Many times, potential borrowers wonder whether a broker or direct lender is the best choice while shopping for a mortgage. Here are some advantages of using First Indiana Mortgage:

• Because we have low overhead, we can offer lower rates that direct lenders.
• We receive a fixed compensation amount for each transaction, based upon a percentage of the loan amount, regardless of the rates that borrowers choose.
• We are required to undergo strict licensing and testing procedures.
• We have long-held partnerships with the lenders that we work with, and have good relationships with underwriters.
• We are responsive to your calls.
• We review the information borrowers supply, and oftentimes, we can resolve potential documentation issues before information is submitted to an underwriter.
• We realize that we are in a customer service oriented profession, and are committed to providing prompt, professional service.

Visit us at www.firstindianamortgage.com for a free rate quote, or to obtain additional information about our company and the services that we provide.

Many times, potential borrowers wonder whether a broker or direct lender is the best choice while shopping for a mortgage. Here are some advantages of using First Indiana Mortgage: Because we have low overhead, we can offer lower rates that direct lenders. We receive a fixed compensation amount for each transaction, based upon a percentage […]

The My Community Mortgage Program is a great low down payment alternative to FHA loans. The my Community Program, which is offered by Fannie Mae, is a conventional loan program that offers flexible underwriting standards, and lower monthly mortgage insurance rates to qualified borrowers, when compared to FHA financing.

First Indiana Mortgage offers the program, with as little as 5% down payment (or 95% LTV on refinances). Using the 5% down/5% equity scenario, based upon a $200,000 loan, FICO 650-699, the My Community Mortgage would save borrowers about $100 per month in mortgage insurance costs when compared to FHA financing.

To qualify for a My Community loan, you must meet certain income requirements, must not have other financed properties. To discuss the My Community Mortgage in more detail, reach out to Forst Indiana Mortgage ay 888/627-2002, or visit our website at www.firstindianamortgage.com.

The My Community Mortgage Program is a great low down payment alternative to FHA loans. The my Community Program, which is offered by Fannie Mae, is a conventional loan program that offers flexible underwriting standards, and lower monthly mortgage insurance rates to qualified borrowers, when compared to FHA financing. First Indiana Mortgage offers the program, with as […]

The Dodd-Frank Bill, implemented after the real estate crisis in 2008, sets the framework for how mortgage brokers are paid. Understanding the process may help borrowers to assess how there can be a variance in the rates offered for identical home loan products.

To provide a background, under these new regulations, borrowers receive a credit from lenders, expressed as a percentage of the loan amount, based upon the rate and program that they choose.  For illustration purposes, let’s suppose that a borrower is seeking a $250,000 refinance loan, has good credit, stable income and sufficient equity in the property. He approaches two mortgage brokers (Broker A and Broker B), and obtains different rate quotes from each, even though both brokers intend to send his loan to the same lender, XYZ Bank.

The Dodd-Frank Bill requires that lenders, in this case XYZ Bank, provide borrowers with a “credit” for each mortgage scenario, and that the credit must be reflective of a borrower’s specific circumstances, so that each borrower with the same credit, income, asset, and equity position be offered the same terms. For the purposes of this discussion, let’s use the hypothetical $250,000 loan above.

Under this scenario, Lender XYZ offers a rate of 4.25% for a 30 -year fixed mortgage, and provides a credit of $7,500 for the borrower to use to pay closing costs, prepaid interest, and to set up an escrow account for the future payment of insurance and property taxes. Under these circumstances, how can the rates offered by Broker A and Broker B be different?

Dodd-Frank requires that mortgage brokers set pre-determined compensation levels, based upon a certain percentage of the loan amount, for each loan that they originate. This lender compensation level is deducted from the lender credit, and the remaining funds go the borrower. Each brokerage sets its compensation level in light of the profit it intends to make on each loan, taking into consideration salaries, overhead, etc. So if Broker A has its compensation level set at 1% ($2,500 in this scenario) and Broker B has its compensation set at 1.5% ($3,750 in this scenario), a borrower would be better served to go with Broker A, and utilize the additional $1,250 to his benefit.

First Indiana Mortgage has set its compensation low to be in the position to offer its clients the lowest possible rates in the Indiana market. We encourage borrowers to shop their mortgage, and solicit written offers from mortgage providers. Visit us at www.firstindianamortgage.com to obtain a rate quote, or to learn more about the products and services that we offer.

