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Equifax Data Breach — Helpful Links

2017 Equifax Data Breach

Here are some helpful links for you with regard to protecting your credit and identity if your credit information was compromised during the recent Equifax data breach.

The massive cyberattack and data breach disclosed by Equifax on September 7, 2017, is one of the largest, and potentially most damaging, cyberthefts ever. Equifax is one of three firms, including TransUnion and Experian, that monitor the financial health of consumers and supply data to potential lenders to help them decide whether someone should get a loan or be approved for credit.

Here are some helpful links for you to utilize to find out more information about how to you and your online credit identity may have been compromised, as well as information and links to protect your identity with a credit freeze.

To find out if you were potentially impacted: https://www.equifaxsecurity2017.com/potential-impact/

Experian Credit Freeze: https://www.experian.com/freeze/center.html

Equifax Credit Freeze: https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

Transunion Credit Freeze: https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp

Consumer Finance Protection Bureau’s recommended action steps: https://www.consumerfinance.gov/about-us/blog/identity-theft-protection-following-equifax-data-breach/?utm_source=newsletter&utm_medium=email&utm_campaign=identitytheft2017&utm_term=20170912

Federal Trade Commission information: https://www.consumer.ftc.gov/blog/2017/09/equifax-isnt-calling

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2017 Eric Leigh. All rights reserved.




What to Know About New Credit Report Changes

What to Know About New Credit Report Changes

As part of their plan to improve credit report accuracy, the three consumer credit reporting agencies (Equifax, Experian and TransUnion) announced changes to what delinquent credit will be identified on credit reports.

Credit ReportEffective July 1, 2017, most civil judgments and tax liens will no longer be shown on credit reports. This is because many of these public records do not meet the credit reporting agencies’ new stricter standards for containing all of the personal information the agencies now require (like social security numbers, for example). The new standards are meant to protect consumers by preventing false identity matches and incorrect reporting information.

What does this change mean to potential homebuyers with tax liens and judgments on their reports?

According to research by FICO, about 12 million people will have a tax lien or judgment removed from their credit report. The majority will see a modest lift (20 points or less) in their credit scores as a result.

How does this change impact getting approved for a home loan?

Fannie Mae, a leading source for mortgage financing, responded to the credit report change, noting existing policy will still require those with genuine delinquent credit, including tax liens and civil judgments, to pay these debts at or prior to closing.

However, the new standards will be especially beneficial to thousands of consumers with inaccurate information on their credit reports due to mismatched records. They will no longer experience the frustration of trying to remove erroneous judgments and tax liens from their credit reports before being approved for a home loan.

If you or someone you know has been refused a home loan because of tax liens or judgments on a credit report, please don’t hesitate to call and see if these changes can be of benefit.

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Who do you know that needs a mortgage and has credit scoring concerns or questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2017 Eric Leigh and Vantage Production, LLC. All rights reserved.




FHA Insurance Premiums Drop

FHA Insurance Premiums Drop

FHA Insurance Rate Cut Helps Offset Some Recent Interest Rate Hikes

FHA’s annual mortgage insurance premiums are being reduced by .25% for most new borrowers who are closing on their FHA insured loan on or after January 27, 2017. This reduction will offset some of the recent interest rate increases that we have seen happening since November of 2016.

The savings from the lower FHA mortgage insurance premiums are very good. Here is a chart illustrating approximately how much FHA borrowers will save if they choose an FHA loan of >= 20 years in length:

Loan Amt Down Payment Previous MIP New MIP Estimated Savings per $100K
< $625,000 < 5% .85% .60% $250
< $625,000 > 5% .80% .55% $250
< $625,000 < 5% 1.05% .60% $450
< $625,000 > 5% 1.00% .55% $450

FHA homeowners with an FHA loan already would have to refinance to take advantage of these cuts in the cost of the mortgage insurance.

The reason we are seeing this reduction is because of the strong, U.S. housing market. Home prices have been moving higher for about five years now, which is part of why cuts like this are possible.

Also worth noting is that additional cuts to the FHA upfront insurance premium (currently at 1.75%) could be on the horizon. The upfront premium was as low as 1.00% in 2010 and 2011, so future cuts are possible. Our country’s continued economic recovery and strength in the housing market will play a big part in determining if this happens.

