Met What Harp 3.0?

HARP was expanded once under current FHFA director, Ed DeMarco but little progress has been made with the program since. With Watt at the helm, the FHFA is expected to overhaul HARP a second time to provide additional aid to troubled U.S. homeowners.
HARP 3 could be here in December.

What Is HARP?

HARP is an acronym. It stands for Home Affordable Refinance Program.
HARP is an economic stimulus program. It was first launched in March 2009 using monies from the Housing and Recovery Act. The premise of the program was to help U.S. homeowners whose homes had lost equity to get access to the day's falling mortgage rates.
Mortgage rates had dropped 1.50 percentage points in the seven months preceding HARP's launch. U.S. homeowners were eager to refinance. However, few could.

Prior to HARP, homeowners whose homes had lost equity were ineligible to refinance without paying private mortgage insurance (PMI) for which costs were exploding; or, without reducing their existing loan balance to 80% loan-to-value at closing, which was often costly given sharply falling home values in many U.S. states.

HARP instructed lenders to ignore mortgage insurance requirements and to waive loan-to-value restrictions. HARP only required that homeowners have a mortgage backed by Fannie Mae or Freddie Mac, and a reasonable strong payment history.

The typical HARP household was expected to save $3,000 annually via refinance -- a projection soon revealed to be overly conservative. As mortgage rates dipped into the 4s and household savings multiplied, it became clear that HARP was a hit.
However, the program was less-than-perfect, in some respects.
As one example, HARP guidelines included a 125% loan-to-value limit which meant that loans over 125% LTV could not be HARP-eligible.

The guideline had little effect on homeowners in cities such Boston, Massachusetts; Denver, Colorado; or Cincinnati, Ohio where home values fell only modestly last decade. For homeowners in hard-hit cities, though, including Phoenix, Arizona; San Francisco, California; and Las Vegas, Nevada, HARP remained out of reach.

As another example, the language of the Home Affordable Refinance Program was written such that refinancing lenders were responsible for any underwriting errors made by the loan's former mortgage lender. If Wells Fargo refinanced a Countrywide mortgage via HARP, then, Wells Fargo would be responsible for Countrywide's due diligence on the loan.

This liability clause created risk for HARP lenders so many simply elected to refinance their own loans only. This was known as "same-servicer" refinancing. You could only refinance a Wells Fargo loan with Wells Fargo; a Bank of America loan with Bank of America; a Chase loan with Chase; and so on.

HARP was expected to reach 7 million households but, after nearly years, it had failed to reach even one million. That's when the FHFA revamped and released the HARP mortgage program, which came to be known as HARP 2.0.

HARP 2.0 Expands The HARP Program

"HARP 2.0" was the government's response to sagging HARP refinance figures.
Fewer than 1 million homes had been refinanced between the program's launch date and late-2011. So, to boost the program's adoption rate, Fannie Mae and Freddie Mac re-released the program, removing some of its restrictions.

There were several big changes between HARP 1 and HARP 2. However, two key elements drove the program's success. The first was the removal of the HARP loan-to-value restriction.
With HARP 2, mortgage lenders were instructed to ignore a home's current value and to refinance it anyway. Loans above 125% LTV were welcome under HARP 2, which rendered millions of additional homeowners eligible for the underwater mortgage program.
Homeowners flocked to HARP.

In the first month during which the revamped program was widely-available, more than 40 percent of closed HARP loans were for homeowners with a loan-to-value exceeding 125% -- loans which would have been impossible under HARP 1.
Plus, the number of closed loans topped 100,000 in a month for the first time in the program's existence.

The second big change was linked to lenders.
Under HARP 2, Fannie Mae and Freddie Mac stopped holding mortgage lenders responsible for the underwriting errors made by a different bank. In removing this risk, the FHFA gave banks confidence to do additional HARP loans nationwide. "Same-servicer" requirements no longer applied.

Not surprisingly, HARP 2 was a hit. More than 1 million loans closed in the program's first 12 months -- more than during the preceding three years combined. However, since April 2013, HARP volume has slowed.
There were fewer Home Affordable Refinance closings in August than during any month since HARP 2's launch. The program may be readying for an overhaul. HARP 3 may launch within weeks. 

