Apply Again for a Mortgage Refinance After Denial, Rosemary Rugnetta,

Despite what has been heard about the mortgage market for the past several years, it is not all gloom and doom for everyone. More homeowners are not underwater than there are those that are underwater. Even today, mortgage refinance applications are still up and providing existing borrowers the opportunity to obtain the current lower mortgage rates available. Applying again for a mortgage refinance after receiving a denial is a must for existing homeowners since there is a good chance for approval.

Many borrowers are or have been denied a mortgage refinance for some reason or other. The denial is often the result of a particular lender’s guidelines that were in place at the time of the mortgage refinance application. Lenders have what are called overlays for conforming mortgages which are additional guidelines on top of those issued by Fannie Mae and Freddie Mac. These are called the matrix in the lending world and differ from lender to lender. Each mortgage is approved or denied according to the matrix for that particular mortgage product. For this reason, when a borrower is denied by a lender, it should not be their final attempt. However, running from lender to lender is also not a good idea since each one will probably make a hit to the credit report which can ultimately damage the borrower’s credit scores. By inquiring for information online without using a social security number, the borrower may be able to find a lender who is able to help them. It is a much easier and efficient way of searching for help and more likely that the borrower will find success.

In some cases, it may very well be impossible at this time to refinance. Finding out the reason is important because it could be related to something on the credit report which the borrower can work on improving so that in several months they may be able to apply again for a mortgage refinance after receiving a denial. Whatever the reason is for being turned down, success is still a real possibility. surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

Are you ready to take out your first mortgage loan?, By Melissa Gates

Whether you’re looking to buy a home in New Jersey, New York, Carolina, Texas or anywhere in the United States of America, you have to inevitably take out a mortgage loan to finance the property. Apart from the ultra-rich people, no one is able to finance their own property with their funds as this requires a huge amount of money. For all the laymen who come from mediocre families, taking out a mortgage loan is the only option left. If you’re a first-time homebuyer, you must not be aware of the basics of taking out a home mortgage loan. If you don’t choose a loan within your affordability, it is most likely that you have to take out a  loan in the near future after paying all the closing costs and other fees. Its better you take the required steps before. Read on to know some basic facts that are taken into consideration by your lender while lending you a loan.


1. Your credit score: The most vital fact that is taken into consideration by the mortgage lenders is your credit score. You’re entitled to take out a free copy of your credit report from any of the three credit reporting agencies and by doing this you can easily take the steps to boost your score before applying for a home mortgage loan. With an exceptionally good credit score, you can grab the best mortgage loan in the market and thereby save your hard-earned dollars.


2. The amount of loan you can afford: This point is to be taken into consideration by you so that you don’t overstretch yourself while getting yourself a mortgage loan. Take out a loan within your affordability so that you don’t have to burn a hole in your pocket while repaying the loan. Consider all the other factors needed to determine the amount of loan that you can afford.


3. The total income earned by you in a month: The gross monthly income that you earn in a month is another important document that is checked by the lender so that he can determine whether or not you can repay the loan on time after managing all your other debt obligations that you owe. If you want to secure a lower interest rate on the home mortgage loan, you should boost your income in a month and then apply for the loan.


Apart from the above mentioned factors, the mortgage lenders take the debt to income ratio into account as they also need to see whether or not the borrower can make timely payments on the home mortgage loan. Manage your personal finances so that you don’t have to opt for refinance in the future.


Home Affordability Reaches Generational High, by International Business Times

If you have good credit and savings, now is a great time to buy. According to, “Homes are more affordable than they’ve been in the past 35 years.”

Not only have home values fallen in many key markets, making homeownership more accessible to the average buyer, interest rates are at historic lows, meaning that once a home is purchased, monthly payments are smaller than in our recent past.

Zillow notes that “today’s median home buyer can expect to pay about 17% of his monthly gross income on his mortgage, compared to a 25% average since 1975.”

In the 1980’s, when interest rates were dangerously near 20 percent, this would take up nearly 45 percent of a buyers gross monthly income. In comparison, today’s rates are an extreme bargain.

The main road block to homeownership at this time is access to credit. Although nearly one-third of all home purchases in recent months have been all-cash, that leaves the majority of the market shares requiring financing.

The tightening of lending standards in recent years, though, has been in direct response to the subprime lending trend during the housing boom.

