Choice One Mortgage

Mortgage Rate Update

Bill Lewis — Wed, 25 Jan 2012 20:42:23 +0000

30 yr fixed as low as 3.875% with 0 points, 15 yr fixed as low as 3.000%, all with minimal or no closing costs.

Interest rates are again at the lowest levels we have ever seen and homeowners are taking advantage of the opportunity to lower their payments. Due to poor economic conditions both here and abroad, investors are once again in a “flight to safety” and looking at Treasuries and Mortgage Backed Securities as safe investments. The FED announced on Jan 25th, 2012 that they intend to keep rates at current levels through 2014. Bond yields remain near their lows for 2011/2012 and lenders pass this along in the form of rates that are at historic lows. Please review our rates on selected programs below. Lower rates are available for borrowers willing to pay discount points.

Loan Program	Max Loan Amount	Interest Rate	APR	Points	Strategy/Features
30 year fixed	$417,000	3.875%	3.913%	0 points	Safe, popular, lowest fixed rate payment, no interest rate risk.
20 year fixed	$417,000	3.750%	3.802%	0 points	Lower rate and forces you to pay off loan in 20 years.
15 year fixed	$417,000	3.125%	3.191%	0 points	Lower rate, save thousands in long run. Balance reduction strategy.
10/1 ARM	$417,000	Call	Call	Call
10/1 ARM IO	$417,000	Call	Call	Call
7/1 ARM	$417,000	3.250%	3.286%	0 points	Short term strategy. Lowest rate/payments.
7/1 ARM IO	$417,000	3.750%	3.788%	0 points	Interest Only payment.
5/1 ARM	$417,000	3.000%	3.036%	0 points	Short term strategy, lowest rate/payments.
5/1 ARM IO	$417,000	3.625%	3.662%	0 points	Interest Only payment.
"Agency Jumbo" 30 yr fixed	$625,500	4.125%	4.163%	0 points	Check County loan limits
"Agency Jumbo" 15 yr fixed	$625,500	3.875%	3.943%	0 point	Check County loan limits
FHA 30 yr fixed	$417,000	3.500%	3.578%	.50 points	Min 3.5% down. Mandatory MI. No interest rate risk.
FHA 15 yr fixed	$417,000	3.000%	3.193%	1 point	Low Payments. Min 3.5% down.
FHA 30 yr Jumbo	$625,500	3.750%	3.750%	0 points	Check County loan limits

Interest rates quoted are for Owner Occupied SFRs and assume 740 min FICO, impound account, 30 day rate lock, loan amount <= $417,000. Maximum loan amounts are determined by county and are subject to change. Loans require underwritten loan approval and pricing adjustments apply for other scenarios. Rates subject to change.

Testimonials

Bill Lewis — Sun, 18 Dec 2011 16:33:57 +0000

Our clients are impressed by our service, professionalism and the value we bring to them. Feel free to share your experience with Choice One Mortgage. Scroll down to the bottom of the page to leave your comments.

Here’s what people are saying about Choice One Mortgage . . .

Understanding No-Cost Mortgages

Bill Lewis — Sat, 17 Dec 2011 18:00:26 +0000

Is it really possible to get a mortgage and pay no closing costs? Yes and no . . .

The reality is, you won’t pay any closing costs up front – but you will pay for them over time.

In a no-cost mortgage, lenders charge a higher interest rate to compensate for the fact they’re not collecting any closing costs. They cover your closing costs up front, but gradually get their money back through the higher interest rate – which the borrower pays. So you’re still paying for closing costs, you’re just not doing right up front.

Pros and cons

On a purchase loan, no-closing cost mortgages can make financial sense if you have limited funds and need to minimize your cash outlay at the time you take out the mortgage. You may have decided you’d be better off putting your money into a larger down payment, for example. If you have the money for down payment and closing costs, it may make more sense to pay closing costs up front, and here’s why. In times of historically low interest rates, you will probably keep a fixed rate loan with a low rate because there will be little incentive to refinance. The lower your rate, the lower your payment, and this will add up over time.

On a refinance, it’s important to try to figure out how long you will have the loan. If you are taking out a loan and believe you will sell the home or refinance within a few years, it usually makes sense to pay the least amount of closing costs possible. If you plan on staying in the home and are taking out a 15 or 30 year fixed rate loan, you may be better off taking the lowest rate you can get, as long as the costs are reasonable.

