The 30-year fixed. The iconic, all-American mortgage. For probably the last 70 years or so, it’s been the most popular mortgage in the land. Nothing else has ever come close. All the fancy mortgages of the 2000s (e.g., interest-only, negative amortization, ARMs, etc.) might have gotten a lot of media attention, but they never were as popular as the 30-year fixed. Not even close.

Here’s a fact. Never, in the 28-year history of Quicken Loans, has any mortgage other than the 30-year fixed been our top seller. That might surprise some folks, but it really shouldn’t. The 30-year fixed is a best seller for many reasons. I’ll get into that in a second. For the record, two of my four mortgages were 30-year fixed. The other two were 15-year fixed. And also for the record, three of the four were VA loans, but that really doesn’t matter. Getting a 30-year fixed made a lot of sense for me. I’ll explain why in the pros of the 30-year fixed below. I’ll also explain why I might have benefitted from a different mortgage (benefitted = saved some money) in the cons of the 30-year fixed mortgage. Here we go.

Pros of the 30-Year Fixed Mortgage

So why is the 30-year fixed so darn popular? And why has it been for so many years? Here’s what you get when you choose a 30-year fixed:

1. An affordable payment (relative to shorter-term mortgages), that won’t change over the life of your loan.
2. You can refinance up to 95% of your primary home’s value.
3. You can buy a home with as little as 5% down (if it’s your primary home – investment home and vacation homes require a slightly larger down payment).
4. You can qualify for loan amounts up to $3,000,000.
5. You will have the peace of mind knowing you are choosing the mortgage that most Americans choose each year. There’s power in numbers, right?

Cons of the 30-Year Fixed Mortgage

1. You pay a higher rate for a longer time than you need to. Most Americans move or refinance every 4 – 7 years (I’ve gotten four mortgages since 1998). Yet, instead of getting a lower rate with an ARM or a shorter term, they opt for a longer term. The longer your term, the higher the rate.
2. It might not be the perfect loan term to match your goals. If you opt for the plain-old vanilla 30-year, you miss the chance to match your mortgage to your financial goals. Are you retiring from your job in 17 years? Maybe a 17-year fixed would be ideal. No job and no mortgage! Maybe your children will be starting college in 12 years. Get a 12-year fixed and be mortgage-free when they start phoning home for cash.
3. You pay more interest. That’s a fact. It’s simple. The longer your mortgage, the more interest you’ll pay. You get a lower payment each month, but because you pay your mortgage over such a long time (and borrow the money over a long period), you pay more interest. Using a mortgage amortization calculator, you can see exactly how much more or less interest you pay based on the length of the term of your loan.

There you have it. The pros and cons of the 30-year fixed. Like I mentioned at the beginning of the post, I’ve had 30-year fixed mortgages twice. The first time, I didn’t know any better. The second time, it made the most sense for me at the time. I’ve since refinanced to a 15-year fixed VA loan. Speaking of that, stay tuned for a post on the pros and cons of the 15-year fixed.

Until then, have a safe and happy Memorial Day. Bye for now.

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At Quicken Loans we strive to make the closing of your mortgage as quick, easy, and effortless as possible. One way we make that happen is with our current closing process. After you’ve confirmed a date, time and selected a location of your choice, we will select one of our best notaries to meet you at that location for the signing. It may seem a little odd that we would send someone whom you’ve never met to sign all of these important documents, but we want to do everything in our power to ensure this is the most undemanding mortgage process ever. Even if it means coming to your home for the closing so you don’t have to get out of your pajamas. So to ease some of your apprehension about the notion of allowing a stranger in your space, let’s break this down and not only discuss the notary’s role in the transaction but also discuss the benefits of having one.

What Are Notaries and What Do they Do?

According to Merriam-Webster, a notary is “a public officer who certifies and attests to the authenticity of writing (e.g., deeds) and takes affidavits, depositions, and protests of negotiable instrument.” In layman’s terms, a notary is someone who is legally authorized to sign documents. Once the signing is complete, the notary will take the documents, place them in a UPS box along with the UPS label that we have provided for them and send them back to us to ensure that everything was signed properly before we shop them off to the county for recording. Without the notary’s stamp and signature, your documents aren’t considered valid, and your state won’t accept the documents once they are sent for recording. You would have to resign all the documentation again.

