Recently interest rates have declined to their lowest levels since the initial drop in January, 2009. This latest reduction creates a refinance opportunity for homeowners whose current mortgage rate is in the mid 5% range or higher! If you previously considered refinancing but determined your monthly savings would not be sufficient to offset the cost, it is definitely time to take another look. It is likely that your savings will be significant. This latest reduction coupled with outstanding home pricing is also the perfect combination for that new home purchase you have been contemplating. Interest rates are volitile. Don’t miss out on this incredible opportunity. Contact your CFS Mortgage Corporation loan officer today!
Per MBA for the week of February 12, 2010, the average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 4.94%, with points increasing to 1.09 from 1.06 (including the origination fee) for 80% loan-to-value ratio loans. The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 4.33%, with points increasing to 1.02 from 0.95 (including the origination fee) for 80% LTV loans.
Mortgage Bankers and Mortgage Brokers provide a similar service, yet there is a significant difference between the two; differences that can ultimately impact the mortgage loan process. These differences can range from creating inconvenience to changing the structure of the loan and in even cause a loan to be denied. Here are just a few of the differences:
Mortgage Bankers under the new HVCC appraisal law can order the appraisal from a vendor of their choice. This appraisal can then be used with any of the Mortgage Banker’s investors. A Mortgage Broker must order the appraisal from a predetermined investor’s chosen automated valuation company and no employee of the mortgage broker can speak with the appraiser. Should the Mortgage Broker choose to send the loan to an alternate investor for any reason, the appraisal must be transferred to the alternate investor. This process is time consuming and cumbersome and adds additional borrower expense.
Due to this HVCC appraisal law, Mortgage Brokers must choose the investor at the time the appraisal is ordered. Since the Mortgage Banker can use the appraisal with any of its investors, it can take advantage of choosing the investor offering the best interest rate at a much later point in the transaction. Mortgage Bankers deliver a closed loan which greatly reduces the work flow of the investor resulting in a better interest rate for the borrower!
At approval, the Mortgage Banker prepares loan documents and ultimately funds the loan using its warehouse line. The Mortgage Broker is dependent on the investor to prepare the loan documents and fund the loan. The Mortgage Banker is the lender at close of escrow and has complete control of the transaction.
In summary, Mortgage Bankers like CFS Mortgage Corporation provide the opportunity for borrower’s to take advantage of multiple investors just like a Mortgage Broker but through a much simpler and cost effective approach. Call your CFS Mortgage Corporation loan officer to discuss in greater detail!
From Bloomberg:
U.S. Senate leaders moved closer to agreement to replace an expiring $8,000 tax credit for first- time homebuyerswith a smaller one that expands access to more borrowers, two people familiar with matter said. The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290. The credit would be available on home purchases that are under contract by April 30. Borrowers would have 60 days more to close the sale.
