Recently, there’s been a lot of talk about G-fees (guaranty fees) increasing and how this may affect interest rates.  You may have heard about this from a number of sources and there seems to be varying opinions…some more dramatic than others…floating around about what this will do.  

          The reason for the G-fee increase is because the Temporary Payroll Tax Cut Continuation Act of 2011 was recently signed into law.  Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae & Freddie Mac. 

          So you’re probably wondering what this all means to you.  Because the increase specifically affects Fannie Mae & Freddie Mac we only expect to see changes in Conventional/Conforming products at this time.  With the increase in G-fees we are starting to see a decrease on what investors are paying for a loan at a certain interest rate.  Based on what we’ve seen so far, we can expect rates for Conventional/Conforming products to increase by .125% to .25% in the foreseeable future.  So, it doesn’t translate into a dramatic increase but any increase is worth noting so it’s gotten its share of attention.  

          Also, it’s worth mentioning that this does not affect FHA.  This will result in an even larger spread between Conventional and FHA rates.  So, with FHA rates most likely staying the same and Conforming rates rising, FHA may be a more attractive option.  For savvy borrowers with less than 20% down, it might make sense to put 3.5% down and save/invest the difference. 

          In conclusion, no…the sky is not falling.  Yes, we will probably see a slight rise in Conforming rates in the coming months.  However, we expect to continue to enjoy historically low rates for the foreseeable future.  You can spend your time worrying about whether Tebow can continue passing like he did against the Steelers instead of stressing too much about where rates are going. 

          Summary:  The Temporary Payroll Tax Cut directs the Federal Housing Finance Agency (FHFA) to increase G-fees charged by Fannie Mae and Freddie Mac.  Interest rates on Conventional/Conforming products will likely rise .125% to .25% in the near future.  This does not affect FHA rates so the spread between FHA and Conforming rates will increase.

If you have any questions, feel free to contact Mark or me and we will be happy to help.  Joel Houwer

Posted by Mark Afman under Home & Mortgage & Mortgage Blog & Mortgage Information | No Comments »

Are you a “glass is half full” or “glass is half empty” kind of person? Growing up, I was very cynical about life and even into my adult years I was a pretty pessimistic guy. When something bad would happen I would justify it by thinking that it was going to happen anyway so why should I think that life would be any better. Sad huh? I was one of those people that thought that life owed me somehting and I could not figure out why life was not paying up. Then I realized that life did not pay back something that it did not owe. It took me awhile but I came to realize that life is what I could make of it. Not the other way around. I still have difficult times, as I’m sure you do. But it just makes more sense to me to know that I can work my way out of it using whatever brains and talents I might have.

So what does this have to do with anything? It occured to me that during this time when the economy is percieved to be in pretty rough shape, I thought I would share a few items that could give us all a little boost. In the Real Estate world, the more knowledge you have, the better your chances are of doing well so here are a few “glass is half full” points. 1) The Denver Business Journal reports that unemployment is down to 8.1% in Colorado. Still too high but it’s better then the national average and the state added 8800 new jobs. 2) Colorado Small Business jobs are up .5%. OK, not a huge number but it’s a step in the right direction. 3) Forbes rates Colorado the 5th best state for business. Not bad, 5th out of 50. 4) The Boulder County Business Report is reporting that foreclosures are down in the Denver Metro Area. Down is better then up. 5) CNN reports that existing homes sales were up in October and since the Wall Street Journal reported that buying a home is less expensive then renting, right now, Why not get the word out.

Let the people in your database or sphere of infulence know these things. If they are anything like I used to be, they could use some good news right about now.

Let me know if you have any thoughts or comments.