Should you have any questions regarding a new FHA loan, or if you’re just looking for trusted mortgage advice regarding your next home loan, CONTACT US directly for a complimentary consultation. We’re here to help!

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Who do you know that needs a mortgage and has home buying questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2017 Eric Leigh. All rights reserved.




New Conforming Loan Limits in 2017

New Conforming Loan Limits in 2017

The Federal Housing Finance Agency (FHFA) announced new maximum loan limits for conforming loans acquired by Fannie Mae and Freddie Mac. This is the first increase since 2006.

Effective January 1, 2017, the maximum loan limit for one-unit properties in much of the country will be $424,100, up from $417,000. Higher loan limits will be in effect in higher-cost areas. New loan limits, however, will not take effect in 87 counties around the country.

What prompted this change?

The baseline loan limit of $417,000 was established by the Housing and Economic Recovery Act of 2008 (HERA). The law requires that this loan limit be adjusted each year to reflect changes in the national average home price.

FHFA’s most recent third quarter Home Price Index report showed average home prices have risen about 1.7 percent above where they were in the third quarter of 2007, prompting an equivalent increase in loan limits.

With home prices on the rise, the conforming loan limit increase opens up opportunities and helps keep home loans more affordable for more Americans.

If you’d like to learn more about these new loan limits or other loan products, please get in touch with me today. I’m happy to help!

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Who do you know that needs a mortgage and has home buying questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2016 Eric Leigh and Vantage Production, LLC. All rights reserved.




The Fed Hikes Rates — So…What Does This Really Mean?

The Fed Is Hiking Rates — What Does This Mean For Consumers?

The Federal ReserveFed Answers Rate Hike Debate

In December, the Federal Open Market Committee raised its benchmark Federal Funds Rate for the first time in almost a decade. This is the rate at which banks lend money to each other overnight. It had been near zero to support economic recovery from the worst financial crisis and recession since the Great Depression.

What does this mean for consumers?

The Fed Funds Rate increase is not directly tied to long-term rates on consumer products, like purchase or refinance home loans. So, consumers should not expect home loan rates to rise as a direct result of the Fed’s decision. That being said, consumers will be impacted in two ways.

First, short-term interest rate loans will increase on credit cards, home equity lines of credit, auto and business loans.

Second, improving economic factors may influence home loan rates. The Fed’s rate increase was based on signs of a strengthening economy. If the economy continues to improve, home loan rates could move higher. Why? Because home loan rates are based on Mortgage Backed Securities, which are a type of Bond. Weak economic news normally causes money to flow out of higher risk investments like Stocks and into less risky investments like Bonds, causing Bond prices and home loan rates to improve. Strong economic news normally has the opposite result.

The Bottom Line
Mortgage rates are still near historic lows, making this a good time to purchase a refinance. If you’d like to find out more about how to get preapproved for a mortgage loan, or if you have any questions about the home buying process, please don’t hesitate to contact me directly. I’m happy to help!

On your team,

Eric

P.S. You can help people understand this by “Liking” and “Sharing” this post. Who do you know that has mortgage and home buying questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.




FHA Changes: Credit Requirements Eased for Some Borrowers

FHA Changes: Credit Requirements Eased for Some Borrowers

Housing Shines BrightlyThe Federal Housing Administration (FHA) announced over 60 loan guideline changes and clarifications, effective September 14, 2015. Many factors will be impacted by these new guidelines, including charge-off accounts, late payments, self-employed borrowers who have experienced a drop in income, and more.

Why is this important? While the changes are subject to lender approval, some of the new rules may make it easier for borrowers to qualify for an FHA loan.

FHA loans are insured by the Federal Housing Administration and are open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderately-priced homes almost anywhere in the country. FHA loans also offer low down payment options and more flexibility than many other types of financing.

The Bottom Line
These are just some of the reasons that FHA loans are a great option for many people. If you’d like to find out more about FHA loans, or if you have any questions about the recent changes, please don’t hesitate to contact me directly. I’m happy to help!

On your team,

Eric

P.S. Your referrals to me are the lifeblood of my business. Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.




New Rules Could Boost Your Credit Scores

New Rules Could Boost Your Credit Scores

How To Raise Your Credit ScoreEach of the major credit-reporting agencies have agreed to changes in their scoring formulas that could boost your credit scores.

