Benchmark’s Wesley Willoughby: THDA Top Sales Agent

Few people are immune from the dream of home ownership, but many don’t have the means to take the leap. Fortunately, programs from the Tennessee Housing Development Agency promote affordable housing; they also facilitate the use of federal and state housing programs for first-time homebuyers and military veterans. As Realtors®, it’s our job to help everyone we can to realize their dreams of home ownership – and agents like Wesley Willoughby use the THDA to live up to the standards that make up Benchmark Realty’s foundation. Willoughby received the THDA Top Sales Agent award because of his proactive stance on helping first-time homebuyers and veterans. So how did he do it?Wes Willoughby THDA TOP SALES AGENT

Promoting Affordable Housing Programs

Willoughby and his preferred lending partner, Michael Hampton of Peoples Home Equity, host monthly seminars to help first-time homebuyers and veterans take advantage of THDA programs. By advertising these free classes through radio, television and print, the pair hosts between 15 and 25 people each month; as a result, they’ve helped people who were having a tough time breaking through the barriers to home ownership. “This class gives us the opportunity to meet face-to-face with homebuyers to answer the questions they may not be able to find answers to in their own research. Most of the time, we clear up misconceptions about the home-buying process,” says Willoughby. He adds that most people aren’t aware of the grant programs available to veterans and first-time buyers –and that those programs often make home buyers eligible for a grant of up to 4% of their home’s purchase amount to be used for the buyers down payment and closing costs! Additionally programs for Veterans include THDA’s Homeownership For The Brave program that offers qualifying veterans a ½ percent rate reduction off any of the Great Choice loan programs or it can be used with a VA loan.

Can You Do the Same?

Most of us would love to help families get out of rentals and into their own homes. If you’re interested in helping people take advantage of THDA programs and grants, Willoughby suggests aligning yourself with a lender who understands how they work; understanding them yourself is also key. “It is a proud part of my business to assist families with the purchase of their first home. I am honored to assist those who qualify understand, and take advantage of, the grant programs available to them through the State of Tennessee Housing Development Agency,” says Willoughby.

Benchmark Agent, Wesley Willoughby is THDA's TOP SELLING AGENT for 2013

Benchmark Agent, Wesley Willoughby is THDA’s TOP SELLING AGENT for 2013

Because Benchmark Realty provides you with the freedom you need to launch successful campaigns like Willoughby’s, all you need to do is put in the legwork. Find out more about the THDA’s programs for first-time homebuyers and see what kind of information Willoughby and Hampton provide. Then, if you’re not yet a Benchmark Agent, please fill out our contact form and find out how we can help you reach this level of success. 

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Mortgage Standards Stop Tightening; Lending Soon To Loosen?

Fed Senior Loan Officer SurveyAs another signal of an improving U.S. economy, the nation’s biggest banks have started to loosen mortgage lending guidelines.

As reported by the Federal Reserve, last quarter, no “big banks” reported stricter mortgage standards as compared to the quarter prior and “modest fractions” of banks reported easier mortgage standards. 

The data comes from the Fed’s quarterly Senior Loan Officer Survey, a questionnaire sent to 64 domestic banks and 23 U.S. branches of foreign banks. The survey is meant to gauge, among other things, direct demand for consumer loans and banks’ willingness to meet this demand.

Not surprisingly, as mortgage rates fell to all-time lows last quarter, nearly all responding banks reported an increase in demand for prime residential mortgages where “prime residential mortgage” is defined as a mortgage for an applicant whose credit scores are high; whose payment history is unblemished; and, whose debt-to-income ratios are low.

Consumers were eager to buy homes and/or refinance them last quarter and 6% of the nation’s big banks said their credit standards “eased somewhat” during that time frame. The remaining 94% of big banks said standards were left unchanged.

The ease of getting approved for a home loan, however, is relative.

As compared to 5 years ago, Nashville home buyers and rate shoppers face a distinctly more challenging mortgage environment. Not only are today’s minimum FICO score requirements higher by up to 100 points, depending on the loan product, applicants face new income scrutiny and must also demonstrate a more clear capacity to make repayments.

Tougher lending standards are among the reasons why the national home ownership rate is at its lowest point since 1997. It is harder to get mortgage-approved today as compared to late-last decade.

For those who apply and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout Tennessee continue to push home affordability to all-time highs.

If you’ve been shopping for a home, or planning to refinance, with mortgage rates low, it’s a good time to commit. 

