Even as the government is pulling all the stops to right the economy some Connecticut homeowners are still finding it difficult to obtain financing. For some Connecticut residents the American Dream of owning their own home is purchasing a multi-family dwelling. Especially in the states urban cities from Stamford and Norwalk to Bridgeport and New Haven to Hartford and New London multi-family dwellings are prominent. Getting a mortgage for these multi-family homes these days is still extremely difficult.

Multi-family homes are not just for the real estate investor to purchase and earn income from the rental of the property. In most cases if an individual wants to purchase a home in an urban area they might not be able to afford the prevailing single-family or condominium purchase prices leaving them with the option of looking to multi family homeownership. With buying a multi-family home the owner will collect rent for the other unit or units depending on whether the home is a two, three or four family home.

The difficult part now is the mortgage. Getting financing on multi-family homes is becoming increasingly difficult. At the height of the loose lending practices borrowers could get 100% financing for a two family home. Investors could get 100% financing in some cases for three and four family homes. Obviously the loose lending days are gone and we have come back down to earth with regard to the current lending guidelines. Even with the current mortgage guidelines that are conservative in comparison to a year or so ago financing is still difficult.

Investors who are looking to purchase a multi-family home are faced with a minimum down payment of 25% if they want a conventional mortgage. That was the guideline going back 10 years ago and in my opinion is within reason. You are making an investment. If you wanted to buy 1,000 shares of Home Depot it would cost you today roughly $25,000. If you had 12,500 and a margin account you could still buy the 1,000 shares and the brokerage firm would lend you the other 50% on margin. So if you are buying a stock and the minimum investment is 50% then plopping down 25% for an investment home seems pretty fair. The issue here is there are a lot of lenders and banks that simply will not lend for investment properties of any kind, single-family, condominium, multi-family it does not matter. The banks and lenders that are willing to mortgage an investment property have adjusted the interest rates as such that aside from some being anywhere from a half to some times even a point and a half higher than an owner occupied home you will have to pay points as well. The option of a no point loan does not presently exist for an investment property. I had a past client come to my mortgage company Everlsey Capital Mortgage LLC in Norwalk. CT and inquire about refinancing his multi-family investment property. The verdict was he was getting a rate in the low 5’s for a 30-year fixed mortgage and paying almost 2 points to get it. His options to say the least were limited.

Borrowers who are interested in purchasing a multi-family home as their primary residence and the property is a two unit home the minimum down payment for conventional financing is a 20% down payment. That is reduced from a very recent 10% down payment. If the home is a three or four unit the down payment is 25%. Interest rates will range anywhere from a half to three quarters of a percent higher than that of a single family or condominium that is a primary residence. There are options for no point loans for owner occupied multi-family homes. FHA, the (Federal Housing Authority) is the only outlet for a lower down payment on the purchase of a multi family home. The guidelines though are much stricter to be able to qualify. The bottom line here is in today’s market if you need to finance a multi-family you need to expect that there are going to be some roadblocks.

The stories that you hate to read about are the ones where you have hard working citizens that because of the real estate downturn and the mortgage crisis end up getting hurt. The real estate boom brought with it a flurry of new construction. It was not just one town but everywhere. From Maine to Connecticut to Virginia to Nebraska and the West coast. The story that I am referring to are the people that have fallen victim to the boom in construction.

Real estate prices kept appreciating as they raised the builders kept on building. Brand new condominium complexes kept going up. In some parts of the country they were selling faster than they could build them and this is where the problem started.

Selling a condominium pre-construction became a normal practice in the real estate world. I personally bought a condo pre-construction back in 2007. Builders would accept offers and down payments often times before ground even broke. In some of the more speculative areas like Vegas, Arizona and Florida units would be sold out before a project was even complete.

The people who bought pre-construction had down payments and were left waiting for the condo’s to be finished. The problem lies where people purchased these units and had financing but amidst the mortgage crisis a lot of the programs do not exist anymore. So the people who put 10 percent down payments on these condos thinking that they had financing for the other 90 percent of the purchase price are realizing that they in fact have no financing leaving them and their down payments at risk.