HARP 3 Comes Closer To A Launch Date

HARP 3 is the next release of HARP. It's a program which has been talked about for months, but not yet made into law.
The passage of HARP 3 grows more likely with Mel Watt at the helm of the FHFA because, as a congressman, Watt pushed for homeowner assistance programs and increased access to credit. He is expected to continue that advocacy as head of Fannie Mae and Freddie Mac.

For homeowners, this could lead to a number of meaningful changes. 
As one example, 2014 conforming loan limits would be less likely to reduce from their current levels of up to $625,500 in high-cost markets, and $417,000 everywhere else. Leaving conforming loan limits as-is through 2014 would allow Fannie Mae and Freddie Mac to back more loans for buyers which helps to keep loan costs low overall.

In addition, the new FHFA may reduce some of its guarantee fees -- costs charged to lenders and passed on to consumers. "G-fees" have been steadily increased since early-2011 resulting in an increase to 30-year fixed rate mortgage rate of 0.500 percentage points or more.
Without FHFA G-fees, today's mortgage rates would be lower.

However, it's the passage of a HARP 3-like program that has U.S. homeowners excited. A revamp of HARP would likely expand the program to reach millions of additional households, and may even allow existing HARP homeowners to refinance via the program again.

Some of the potential HARP 3 enhancements include :

1. Changing the program eligibility date : Currently, to be HARP-eligible, your loan must be originated no later than May 31, 2009. With HARP 3.0, eligibility dates may move into 2010 or 2011.
2. Allowing non-Fannie Mae and non-Freddie Mac mortgages : Currently, only loans backed the FHFA are HARP-eligible. With HARP 3.0, eligibility may be extended to include Alt-A, subprime, and bank-held loans, too.
3. Permit the refinance of an existing HARP loan : Currently, the HARP program is one-use only. With HARP 3.0, homeowners may be allowed to "Re-HARP" an existing HARP mortgage.
4. Make HARP a true "streamlined" refinance : Currently, HARP requires some paperwork. With HARP 3.0, the program could mirror the streamlined programs of the FHA, VA and USDA for faster, simpler approvals. 

Each of these enhancements would jump-start the Home Affordable Refinance Program and, by extension, the U.S. economy.

The typical HARP refinance reduces a homeowner's monthly payment by 27%, a figure which far exceeds the government's original estimates. Under HARP 3, Refinance volume would surge, consumer spending and savings rates would rise, and labor markets would expand.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options. 

Adjustable vs Fixed Rate

 

All About Fixed Rate Mortgages

A fixed-rate mortgage is exactly what it sounds like. It's a mortgage for which the interest rate is fixed for the life of the loan.
Fixed rate mortgages are available in multiple terms, where "term" is used to describe the length for which the mortgage contract is in place. With a fixed-rate mortgage, when the term is complete, the loan is paid-in-full.
As you may suspect, the monthly payment required for fixed-rate loans increase as the loan term reduces. This is because, with a shorter loan term, the homeowner is repaying the mortgage lender over a lesser period of time.
The upside of assuming the larger payment that comes with a shorter fixed rate loan term is that mortgage rates are often lower, and the amount of mortgage interest   paid over the loan's lifetime is less, too.
For example, consider a homeowner in Orange County, California borrowing at the local jumbo mortgage limit of $625,500 and how different loan terms affect the monthly mortgage payment, given today's mortgage rates :

• 30-year fixed rate mortgage : $2,765 monthly; $370,000 mortgage interest over time
• 20-year fixed rate mortgage : $3,547 monthly; $226,000 mortgage interest over time
• 15-year fixed rate mortgage : $4,208 monthly; $132,000 mortgage interest over time
• 10-year fixed rate mortgage : $5,897 monthly; $82,000 mortgage interest over time

Some banks also offer intermediate loan terms including the 25-year fixed rate mortgage and odd-year terms such as a 17-year fixed rate mortgage.
The main benefits of a fixed rate mortgage are linked to its predictability. With a fixed-rate mortgage, your mortgage payment is set on Day 1 of your home loan, and never changes until the loan is paid-in-full. Some homeowners like this.
However, in recent years, another benefit has emerged.
For U.S. homeowners refinancing via the government's HARP mortgage program for underwater home loans, refinancing into a fixed-rate mortgage gets you access to the program's "unlimited LTV" feature. HARP households using adjustable-rate mortgages are limited to 105% loan-to-value. Homeowners using a fixed-rate loan can have LTVs of 200% or higher.