Posted by Mark Afman under Home & Mortgage Blog & Mortgage Information & Real Estate | No Comments »

I would like to announce that I now have a partner working with me. His name is Joel Houwer and he is a fully Licensed Loan Officer in the state of Colorado. Joel and I will be working together to bring an even higher level of customer service to you or your referred clients. He provides a tremendous attention to detail and customer service.  He is trained in all of the loan products that Universal Lending provides (FHA, VA, Conventional, USDA) and he is backed by the 30 years of experience from Universal Lending and the 9 years of experience that I have. Joel will be working to develop some new marketing strategies that we will be able to share with our referral partners and will bring a, shall we say, more youthfull perspective to this industry. As always, we will specialize in first time home buyers and their unique needs. We will communicate the seemingly complex world of home loans in terms that make it easy to understand. We can also help with your move up buyers, loans for 2nd homes, refinance loans, investor property loans, and the FHA 203K rehab loan.

So please welcome Joel he joins me to provide you and/or your referred clients with the highest level of service and help in this always changing world of home mortgages. Feel free to contact either Joel or myself, using the contact information below, if you have any questions or would like to start the pre-approval process for a yourself or your clients.

Posted by Mark Afman under Home & Mortgage & Mortgage Blog & Real Estate | No Comments »

There are two new developments that have come to light with FHA loans that you need to know about.
1) As of August 19th, FHA has lowered their loan limits nationwide. In the Denver Metro Area that means that loan limits are being reduced from $406,250 to $368,000. That means that you FHA buyers now have $38,250 less in buying power and sellers in that price range now have fewer buyers that their homes are available too.

2) I doubt if there are many buyers that want to buy a home that has a history of Meth use. But up to now an FHA loan could be used to by that home if it had been remediate. Universal Lending has learned that any home including HUD Repo’s which have any evidence of the use of meth or creation of meth or even if a police report has been issued stating meth was in use in a home is ineligible for FHA insurance.  Even if remediation has been done, they will not accept the property. 

Let me know if you have any questions or if I can help in any way.

Mark Afman

Senior Residential Mortgage Specialist

Universal Lending Corporation

6775 E Evans Ave, Denver, CO. 80224

NMLS # 299217ColoradoLic #100017652

 Direct: 303-759-7392, Cell: 303-905-2488, Fax: 866-896-9240

I’m honored to be selected as a Five Star Mortgage Professional by 5280 magazine.

 Apply online at www.mafman.ulchomeloans.com

 Please visit me at www.facebook.com/AfmanHomeLoans, or www.twitter.com/afmanhomeloans

 Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real?estate/index.htm

Posted by Mark Afman under Home & Mortgage & Mortgage Blog & Real Estate | No Comments »

In a post dated April 28, John Rebchook, of www.InsideRealEstateNews.com, stated that rental rates are up. I think that renters are getting sick of it and they want to buy a home. I have had 3 people call in the last week to get pre-qualified for a home loan because their rent was going up and they could buy a better home with a lower payment then the rent they were paying. “But Mark, people can’t qualify for a loan anymore, the underwriting is too strict.” There is some (but not that much) truth to that idea. Lenders are running scared because of the heavy government regulations and they don’t want to anything come back on them so they are they are putting their own restrictions on the underwriting (called overlays), over and above the guidelines of the program.

So loans are harder to get done and I have to ask my clients for documents they probably didn’t even know that had but loans are getting done. Even people with lower credit scores can get an FHA loan from sources like CHFA. Rates are still in the high 4% to low 5% range and many times a house payment is equal or lower then rent payments. So if a friend complains about their rent going up, have them get pre-qualifed with a good mortgage banker (by the way, I happen to be a mortgage banker, just in case…) But now is the time to buy a house.

Let me know if you have any comments or questions.

Then and Now: These two photos show the old Morrison School Building. It was built in 1875. Morrison was a mining town that started in the early 1870′s. It mostly mined gypsum and stone building blocks. There was a spur of the Denver, South Park, & Pacific railroad that ran up bear creek to haul the quarried stones to Denver. A small community soon built up around there and they needed a school. Now the school building has been remade into a personal residence. You can click on the pictures to see a larger version.