I had a client that lost his deposit on a new condo complex in Stamford, Connecticut. He put his down payment down almost two years ago and had financing from a lender. The lender told him that they no longer offer the program he was approved for. He needed stated income financing. He came to my office at Everlsey Capital Mortgage in Norwalk, Connecticut to see if I could help him. Unfortunately stated income loans are no longer around and there was nothing I could do to help him. He ended up losing his deposit.

There was an article in the New York Times Real Estate section on this very topic. It featured stories just like the client that came into my office looking for a mortgage. These are the stories that you hate to hear about and it is unfortunate that these people are victims of the financial crisis. To read the New York Times article click here:    NY Times Article

Greed is what helped propel the domino effect on the economy and financial and real estate markets over the past 2 years. There are very few bright spots in the mortgage or real estate world but here are three. The Government has in place a first time buyer tax incentive of $8,000. Property values are cheap and mortgage rates, well they are at near historic lows.

The mortgage rate roller coaster is presently in your town. I am the owner of Eversley Capital Mortgage LLC located in Norwalk, CT. The question that I get these days from existing clients and new ones is whether or not to jump on and seek the options of refinancing? My answer is precise and to the point. If it makes sense for you to refinance today you should jump at the opportunity. If you are someone who is on the fence or not sure if rates may go lower then odds are you could miss the boat.

The fact here is interest rates for 30 year mortgages are at near record lows. You can for the most part depending on your credit score, type of property and amount of equity in your home secure an interest rate under 5 percent. In fact in some cases we are at 4.5 percent paying a point for a lot of borrowers. Rates on 15 year mortgages are hovering close to 4 percent.

Mortgage rates in the past year have been volatile. I almost dare liken the swings to that of a .com stock back in the day. At the end of November 2008 30 year mortgage rates were above 6.00 percent. They were 6.6 percent in August 2008.By the end of 2008 they were 5.5 percent, dropped under 5 percent shortly in the beginning of 2009 and then went back up to 5.5 percent. We have since seen rates drop under 5 to an average currently of 4.85 percent.

The mortgage rate train is here for how long who knows? If you have an interest rate higher than 5.5 percent you should seek the possibility of refinancing. If you wait you may miss the boat and that could end up costing you and your family a whole lot of money.

This is an age old question. One of the top five questions that borrowers will ask me. There is an awful lot of misconception surrounding the question and I could see why, there are several answers to the same question.

Having your credit pulled does affect your credit score but it does not end there. The credit agencies refer to an inquiry of your credit report from a lender or consumer as a “hard inquiry”. What that means is if you apply for a car loan, a credit card, a mortgage, student loan, anything that would entail that entity to run your credit it lands on your report. Federal Law requires all inquiries to remain on your report a maximum of 24 months.

There is not a “number” that is established that will affect your score when you have it pulled. People often think that their score will go down by let’s say 5 points with each inquiry. Not true. What is true is that there is an allowable amount of time that would be considered normal to shop around for a car or mortgage. In that time frame several inquiries to your credit will not continually affect your score.

If you have good credit, pay your bills on time and have never had credit issues an inquiry into your report is not a bad thing for your FICO score. If you sometime pay your bills late, have had some credit issues or have limited credit and have an inquiry into your credit it will have more of an impact for that person than someone who has good credit.

There are some inquiries that have no impact at all.

·         Requesting a report to check for accuracy and content from one of the three credit bureaus

·         Employment inquiries

·         A lenders request to review an account you have with them

The important thing to remember is that you’re FICO score is derived from many factors, length of time of your credit history, your payment history, balances owed, and delinquencies if any. Those are the factors that weigh the heaviest on your FICO score and a few inquiries are not much of an impact. If your credit is somewhat shaky then several inquiries will affect your score to some degree.