All About Adjustable-Rate Mortgages

An adjustable-rate mortgage (ARM) is a mortgage for which the interest rate can vary over time.
Mortgage rates are often lower with an adjustable-rate mortgage versus for a comparable fixed rate loan because the homeowner assumes some of the long-term interest rate risk which is fully-assigned to the bank with a fixed-rate loan.
Most ARMs works like this :

• For some preset, fixed number of years, the ARM's mortgage rate remains unchanged
• After the fixed period ends, the mortgage rate changes based on a preset formula
• Annually, the ARM's mortgage rate changes again based on the same formula

Adjustable-rate mortgages then to adjust once per year until the original loan balance is paid in full, usually in 30 years. Note that some ARMs exist which adjust every six months, but they are uncommon. Annual adjustments are most prevalent.
When ARMs adjust, the "adjusted mortgage rate" is a sum of two numbers -- a constant figure called a margin and a variable figure called an index. When you add the (margin) to the (index), you get your new rate.
The most common index used for ARMs is the 12-month LIBOR rate, which is currently 0.86%. Margins are typically 2.5%. Today's homeowners with adjusting mortgage rates, therefore, get new mortgage rates near 3.36%.
The good news is that adjustable-rate mortgages cannot adjust too high, too quickly. This is because ARMs come with "adjustment caps" -- limits in how far an adjustable-rate mortgage's mortgage rate can change during any one adjustment period.
The adjustment caps often vary by the ARMs initial fixed-rate period.

• 3-Year ARM : Rate doesn't change for the initial 3 years, after which it can change up to ±2% annually, and after which it may never be more than ±6% from the initial mortgage rate.
• 5-Year ARM : Rate doesn't change for 5 years, after which it can change up to ±5% at the first adjustment, and after which it can change up to ±2% annually, and after which it may never be more than ±5% from the initial mortgage rate.
• 7-Year ARM : Rate doesn't change for 7 years, after which it can change up to ±5% at the first adjustment, and after which it can change up to ±2% annually, and after which it may never be more than ±5% from the initial mortgage rate.

Adjustment caps protect homeowners from a rapidly-rising index such as LIBOR, limiting how far an ARM can adjust in any given year.

Which Is Better For You : Fixed Rate Mortgage Or Adjustable Rate Mortgage

There are a lot of reasons to choose a fixed-rate mortgage over an adjustable-rate mortgage; just as the reverse is true. The "best" product will depend on your individual risk tolerance and your short- and long-term financial goals.
However, in recent years, as fixed rate mortgage rates have dropped, the relative value of an ARM's low starting mortgage rate has diminished.
Furthermore, certain ARMs including those made in "high-cost areas" such as Montgomery County, Maryland; San Jose, California; and New York, New York require larger downpayments than comparable fixed-rate loans.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options. 

Harp Update?

 

HARP : Saving Homeowners $21 Billion Annually?