Posted by Mark Afman under Home & Mortgage Blog & Real Estate & Then and Now | No Comments »

There is a comedy sketch that has been done by several British comics called Four Yorkshiremen. <iframe title=”YouTube video player” width=”480″ height=”390″ src=”http://www.youtube.com/embed/Xe1a1wHxTyo” frameborder=”0″ allowfullscreen></iframe>The version I like the best is done by 4 of the members of Monty Python. The gist of the sketch starts out with 4 well dressed gentlemen sitting in what appears to be an exclusive club, sipping some expensive french wine. They go on to remember their childhood “30 years ago” and how tough it was and proceed to try to outdo each other in their descriptions of how difficult they had it until it gets into the ridiculous. “We got evicted from our hole in the ground, we had to live in a lake”. “We had 150 of us living in a shoe box in the middle of the road”. “I used to have to get up half an hour before I went to bed and go work at the mill for 29 hours a day”. The punch line…well I’m not going to tell you the punch line. Google Four Yorkshiremen and watch it.

The reason I bring this up is to ask the question, how will we look back on our lives.  It’s a little bit of human nature to want to build ourselves and our accomplishments up in our minds and that seems to work better when we look at where we came from and how we overcame a lot of adversity. So we make that adversity even worse then it really was so that our accomplishments seem better then they really are. It makes us feel good. However, I submit that as funny as this sketch is, if we have a good attitude and outlook on life, then we don’t need to exaggerate the good or the bad. Life was not more difficult or easier in years past and it is not any better or worse now. Circumstances can be better or worse but not the basic tenants of life remain the same. Life is what you make of it. You can’t always control what happens to you but you can control how you react to it…for what it’s worth.

Then and Now:

Speaking of tough times, Cherry Creek has always been temperamental. In the 1860′s the native people tried to tell the new arrivals that the buildings they built next to the creek bed (sometimes in the creek bed) were going to washed away when it floods. This advice was ignored until one day in 1864 when the little trickle became a torrent and did wash away several buildings including the office of the Rocky Mountain News. It has flooded several times since then but one of the worst was when the Castlewood Canyon Dam (just upstream from Franktown) broke in 1933. The resulting rush of water downstream ripped several bridges out but this one across Wynkoop Street survived. Click on each picture for a larger version.

Posted by Mark Afman under Home & Miscellaneous & Mortgage & Mortgage Blog & Mortgage Information & Real Estate & Then and Now | No Comments »

I have become a lender that works with many first time buyers. I have worked with some people that are extremely well prepared for this process, some that are getting there, and others that do not have a clue. It is not becuase this last grouping of people are stupid. On the contrary, they are usually very smart but they have not been trained in the financial aspect of life. It amazes me sometimes how we emphasize so many things to our children but rarely do we really teach them how to handle some of the details of financial responsibility. Even my own upbrining did not teach me about the details of how finances owrk. My parents were very good about teaching me to be responsible with my money in an overall sense, but not so good about teaching me the details. That, I had to learn on my own just by forging through it. So I am going to try to put a series of posts on the basics of a home loan.

1) Income: You have to have some money coming in. Obvious right? Yea, but there are a few pitfals here. If you are on any kind of variable income like commisions or bonuses, we have to average them over time. If you just started a job 6 months ago where you are on a base + commision, we can’t use the commision. We need 12 months history. Same thing with bonuses. If you are self employed, we need 2 years of documentable income and if you have a very creative accountant that knows how to you every deduction, then that may hurt your documentable income. We don’t count your gross income, we count your net income after your expenses have been taken out. So you might save on taxes but you won’t be able to buy much of a house. More to come…

Then and Now.