Help To Correct Errors

Until now, disputing inaccurate entries on your credit report resulted in a “passing of the buck” by the bureaus. They simply forwarded your complaint along to the creditor for review, then refused to adjust or even remove the inaccurate tradeline if the creditor would not admit their error. Under new rules, if you provide the appropriate documentation AND a creditor does NOT back of its stance, the credit bureaus will now assign an advocate to review your documentation. The advocate also has the power to change the tradeline, regardless of the creditor’s resistance.

Longer Time To Resolve Medical Bills

Credit reports often show medical debt that has been sent to a collection agency simply because a health insurance company was slow to pay a claim. I’ve personally seen collection accounts lower my mortgage clients’ scores by 100 points or more. Now, medical collections cannot be reported to the credit bureaus any sooner than 180 days after the medical debt becomes delinquent. This gives the insurance company and the claims process plenty of time to run its course.

No More Penalties For Unpaid Parking Tickets

Under the current system, unpaid parking tickets or overdue library book fines can end up as a collection account reporting to the credit bureaus. Now, credit reports will NOT be allowed to include charges or collections unless you agreed to a contract or signed an agreement to repay.

If you have other credit scoring questions, or would like to schedule a complimentary credit consultation, don’t hesitate to Contact Me directly. My team and I are here to help!

On your team,

Eric

P.S. Thank you in advance for your referrals to ANYONE that needs my help. Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.




FHA Lowers Mortgage Insurance Premiums

The best way to describe this change for homebuyers and the housing industry?

GAME CHANGER

http://www.dreamstime.com/-image10634598For the first time since 2001, the FHA is reducing its mortgage insurance premiums for homebuyers utilizing the FHA mortgage program to purchase or refinance a home. This change took effect on January 26, 2015.

The Federal Housing Administration was created over 80 years ago to help make homeownership more affordable. When the FHA was created, most homebuyers were required to make very large downpayments. 50% or more down and a five year repayment were not uncommon during that time. As you can see, those types of repayment terms made homeownership impossible for most Americans. The National Housing Act of 1934, which created the FHA, changed all that.

The rules of the FHA insurance programs were clear and simple. If a mortgage lender made sure that a loan met the FHA’s requirements and guidelines for “good loans”, the agency would agree to insure the lender against losses if the borrower defaulted on their FHA loan.

For 70+ years, the FHA’s system worked very well. The agency was self-funded using mortgage insurance premiums (MIP) paid by FHA-backed homeowners and carried a strong reserve surplus. The housing crash of the 2000’s changed that, and the FHA’s insurance reserve fund dwindled down to less than what Congress requires. At that time, the FHA was forced to raise their mortgage insurance premiums to replenish their reserves.

Here’s the history of FHA MIP, from 2008 to early-2015:

Prior to January 2008 : 0.50% annual MIP plus 1.50% upfront MIP
October 2008 : 0.55% annual MIP plus 1.75% upfront MIP
April 2010 : 0.55% annual MIP plus 2.25% upfront MIP
October 2010 : 0.90% annual MIP plus 1.00% upfront MIP
April 2011 : 1.15% annual MIP plus 1.00% upfront MIP
April 2012 : 1.25% annual MIP plus 1.75% upfront MIP
April 2013 : 1.35% annual MIP plus 1.75% upfront MIP
January 2015 : 0.85% annual MIP plus 1.75% upfront MIP

Note that the FHA consistently increased its annual MIP charges while also tweaking its upfront MIP in order to remain solvent and with sufficient reserves.

Things are better in FHA land today. Fewer loans are going bad as the domestic economy has improved. As a result, the FHA now shows a positive capital reserve balance. With its reserves growing quickly, the FHA is now ready to reduce what it collects from homeowners for the first time since 2001.

Click here to get current FHA mortgage rates.

HOW FHA MORTGAGE INSURANCE PREMIUMS WORK

The first thing you must understand is that FHA is not a mortgage lender. It’s a mortgage insurer. Just like other insurers, the FHA collects regular payments known as premiums which fund the claims it pays to lenders when borrowers default on their mortgage loans.

FHA mortgage insurance premiums are split into two parts. The first part is the Upfront Mortgage Insurance Premium (UFMIP). Under the FHA’s new plan, UFMIP is paid at the time of closing and is equal to 1.75% of your loan. This means that for every $100,000 in your loan size, your upfront mortgage insurance premium paid is $1,750.

