Today the Federal Reserve announced it will extend purchase of mortgage backed securities until Mar 2010. However, they will be gradually slowing the pace of those purchases in order to promote a smooth transition in the markets.

Then they reiterated they would keep their options open.

The bond market and mortgage rates initial response was very positive, then went on a roller coaster ride. 

The bond finished up + 9bps Wednesday evening, turning around what was a - 34bps loss just prior to the Fed meeting.  That means interest rates finished up a little better today from their 12:00 levels.
I think this activity of uncertainty will be the norm as we go through the remainder of this year. 

And because we know the Fed's program is an "artificial" rate lowering program and the subsidy is going to taper off and go away, I would put some serious thought into locking in a rate if you have a good benefit.

Author: Brenda Roetger
Phone: 615-370-8888 x.205
Email: Brenda.Roetger@churchillmortgage.com

This time of year, the U.S. experiences all kinds of natural disasters and currently the South is under water. How does this affect your mortgage?  You might be surprised.

• First things first: If your home is flooded, get to a safe place and secure your belongings.

• Next: Find out what options your homeowner's insurance offer.

If you don't have insurance to cover the natural disaster that has damaged or destroyed your home, you may have some options through Federal Aide or Fannie Mae.

Floods, fires and other disasters often require the state to declare an area a 'disaster zone'. This qualifies the state for Federal monies to begin rebuilding the public infrastructure. Sometimes homeowners are given assistance through such a program. Your local government offices will be able to give you more information about these programs.

Fannie Mae, who secures mortgages for lenders, has a disaster relief program in place. They could suspend payments up to 3 months, or reduce payments up to 18 months or create longer pay back plans. All these are on a case by case basis of course.  You can go to www.fanniemae.com for more information.

Author: Doug Walker, VP of Sales and Marketing
Phone: 615-370-8888

On September 22-23, the FOMC (Federal Open Market Committee) will meet to discuss the government's MBS purchase program (Mortgage Backed Securities). 

What Does This Mean In English?
At this meeting, it is expected the Fed will make comments about the government's desire to continue buying mortgage securities so the rates stay artificially low. 

What Does This Mean To You?
If you are looking at refinancing or purchasing a home before the end of the year, you might want to get it in gear!  All it will take is one negative comment or insinuation, and the bond market could tank, sending mortgage rates higher.

Fannie Mae's chief economist, Doug Duncan, expects the Fed will extend its MBS purchase program, then slowly wind down.  That could mean more time, but once the news starts circulating about an "end" to the gov't buying program, the markets usually respond well in advance to the actual event. 

Best Course Of Action: If you are going to refinance or purchase, now is a great time to lock in a rate to avoid the market swings.  The bond market has come up over 300 basis points since its lows in June,   which has equated to a rate improvement of about .75%.  Now sure seems like the time to take advantage and avoid gambling that things will get even better - especially knowing the above news is looming.

Author: Chris Bowser, Home Loan Specialist
Phone: 615-370-8634 ext. 187
Email: Chris.Bowser@ChurchillMortgage.com

We receive a lot of inquiries regarding the opportunities for 100% Financing/No Down Payment home loans. There have been numerous Guideline Changes from Fannie Mae, Freddie Mac and FHA over the past 18 months or so. They have eliminated the Zero Down Payment options which means, there are only 2 options now available.

The first is a VA (Veteran’s Administration) Loan. To qualify, you either have to currently be enlisted in the Armed Services or previously been enlisted in the Armed Services.  The website for additional information is http://www.homeloans.va.gov/ which will answer the questions you probably have, including eligibility. The number one facet of value is that there is not any PMI (Private Mortgage Insurance) with the loan. The only downside would be the “Funding Fee” that is charged in obtaining the loan. Depending on how many times you have used your privilege the rate can be from 1.5% to 3.3% of the loan amount which is simply tacked on to the loan amount.

The second loan that qualifies for 100% Financing is the USDA Rural Property Development Loan.  In order to qualify for this loan, the property has to be located in a USDA approved location and furthermore there are income limits. To see if you qualify for this type of loan, please visit http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1 and follow the links. Like the VA Loan, PMI is not required monthly. However, there is a Funding Fee similar to the VA Loan which is 2% of the loan amount.

Finally, the good news is that FHA only requires 3.5% of the Purchase Price for the down payment and Fannie/Freddie only requires 5% down. In all cases, credit worthiness needs to be acceptable along with proper income verification. The Loan to Value is determined by the Purchase Price and not the Appraised Value of the property. Please also keep in mind that with any Mortgage/Home Purchase Transaction that there will be Settlement Charges (Closing Costs) in addition to the money down. You can always have the Seller pay for these items which reduces the amount due from you and helps you get into the home with very little down.

Let us know if you have any further questions about this program or others here at Churchill Mortgage.