Henry Daniels -- Government Loan Specialist with VA, FHA & USDA Mortgages

A rate lock or a rate commitment is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and at the end of it finding out the interest rate has gone up.

A rate lock period can vary in length, and longer ones usually cost more. A lender will agree to "hold" your interest rate and points for a longer period, say 60 days, but in exchange the rate and maybe points are higher than with a shorter rate lock period, for example.

Finally, the interest rate a lender is willing to offer you depends on your credit score and your debt-to-income ratio. If you have good credit and your income far exceeds your debt obligations, you will qualify for a lower rate.

Well looks like all turned out as well as can be expected here in Conroe after getting Hit by a storm such as IKE.

I'll post a few observations... some are tounge and cheek but nonetheless true! Not to make light of those who lost everything including their lives but right about now I feel that a little humor is in order for all of us.

• Our Property Owners Association raided with nearly unanimous consent our fund to purchase fuel for the Generator to run our community well. Thank goodness we didn't spend $15k on a new fence that has been proposed recently.
• All of the preparations that I sent out in my earlier blog we adhered to and then some. As a result we had enough fuel to feed the generator until things calmed down.... in short if you store it safely you can't have too much and you can always pour it back into your car. Even with that. The President of the POA who has a large truck and trailer had to go to Bryan twice to get fuel for the neighborhood. (Side note to self... Wife's idea of buying a Generator in Dallas .... $500.... not having to stay with my parents and their 3 dogs along with our two dogs.... Priceless!!) Moral... listen to wife... she's more often right than wrong in such things.
• Recommended Reading Alas Babylon.... hmm feels very familar....
• We were very fortunate to only have a tree lean up against the house ... but on the bright side I now have enough oak, maple and elm for at least a cord of wood so at least I'll be warm this winter.
• Last meeting of the POA it was proposed and accepted to seal off the subdivision from all "onlookers" and at night have armed patrols to deal with looters. None were spotted so no one was shot and fed to alligators that are lurking about.
• Power station on our side of lake conroe blew up when the high tension wires were turned into jumbled spaghetti.
• Boy.... junk food never tasted so good once a few places came back on line with generator power.

Well back to work.... let me know your experiences.

As you may know, Hurricane IKE will be striking the Gulf Coast of Texas in the next day or so. If you are not getting prepared I would suggest that you do even if you are within 100 miles of the cost.

We at Equity Mortgage would like to take a quick moment to help in your preparations by providing the following list of things to do. We hope that this is helpful.


If you are evacuating your home:

• Turn the pilot light off on your water heater and furnace, then turn off the gas line valve near the appliance and, finally, turn off your gas at the meter. This will reduce the probability that a tree falling on the roof will break an active gas line and create the chance for a spark to cause a fire. Turning off valves working from the appliance to the meter will make it easier to reignite on your return by reversing the process.
• Turn of your master water supply.
• DO NOT Turn off your master breaker. You need power for the alarm and refrigerator.
• Unplug all fixtures or small appliances that can be accessed.
• Bring into the garage, or otherwise secure all movable exterior items such as small plants in pots, lawn furniture and pool equipment.
• Fill all vehicle fuel tanks.
• If you have time trim all branches or heavy bushes that could damage windows.
• Take with you:
• Food and snacks for Two days
• 2 gallons of water per individual
• Clothing for one week
• First aid kit
• Medications for 30 days
• Flashlights and spare batteries
• Cash
• Important documents (wills, insurance, licenses, medical and bank records as needed)
• Pet care items
• Tell a neighbor that is staying where you are going and how to contact you. Exchange numbers.

If you are staying (this is highly discouraged if you are in a storm surge area or near the immediate path of any storm):

• Increase food supplies to 3-7 days--preferably non-perishable food items.
• Fill up your propane tank for your grill or buy two sacks of charcoal.
• Insure that you have a functional fire extinguisher. ABC type will work on any fire. Remember, with down trees and no reliable phone service 911 may not be an option.
• Increase water supplies to one gallon per person per day.
• Adequate toiletries, diapers and special items to last at least one week
• One flashlight per individual and 1 spare set of batteries per light
• Increase cash on hand.
• Battery operated radio
• Toys books and games
• Tools
• Clean and fill the tub the night before land fall. This water will be used for pets and flushing toilets.
• Do all of your laundry before landfall. You may not have a chance for a week or so.
• Take digital pictures of your home and each room. This will support future insurance claims.
• Store your valuable papers in a waterproof container or bank vault.
• Fill bags with ice from your ice machine
• Back up your computer data and store it in a safe place.

Additional steps for family safety:

Discuss hazards that could affect your family (storm surge, rising water, down power lines).
Determine a safe escape route and two meeting points if you have to evacuate your house unexpectedly. Have a contact person out of the area that each family member can contact if you are separated.
Locate the safest room in your home. Pre-stock with pillows and blankets if room allows.
Plan for taking care of your pets.


We hope that IKE is less sever than predicted.

