Virginia mortgage rates and industry news

Many investors updated their rate sheets this week and added a new loan program...."The conforming PLUS program".  After a highly anticipated move by HUD to temporarily increase the conforming loan limit in high cost areas, most of us have watched in dismay as rates and guidelines have been released on this new program. 

Although this new loan program is offering some relief for home owners and buyers requiring jumbo financing, the requirements and rates associated with this new loan program are not as favorable as many had hoped.  Most investors are requiring a 700 or better credit score and are limiting their exposure to 90%.   Translation; you'll need excellent credit AND you'll need at least 10% equity in your home, or be required to put 10% down.  Even if you've got all of that going for you, don't expect to see rates in the 5's right now.

Let's talk rates.  Right now as I type this email, excellent credit will get you a conforming 30 year fixed rate up to $417,000 at 5.625% with zero points.  You can confirm that by clicking HERE.  Should you need to borrow even more money, the new "conforming PLUS program" may be your answer, but the rates are vastly different.  A $650,000 loan under the new program is roughly 6.50% (depending on adjustments)with zero points.  Contrast that with traditional jumbo financing, and those rates are in the high 7's!

What happened to ARM's?  Approximately ten days ago Wall Street lost their appetite for Adjustable Rate Mortgages.  So much in fact, that a traditional 3/1 or 5/1 ARM will set you back as much as a conventional conforming 30 year fixed!  Will they come back?  We are watching patiently...

Stated Loan (Update)  As quickly as investors rolled out the "Conforming PLUS program" they pulled the traditional Stated/Stated or SISA loan off the shelves.  There are only a handful of investors still doing them.  Word of advice?  If you know you need this type of financing, RUN...don't walk to lock these loans in. 

How should you structure your purchase or refinance?  That will clearly be dictated by the amount of home you need to finance.  While second mortgages still exist and provide excellent means to avoid mortgage insurance, they are no longer available up to 95% in most cases.  Mortgage insurance and "Lender Paid" mortgage insurance have made their way back onto the playing field and look to be more prevalent than ever.  

Do you have questions concerning the way your mortgage is structured, or how to structure a new home purchase?  I would be glad to discuss it with you, and make sure you are getting the maximum benefits from today's complicated mortgage arena.