How We Select Our Notaries

Once you’ve completed the scheduling call and have secured your date and time, our sister company who handled all of the title work (Title Source) will reach out to one of their trusted vendors to find the person with the highest satisfaction rate in your area. In order to be considered for the position the potential notary must send in their W-9’s, a copy of their notaries commission (license), go through an extensive background check as well as send us their resume with three business referrals. Pretty thorough, right? Once the selection has been made, the notary will reach out to you to make an introduction before coming to your closing location.

Benefits of Notaries

Most notaries are mobile, which means although they don’t have an office where you can meet, they are able to travel and meet you almost wherever you want. As previously stated, most of our clients prefer to close in the comfort of their own home. However if you would like to meet at a coffee shop or a library, the notary will have no problem meeting you there. Another benefit of having a notary perform the closing is their ability to bring a witness should one be required to sign the mortgage. That’s right, depending on the state that you live in, you may be required to provide a witness and have them sign the mortgage. No worries, we’re able to help you with that. Once we schedule the closing, we’ll contact our notary team and have them assign a notary who will be able to bring a witness with them if needed. Just one less thing you have to worry about.

If you have any questions regarding notaries and their role in closing you home loan please let us know in the comment section below.

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That’s the long and short of it. Changing your job while applying for a mortgage is a big mistake that’ll land you in a metaphorical mortgage morass. That’s not to say that taking a new job will automatically disqualify you from getting a mortgage, just know that it’s a big red flag for mortgage lenders.

When considering a loan, underwriters look at, among many other things, three different aspects of your income – the amount, the history and the stability. The majority of loans require a two-year work history, and underwriters need to be able to document any employment gaps or changes in income.

To verify your employment, you usually have to provide your lender with pay stubs and sometimes a written verification of employment (VOE).

Jim Woodworth, a mortgage specialist team captain here at Quicken Loans, explains this further:

“The biggest issue that we see with changes in employment is when a change in pay structure occurs. For example, someone that goes from a salaried position to a commissioned position will encounter some obstacles with applying for a loan, even if the new job results in higher income.”

Your income helps decide how much loan you qualify for, and, if your income changes, then the lender has to reevaluate everything. Switching jobs causes an especially big problem if you take a new job at the end of the year because it will mess up your tax info and W-2s as well. Also, a significant time gap between jobs could be a problem because your income won’t look very stable.

Generally speaking, if you immediately switch from one job to another within your same field and get equal or higher pay, that’s not going to be much of a problem. But, if you start in a new career field or take a lower paying job, you’ll have a harder time getting your loan approved.

The bottom line is that your lender just wants to make sure you have a reliable income so you’ll be able to pay your mortgage every month.

If you have more questions on this topic or some suggestions of your own, let us know!

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Whether you know it or not, when you refinance or purchase a new home, one of the steps is to obtain a title insurance policy. The reason why you need a title insurance policy is to protect your legal rights to own, possess, use, control and dispose of your land. There are two types of title insurance policies that are produced while obtaining a mortgage.

“One of the most common misunderstandings that I hear from our clients,” said Kim Kareus, team leader of Client Relations, “is not knowing the difference between a lender’s and an owner’s policy of title insurance.” So, now let’s talk about the different two different types of policies.

The lender’s policy is required for the mortgage and it financially covers the amount of the loan and provides protection to the lender. A lender’s policy is required for both a purchase transaction and a refinance transaction.

The owner’s policy protects the land owner against any title loss, which ensures the value of the property. With title insurance, if a claim is made against the title, the underwriter must pay any and all costs associated with the defense against the challenge, and if unsuccessful in that defense, reimburse the land owner for any reduction in the value of the land. An owner’s policy is only required for a purchase transaction because an owner’s policy protects the home owner for the entire length of time that they own that property.

Although title policies are seamlessly incorporated with a lender’s mortgage process, it is important to understand the type of policy obtained in the transaction and how important the policy is to the protection to the home owner’s property and to the protection of the lender.

Any questions?! Please let us know!

Title Source is the largest independent provider of title insurance, property valuations and settlement services in the nation. We have over 16 years of industry experience and expertise. Our solutions power the nation’s largest residential lending institutions, as well as smaller community-based lenders.

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You read that title correctly.