Here are two pictures from pretty much the same spot. In the late 1800′s and early 1900′s there were 2 or 3 long viaducts that were there to carry trollies, horse wagons, people, and eventually, cars from the Highland neighborhood over the railyards, to downtown. Now those viaducts are gone. But the 16th St corridor has a couple of pedestrian bridges to help people get over I25 and what few rails are left. Notice the building on the extreme left and the Daniels and Fischer building in the distance in both photographs. You can click on each picture to see a larger version.

As always feel free to contact me with any questions. Mark Afman

Posted by Mark Afman under Home & Mortgage Blog & Then and Now | No Comments »

When you think about FHA 203K loans, what comes to mind? How about when you think of CHFA? Maybe some of the following thoughts come to mind: Too much hassle, Extra paperwork, Takes too long, I can’t say that I blame you for perceptions that you may have been told are real or that you have even experienced. How would you feel if I told you that we can combine the two and do a 203K using the CHFA Down Payment program?

Maybe you are asking yourself what a 203K loan is or what is CHFA. So quickly here is a rundown of these two programs. A 203K is an FHA loan program that allows a buyer and seller to close on the sale of a property that might need some fixing up, sprucing up, or flat out redoing. You can close on the property in it’s current condition and then have money set aside for doing the work after the closing. Obviously there are more details but that is the jist of it. The CHFA program allows a buyer that meets certain criteria to get some help with the down payment. This assistance does not come from the seller but rather a small 2nd mortgage to assist with the 3.5% down payment of an FHA loan. CHFA is in essense, a non-profit bank that purchases loans and services them and is specifically for low to middle income buyers that need a little help with the down payment.

These two programs combine to get folks the help they need with the down payment to be able to buy distressed properties that need some fix up. Obviously, this tends to be a more involved process then a regular purchase loan but the benefits clearly outweigh the extra hassle and if you work with a lender that has a long history with both CHFA and 203K loans, (this is where I drop a little hint that Universal Lending and I meet that criteria) then that process is made even easier.

As I said before, there are more details that you and your buyers need to be aware of so feel free to contact me with any questions but it is just one more tool for you to use to help more buyers.

Posted by Mark Afman under Mortgage & Mortgage Blog & Mortgage Information & Real Estate | No Comments »

Are you thinking about refinancing and sprucing your place up a little bit too? An FHA 203K loan can knock both of those items off your To-Do list. A 203K Streamline loan is an FHA product that you can use to either buy a home or refinance your current mortgage and have as much as $35,000 left over after the closing to fix the house up. The best thing about it is that the appraised value is not based on the current condition of the home, but rather the condition of the home after the proposed rehab work is done. On a refinance, you would get a bid for the work that you want done, then a specially trained FHA 203K appraiser would look at you house in it’s current condition and then take the bid for the work that is being done and give a value as if the rehab work was already done. The new loan amouint can then be based on that final appraised value.

So say, for example, you have a home that is worth $200,000 in it’s current condition and your current loan is at $195,000. You get a bid that determines that it’s going to take about $20,000 to fix up your home the way you want it. (A streamline 203K is for rehab work only. It can’t be used to knock out walls, add additions, or pop the top.) Your lender (um…I’m available if you need a good lender, just saying) send’s out an appraiser. The appraiser looks at your $200,000 home and then looks at the scope of work on the bid, and determines that if you fix the house up with this work, it will be worth say $235,000. The lender then adds the $20,000 on to your current payoff of $195,000 so that you now have a loan of $215,000 (you can add the closing costs into the loan or bring that to closing). Now you have a house that is worth $235,000 and a loan of $215,000 (plus closing costs if you choose). So before you had $5,000 in equity and now you have around $20,000 in equity and you fixed the house up the way you want it.

Obviously not all scenarios would work that way but the 203K the only refinance product that I am aware of that allows the value to be based on the work being done, not the current condition. It is a great way to get a better rate (right now the 203K rate is in the mid 4% range) and fix your house up.

As always, you can contact me with any questions.

Posted by Mark Afman under Home & Mortgage & Mortgage Blog & Mortgage Information | No Comments »