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A Message From

Kemmer Matteson

 
 
 
 
 
 

March

2015

 
 

  

Kemmer Matteson

  

949-421-1000 x701

Cell: 714-606-8400

  

www.firstcaliforniafinancial.com

Inside This Issue:

 

* Lower FHA mortgage insurance premiums.

 

* Buying this year may be a wise decision.

 

* Question of the Month: When can I buy after a bankruptcy?

  
 
     
 

The FHA Lowers it's Mortgage Insurance 

 
   
 
 

 

We believe in building strong relationships that are genuine in doing business the right way. Most of our new customers are referrals from our existing happy clients. Our relationship with local real estate professionals who have wonderful testimonials about us, have also help built our client-base. We are proud of our long list of happy customers. And, we are confident that we will meet and exceed your needs and expectations too.

 

- Kemmer Matteson

 

The most attractive aspect of a loan backed by the Federal Housing Administration (FHA) is the low down payment requirement. If you qualify for an FHA loan, that could mean a down payment as low as 3.5 percent. Also, interest rates on FHA loans are the lowest they’ve been in almost two years.

The bad news is this: FHA loans do require mortgage insurance premiums (MIP), which can be quite costly. However, there is also good news: The FHA just lowered the monthly mortgage insurance requirement by one half of one percentage point. This could mean hundreds of dollars of savings each month.

For the past several years, the FHA—which insures roughly 20 percent of all mortgages—had imposed costly mortgage insurance premiums on borrowers in order to fund its cash reserves. As recently as last year, the FHA needed a cash infusion from the U.S. Treasury, but improved loan performance and rising home values increased its capital reserve balance by the end of 2014. In turn, the FHA decided that it would lower its MIP requirements by 0.5 percentage points—from 1.35 percent to only 0.85 percent for a 30-year loan with a loan-to-value ratio of 95 percent or more.

What could this mean for you? Like we said, the monthly savings could run in the hundreds of dollars. Although upfront mortgage insurance required on FHA loans remains unchanged, the monthly cost—which is the one that really matters—has been significantly reduced for FHA loans of $625,000 or less.

FHA loans have become more popular lately and these loans have helped many people buy over the last five years. Although not every borrower qualifies for an FHA-backed loan—and it may not be the right loan for many borrowers—if you do qualify, this new lower MIP is definitely good news. Δ

 
 
     
 

Five Reasons Why Buying This

Year May Be a Smart Decision 

 
   
  
 

Whether you’ve been mulling over the idea of buying your first home or fifteenth home, it may be a very wise financial decision to finally pull the trigger on buying a new home in 2015.

Here are five reasons why:

1. Having a mortgage can be less expensive than paying rent. Rental rates have been climbing and the latest numbers show a 6.1 percent year-over-year increase. In many areas, the average monthly rent is higher than the average monthly mortgage. Or, look at it this way: Making a mortgage payment is an investment into your equity, whereas making a rental payment is not.

2. Home prices are still reasonable in most areas. As we mentioned, home prices are rising in many areas, but not as fast as they were two years ago or even last year, when prices rose slightly above 4.0 percent nationally. Although all real estate markets are different, prices in many cities and markets are significantly lower than they were at the peak of the housing boom back in 2006.

3. Interest rates are low for all types of mortgages. Whether you’re looking for a 30-year fixed-rate, a 15-year fixed-rate, a jumbo loan, or an adjustable rate mortgage, the interest rates are definitely in your favor right now. Currently, the rates are at the lowest levels they’ve been since May of 2013. Along with home prices, this is an area in which you can save quite a bit of money.

4. Getting a mortgage with a down payment of 3 percent just got easier. Although there are some restrictions, you can now get a mortgage backed by Fannie Mae or Freddie Mac that has a down payment requirement as low as 3.0 percent (Fannie began backing such loans in December and Freddie will begin on March 23). You now have two more options to go along with the other low down payment loans.

5. Buying a home is a good investment—especially as a long-term investment. Real estate is one of the best investments. Yes, the housing market is cyclical and there are plenty of ups and downs, but right now we’re seeing an upswing in many markets and this is a good time to be a buyer. In the long term, real estate is an especially good investment—as long as you’re willing to ride out any declines in prices and values.

It’s important to remember that real estate is always in flux and market conditions can change very quickly—especially home prices and interest rates—so don’t wait to buy if you’re ready. ∆

 
  
     
 

March's Question of the Month

 
   
 
 

"I WENT THROUGH A BANKRUPTCY SIX YEARS AGO. I’VE BEEN WORKING HARD TO IMPROVE MY CREDIT SINCE THEN, BUT WILL IT BE DIFFICULT FOR ME TO BUY A HOME AND GET A MORTGAGE NOW?"

 

Although each situation is certainly different, getting a mortgage after a bankruptcy will depend on the type of bankruptcy you filed, the type of loan you’re looking for and how you’ve been able to re-strengthen your credit and financial situation. Each type of loan has a mandatory waiting period after a bankruptcy, ranging between one and four years. The waiting period for a FHA-backed loan is two years for a Chapter 7 bankruptcy and one year for Chapter 13 bankruptcy, as long as you have abided by the terms of the bankruptcy proceedings. For a conventional loan, the waiting period is four years for a Chapter 7 and two years for a Chapter 13. Keep in mind that there are other requirements you’ll need to meet and you may need bankruptcy court approval before getting a loan. In your particular situation, if you’ve been diligent about paying down debt and you’ve been building up your credit over the past six years—and you’ve met all of the other guidelines—you should be able to buy a home and get a mortgage at this point. If you’ve gone through a bankruptcy and are interested in buying, make sure you discuss your situation with a financial planner, an attorney (if needed), and your mortgage professional.

 
 
 

  

Kemmer Matteson, President/CEO

First California Financial Inc.

  

Direct: 949-421-1000 Ext. 701

 
 

Cell: 714-606-8400

www.firstcaliforniafinancial.com

Fax: 949-429-7518

kemmer@firstcaliforniafinancial.com

 
 
        
  

Kemmer Matteson

 

Private Client Mortgage Lending

 

  
     

 

First California Financial Inc. 30531 Via Ventana, San Juan Capistrano, CA 92675

 

 

NMLS #249189 DRE #01151976

 

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