Utah Real Estate & Mortgage Blog
Learn about Utah, the suburbs, neighborhoods, schools and the real estate market here. This blog is authored by real estate experts from all around Utah. If you're looking to stay updated on Utah's Real Estate Market, this is the place for you.
0
Buyer Beware…You might want to reconsider that decision and go with a Mortgage Lender the next time you buy a home in Utah. I want to share a recent experience I had as a Utah Real Estate Buyer’s Agent.
This was for a purchase of an owner occupied home that was less than $150,000. This buyer got approval from the broker back in September 2010. We wrote an offer at the end of September and were under contract within the first few days of October. We should have closed on this client’s home last week.
WE DID NOT CLOSE.
As of today, we are still waiting for formal approval from the broker. The loan officer has communicated that he/she has done everything possible to speed up the process. My client is now at risk of losing thousands of dollars in deposits and inspections due to the broker not closing the loan on time. Every week, we were told that everything is OK and it should only be another day or two. It has been more than 3 weeks in underwriting. Is this an isolated problem that does not happen that often? No. Let me explain.
A couple of years ago, mortgage brokers were put on a pedestal by the banks and their loans were given priority. After the collapse of the banks/lending, banks started to push mortgage brokers out of the way. Many national and local banks shut down their wholesale lending operations (these were the divisions that handled mortgage brokered loans). In the past I was a California & Utah Mortgage Licensee. I have had experience in working with both brokers and lenders. I understand what it takes to get a home loan and close on-time.
Since my move to only being a Utah real estate agent, I have never had deal not close on-time. I went back and looked at the financing my clients used to purchase these properties. NOT ONE was with a mortgage broker. They were either with a Utah lender (bank, credit union, in-house lender) or cash. Then I went back and looked at all of Zoom Real Estate’s closed purchase transactions for the previous year. I looked at if the deals closed on-time and if they used a broker or lender.
- Of the deals that the buyer used a mortgage broker for the financing…85% of them DID NOT CLOSE ON-TIME.
- Compare this the deals that the buyer used a mortgage lender for the financing …1.5% of them DID NOT CLOSE ON-TIME.
I am writing this blog post today to warn Utah home buyers to beware of mortgage brokers if you want to close on-time. It is difficult for brokers to close on-time because they do not have the resources to do so. Lenders have in-house underwriting, control of the loan file, and better access to the team working on your file (AKA..your home loan).
If you are being given the run-around from your mortgage broker, give me a call and I would be more than happy to recommend several local UTAH lenders to help you with your home purchase.
Kris (801) 792-5040
Zoom Real Estate Agent
HOW?
Three different lenders I work with contacted me today about home loan rates. All three of them are able to do a 30 yr fixed rate FHA or VA loan at 3.75% (apr 3.99%). WOW! With the loan rates getting even better today, you can save an estimated $72 a month (see example below).
Saving $72 a month on your Utah home payment is great, but how does $72 a month = $25,000 in savings? Look at the total interest paid over the life of the loan as given in the example below. In addition to the lower payment, you will save thousands in total interest paid. What a great day to buy a home.
Interest Rate: 3.750% (3.99% APR)
Loan Amount: $250,000.00 ~
Term of the Loan: 30 years
Monthly mortgage payments: $1,157.79 ~
Total interest paid over the life of the loan: $166,804.04
VS.
Interest Rate: 4.25% (4.49% APR)
Loan Amount: $250,000.00 ~ Term of the Loan: 30 years
Monthly mortgage payments: $1,229.85
Total interest paid over the life of the loan: $192,745.91
Buy more home today than yesterday. Contact me today to find out more about these rates and loan programs. 801-792-5040
November Update on Utah Home Lending:
- There is money available as of November 4, 2010 for Down Payment Assistance (up to $10,000) throughout Salt Lake County.
- 100% financing programs available. NO DOWN PAYMENT!
- $100 down payment HUD homes are available throughout Utah.
- Special Loan deferral programs are available in Salt Lake County (up to $20,000!) No payment/No Interest on select homes.
- FHA rehab loans that allow you to buy a home through FHA and receive the money to rehab/repair a home at the same time.
- FHA Energy Efficient Mortgages that allow you to update windows, appliances, furnace, hot water heater, insulation when you purchase a home.
If you have a steady job and decent credit, you may be a home owner before the end of the year.
801-792-5040
FHA mortgage insurance premiums approved to triple in 2010. Last week, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.
Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent.
Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
Assuming a $200,000 mortgage, the math to a homeowner looks as follows:
* Current Premium (0.55%) : $91.67 monthly mortgage insurance premium
* Expected Increase (0.90%) : $150.00 monthly mortgage insurance premium
* Maximum Increase (1.55%) : $258.33 monthly mortgage insurance premium
A increase in monthly mortgage insurance premiums will reduce home affordability for buyers in Utah. If more of your monthly payment is going towards the mortgage insurance premium, then you have less money to pay towards the home mortgage.
The bill awaits companion legislation in Senate and final approval into law, but considering the House’s vote last week, it could happen rather quickly. If you’re planning to buy or refinance a home using an FHA mortgage, you may find that waiting to take the next step could reduce how much home you can afford to purchase.
Finally, after over two years of existence, the federal home buyer tax credit is no more.Expiring last month, what started as a $7500 “credit” that was in reality an interest-free loan (it had to be paid back), then became an $8,000 fully refundable true tax credit, which was extended and modified yet again to include non-first time buyers, the home buyer tax credit offered by the federal government is no more.
OK, now what? Utah home buyers do not need to rely on the federal tax credit to buy a home in Utah!
There is government grant money available in many Utah cities, counties, and rural areas. You just have to know what to ask for. Remember that not all mortgage loan officers or Utah real estate agents know about these government grant programs. I often receive calls telling me that they did not know these programs existed or that their Realtor didn’t know about these Utah home grants. In Utah, there are only a handful of places you can get this grant. Most often this is a true grant, which means the money does not have to be repaid as long the home is your primary residence and you live in the home for a specific period of time.
Zoom Real Estate knows about these grants. Utah cities replenish their grant money every summer! Would $10,000 towards your home price, closing costs, and even the down payment motivate you to buy a home with a 30 year fixed interest rate that is less than 5%? In addition to the Utah home grants; there are 100% (no money down) financing options and a special $100 down program available on homes throughout Utah.
Contact me today to find out what grants/loan programs may be available to use for your home purchase.
Call Kris/ Zoom Real Estate (801) 792-5040
Back to top