Federal Reserve research indicates that a quarter of all mortgages in 2006 were subprime. This means that these loans were made to borrowers with credit scores below 620-660 and who were unable to put down the traditional 20 percent.

Today, buyers need credit scores in the 700s, with the higher the better. According to Zillow, “Applicants with FICO scores under 620 were virtually unable to get loans at any rate, thus being effectively excluded from the home-buying market. And those with FICO scores below 620 represent almost a third of the population.”

There has also been a return of the 20 percent downpayment. This is in your best interest, as it means savings when it comes to closing costs. “The difference between a 10% and 20% down payment means she now has to save up another $17,220 in addition to any closing costs.” (Zillow)

So, while it is more difficult for many homeowners to get into the market in today’s economy, for buyers who have good credit and adequate savings, homes may never have been more affordable.

VA Home Loan Eligibility in Eugene/Springfield Oregon can be confusing, by Fred Chamberlin,

VA Guaranteed Home Loan eligibility in Eugene/Springfield Oregon can be very confusing. Who is and who is not eligible may be a surprise to those that are eligible that may not realize it. As a Vietnam Era U.S. Air Force veteran with 10 years of service, my eligibility is pretty easy to see.

Some are obvious (like mine), others are more obscure:

Veterans with active duty service (who were not dishonorably discharged) during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days of service.
Veterans and active duty military personnel who served during peacetime must have had more than 180 days of active service. Veterans of enlisted service starting after September 7, 1980, or officers with service beginning after October 16,1981, must in most cases have served at least 2 years.
Veterans who have served after August 2, 1990 (Gulf War period) must have completed 24 months of service or at least 90 days of active duty for which you were called or ordered to active duty. Most of this is written in “militaryeze” so the easiest way is to submit for a certificate of eligibility or COE. Reservists and National Guardsmen will often qualify for the 90 days of active duty provision if they had been called up for duty.
Active duty personnel with at least 181 days of service or 90 days during the Gulf War.
The VA does not require that you have a certain credit score in order for approval. The actual mortgage lenders, however, are allowed to set their own standards for VA loan requirements and that is normally either 620 or 640 mid score.

Changing economic conditions and increased losses due to loan defaults have motivated lenders to limit who they will lend to.

Since early 2010, most VA lenders in the U.S. have tightened their lending and credit score requirements, making home financing harder to come by for those with credit issues or other criteria that makes their loan more risky.

As a result, getting a loan without a down payment is more difficult, though one of the few remaining options for 100% financing is a VA loan. Major lending groups have generally resolved to set the minimum credit score requirement at 620.

To learn more about this, our article Credit Score Requirements For VA Mortgages (in a later post) is a great place to start.

There are several specific pieces of documentation a lender will need to determine your eligibility:

A DD214 for discharged veterans.
A NGB Form 22 for Army or Air National Guard
A statement of service for active military personnel.
A certificate of eligibility (COE) to determine you have VA entitlement.
Widows/widowers of service personnel that died while on active duty.

Because each lender has different qualifying guidelines, the next step is to contact me to find out if you meet their VA loan requirements such as minimum FICO/credit scores, debt-to-income (DTI) ratios, and find out about maximum loan amounts with and without a down payment.

I can help you attain your certificate of eligibility on your behalf.

Lastly, if you have either had a divorce, filed bankruptcy, or had a previous home go into foreclosure, you are not immediately disqualified from a VA loan, although there are some additional restrictions.

You can find more information regarding these future topics in our articles titled Divorce And VA Loan Eligibility, Does A Bankruptcy Mean I Can’t Get A VA Loan? and Can I Get A VA Loan If I’ve Had A Recent Foreclosure?

Contact me

Navigating the mortgage approval process doesn’t have to be daunting. With me on your side those hurdles can be overcome. I am available right now to help you with the loan process and know the ins and outs of FHA, VA, USDA and conventional financing. If you want to buy a home using an FHA loan or refinance using VA, I am here to help. Contact me at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401, 541-342-7576/541-221-3455 cell or by e-mail. Only you can make the choice it is time to get the process started.