You can click on any of the three credit bureaus and it will take you to their respective web sites.

Equifax

Experian

TransUnion

Connecticut Mortgage Loan Limits

I am often asked what the difference between a Conventional Mortgage Loan Limit, Jumbo Loan Limits, FHA Mortgage, etc. are? Conventional (conforming) are those limits established by F.N.M.A.  Federal National Mortgage Association (Fannie Mae) and F.H.L.M.C.  Federal Home Loan Mortgage Corporation (Freddie Mac).   Any loan amount over the limit is considered a Jumbo loan.  FHA (Federal Housing Authority) have their own limits as well.

Conventional Mortgage in CT:

Single Family      $417,000.00

Two Family          $533,850.00

Three Family        $645,300.00

Four Family         $801,950.00

Fannie/Freddie also have Higher Limits for Certain Counties in Connecticut (higher rates apply) below are the limits for Single Family Properties. These are referred to as conforming jumbo mortgages:

Fairfield County                                          $708,750.00

Hartford, Middlesex and Tolland County   $440,000.00

FHA Limits by County in Connecticut * any amount over $417,000 is considered Jumbo Mortgage Financing and subject to higher interest rates.

All Loan amount are based on a single-family property.  Higher loan amounts are available for multi family properties.

Fairfield County Ct       $708,750.00*

Hartford County Ct        $440,000.00*

Litchfield County Ct      $375,000.00

Middlesex County Ct     $440,000.00*

New Haven County Ct   $387,500.00

New London County Ct $398,750.00

Tolland County Ct          $440,000.00*

Windham County Ct      $272,500.00

*over 417,000.00 loan limit higher rates apply.

These are all the loan limits per County for a mortgage in Ct.

The Federal Reserve wrapped up its 2 day meeting yesterday and it was highly anticipated for them to leave interest rates untouched. And as anticipated they left key short-term bank rates at all time lows between 0.00-.250 percent. The shocker and what was not intended was the Federal Reserves massive infusion of capital. They announced yesterday a massive $ 1.2 trillion of pledged money to help push mortgage and consumer interest rates lower.

The plan is for the Fed to start purchasing long term Treasury debt to the tune of up to $300 billion. The news sparked a massive rally in the 10 year Treasury note. The yield on the 10 Year Treasury plummeted from 3.01 to finish the session at 2.53 that was the biggest one-day drop in 25 years. The ten year Treasury not as well as the (MBS) Mortgage Backed Securities are how mortgage rates are derived.

The second aspect of the massive capital injection is for the Fed to purchase up to $ 750 billion in mortgage backed securities guaranteed by both Fannie Mae and Freddie Mac. The Fed already has in place a commitment that they have been executing on to buy $ 500 billion in mortgage-backed securities bringing the total commitment to $1.2 trillion. The Fed also said it would purchase up to $ 200 Billion of both Fannie and Freddie debt

This announcement clearly shows that the Fed is willing to take all means necessary to head off what is arguably the worst financial and economic meltdown in this country since the Great Depression. These steps are clearly being put in place to help spur and induce lending as well as push consumer rates lower. It seems that the Fed may very well succeed.

Here is an Intra-Day chart of the 10 Year Treasury Bond:

Allot of homeowners get confused as to whom they should speak to if they find themselves having trouble paying their mortgage or are behind on their mortgage payments. So I felt that it would be helpful for those that look to LoanClassroom for advice and help to have one centralized list of potential mortgage servicers as well as phone numbers. Keep in mind I do not think trying to negotiate with your lender yourself is EVER a good idea. Some good suggestions would be to contact your attorney and if that is not a viable option if you are in Connecticut contacting CHFA or ACORN or HOPE NOW is great advice,  If you are out of state all three of those organizations will have respective local offices in your area. Here is a list of servicers and phone numbers:

 American Home Mortgage Servicing Inc.-  (877) 304-3100

Aurora Loan Services- (800) 880-0128

Bank of America-  (800) 846-2222

BB & T- (888) 562-6228

Carrington Mortgage Services LLC-  (800) 790-9502

Citigroup- (877) 675-3656

Countrywide-  (800) 669-6607

Downey Financial Corp.- (866) 436-9639

EMC Mortgage Corp.-  (800) 723-3004

Fifth Third Bank- (866) 601-6391

First Horizon- (800) 364-7662

Flagstar Bank- (800) 945-7700 x9780

Green Point Mortgage- (800) 784-5566

GMAC- (800) 206-2901

Indy Mac- (877) 908-HELP

Irwin Home Equity-  (800) 839-6600

JP Morgan Chase- (800) 848-9136

National City Bank/PNC Bank- (888) 762-2265

Nationstar Mortgage LLC-  (888) 850-9344

Ocwen Financial Corp.- (800) 746-2936

Provident Funding- (800) 696-8199 option 4

PNC Bank/National City Corp./Midland Loan Services- (888) 762-2265

Residential Capital/Homecomings Financial Di-Tech- (866) 344-8935

Saxon Mortgage Services- (888) 325-3502

Select Servicing Portfolio- (888) 818-6032

Sun Trust Bank- (800) 443-1032 option 3

Taylor Bean & Whitaker Mortgage Corp.- (800) 530-2602

Thornburg Mortgage- (888) 898-8698

US Bank Home Mortgage- (866) 932-0462

Wachovia/Wells Fargo/World Savings- (800) 922-6267

Washington Mutual/JP Morgan Chase- (866) 926-8937

Wells Fargo- (800) 678-7986

If you come across any servicer that you think should be added to the list please send me a response.  Thanks and I hope that this helps.

As the economy and job market worsen the number of Connecticut residents finding they are facing foreclosure is growing. More and more people are finding they are falling behind on their mortgages. If you do find yourself up against the risk of losing your home to foreclosure or fall behind on your mortgage there are places to turn to get help. Refinancing is typically not an option so here are some suggestions.

                ACORN (Association of Community Organizations for Reform Now)

                            The main phone number is (860) 232-2675

                              There is also an office located at 2310 Main St. in Bridgeport CT (203) 366-4180

                                http://www.acornhousing.com/index.php

                CHFA (Connecticut Housing Finance Authority)

                          (860) 571-3500 or (877) 571-2432

                                http://www.chfa.org/MainPages/default.asp

                Housing Development Fund 100 Prospect St Suite 100 Stamford CT (203) 969-1830

                                http://www.hdf-ct.org/multifamilylending/clientspastpresent.html

                Hope Now the toll free hotline number is (888) 995-HOPE

                                http://www.hopenow.com/contact_us.html

More often than not people end up losing their homes to foreclosure when there could have been a way to prevent it. So the best advice that I can give to anyone who is in this situation is to contact one of the above agencies or contact your lawyer for advice. The worst mistake that is made is people do not seek help or assume there are no options for them. Never try and tackle the problem yourself.

Applying for and shopping mortgage rates is a click away www.EversleyCapital.com

Interest rates for mortgages are now lower than they were in 2003. The problem this time around for Connecticut residents is their homes value. Home prices in the State of Connecticut have continued to slide. The figures that were just released were 1 in 5 homeowners nationally are under water in their home. What that means is they owe more than what their home is presently worth. This poses a huge road block for CT residents looking to take advantage of a low interest rate environment.

In a recent study 8.3 million properties had negative equity nationally at the end of 2008. That figure was up from 7.63 million at the end of September. Connecticut recently saw a 25% increase of homes with negative equity making it increasingly harder for some Connecticut residents to refinance. I am seeing this first hand as an owner of Eversley Capital Mortgage LLC in Norwalk, CT. I have clients on a regular basis contact the company in the hopes of refinancing. It is difficult to inform borrowers that even though their credit scores are perfect and their income is a non-issue that they have no options. They owe more than their home is presently worth.

Applying for and shopping mortgage rates is a click away www.EversleyCapital.com