Shelter From The Storm: Structuring Your Insurance and Mortgage

In Insurance & Regulations by Jo Garner0 Comments

Good morning, Memphis! You are on the Real Estate Mortgage Shoppe program with me, Jo Garner Mortgage Officer with Evolve Bank and Trust. With us today are Troy and Lynn McDonald of Erin McDonald Allstate Insurance Agency Our topic today “Shelter From The Storm: Structuring Your Insurance and Your Mortgage.”

Lets get into the mortgage news first. We have some good news for those of you who still want to buy a house or refinance one. The mortgage rates stayed new all time lows again this week after threatening to spike upward.
The benchmark 30-year fixed-rate mortgage fell to 4.1 percent. The benchmark 15-year fixed-rate mortgage was unchanged at 3.32 percent, and the benchmark 5/1 adjustable-rate mortgage rose to 3.05 percent from 3.03 percent the previous week. With THESE mortgage rates it is perfect weather to buy a home or refinance one. Especially since the Home Affordability Index is better than it has been since the index got its start in 1970.
The big news this week has been and still is the special government HARP program for underwater homeowners. The Home Affordable Refinance Program in most cases does not require an appraisal and allows some homeowners to refinance even though they owe more on their mortgage than the current value of their home. My assistant Susan Belew and I are getting a flood of customers in our office to take advantage of the low rates. It has been fun these past few weeks talking with customers getting the HARP program. So many of them thought it was too good to be true. We can save so many $200–$300– $400 per month or more. One of the most common comments I hear is ” why did we not have this program available sooner?” Another most common question is “can I refinance a rental property on the HARP program?” The answer is yes. Under certain restrictions you can refinance your primary residence, a 2nd home, AND RENTAL PROPERTY. .
Susan and I would like to challenge you to call us and let us do a free evaluation of whether you qualify for a refinance without an appraisal on the HARP program. If you can think of a friend or family member who has said they owe more on their house than the current value, Susan and I would like to have an opportunity to help them too. We work with people all over the country–not just in Memphis. The best way to reach me directly off the air is to call (901) 482-0354. That is (901) 482 0354. or visit me on my blog www.mortgageloansblog.com
Word to the wise: Don’t expect these low rates to hang around forever. If refinancing or purchasing a home makes sense for you now–do it now.
If you want to have shelter from the economic storm, consider the fact that rents are on the rise right now and mortgage rates for homes are at historic lows. No one knows what economic conditions to expect in the future, but personally I like having a low house payment on a fixed rate I can count on to stay low for years to come.
If you are renting and have considered purchasing a home, the first step is to get preapproved for a mortgage. Check with your loan officer for other loan program scenarios that might work for you. Of course, I would like very much to work with you. The next step is to find an experienced realtor who has the time and expertise to help you locate the home that will work best for you and your family.
If you own a home but are looking to build up your retirement income, real estate can be a great way to do that. Richard Scarbrough of First National Realty is on our show often and has helped hundreds of people get started on the right track with real estate investing. A few good real estate properties with a healthy positive cash flow can make your retirement much more comfortable.
Here’s some more words to the wise for those who are about to buy a house or refinance one:
1. Be prepared with the right documentation. Set aside time during the loan process to get the loan officer whatever they need within 24 hours of the request. My dad used to say “when the line is long, the movie is good.” The same is true for mortgages. There are a lot of folks in line to buy houses and refinance right now and once the loan is closed, the buyer can enjoy a lot of bragging rights. The more prepared and prompt you are, the quicker you can get your loan closed.
2. Once you lock your rate, then it is REALLY important that you respond with needed documentation right away. If you are having the house appraised, allow the appraiser in immediately. Do not put this off. Delays in processing, underwriting and closing departments are the norm due to the increased flood of traffic.
3. Communicate with your lender. While your loan is in processing or waiting to be underwritten, there may be a few days when you do not hear from your lender. Don’t be afraid to call or email to stay in touch. Also, check your email regularly to make sure you have not missed a notification. Don’t forget to check your email Junk Box. Spam filters send emails from a bank to the Junk Box much of the time.
4. Find out the details on your mortgage rate lock agreement. When was it locked? When does your rate lock expire? What is the rate and terms of your mortgage rate lock agreement?
Hopefully these words to the wise will help you has you build protection from the storm by structuring your mortgage within your comfort level.

Troy and Lynn McDonald of Erin McDonald Allstate Insurance Agency know a LOT about storms and how to protect yourself from them by having the right insurance. How are some ways I can find shelter from the storm by having the right insurance?
Questions for Jo Garner to answer: What are some of the guidelines for HARP.
A. Must have made last 12 months mortgage payments with no over 30 day late payments,.
B. Your mortgage must have been backed by Fannie Mae or Freddie Mac since on or before May 31, 2009.
Question 2 for Jo Garner to answer: What other methods are there to refinance without an appraisal if you do not qualify for HARP?
A. FHA Streamline, VA Streamline,
Question 3 for Jo Garner to answer: What if you do not qualify for HARP and your house value is lower than what you owe, but you need to get the payment down?
A. Substitution of collateral doing a cash out on a different property (if there is enough equity)
B. Using gift funds from family. If you late decide to pay it back you can pay it back with the funds you save from the refinance. ( If you are really good, you could pay it back with more interest than they are currently earning on it–which would not be hard)
C. Use a margin loan for short term credit line to pay down mortgage enough to refinance with regular appraisal.
Jo Garner, Mortgage Loan Officer Evolve Bank and Trust (901) 482-0354 www.MoneyShoppe.NET
Troy and Lynn McDonald, Allstate Insurance (901) 849 7101
Contact me with your questions about mortgage loan programs for home purchase, mortgage refinances, USDA, FHA, Conventional, VA, THDA, Down payment assistance, Homepath financing, Homepath with Renovation financing, 203K FHA repair loan program.

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