if your home mortgage is currently owned by Fannie Mae or Freddie Mac, you may be eligible for a refinance or modification that doesn’t require your home to appraise out.   It is possible that the mortgage could be as high as 125% of the value!  If you currently don’t have a mortgage with private mortgage insurance, PMI, you will not be required to pay it in the refi.   So, if you are just a little upside down, you may still be able to refinance and lower your payments.  Call in a market professional for a quick CMA.  I am always happy to do this as a service for my past, present and future clients and customers.


IS YOUR HEAD SPINNING YET?


All information (especially the government plan)  is subject to change and specific programs may not work for everyone’s specific situation.   I will always refer you back to your Attorney or Tax Professional, as I am neither.

Choosing the right Real Estate Professional is more important now than ever before.  There is never a better time than the present to have a free consultation with your REALTOR.    Be sure to choose someone who has the market knowledge and experience to make sure all of your needs are anticipated and met.

Do you have questions about buying, selling or saving your home?   Sarah Pietkivitch can be reached at RE/MAX of Stuart, 729 S. Federal Hwy, Stuart FL 772-214-4420 www.sarahsellsflorida.com

Sarah Pietkivitch is a Broker Associate for RE/MAX of Stuart.  She holds a degree in Real Estate and is an Accredited Buyer Representative Manager(ABRM), Certified Real Estate Specialist (CRS), Graduate Realtor Institute(GRI) and Certified Distressed Property Expert (CDPE).  She is a member of the Employee Relocation Council and the Certified Luxury Home Marketing Specialist Institute.  She has been a top producing Real Estate Broker and Mortgage Lender for nearly 30 years.  Her resume includes Mortgage Lending Manager for a 20,000 member Credit Union and the Broker/Owner of a RE/MAX Franchise in Wisconsin.  She was elected to the Executive Council of RE/MAX North Central and is a member of the coveted RE/MAX Hall of Fame Award.  She has personally sold and/or financed over 1000 homes in her career.  Sarah has been ranked in the top 1% of all REALTORS® Nationwide.