Isolina Fernandez-Kirchner

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What is a portfolio loan? A portfolio loan is one where the lender keeps the loan in its “portfolio” and does not sell the loan in the secondary market. Okay, so what is the secondary market? The secondary market as it relates to the mortgage industry ensures liquidity in the mortgage market where lenders can buy and sell home loans. This liquidity is so very important in the industry because without it, lending activity would shrink and rates would rise.

The most common loans bought and sold in the secondary market are those that adhere to standards set by Fannie Mae and Freddie Mac. Each entity issues its own guidelines and as long as a loan is approved using those standards, the issuing lender can sell that loan to Fannie or Freddie or even to other lenders. When financing a loan the lender taps into its credit line, funds the loan and then sells it. Doing so replenishes the line of credit, allowing the lender to make still more mortgages. Nearly two out of every three mortgages issued today are either Fannie or Freddie.

But there are plenty of other scenarios that do not follow these guidelines. Borrowers can still have good credit and a down payment but for whatever reason can’t qualify for a traditional mortgage. For example, a standard requirement for a conventional loan is having two years in the workforce. The borrowers might be an excellent credit risk but may not yet have reached the two year minimum. A portfolio loan however can approve the application in this scenario with say just one year of employment.

Another scenario relates to income. Fannie and Freddie guidelines ask for two years of employment and ...


When consumers first think of refinancing an existing mortgage loan, typically it’s because there’s new out about falling interest rates. In today’s environment however, especially with mortgage rates being as low as they are for such an extended period of time, refinancing to lower a monthly payment is happening with less and less frequency. But it’s not always just about the current rate on a mortgage compared with market rates. A mortgage refinance can still make sense in New Jersey or other areas in this environment for many.

One reason to refinance now would be to consolidate debt. By paying off higher interest debt with a lower rate mortgage loan can save money. The most competitive interest rates are typically those associated with a first lien mortgage. Higher interest rates can be attached to other consumer credit obligations such as credit cards or automobile loans, student loans or home equity lines of credit, or HELOCs.

To see if this strategy works for you, take a few moments and gather your most recent credit card and consumer debt statements. List each account, the current balance, minimum monthly payment and interest rate associated with that account. When finished, take a look at the total monthly payments as well as the total outstanding debt.

Next, add the amount of these debts to your current mortgage balance. Then, contact your loan officer to get an update on where mortgage rates are today and compare what your new mortgage payment ...


Mortgage rates rose steadily during the first half of 2018, and have since leveled off a bit. Looking forward, a new round of industry forecasts suggest that mortgage rates in New Jersey and nationwide could hover just below the 5% range for much of 2019.

Mortgage Rates Up Since the Start of 2018

On average, mortgage rates have risen by roughly 1% since the start of this year. The average rate for a 30-year fixed home loan was 3.95% during the first week of January, according to Freddie Mac. That average had risen to around 4.94%, as of mid-November 2018.

Those who are planning to buy a home next year are probably wondering: What are mortgage rates in New Jersey expected to do in 2019? Will they rise gradually over the coming months, or continue to hover within their current range?

While there’s no way to answer such questions with certainty, a pair of new mortgage rate forecasts have shed some light on the subject. Here’s what the experts are predicting, as of November 2018.

Forecasts Predict That Rates Could Hover Just Below 5%

No one can predict future rate movements with complete accuracy. There are too many variables involved, and those factors are ever-changing. But there does seem to be a general consensus among industry analysts. And those forecasts suggest that rates could remain relatively stable over the coming months.

The first forecast came from the Mortgage Bankers Association ...


Sorry home buyers. FHA mortgage insurance premiums in New Jersey won’t be reduced anytime soon. That recent announcement came from officials with the Federal Housing Administration. So the mortgage insurance premiums that are currently in place will be carried over to 2019, unchanged.

FHA Mortgage Insurance Premiums in 2019

Home buyers in New Jersey who make a relatively small down payment typically have to pay for mortgage insurance. These policies are usually required when the borrower’s loan-to-value (LTV) ratio rises above 80%.

There has been some industry “chatter” over the past few months that the Department of Housing and Urban Development (HUD) might lower the FHA mortgage insurance premium that’s required on most FHA loans. That would’ve been a money-saver for home buyers using an FHA loan to buy a house in New Jersey.

And there’s a precedent for this kind of thing. FHA insurance premiums have been reduced in the past, most recently during President Obama’s time in office. The Obama-era reductions were scheduled to begin toward the end of January 2017. But they were later reversed by President Trump, shortly after he took office on January 20.

The National Association of REALTORS® and other groups have asked HUD to reduce FHA mortgage ...


Mortgage rates in New Jersey and nationwide have leveled off a bit over the past few weeks, and that trend could continue into 2019. Home prices, on the other hand, continue to climb in most of the state. Those are just two of the trends and forecasts that we are monitoring. Here’s an updated look at housing trends for New Jersey, with an outlook stretching into 2019.

Mortgage Rates Settle in the 5% Range for Now

Last week, Freddie Mac reported the results of its latest survey of the mortgage industry. According to that report, the average rate for a 30-year fixed home loan was 4.94%. That was roughly 1% higher than the first week of 2018. So rates have risen a bit since the start of this year.

Looking forward, housing analysts and economists are predicting that mortgage rates could hover within their current range for a while.

For example, the economic research team at Freddie Mac recently predicted that 30-year home loan rates would average 5.1% during 2019. The Mortgage Bankers Association (an industry group) issued a nearly identical forecast in October, suggesting that rates would hover in the low 5% range throughout next year.

Note: The trends and forecasts mentioned above pertain to industry-wide averages. The actual interest rate assigned to home loans can vary due to a number of factors (the type of mortgage loan being used, the borrower’s qualifications, etc.). Please contact us if you would like a ...


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