The Home Affordable Refinance Program is nearly 5 years old. It was first introduced in March 2009 as part of that year's economic stimulus, and will be available through the program's December 31, 2015 end date.
HARP is touted as the "underwater mortgage". It makes today's low mortgage rates available to homeowners whose homes have lost value since purchase.
When it was first launched, HARP was timely. Home values were sinking as fast, as were mortgage rates. Homeowners with Fannie Mae- and Freddie Mac-backed mortgages, however, were unable to refinance. They lacked sufficient home equity to qualify for a loan.
HARP mortgage guidelines instructed lenders to overlook a homeowner's loan-to-value (LTV) and to refinance their home loan anyway.
Interestingly, HARP was not billed as a housing market stimulus but, rather, an economic one. The government's goal with HARP was to boost consumer spending.
By giving U.S. homeowners access to lower mortgage rates and payments, the government posited that households would have more available money to spend on goods and services.
How much more? How about $21 billion, based on two government claims about HARP. First, that the program would save the typical U.S. household $3,000 annually; and, second, that it would reach 7 million households nationwide.
After two years, though, it was clear HARP would fall short of its 7-million target. To put the Home Affordable Refinance Program in the hands of more homeowners then, in late-2011, Fannie Mae and Freddie Mac began lifting program restrictions.
Gone was the requirement that HARP loans cap at 125% LTV. Gone was the requirement to use your same mortgage servicer. Gone was the verification of income, assets and credit. Via "HARP 2.0", homeowners could refinance at any LTV with any mortgage lender with fewer hurdles.
The program bore a strange resemblance to the Federal Housing Administration's FHA Streamline Refinance and the Department of Veterans Affairs' VA Streamline Refinance.
HARP was redesigned as the "streamline" conventional refinance and, under the HARP 2 rules, there have been an additional 1.7 million closings.
Now -- again -- Fannie Mae and Freddie Mac are tinkering with HARP.
They've already extended the program deadline by two years this year to December 31, 2015. Now, they're updating the program's eligibility requirements. It's another small step toward the release of HARP 3.

Updated HARP Eligibility Requirements

Mortgage rates today are lower than the government ever expected. As a result, today's HARP-refinancing homeowners are saving more money than the original projections ever predicted they would.
At today's low rates, for example, to meet "$3,000 in annual savings", your original mortgage loan size would have to have been $163,000. This is a small percentage of the U.S. population. Many homeowners borrow more than that and, if you loan size was bigger, your savings are bigger, too.
A homeowner whose original loan size was $250,000 could use HARP to save $4,800 per year, and a homeowner whose original loan size was $400,000 can save $8,000 annually.
Despite these benefits, HARP refinance volume has slowed nationwide.
In August, the number of HARP mortgages fell to its lowest point since the launch of HARP 2.0 and interest in the program appears to waning. Likely, this is an awareness issue because there are millions of U.S. households still eligible to HARP.
Maybe you're among them. The eligibility requirements for HARP are basic :

1. Your loan must be backed by Fannie Mae or Freddie Mac
2. Your mortgage note date must be on, or before, May 31, 2009
3. Your loan must be current, with no "late pays" in the last 6 months

Beyond that, HARP guidelines are similar to other streamlined refinance loans -- documentation requirements are fewer, appraisals can be skipped, and underwriting turn times tend to be faster.
Unless volume increases, though, it's likely that HARP 2.0 will be revamped much like its predecessor.
HARP 3 could feature a host of changes including opening the program to non-Fannie Mae and non-Freddie Mac homeowners; extending the program's start date from May 2009 into 2011; and, allowing the "Re-HARP" of an existing HARP home loan.
A HARP 3.0 bill is currently in committee in Congress. Fannie Mae and Freddie Mac could wait for its passage, or release additional HARP updates on their own.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

Mortgage Terms 101

Defining PITI

When a mortgage lender is trying to determine your ability to repay, one area at which it looks is your total monthly housing payment.
Your total monthly housing is calculated as follows :

• Your monthly mortgage principal payment
• Your monthly mortgage interest payment
• Your annual real estate tax bill, pro-rated to a monthly figure
• Your annual homeowners insurance bill, pro-rated to a monthly figure

Collectively, these elements -- principal, interest, taxes, insurance -- are known as PITI. 
PITI is pronounced "pee-eye-tee-eye" and for rate-shopping home buyers, it can vary from day-to-day, and from home-to-home. This is because mortgage rates change daily, which change a home's principal + interest payment, and because every home's tax bill and insurance bill are different.
A home in storm-heavy Miami, Florida, for example, will typically cost more to insure than a home in Columbus, Ohio. The same is true for a home in the San Francisco Bay Area which may be more susceptible to natural disaster than a home in Denver, Colorado.
Similarly, homes in newly-built areas may require a higher tax bill as infrastructures get built, raising the monthly PITI as compared to homes in more mature neighborhoods. 
Many mortgage programs such as the FHA Streamline Refinance and various VA home loans require monthly pro-rated tax and insurance bills to be included within the monthly mortgage payment, a loan trait known as "escrowing" taxes and insurance. 