Just because we can do an FHA loan at 580 FICO, does that mean we should? By: Jason Hillard

this post was originally published on home loan ninjas on July 2nd 2010

Perhaps the biggest advantage to being an affiliate branch of a mortgage bank is our inherently “hybrid” nature. We are the bank; we have more responsibility and control than ever before. However, there are some hard and fast guidelines that all loans we originate and underwrite “in-house” must adhere to. These are policies that ensure our good standing with the investors we sell the loans to. Without access to these investors, we wouldn’t be in business because we do not service loans.

One of these steadfast rules is a minimum FICO score of 640, regardless of the loan program. This is where the “hybrid” nature of our operation kicks in and really sets us apart from a traditional bank. If we have clients that don’t meet certain underwriting criteria as prescribed by our investors, we can broker the loan to another bank. Hybrid: part bank, part broker. It really is a beautiful thing because it allows us to assist more customers than before. And we can be faster on our feet because we aren’t always relying on third parties, and provides more options to the consumer.

A quick perusal of the matrix of banks we are brokered with yielded a surprising tidbit of information: we can still do an FHA loan down to a 580 credit score.

This, of course, brings up an important question…

Just because we can, does that mean we should?

My partner and I, as I have previously mentioned, rarely fill out a client’s home loan application the first time we talk to them. Many people out there don’t qualify for their “ideal” mortgage right away. Others don’t know how much income they truly make. The point is, we get to know the down and dirty details before we begin the process in earnest. Outside of a few exceptions, this is the only responsible way to do business.

Now many times one of those details is a “less than perfect” credit score. Frequently, this can be remedied in 6 to 12 months with a little hard work, diligence, and a willingness to pay the items that are negatively impacting the client’s credit score.

We help people climb back up. Its what we are supposed to do. We are advisors, not just salesmen.

Can you make a case in the post-bubble (fingers-crossed) era for doing loans for people with a 580 credit score?

Right now, we have quite a few clients that are in this range. Actually, we always do because we talk to a lot of people and we don’t believe in simply turning people down with no plan to become “approvable”.

So how do we determine whether or not to proceed?

The answer, to me, lies in whether or not the consumer is climbing the stairs up, or riding the slide down.


Let’s say we had a client come in to review their credit history with us 6 months ago, and at that time, their score was 493. We highlighted a plan of action, and they set their minds to achieving those goals. Let’s now assume that client followed all the steps and now they have a 597 credit score. They mention that they saw a house for sale over the weekend that they absolutely fell in love with. They want to know if they can get approved to purchase the home. I am morally OK with my Originator beginning the process with them. They have worked hard to improve their situation, and want to take an advantage of the opportunity to buy a house they really want, rather than settling for something now and trying to upgrade later.

Now let’s look at another situation that isn’t uncommon. A borrower comes to my mortgage company to get pre-approved to buy a “to be determined” property. They have a 641 credit score at the time of application. They start house-hunting, but can’t find anything they want for 60 days. Then they find something, put an offer in, and the offer is rejected. They put an offer in on another house; this one’s a short sale. They go back and forth with the seller over the next few weeks about closing cost concessions and inspection addendums. Suddenly the credit report is over 90 days old, which means we have to pull a new one. Low and behold, the borrower has maxed out a credit card, or taken a new loan out and missed a payment. Their credit score has dropped to a 599. Should we go ahead with the home loan?

The answer is not so clear cut, but I am damn certain about this: we are not acting in the consumer’s best interest if we don’t at least review the situation with them and determine the delinquency’s validity. It’s not professional to negotiate a mortgage for someone who is on the slippery slope of credit decline.

We aren’t trying to be “negative”, just honest and professional. The collective irresponsibility of borrowers, brokers, lenders, and banks got us into the current mess, and professional responsibility is the only way to prevent a repeat.

question mark image credit  Image: jscreationzs /

slide image credit Image: Tina Phillips /

Conventional Wisdom: 6 Things You Need to Know About Private Monthly MI, by Cecilia Farley MGIC

Recently, the Federal Housing Administration (FHA) made a change to its premium pricing structure: lowering the upfront premium amount from 2.25% to 1% and raising its monthly premium from .50% to .85% for 30-year loans with 5% or more down and from .55% to .90% for 30-year loans with less than 5% down. This change has made some people anxious and others just don’t care. What does this change mean to today’s homebuyers? Is this a good change or not?

Well, that depends. For borrowers with lower credit scores, an FHA loan may continue to be the best option. For borrowers with higher credit scores, private mortgage insurers offer cheaper alternatives.