That vast majority of my clients add their upfront MIP to their mortgaged amount because UFMIP does not count against loan-to-value (LTV). If you make the minimum FHA downpayment of 3.5 percent, then you will often carry an initial loan-to-value closer to ninety-eight percent.

Also, homeowners can earn an UFMIP refund via a refinance. When FHA-backed homeowners use the FHA Streamline Refinance program within 36 months of closing, a portion of the upfront MIP paid is refunded in full. Refunds range from 68 percent of the initial amount paid to ten percent — depending on how soon you refinance. The longer you wait, the lower your FHA MIP refund.

The second type of FHA mortgage insurance is annual. Annual MIP rates vary based on the length of your loan, the amount you’re borrowing, and your initial loan’s LTV.

The complete MIP schedule for FHA loans sized $625,000 or less, as of, is as follows:

15-year loan terms with loan-to-value over 90% : 0.70 percent annual MIP
15-year loan terms with loan-to-value under 90% : 0.45 percent annual MIP
30-year loan terms with loan-to-value over 95% : 0.85 percent annual MIP
30-year loan terms with loan-to-value under 95% : 0.80 percent annual MIP

The above FHA MIP schedule is effective January 26, 2015 and applied to all loans with FHA Case Numbers assigned on, or after, this date. Loans above $625,000 are subject to an additional 25 basis point (0.25%) annual FHA MIP increase.

One important note to make on this for you: The number of years that a homeowner must pay FHA MIP varies by loan type. Loans for which the initial downpayment was 10% or more carry FHA MIP for 11 years from the date of the mortgage. All other FHA loans pay FHA MIP for as long as the loan is active.

FHA LOANS ARE NOW THE CHEAPEST THEY’VE BEEN IN HISTORY.

The whole reason behind Congress’ thinking when creating the FHA was to provide affordable U.S. housing and the agency is getting it done. You can now finance new homes cheaper than ever before and homeowners with existing FHA mortgages can refinance via the FHA Streamline Refinance cheaply and easily.

Should you have any questions on this, or any mortgage related topic, call me today. Or feel free to contact me via email to start dialogue about your question. I’m here to help!




It Still Makes Sense to Buy Versus Rent

Rent Versus BuyNearly a full third of households are still renting. If you’re one of them, you could be paying a hefty price.

Before talking about purchasing a house, it’s important to note two things. First—and this is extremely important—the housing market is actually localized. So the outlook in your hometown may be different than another city across the state or on the other side of the country. Second, home prices are tied to employment. For example, if someone feels like their job is in jeopardy, it might be enough to stop them from making a move. So, if your local job market is feeling a pinch, the home prices in your area may be down as well.

But with all those factors under consideration, it still makes sense to buy instead of rent. In fact, renting may be costing you a bundle.

Let’s look at an example that I put together for an existing mortgage client of mine that is purchasing a home in Meridian (near Boise) Idaho…

If you are paying rent at $800 per month and your landlord increases your payment by a modest 3% each year, you would wind up paying just over $50,000 over a 5-year period! Worse yet, after forking over $50,000, you still would have nothing to show for it.

And speaking of having nothing to show for it, how about any improvements you might make to a rental property? It’s not uncommon for renters to freshen up the paint, install new light fixtures or plant some nice flowers outside. But guess what…all your efforts, labor and the benefit of that improvement belong to the landlord, not to you.

With convenient down payment options still available for qualified buyers, affordable home prices and low interest rates, the very same money could have been used towards home ownership.

Even using a standard 30-year fixed program, a mortgage of $150,000 could be obtained with a total monthly mortgage payment—including property taxes and insurance—of around $980. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on rent during the same period after your tax benefit.

And the benefits of home ownership are quite considerable. Because the mortgage is being paid down each month, equity is being built. After 5-years, the $150,000 mortgage could be reduced to $137,000, adding $13,000 to your net worth!

But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up next April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have less tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all year, interest free.

Visit www.irs.gov and use the IRS withholding calculator. This very handy tool can quickly show you the impact that a change in withholding will do to your net paycheck. Remember to balance this with the expected refund and it is always a good idea to check with your tax advisor.

Don’t fall victim to the national headline hype. Feel free to contact me or give me a call for a complimentary rent vs buy analysis of your current scenario. I’m here to help you with all your mortgage needs.

And remember, buying a home is a big step, but it is almost always one in the right direction.




Make Your House a Better Investment