It isn’t always easy to find a good loan officer.

And sometimes when you search on the web, it can be difficult to get the information that you are looking for and it is tough to seperate what is really possible vs what used to be possible but isn’t really possible anymore.

Which is why I am putting together a collection of some of the best Arizona loan officers and asking them to contribute to our overall mortgage efforts.

Some of the great Arizona loan officers that now contribute to our family of sites include:

• Shane Hollenback at Prime Lending
• Ted Canto at Academy Mortgage
• Amy Simmons at On Q Financial
• Mike Jones at Sunstreet Mortgage

And we are not done finding and promoting great loan officers.

So if you are a Realtor and you love your loan officer, but wish he would start blogging — put him in touch with me and I will see if I can get him (or her) to be a regular contributor on one of our mortgage blogs.

What is LPMI?
LPMI is lender paid mortgage insurance and is available only on conventional loans. It allows you to pay an upfront fee or take a higher interest rate instead of having monthly mortgage insurance. It can be a dramatic savings on your monthly payment. LPMI used to be a much more popular product a few years ago but as options have been limited these products are tough to find.

The good news is Academy Mortgage still has this LPMI product!

We will take a look at an example. Here is a conventional loan with the following assumptions:

• $200,000 purchase price
• 10% down payment
• 750 credit score
• 30 Year fixed rate 4.875%

Option 1 – with standard monthly MI:

• $971 Principal & Interest
• $84 Monthly mortgage insurance
• =$1055 Total

Option 2 – upfront premium paid by borrower or seller is $3574

• $971 Principal & Interest
• = $84 monthly savings
• = $9504 10 year savings

Option 3 – Borrower takes a higher rate of .375% or 5.25% in exchange for no monthly MI

• $1013 Principal & Interest
• =$42 monthly savings

Another great benefit to this loan is that you can actually qualify for more money since your monthly payment is less.

I recently had a loan where they borrower could not qualify for the home they wanted because Fannie Mae and mortgage insurance companies have made the debt to income ratios so conservative. In this specific case the borrowers were just 1% over the allowed debt to income ratio.

We were able to provide upfront mortgage insurance which was paid for by the seller and reduce the borrower’s payment enough that it was acceptable to Fannie Mae and the mortgage insurer.

The monthly savings are dramatic and may be the difference of you qualifying for the home you want.

My friend Christoph Schweiger announced that his new office is now open for business today.

Christoph works for Sunstreet Mortgage in their new Mesa office and is surely to rise fast t be one of the valley’s most respected loan officers.

Christoph comes from the Real Estate side and having recently made the move to becoming a loan officer, he will be easy for Realtors to work with because he understands what it is like to be on the other side of the fence.

And if you are a buyer, who better to work with that understands the Realtor’s needs regarding your transaction as well as the lending requirements?

Sunstreet Mortgage highlights include:

• Many years of experience by the company management in mortgage banking
• 2 Managers in Tempe: Gary Miljour and Kim Chartier
• Sunstreet Mortgage is based in Tucson with branch offices in Nogales, Arizona and Albuquerque, New Mexico
• Was founded by John E. Capp, Sarah J. Roads and Patrick W. Sniezek

Grand Opening Party

Christoph says that they are planning a grand opening party once they have fully moved into the new space, but if you want to stop in – feel free to stop by anytime.

You can find the Sunstreet Mortgage office in the Stapley Corporate Center , 1910 S Stapley Dr., Suite 202, Mesa, Arizona 85204

USDA Loans – 100% Financing

The USDA loan is one of the best loan programs out there today. It typically offers the most benefits, competitive rates and the lowest monthly payment. Once you are qualified for a USDA loan you have to find a home that is in a USDA eligible area. Click here for a map of the available USDA areas. For us located in the Phoenix valley there are plenty of places that are a commutable distance away.

USDA Loan Benefits:

• No monthly mortgage insurance
• No maximum loan amounts
• True 100% financing with no minimum investment
• No reserve required
• Up to 6% seller concessions
• Competitive rates. (usually about the same as FHA)
• 620 credit score required.

Another benefit of the USDA loan combined with the power of Academy Mortgage is that we can close your loan in just ten days!