The Dodd-Frank Bill, implemented after the real estate crisis in 2008, sets the framework for how mortgage brokers are paid. Understanding the process may help borrowers to assess how there can be a variance in the rates offered for identical home loan products. To provide a background, under these new regulations, borrowers receive a credit […]

The Fed recently confirmed that it would conclude its Mortgage Backed Securities purchases in October, 2014. While the Fed has been tapering its purchases recently, its exit from the MBS market will reduce demand, and drive the price of Mortgage Backed Securities down. As we know, interest rates and bond prices have an inverse relationship, so when bond prices go down, interest rates go up.

With that in mind, if you are in the real estate purchase market, or have an adjustable rate mortgage that need to be refinanced, then it is the time to lock your interest rate.

First Indiana Mortgage offers a wide variety of loan products, low rates, and superior service. Visit us at www.firstindianamortgage.com or call 888-627-2002

The Fed recently confirmed that it would conclude its Mortgage Backed Securities purchases in October, 2014. While the Fed has been tapering its purchases recently, its exit from the MBS market will reduce demand, and drive the price of Mortgage Backed Securities down. As we know, interest rates and bond prices have an inverse relationship, […]

This morning, I read that former Fed Chairman, Ben Bernanke, was unsuccessful in his attempt to refinance his mortgage, even though he commands fess of up to $250K for individual speaking engagements. He is quoted as saying: “I think it’s entirely possible [that lenders] may have gone a little bit to far on mortgage credit conditions . . .The housing area is one area where the regulation has not yet got it right.” I agree and disagree, and here is why.

Reportedly, Bernanke, who had earned nearly $200K per year as the Fed Chairman is now self-employed. For many years, lenders have required proof of income for self-employed borrowers in the form of two years of federal tax returns to document income stability, and that makes sense. Bernanke left the Fed less than two years ago, so it follows that he cannot document his income. These requirements are set by Fannie Mae and Freddie Mac for loans that can be sold on the secondary market, and, in my mind, do not qualify as “regulation” in the context of Bernanke’s statement.

Looking back a few years, the housing market crisis was fueled by lenders offering loans that required no income documentation, then packaging and selling those loans in the secondary market. From the outset, a reasonable person would have concluded that the borrowers, in many of these instances, would have difficulty repaying these loans, especially in an environment where housing prices were declining.

There was little regulation at that time regarding the types of products that lenders were offering, and by playing “hot potato” with these loans on the secondary market, lenders caused significant injuries to the economy as a whole. For a former Fed Chairman to insinuate that income documentation is a form of over-regulation misses the point.

The current state of regulation in the mortgage industry favors big lenders over smaller ones, and places a huge burden of compliance and disclosure on mortgage brokers, disproportionately. Unlike lenders, mortgage brokers are required to disclose all of their income to borrowers at the outset of the loan application process, and income is set as a percentage of the loan amount, no matter what interest rate is offered to a borrower. Big national lenders have a different set of rule, and are not subject to the same disclosure requirements.

Mortgage brokers can offer lower rates than lenders, because they generally are leaner, have lower overhead, and they set their pre-determined compensation rates low. Borrowers often times lose sight of the fact that, in most cases, the people that handle the loan conditions on any loan file have more experience than workers holed up in cubicles at national banks, and they have a vested interest in getting a loan submitted, approved and closed in a timely manner.

First Indiana Mortgage is a mortgage broker, and we encourage you to visit our website at www.firstindianamortgage.com

This morning, I read that former Fed Chairman, Ben Bernanke, was unsuccessful in his attempt to refinance his mortgage, even though he commands fess of up to $250K for individual speaking engagements. He is quoted as saying: “I think it’s entirely possible [that lenders] may have gone a little bit to far on mortgage credit […]

The FHA 203k Streamline loan allows homeowners and purchasers to combine repairs and home financing into one loan. The FHA 203k Streamline allows borrowers to finance the purchase or refinance of an existing home and make improvements or upgrades up to $35,000. $5,000 minimum repair costs required.

Examples of repairs:

• Repair, replace, and upgrade roofs, gutters and downspouts
• HVAC systems (heating, vacuum, and AC)
• Plumbing and electrical systems
• Flooring, exterior decks, patios, and porches
• Minor remodeling that does not involve structural repairs
• Interior and exterior painting
• Weatherization, including doors, windows, insulation, stripping, etc.
• Appliance purchase and installation (kitchen appliances, washer, dryer)
• Lead-based paint removal and stabilization
• Exterior wall re-siding
• Certain other improvements that are a PERMANENT part of the real estate*

Contact us at www.firstindianamortgage.com for additional details.

The FHA 203k Streamline loan allows homeowners and purchasers to combine repairs and home financing into one loan. The FHA 203k Streamline allows borrowers to finance the purchase or refinance of an existing home and make improvements or upgrades up to $35,000. $5,000 minimum repair costs required. Examples of repairs: Repair, replace, and upgrade roofs, […]