If you are in the city of Houston there is a good web site Called Hide From the Wind.

Other Good Links is my Favorite of Weather Underground. Here is a Link to the IKE Page.

Be safe and we'll be up an operating tomorrow and Monday as long as we have Internet and phone. We are 90 miles in from the coast but we are expecting Tropical Storm winds but we located in the piney woods so we'll have to watch for falling trees.

Sincerely,
Henry Daniels - Broker
Fax: 832-217-3033
Direct: (832) 519-0695
www.GoToEquityMortgage.com
Originating Loans In all 50-states and Internationally

Now with the one two punch of the Government Takeover of Fannie and Freddie coupled with the Elimination of Seller Funded aka non-Profit down payment assistance (although the fight goes on to restore it) brings to bear the following realities.

• Buyers with good jobs and sub 660 credit will have to go back to the old ways of saving or having the 3% necessary to purchase a home or work with a Broker who is not a one trick pony in regards to Down Payment Assistance. All of the state, county & city down payment assistance programs are all still intact.
• Furthermore buyers must educate themselves that FHA is not sub-prime. I have often said that FHA may forgive you for a low FICO score, to a point, but you must be responsible with your finances or you will not get a loan.
• The next widespread announcement to come will be that lenders will cease allowing the use of alternative trade lines when insufficient credit on your credit report shows. This news is getting trampled by the Fannie & Freddie Meltdown but in coming months it will be the stealth story that wipes out an entire segment of previously eligible borrowers on ALL government loan products including VA.
  
• Buyers with 680+ Credit the normal downpayment for a conventional loan may soon be 10% and underwriters will be more selective as to whom they lend to.
• For all borrowers the cost of getting a Mortgage will go up. Through Higher rates and Mortgage Insurance Rates.
  
• Sellers will have to realign their selling expectations to the new market reality and this may mean longer selling times and lower prices.
  

It will be the job of Mortgage Professionals as well as Realtors to guide both buyers and sellers through these changing waters that were last visited over 15 years ago.

With all the doom and gloom many Mortgage and Real Estate professionals will throw in the towel and this is a simple fact of business in this down cycle. Is there hope? You bet there is.

VA & USDA still offer 100% financing. Also, local portfolio Lenders while they follow the common sense rules of lending they do make their own rules to a point and will make some loans that Fannie, Freddie and soon Ginne will no longer make.

Realtors, Buyers and Sellers need to work with versatile and experienced Mortgage Brokers since the one bank solution is in reality not a solution but a gamble. At a bank when the guidelines change halfway or at the end of the loan process resulting in a loan being rejected you have to start over from scratch. If you are working with a good and experienced broker the loan is normally placed with multiple lenders and if one changes their guidelines it is only a matter of the broker sending a few pieces of paperwork over to the backup lenders to get the ball rolling. Normally these brokers already have approvals from several lenders and rather than having to start over again from scratch the loan can start mid-way if not further into the process resulting in minimal or no delays in the process.

• Buyers if you want to work with a Mortgage Professional that is experienced in getting loans done and getting you pre-qualified call or email us. If you need of a realtor we have many realtors that are versed in the current market conditions that we could recommend.
• Sellers if you are not working with a Realtor we can refer one who is versed in the current market conditions and if you prefer not to use a Realtor we can also assist you in marketing your property as well and pre-qualifying your buyers and keep you in the loop as to what the current status is. For more information contact our office for a free consultation.
  
• Realtors if you want to work with a Mortgage Professional that is in touch with the realities of the marketplace and can offer both your sellers and buyers real solutions contact our office.

If common sense prevails we will all get through this downturn and market difficulty with most of our marbles.

I'd very interested in hearing your point of view on this.

Did you know the Veterans Housing Assistance Program (VHAP) provides financing up to $325,000 toward the purchase of a home to qualified Texas veterans.

There is no maximum sales price with the VHAP; however, the VLB can only loan up to $325,000 towards the purchase. The VHAP must be originated in conjunction with the following:

Federal Housing Administration (FHA)
OR
Veterans Administration (VA)
OR
Conventional financing

The VHAP is not a refinancing program. If you have an existing loan on your home, you cannot use the VHAP to lower your interest rate, nor can the VHAP be used as a down payment on a home. It can only be used as a first lien on your primary residence.

The term of the loan can be 15, 20, 25 or 30 years.

VHAP loans typically require an escrow account be set up for taxes and insurance.

Cosigners and guarantors may be accepted on the veteran's behalf if the veteran has sufficient income to qualify for at least 60 percent of the monthly payments on the mortgage loan, including taxes and insurance.

Two married, eligible veterans may have only one active VHAP loan at one time.

In addtion the Texas Veterans Land Board offers 95% financing on land up to $80,000.

All VLB loans are subject to credit approval.

For More information on how to apply for and receive the lower rates offered by the Texas Veterans Land Board feel free to contact our office directly and we'd be happy to assist you.