Most other companies (and even USDA themselves) typically quote 30-60 days for closing a USDA loan.

You can imagine when sellers are evaluating multiple offers for consideration having short closing dates makes your offer look much more attractive. Often times investors/sellers may even take a lower offer with a shorter time frame for closing.  USDA loans offer great options in Arizona.  If for some reason you find that a USDA loan isn’t for you, you can still take advantage of our great FHA loan programs in the Phoenix AZ metropolitan area.

For more information please give me a call or shoot me an email.

Here is a video about the FHA flip rule – hat tip to Mark Madsen at MyFHAMortgageBlog for letting me know about it.

FHA Streamlines are NOT Dead

There is some confusion out there regarding the new guidelines for FHA Streamlines. The new guidelines have been out since November of 2009. We didn’t know how some investors would interpret some of the new guidelines but those concerns are now gone. Some borrowers think they have missed the boat which is not true. Streamlines are still around and interest rates are still at all time lows. The FHA 30 year fixed rate is currently around 5.0%.

There are more changes to the streamline process than listed below but these are the biggest changes that will most likely affect you.

1. Net tangible benefit – FHA wants to see that you at least have a 5% reduction in your mortgage payment be refinancing. For example, if your principal and interest is $1,000 per month your new mortgage payment must be at least $950 or less. Pretty simple.
2. Verification of Income – The new guidelines require that you are “employed and have an income.” This was one of the grey areas that we did not know how it would be interpreted. All we require at Academy Mortgage is that you are employed though a verbal verification of employment. No paystub or other income verification documents are typically required.
3. Maximum Loan Amount – This is probably the biggest change. The new maximum loan amount for a streamline refinance without an appraisal is the current principal balance – UFMIP refund + the new upfront mortgage insurance premium. What this means to the borrower is that they cannot roll any closings or pre-paids/escrows into the loan. Having out of pocket expenses can be tough for some to come up with at closing. Keep in mind, there will not be a mortgage payment due for the month after your closing so this will help offset some of those out of pocket expenses. You will also get a check back from your current lender for your escrow account once they are paid in full. In summary, even though there will be some out of pocket expenses, you can reimburse yourself for those funds.
4. No Appraisal required – This is nothing new but I wanted to reiterate that there are still no appraisals required on FHA streamlines. This is one of the biggest benefits of the streamline loan and they did not take this one away.

If you have an FHA loan and currently have an interest over 5.5% it probably makes sense for you to do a streamline. If you have a $300,000 loan and save 1% off your note rate by refinancing you can save over $60,000 in interest!

This blog is approaching its five year anniversary on Feb 1st, 2010. As I think about the coming milestone I wanted to share with you some changes that have been occurring on the back end recently.

At one point I used to update this blog on a daily basis.  There was a time when I used to be on the cutting edge of breaking news, information and home financing tips. However, I’ve slowed down a bit over the past few years. For starters I haven’t been even been in the industry since 2008, so you can understand why I haven’t been around. Aimee has been the primary blogger and for all intent and purpose was the “Arizona Mortgage Guru”.  She’s fantastic as a blogger, broker and everything else. However, things have not worked as we had hoped. In fact I’ve already made a few changes around here if you haven’t already noticed.

The first big change is this blog is no longer Aimee’s. It is now back in my (Shailesh’s) hands. So, I guess you can call me the “Arizona Mortgage Guru” again (but you don’t have to if you don’t want to). There are a number of reasons for this but I really can’t go into the details here right now. If you really want to know lets have coffee and I can tell you in person.

The other change to this blog is that I am blogging as a mortgage commentator not  a mortgage professional or broker. Since I was in the mortgage industry for a while and have intimate knowledge of the industry I can still share a lot about the industry. In fact I continue to follow the changes and events in the industry so I have expertise that I can share. Most importantly though, for better or for worse, I’m not tied to the industry. Hence am able to voice my personal opinions and thoughts freely.