Find Your Monthly Escrow Payment

Escrows are a part of your mortgage payment and you'll want to know your obligation. It's best to use a calculator because, although the math is simple, you want to make sure you get it right.
First, find your home's real estate tax bill(s), noting that in some areas, you may receive statements from multiple different taxing authorities. Find the sum of these statements and add to it your annual hazard insurance premium.
If you are a home buyer and don't know what your hazard insurance premium will be, estimate 1% of the purchase price. This will yield an estimate which is likely larger than your actual premium, but when building a budget, it's often better to estimate on the high-side.
Next, divide your sum by the 12 months in a year.
As an example, a Bucks County, Pennsylvania home with a $8,400 annual tax bill and a $1,200 insurance policy will pay $9,600 annually. This yields $800 paid into escrow monthly as part of PITI.
These monies are paid along with the mortgage payment's principal + interest portion.

Some Homeowners Prefer To "Waive Escrows"

Not all mortgages will require a homeowner to escrow. Specifically, mortgages via Fannie Mae or Freddie Mac for which there is at least 20% equity will often allow self-management of a homeowner's annual tax and insurance obligations.
Asking to pay your own taxes and insurance is known as "waiving escrow".
Not surprisingly, mortgage servicer’s prefer that homeowner’s escrow for taxes and insurance. This is because when escrows are waived, it introduces two major lender risks:

1. A home’s real estate taxes may go unpaid, go delinquent, and get sold to a third-party
2. A home's insurance coverage may lapse, and major damage is somehow sustained

These two scenarios are avoidable for loans with escrows; when the full PITI is paid to the lender monthly.
For this reason, homeowners choosing to waive escrows may sometimes be denied access to the same low rates as their tax-and-insurance escrowing peers. The "fee" to waive escrows can raise your mortgage rate by as much as 0.25 percentage points.

Get Today's Rates With (And Without) Escrows

If you're planning to buy a home or refinance one, and aren't sure whether you'd like to escrow, consider the costs of both routes. Putting your tax and insurance bill in the hands of a lender gets your bills paid on-time, but restricts your access to those funds -- including the ability to earn interest on them.
However, if you choose to waive escrow and self-manage your bills, you may be subject to higher mortgage rates.
Note, though, that not all lenders charge an escrow waiver fee and you can't know until you ask. Jumbo lenders are most likely to allow the waiving of escrows without penalty.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.   

The Levels of Debt

Credit Inquiries : A Fraction Of A Fraction Of Your Credit Score

A "credit inquiry" is a formal request to review a person's credit report.
They are just one small element within a larger credit-scoring category known as "New Credit". New Credit accounts for 10% a person's overall credit score.
New Credit is the smallest of 5 credit score components.
Searching for new credit is relevant to your credit score because when you make a credit inquiry, it's a specific request to increase your level of indebtedness. Taking on additional levels of debt increases the probability of a default.
This is why credit scores drop when you go looking for new credit cards or charge cards -- each new credit inquiry increases the probability that you're taking on large amounts of debt, which makes it less likely that you'll make good on your payments to your creditors.
Credit inquiries come in many varieties.

1. A credit check for a mortgage loan
2. A credit check for an auto loan
3. A credit check for a credit card application
4. A credit check for a store credit card, or consumer loan

Not surprisingly, each of these 4 credit check-types receive different treatment by the bureaus.
For example, a credit card application is weighted "worse" than a mortgage loan and can be be more damaging to your total credit score. This is because credit card debts tend to move higher over time, which worsens your overall credit position.
Mortgage debt, by contrast, eventually pays down to $0.
The same is true for consumer loans and store credit cards. These card types are associated with layaway plans and "loans of last resort". Both credit types with high default rates. These, too, can have a damaging effect on your credit score.
Because store credit is considered "bad", give careful consideration before opening store credit cards. You may save 20 percent on that purchase by starting up the new account, but you may also inflict major, immediate damage on your credit score.