Even FHA commissioner David Stevens said, in an article that appeared in the National Mortgage News on September 27, 2010, “We have actually made GSE loans with private mortgage insurance a better option for some homebuyers.”

Private mortgage insurance (MI) has become a better option because private mortgage insurance companies have made changes, too. In response to the housing and economic downturn many private companies, including mortgage insurers tightened, however,  as the economy began to recover most have spent the majority of 2010, opening up markets and normalizing guidelines and some have altered their pricing . The result is private MI options that are competitive with FHA, especially for borrowers of credit scores of 720 or higher.


Here are 6 things you need to know about the Monthly MI premium plan offered by private MI insurers:


  1. No upfront premium: While all MI companies offer premium plans that allow for an upfront premium, the most popular premium structure by far in the industry is the Monthly MI plan where no upfront payment is needed. Borrowers choosing an FHA loan must either pay an additional 1% at closing or finance the amount into their loan.
  2. Lower loan amount: Most FHA borrowers choose to finance that upfront premium into the loan and spread it over the life of the loan, increasing their debt. With a private MI Monthly premium, there is no upfront premium and no need to increase the loan amount.

  3. Greater equity: Because there was no upfront premium to finance into the loan with a private MI Monthly premium, the borrower is put in a better equity position right from the start.


  1. Lower or comparable monthly payment: Here is where homebuyers and real estate professionals should rely on a professional loan originator, because several variables will come into play, especially the borrowers’ credit scores.

    For instance, at MGIC, the leading private mortgage insurance company, a borrower with a 720 credit score and 5% downpayment will pay a monthly premium rate of .67%, compared to FHA’s premium rate of .85% for a borrower with the same score and downpayment. But remember that FHA also charges a 1% upfront premium!  So it’s important to “do the math” to see which option is actually better for the borrower. In many cases, going the private MI route results in a lower monthly payment, compared to FHA.


  1. Lower total MI cost: Because there is no upfront premium and often a lower monthly premium, the amount paid for mortgage insurance can be dramatically less with private MI compared to FHA. For example, on a $150,000 loan where the borrower put 5% down and had a credit score above 720, the borrower will pay more than $2,500 more in MI costs over 3 years with FHA compared to MGIC’s Monthly MI.
  2. Cancellation: Fannie Mae and Freddie Mac have more flexible rules for cancellation than FHA, meaning a homebuyer using private MI may be able to cancel the monthly MI payment sooner than with FHA, saving even more money over the life of the loan.

It’s obvious that checking out all the options can really pay off for savvy lenders and homebuyers. To find out which is the better option, all the MI companies provide calculators that allow originators to compare FHA and private MI premium plans. (MGIC’s calculator is located at:

Cecilia Farley – MGIC
Account Manager
Cell (503) 869-5732



MGIC (, the principal subsidiary of MGIC Investment Corporation, is the founder and leader of the private mortgage insurance industry, serving more than 3,300 lenders with locations across the country and Puerto Rico.

What Up With That?, by Lee Adler,

Logo of the Federal Housing Administration.

Image via Wikipedia

So there was this big jump in mortgage purchase applications today. I thought to myself, “Hmmmm, I  wonder how many will make it to closing. And I wonder what triggered the pop.” Pop is relative of course. Yeah, it was a 9% jump from last week, but the level is still 35% below last year in the same week and 62% below the May 2005 peak (I sold my house in Florida in April 05, closed in June, thank you very much Mr. Greenspan).

So I dug a little deeper, held my nose, read the press release straight from the MB Ass. And there it was.

“The increase in purchase activity was led by a 17.2 percent increase in FHA applications, while conventional purchase applications also increased by 3.6 percent,” said Jay Brinkmann, MBA’s Chief Economist. “This is the second straight weekly increase in purchase applications and the highest Purchase Index level since the expiration of the homebuyer tax credit program. One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements.”

The old “BUY NOW before we make it impossible for you” trick.

So much for that pop.

I’ll be updating the chart and commentary in the Professional Edition Housing Report tomorrow. You can stay up to date with regular updates of the US housing market, along with the machinations of the Fed, Treasury, and foreign central banks in the US market in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Try it risk free for 30 days. Don’t miss another day. Get the research and analysis you need to understand these critical forces. Be prepared. Stay ahead of the herd