There are more changes coming. I will be sure to update you as I make them. In the mean time continue to use this blog as a resource for all your home financing needs.

photo credit: Omer Wazir

Recently, I have had the opportunity to become familiar with Casas del Oso, a custom luxury home builder in Scottsdale, Arizona. They build the most beautiful homes based upon the romantic architecture of Spain, Italy & Mexico. Most of their homes are located predominantly in golf communities in the greater Phoenix area.

I had the chance to tour one of their homes, and I must tell you, the craftsmanship, care and passion is very impressive and nothing but stellar. Over the past few months, I have also had the opportunity to speak with Barry and Christy Smith, the owners of Casas del Oso. Barry is the architect of the homes they build. He has a deep passion for building the client’s life experiences and lifestyles into their homes. He takes great pride in the close relationships they build with clients and the authenticity and craftsmanship these homes bring to the neighborhoods. These homes are truly a work of art.

Barry explained to me how when meeting with clients, he takes their passion, heart and soul and creates an authentic home that meets their needs, wants and desires. As no two clients are ever the same, Casas prides itself on its innovative design. Barry feels that every home they build is custom designed and calculated to meet each homeowner’s specifications.

Don’t take my word for it; head on over their website and take a look at the slideshow under “the details” section. It is truly amazing!

For those of you who are looking to purchase your first home in 2010…with a little extra work, you could find yourself with $15,000 in down payment assistance. Newtown Community Development Corporation (CDC) is a nonprofit corporation begun in the 90s to address concerns about housing, neighborhood preservation and sustainable development. The vision of CDC is to increase affordable housing and support homebuyers through innovative programs.

Today I want to hone in on the down payment assistance CDC has to offer. It is called an Individual Development Account. Essentially, eligible homebuyers can receive $15,000 toward the purchase of a home, matching up to $3 for each $1 saved by the participants.

Now…the key with this program, as with any assistance program, is to read the fine print. To know if you should even consider applying, you must know the specific requirements of the program.

So, with that said…here are the guidelines:

•You must be a first-time homebuyer! (Remember, this means that you haven’t owned a home in the past 3 years)

•You must earn 80% or less of the HUD Area Median Income (1 person family: $36,900; 2 person: $42,150; 3 person: $47,450; 4 person: $52,700; 5 person:$56,900; 6 person:$61,150)

•As a part of the program, you must complete an approved homebuyer education and counseling program.

•Funds may only be used toward down payment or closing costs on a primary residence. (So…this means funds can’t be used for remodeling or for an investment home.)

•Your debt-to-income ratio cannot go above 43%. (This means that the total payment on the mortgage…principal, interest, taxes and insurance and home owners association fees…cannot exceed 43% of your total income)

•The funds are not a grant, but a forgivable loan. You must live in the home for 5 years. If you live in the home less than 5 years, the repayment will be prorated.

•The assistance money can be used for any property in Maricopa County.

•Your mortgage must come from a participating financial institution.

•There is a $435 administration fee, a $35 enrollment fee and a $400 closing fee.

•In order to receive matched funds, you must open an IDA savings account with a participating bank, make regular monthly deposits of $20 for a minimum of 10 months and you must open escrow on a home purchase within five years of enrolling in this program.

Since its inception, the IDA Program has provided more than $1.8 million in IDA match funds to first time homebuyers. There is, however, one issue! This money runs out fast! According to a Newtown representative I spoke with on the phone recently, in 2009 the money didn’t actually get released until about April and completely dried up by August. If you want these funds, you have to be on the ball! This means you apply for the program now , begin saving now , get pre-qualified now, find a realtor asap and be ready to put in offers come next April when the money is hot off the press. This program is for the diligent, for the planner, for the go-getter!! And if that is what you are, I have no doubt that you will be the recipient of these funds in 2010.

It has been a while since I last provided an interest rate chart on this blog. Plus I was curious to see what the graph would look like. I knew rates were lower than earlier this year, but it’s always nice to see it plotted out.

As you can see in the chart below, after peaking at about 5.60% in the first week of June this year, the 30 year fixed rate has been hovering very close to 5.00%. The 15 year mortgage is also on a similar trend but at a slightly lower rate.

The good news is rates remain at historically low levels. The graph above is based on an average weekly mortgage rates provided by Freddie Mac. Of course the exact rate you receive is dependent on many factors.