A Mortgage Inquiry Lowers Your FICO By 5 Points

Even still, the effect of a mortgage inquiry on your credit score remains tiny. Here's why.
Mortgage lenders evaluate your credit using the FICO scoring model. The FICO scoring model ranks scores from 300-850. 65% of that score is linked to two elements of your credit history -- (1) Payment History, and (2) Credit Utilization.
The credit bureaus give the most weight to how much money you're borrowing from creditors, and whether you're actually paying your creditors back.
That makes sense.
The next 15% of your credit score is tied to your credit history; to the length of time you've had credit in your name. The more time you've spent managing your own credit, the better your score will be.
This, too, makes sense. It's risky to lend to a "first-timer"; a person who has never had a credit card to his name, or repaid a car loan, or borrowed money for an education.
Then, the next 10% is linked to the type of credit you maintain.
Auto loans and mortgage debt are viewed as positives in this regard. Store charge cards are viewed as a negative. These positives and negatives are based on default rates from tens of millions of other borrowers.
The credit bureaus have found that people with high numbers of charge cards tend to default more often then people with traditional credit cards. As a result, people with high numbers of charge cards tend to show lower credit scores than people with no charge cards at all.
The remaining 10% of your FICO scale is the 10% reserved for what's known as "New Credit".
New Credit is an assessment of the new credit accounts you've opened, the types of credit for which you've applied, and how long since you last opened an account.
Because FICO is a 850-point scale, at maximum, New Credit is worth 85 points to your FICO. Having a lender check your credit score can only affect a small portion of that figure. 
A mortgage credit inquiry is estimated to lower your credit score by just 5 points.

Shop Multiple Lenders, Get One "Ding" On Credit

When shopping lenders and taking credit checks, you're going to lower your credit score. It's how the system works. However, there's a right way and wrong way to move forward. 
The first important concept is that -- unlike applying for multiple credit cards -- when you apply multiple mortgages, you won't get dinged for multiple, consumer-initiated inquiries. This is because when you apply for 5 credit cards, you'll likely get the option to use them all five.
By contrast, with the mortgage applications, you'll only get an approval once.
As such, the credit bureaus have made it formal policy to permit "rate shopping". In fact, it's encouraged. And this leads us to the second important FICO-protecting concept. 
You have the right to shop with as many lenders as you like. The trick, though, is to shop for your mortgage within a limited, 14-day time frame. If you can manage that, the credit bureaus will acknowledge your first credit pull as a "ding", but will ignore each subsequent check.
This means that you can have your credit checked by an unlimited number of lenders within a 2-week period, enabling you to compare mortgage rates and fees ad nauseum.  And, no matter how many credit checks you do, the mortgage inquiries get lumped into a single credit score hit.
It's a policy that's good for you and good for the credit bureaus. Your credit scores stay high, and TransUnion, Equifax and Experian collect more fees from the banks.

Advice : How To Get The Lowest Mortgage Rates

The credit bureaus do a terrific job of explaining how you can exploit the mortgage process to get very low rates :

1. Want the best rate? As they say, "shop around" for it.
2. Limit your rate shopping to 14-day timespan to minimize your total credit "dings" 
3. Give up your social security number so lenders can give accurate quotes instead of just guesses

Note this last point -- it's important.
Metaphorically, not letting your lender check your credit is like not letting your doctor check your blood pressure. Sure, you can get a diagnosis when your appointment's over -- it just might not be the right one.
Letting a lender see your credit score can mean the difference between a 3.25% and a 4.25% mortgage rate; a conforming mortgage and an FHA mortgage; an underwriting approval and an underwriting denial.
Start your shopping and do it right. See today's low mortgage rates.


To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

What Is A Mortgage Closing Cost?

 

What Is A Mortgage Closing Cost?

Mortgage "closing costs" are fees consumers pay to start a new mortgage, and can be grouped into two categories.

