Juicy Estates: Mortgage Blog

Archive for April, 2010

5% Down Conventional Financing Is Back!

This just announced, we are now able to provide conventional financing with just a 5% down payment.  For the past few years the mortgage insurance companies all required at least 10% down but as the South Florida real estate market recovers mortgage insurers are coming back into town.

These conventional financing products should prove to be a more efficient alternative to FHA financing as no upfront mortgage insurance premium is required.  Currently a 30 year fixed rates for this loan program will be about 5.125% with no points or origination fees and the 5/1 ARM is about 4.25%!

To qualify for this financing the buyer and property must meet the following criteria:

• Primary Residences
• Purchase or rate and term refinance only
• 680 minimum credit score
• 1-unit properties only
• Up to $417,000 loan amount
• 41% max debt to income ratio
• 2 months PITI in reserves after closing
• No condos or attached housing in Florida

In additional signs of the recovery down payment and or equity requirements have been lowered for jumbo loans as well providing some much needed relief to the luxury market.

Miami Mortgage Market Guide ~ April 26, 2010

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Miami Mortgage Market Guide ~ April 19, 2010

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Coral Gables Real Estate Leads The Way

As Riley Smith of EWM Realtors wrote in his post on The Coral Gables Real Estate Vault the Coral Gables real estate market is showing all the signs of a solid recovery.  This trend is not uncommon among luxury neighborhoods throughout South Florida.   Even Forbes Magazine’s Luxury Home Index took note of the activity in Coral Gables as I highlighted on March 29th here on Juicy Estates.

We in the finance world have taken note of these positive market trends and have already loosened the purse strings a bit making Jumbo financing in these markets more readily available with easier qualification standards.  A clear example of this is a purchase I am closing at the end of the month on a Coral Gables home with Jumbo financing and only a 15% down payment…..and no mortgage insurance!

Another example of the liquidity returning to the jumbo market is the narrowing of the spread between conforming interest rates and non-conforming interest rates.  As I detailed in my post of April 1st, conforming interest rates (for loans below $417,000) did increase a bit (about .25% as I predicted) as a result of the end of the Fed’s MBS purchase program but interestingly we actually lowered our jumbo rates earlier this week.

If you are buying or selling a luxury home or commercial property in South Florida I would welcome the opportunity to help get you to the closing table.

Special thanks to Lowell Kuvin Esq. of www.CoralGablesZoningLaw.com for the image in this post.

Miami Mortgage Market Guide ~ April 5, 2010

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End of Fed MBS Program Doesn’t Mean Higher Rates

The real estate world is buzzing with talk of higher mortgage interest rates as a result of the end of the Fed’s mortgage backed securities (MBS) purchase program.   The Fed has spent $1.25 trillion dollar in this program to keep rates low and now that the program has come to an end private sector investors are picking up where the Fed left off.

I expect that conforming interest rates will only rise .125 to .375% in the coming weeks which is certainly nothing to panic about.   Does anyone remember where conforming 30 year fixed rates were in 2007….about 6.5% or more than 1.5% over their current levels.

Rates are (and will remain) low through the end of 2010, prices are down and we have an excessive amount of money to lend.  Mortgages, especially jumbo mortgages are easier to get today than at anytime in the past 3 years.

It’s a great time to buy and it’s a great time to be in the real estate business.