An estimated 2.7 million American households could refinance to today’s mortgage rates (which are at historic lows, in case you haven’t been paying attention) through the gov’s HARP program. And they can do it even if they owe more money than their home is worth. Up to 200%. But they aren’t. And we don’t know why.

Why don’t they want to lower their mortgage payment?

Why don’t they want to shorten the term of their loan?

Why don’t they want to save thousands in mortgage interest?

We wish we knew, because then we could reach out to them and explain why they absolutely should take advantage of HARP while it’s still around. Which brings up some good news for American homeowners. HARP has been extended through 2015. That’s a good thing. The bad thing is that mortgage rates most likely won’t stay as low as they are for very long. At some point, once rates rise, the ability to save money with HARP may be diminished.

Jordan Fylonenko (who sits a few seats over from me on the 12th floor of the Compuware Building in downtown Detroit) recently met with Quicken Loans Chief Economist Bob Walters to discuss HARP and what’s going on with the millions of folks who haven’t taken advantage of it.

Before we show you the video, here’s some info on HARP from our Press Room:

The FHFA’s announcement to extend the HARP deadline to 2015 is much needed for the estimated 2.7 million underwater homeowners who are eligible and still able to benefit by refinancing. Unfortunately, a too-good-to-be-true perception coupled with long lines to refinance and repeated “no’s” from lenders who are not utilizing HARP to its fullest extent have left many disgruntled to enter another arduous loan process. But for those homeowners needing a personal stimulus, picking up the phone again is well worth it.

The average savings from a HARP refinance is around $200 a month with an average rate reduction of 1.75%, resulting in $2,400 savings per closed loan per year and $74,000 per lifetime (assuming a 30-year mortgage). The potential stimulus for the economy is even more significant, reaching up to $6.5 billion ($2,400 in savings a year per consumer x 2.7 million consumers).

These savings are more than just numbers on a spreadsheet. A Quicken Loans client and active duty Air Force recruiter from Sacramento, CA, was able to cut $763 off his monthly payment for his investment property and lowered his rate down by more than a point through HARP. This was after his original lender told him they couldn’t help.

Another Quicken Loans HARP client from North Brunswick, NJ, was able to save $387 on his monthly payment and lower his rate by more than a point to 3.85%.

In a monthly video series, Markets and Musings, Quicken Loans Chief Economist sat down to discuss some of the recent changes that have opened up HARP to more underwater homeowners.

That’s it. Here’s the video. Enjoy and let us know what you think. And, of course, get HARPed if you haven’t already.

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Quicken Loans CEO Bill Emerson recently appeared on Bloomberg TV’s “Market Makers,” with Scarlet Fu and Stephanie Ruhle, to discuss the recent deal with Ally to purchase $34 billion in servicing rights.

This is a huge move and makes us one of the larger mortgage servicers in the nation. Plus, these are great loans to add to the Quicken Loans servicing portfolio. They are performing well and many have interest rates above today’s record-low mortgage rates. Hint: these folks are perfect candidates to save some money with a mortgage refinance and we want to make it as easy as possible for them to do so.

Emerson also talks about Fannie Mae and Freddie Mac, interest rates remaining low, risk and change in the mortgage industry (and how Quicken Loans has always been able to adapt quickly – you can take my word on that one), the economy and the housing market.

Check out the video below and let us know if you have any comments or questions on the stuff Bill talks about. If you can’t see the video, watch it here.

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Mortgage rates are at historic lows. We know that.

But for how long?

Nobody knows for sure. That’s a given. But all the signs are starting to point to mortgage rates going in one direction. Up. And probably in the not-so-far-away future.

Chief Economist Bob Walters explains it all in this video. He talks about how short-term rates (the Fed Fund rate) are already at zero. That means they can’t go any lower. Long-term rates (30-year fixed, for example) are down to levels Americans haven’t seen in decades. Since Eisenhower was president. And I Love Lucy was a brand new TV show. That’s a long time, friends.

Walters discusses a speech Federal Reserve Chairman Ben Bernanke gave on March 1, 2013 in which Bernanke gave a forecast of the 10-Year Treasury rate, which could rise significantly by 2017.  This is important, because the 30-year fixed rate traditionally is about 2% higher than the 10-Year Treasury rate. So if the 10-Year Treasury rate rises to 5%, guess what happens to the 30-year fixed rate? You guessed it. It goes to a whopping 7%. The funny part is that my first VA loan was a 30-year fixed in 1998 that was 7.25% and I thought I had won the lottery. My friends congratulated me on getting such a low rate.