Origination/Lender Charges

Origination/Lender fees are fees paid in conjunction with your loan's origination. They include line-items from your settlement statement which may include an application fee, a rate lock fee and/or origination points, for example.
Listing all such fees is difficult because fees masquerade under different titles from bank-to-bank, and from product-to-product. One bank's "underwriting fee" is another bank's "processing fee", for example, and VA loans and FHA loans have specific costs which don't exist for conventional ones.
This is why rate shoppers who attempt to shop banks "fee-for-fee" tend to strike out. It's an impossible comparison.
A better plan for today's home buyers and refinancing households is to just ignore the individual line items which make up lender's origination fees completely. Instead, savvy shopper should focus on the sum of origination charges -- it's inclusive of all fees and makes for simpler comparisons.
Look for Section 800 on your Good Faith Estimate (GFE). It's the section in which origination fees and lender charges are listed and summarized.

Third-Party Charges

The second type of closing costs are "third-party" costs.
Third-party costs are fees paid to parties other than your mortgage lender. Third-party fees can include the costs of your appraisal(s), the cost of your credit report, and title company settlement costs.
In general, when comparing Good Faith Estimates against each other, you should ignore whatever third-party fees are listed. This is because third-party fees are often fixed-cost items which cost the same no matter which bank you ultimately work with.
Your appraisal costs what it costs; your credit report costs what it costs; and your choice of lenders won't affect that. That said, one of the rare times that third-party costs come into play is with respect to HARP refinancing; or via the FHA Streamline Refinance and VA Streamline Refinance. These three programs often waive the need for a home appraisal. Some lenders, however, may insist on performing one, which can affect costs.
Be sure to ask your lender whether an appraisal will be required.

Convert Your Mortgage Into A Zero-Closing Cost Mortgage

Closing costs are 6% higher as compared to last year and paying for costs can be costly -- especially if you live in high closing cost states such as Hawaii, California or New Jersey.
There are three ways to pay your mortgage closing costs :

1. You can pay your costs with cash at closing
2. You can add your closing costs to your loan balance (for refinances)
3. You can waive your closing costs via a zero-closing cost mortgage

Each method has its advantages.
When you pay your costs with cash at closing, you often get access to the lowest combination of mortgage rate and loan size. In the long-term, this reduces the amount of mortgage interest paid to your lender, and can result in a quicker principal balance reduction.
When you add your closing cost to your loan balance, you save your savings which can help with financial planning. It's important for all homeowners to have an emergency cash reserve and using your reserve to pay for closing costs could be foolish.
Or, you can waive your closing costs altogether via a zero-closing cost mortgage.
Zero-closing cost mortgages are exactly what they sound like -- they are mortgages for which the homeowner pays absolutely zero closing costs -- nothing is added to the loan balance, nothing is "hidden" in the figures.
With a zero-closing cost mortgage, all fees down to the last penny are paid by the lender instead of by you. In exchange for this payment, the homeowner agrees to accept a slightly higher mortgage rate than the day's "market rate" -- typically an increase of 0.25 percentage points.
As an example of how this works, let's say a homeowner in Loudoun County, Virginia wants to borrow at the local jumbo conforming loan limit of $625,500 and doesn't want to pay Virginia's closing costs with cash. In most cases, the homeowner could add the costs to his loan. Here, however, it's not an option. This is because the loan balance would exceed conforming loan limits if the closing costs were added.
The homeowner would have to use a zero-closing cost mortgage, then.
If today's mortgage rates are 4.50%, the mortgage applicant would get a rate near 4.75% from his bank. In return for taking the higher rate, all of the applicants closing costs would be waived.
Zero-closing cost mortgages are available with purchases and refinance.

Get Today's Zero-Closing Cost Mortgage Rates

In many refinance scenarios, zero-closing cost mortgages are an economically-sound decision. When you pay no costs, you get a refinance with infinite ROI -- there are measurable monthly savings and no closing costs to recoup. You break-even on the mortgage before it ever even starts.
On purchases, they can work out, too. Paying fewer closing costs means that you can increase the size of your home downpayment, or reserve some money for repairs.
Closing costs are rising, Bankrate.com tells us, and they're expected to rise through 2014, too. Make sure to have a plan. Know what today's zero-closing mortgage rates look like and see where you can save on fees.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.