FHA To Change Its Mortgage Insurance Premium Schedule Monday, June 11, 2012

New FHA MIPBeginning Monday, June 11, the FHA is changing its mortgage insurance premium schedule for the second time this year.

Some FHA mortgage applicants will pay lower mortgage insurance premiums going forward. Others will pay more. The new premiums apply to all FHA mortgages, both purchase and refinance.

The MIP update will be the 5th time in four years that the FHA has changed its mortgage insurance premium schedule.

FHA-backed homeowners who have not refinanced within the last 3 years will benefit from the new MIP. This is because, beginning with all FHA Case Numbers assigned on, or after, June 11, 2012, homeowners whose current FHA mortgage pre-dates June 1, 2009 will be entitled to dramatically reduced annual mortgage insurance premiums and almost zero upfront MIP via the FHA Streamline Refinance program.

Whereas new FHA applicants may pay up to 1.25% per year for annual mortgage insurance plus 175 basis points at closing for upfront MIP, the “grandfathered” FHA applicants will pay just 0.55% per year for mortgage insurance and 1 basis point at closing.

Assuming an FHA loan size of $200,000, the savings are large :

  • New FHA applicant : $208 per month for annual MIP; $3,500 due at closing for upfront MIP.
  • Pre-June 2009 FHA applicant : $92 per month for annual MIP; $20 due at closing for upfront MIP.

The premiums apply to all FHA mortgage applicants, regardless of loan product or term. For example, 15-year FHA mortgage will follow the same mortgage insurance premium schedule as a 30-year FHA mortgages.

Another class of FHA-backed homeowners won’t get so lucky. For homeowners in high-cost areas whose mortgages are between $625,500 and the local FHA loan limit, annual mortgage insurance premiums will be raised by 0.25% for all 15-year and 30-year loan terms.

For loan sizes above $625,500, the new annual FHA mortgage insurance premiums are as follows :

  • Loan term of 15 years or fewer, loan-to-value of 90% or less : 0.35% per year
  • Loan term of 15 years or fewer, loan-to-value greater than 90% : 0.60% per year
  • Loan term of more than 15 years, loan-to-value of 95% or less : 1.45% per year
  • Loan term of more than 15 years, loan-to-value greater than 95% : 1.50% per year

FHA-backed homeowners with loan terms of 15 years or fewer, and with loan-to-values below 78%, are exempt from annual MIP. Upfront MIP payments, however, remain mandatory.

The FHA continues to tinker with its mortgage insurance premiums, attempting to strike a balance between affordability for its homeowners and solvency for its program. Experts expect the FHA to change its premiums again. And, when it does, it’s likely that premiums will rise.

If your FHA mortgage will be for more than $625,000, and you plan to make a purchase or refinance application soon, it’s best to get your FHA Case Number prior to Monday, June 11. Otherwise, you’ll pay higher annual MIP.

Against a $700,000 mortgage, the extra 0.25% in MIP per year will add $1,750 to your annual housing payment.

Reverse Mortgages : Pros And Cons

Despite several big-name banks pulling the product from their respective home loan offerings, reverse mortgages remain a popular mortgage choice among homeowners aged 62 or over.

A reverse mortgage is exactly what it sounds like — a mortgage in reverse. Rather than borrow a fixed amount of money then pay that loan balance down to zero as with a “forward” mortgage, a reverse mortgage starts at a given loan balance and works its way up as scheduled payments are added to the existing loan balance.

This 4-minute piece from NBC’s The Today Show highlights a few pros and cons of reverse mortgages, and the reasons why you may want to consider one, including :

  • No mortgage payments are ever due on your home
  • There is no credit check required for a reverse mortgage
  • There is no income requirement to qualify for a reverse mortgage

There are some basic qualification standards for the reverse mortgage program including a requirement that all borrowers on title must be 62 years of age or older; and that the subject property be a primary residence. Loan fees can also be higher than with a conventional-type mortgage.

If you meet the qualification standards, though, with a reverse mortgage, you have flexibility in how your home equity is distributed to you. You can receive a lump-sum payment, elect for monthly installments over time, create a line of credit, or a combination of all three. 

Like all mortgages, reverse mortgages are complex instruments. That’s one reason why all reverse mortgage borrowers are required to attend counseling — the government wants you to be certain that you understand the nuances of the reverse mortgage program.

Your lender will want you to understand the program, too.