You won’t feel like you won the lottery if rates rise to 7% and you miss out on rates in the 3%-4% range. No, you’ll feel like you lost a lot. And you will have.

So don’t wait. If you can refinance at today’s rate, you should. What are you waiting for?

Check out the video and let us know what you think.

If the video does not play, click here.

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Great article in USA Today about the HARP Refinance program featuring Quicken Loans Chief Economist Bob Walters.

Bob Walters chats about the success of the HARP program and the 3 million underwater homeowners still eligible to refinance.

That means they could save some money by taking advantage of today’s record low mortgage rates, which are starting to tweak up, by the way.

Bob is quoted alongside Moody’s Analytics chief economst Mark Zandi, another leading source for economic insight.

Here’s a little bit of the article for you to enjoy:

A government program to help struggling homeowners take advantage of low interest rates helped 1.1 million borrowers last year — more than twice as many as in 2011, the government says.

The Home Affordable Refinance Program (HARP), launched in 2009, was revamped in late 2011 to make it more attractive to homeowners and banks doing the refis.

Given those changes, HARP “is finally living up to expectations,” says Mark Zandi, chief economist of Moody’s Analytics.

Since 2009, almost 2.2 million homeowners have gotten HARP refis, the government says. On average, they’re saving about $4,300 a year on home loans, Fannie Mae estimates.

To be eligible, HARP applicants must have loans owned or guaranteed by Freddie Mac or Fannie Mae, have less than 20% equity and be current on payments.

Almost 3 million more borrowers may be eligible for HARP, says Bob Walters, chief economist of Quicken Loans.

He says the biggest problem is that HARP had so many false starts, people don’t pursue it, and they “believe it’s too good to be true.”

It’s not too good to be true. Just ask my sister. She’s saved a ton of dough with HARP and maybe you can too. Maybe. Just maybe. If you think you might qualify for HARP, we’d love to hear from you. In fact, you can use our HARP Qualification Tool to get started right now. Why wait? It’s only money we’re talking about.

Read the full article here: HARP program doubles mortgage refis in 2012

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Hey Zing readers.

Just wanted to share a great article from Yahoo! Homes I came across - Four Reasons to Refinance Now Instead of Wating.

I couldn’t say it better and I totally agree.

Mortgage rates are still near historic lows and many great programs for mortgages are available only for a very limited time.

What does that mean for you?

Now just might be your last chance to take advantage of the best mortgage market in decades.

Here is a quick summary of the article and why refinancing your mortgage right now is a really, really, really good idea for you. And I do mean really.

1. FHA insurance premiums are rising April 1, 2013. Another change in FHA insurance that could affect your wallet happens in May. FHA loans assigned a case number (which happens at application) before those dates will qualify for the lower insurance rates.
2. HARP is scheduled to end this year.
3. Benefits to refinancing during the tax season
4. Market forces are beginning to show signs of an empending rate increase. The article explains this in detail.

It’s yours for the taking right now, but it won’t last. Act now and win. Wait and you just might lose out forever. That would not be good.

Read the full article here and let me know what you think!

Here’s to saving some money. That’s an idea we can all get behind. No?

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If you happened to miss HGTV’s Love It or List It last Monday night, you missed a chance to win $50,000 in HGTV’s Mortgage Madness Watch & Win Sweepstakes, presented by Quicken Loans.

But the great news is, there are still three more chances to win, starting tonight!

All you have to do is watch HGTV’s Love It or List It tonight at 8 p.m. ET for a special code word. You’ll then have 24 hours to visit HGTV.com/mortgage to enter for your chance to win.

What could you do with $50,000? Pay off your mortgage? Add granite countertops and new kitchen cabinets? Buy a new home with the perfect backyard? The possibilities are endless!

The sweepstakes ends March 26 at 7:59 p.m. ET, so be sure to tune in every Monday in March at 8 p.m. ET for that special code word and enter within 24 hours! The fun continues March 18 and 25, so mark your calendars!

To enter, and for Official Rules, including how to learn the Code Word and the Entry Period date(s)/time(s), visit www.HGTV.com/mortgage.

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