How long will you have the home?

One thing to remember is that a no-closing cost mortgage makes financial sense only if you plan to own the home (or keep the loan) for a relatively short time – about five to eight years, depending on the terms of your loan. That’s because otherwise you’ll be continuing to pay a higher interest rate well past the point where the lender recouped its closing costs – so it’s strictly gravy for the lender from that point on.

You can always refinance the mortgage in a few years to get rid of the higher rate, but given how low mortgage rates are currently, it’s not likely you’ll be able to get a better rate by refinancing a few years from now.

What will the interest rate be?

Generally speaking, no-cost mortgages will add about half a percentage point onto the interest rate you pay on your mortgage, so if you can get a rate of 4.00% on a 30-year fixed-rate mortgage, a zero-cost mortgage might have a rate of 4.75%. That could be more or less, depending on the loan program and what your closing costs would have been otherwise.

A final thing to remember is that you may still have to pay some closing costs upfront, even with a zero-cost mortgage. You’ll probably have to pay separately for appraisal, homeowner’s insurance and property taxes, and individual lenders may vary as to what specific costs they’ll cover in a “no-cost” mortgage. Be sure to find out exactly what costs are and are not covered when comparing offers from different lenders.

How Interest Rates Move

Bill Lewis — Mon, 05 Dec 2011 18:21:20 +0000

Here’s a great video discussing how interest rates move. Although produced in 2010, the principles still apply in our economy today and should for the foreseeable future. – Bill Lewis

Should I Lock or Should I Wait?

Bill Lewis — Sat, 03 Dec 2011 23:46:51 +0000

“Interest rates rise like a rocket and fall like a feather.” This old axiom holds a lot of truth. Generally speaking, rates tend to fall in a poor economy and rise in times of prosperity. But more to the point, it takes a long time for rates to fall while they tend to rise very quickly when conditions change for the better. While it’s hard to predict what interest rates will do from day to day and from week to week, we do know that in periods of historically low interest rates (like we are in now), it’s far more likely in the short term for rates to jump up than it is for rates to improve (remember, rise like a rocket!). Economic news and political and world events all affect rates on a daily basis. I am asked all the time what I think will happen with interest rates, and the truth is, none of us really know for sure. What I can tell you is that we have been in a prolonged period of low interest rates due to poor economic conditions and once the economy shows signs of improvement, rates will rise – probably very quickly!

Experience has taught me one thing. If you are in the mortgage market today, whether purchasing a new home or refinancing your current one, lock your rate as soon as you can and don’t look back. You may not hit the bottom, but you will be very close.

Should I Impound my Taxes and Insurance?

Bill Lewis — Fri, 07 Oct 2011 04:30:03 +0000

Many of our clients prefer to have their taxes and insurance impounded in their monthly loan payment (the lender adds 1/12 of your property tax and homeowners insurance bills to the normal payment, sets them aside in an escrow account and then pays the bills for you when they are due). Some rule it out and prefer to handle the payments themselves. It usually comes down to a decision of whether you find it more convenient to pay the bills on your own or prefer to lessen the pain and pay them monthly with your mortgage payment.

Here’s the reality when refinancing. If you are doing an FHA loan, you have no choice. Impounds are required. If you are doing a conventional loan, lenders offer a .25 point fee incentive to set up an impound account which means that the rate that you lock in at costs you .25 points less. For example, on a $200,000 mortgage, opting to set up an impound account will save you $500. This is definitely worth considering!

A Brief History of the Housing Bubble

Bill Lewis — Thu, 06 Oct 2011 19:35:32 +0000

This is a really good summary of the causes of the recent housing bubble. Click on the link below:

A Brief History of the Housing Bubble

Courtesy of OCHousingNews.com.

Property Tax Info

Bill Lewis — Wed, 05 Oct 2011 19:13:15 +0000

Property taxes are typically paid in two installments, the first in the fall (usually before December 10th) and the second in the spring (usually before April 10th). Click on the link below to see the property tax calendar for California.

Property Tax Calendar for California

Here are links to local County Tax Assessor websites. Many offer the ability to pay your taxes online.

San Bernardino County

Riverside County