Author Archives: Rhonda Porter

About Rhonda Porter

Rhonda Porter is an NMLS Licensed Mortgage Originator MLO121324 for homes located in Washington state. Her blog, The Mortgage Porter, is nationally recognized for sharing relevant information to consumers about mortgages. She has been originating mortgages since 2000 at Mortgage Master Service Corporation #40445 Consumer NMLS Website: http://www.nmlsconsumeraccess.org/TuringTestPage.aspx?ReturnUrl=/EntityDetails.aspx/COMPANY/40445 NMLS ID 40445. Equal Housing Opportunity. You can follow Rhonda on @mortgageporter, Facebook and/or Google+

2019 Conforming Loan Limits for Seattle and King County

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2019 will bring higher conforming loan limits for homes located in King, Snohomish and Pierce Counties. Loan amounts over a conforming loan amount for which the property is located in is considered “non-conforming” or a “jumbo” mortgage.

For 2019, the conforming loan limits for King, Pierce and Snohomish Counties are:

  • One Unit: $726,525
  • Two Unit: $930,300
  • Three Unit: $1,234,475
  • Four Unit: $1,397,400

Technically, the loan limits for King, Snohomish and Pierce Counties are called “high balance conforming” as the loan limits are higher than the “true” conforming loan limits (which the rest of the state has for conforming loan limits).

For homes located in Washington state in any other county, the conforming loan limits are:

  • One Unit: $484,350
  • Two Unit: $620,200
  • Three Unit: $749,650
  • Four Unit: $931,600

When structuring your mortgage scenario, it may be more beneficial to have a “true conforming” loan amount vs. a high balance mortgage depending on your scenario and how rates are currently priced. It’s not unusual to see jumbo rates more favorable than “high balance” or “true” conforming. It’s important to work with a licensed local loan officer who will check out the various options that may be available to you.

 

Seattle City Council preparing to regulate Vacation Rentals

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It’s no big surprise that the Seattle City Council has been preparing to set regulations on vacation rentals, such as homes you find on AirBnb or Home Away/VRBO.  Typically, vacation rentals allow home owners to rent out all or a portion of a home for short periods of time. Vacation rentals have become very popular with guests in search of a different experience than what you find staying in a hotel.  Inside Airbnb states there are approximate 3,818 homes are being used as a vacation rental in Seattle that are rented, on average 110 nights out of the year. According to Inside Airbnb, 35.8% of the “hosts” or owners have more than one active vacation rental.  People who I know who operate vacation rentals do so to help cover their housing expenses or because they plan to eventually retire in the vacation/second home.

Daniel Beekman of The Seattle Times wrote an article yesterday, “Seattle may slap new rules on Airbnb to ease the rental crunch“.  The article fails to mention that Tim Burgess, who is the council member leading the charge on this issue, received a large contribution from hotel lobbyist.

The council is proposing to limit the number of days that can be rented as a vacation rental to 90 in a 12 month period. Burgess assumes that the other 9 months out of the year, these properties will be available to rent for periods of 30 days or more. This theory is flawed.

Often times with vacation rentals, an entire month is not “booked”. You might have someone staying one week and someone else staying a weekend in a month – not allowing a month to be available for a full 30 day rental period.

In addition, Mr. Burgess assumes that when a home is not booked for a vacation rental, that it will become available for longer term (30 days or more) rentals. Vacation rentals are furnished properties and, if rented for long term, will most likely not help those who are looking for “affordable housing”.

I do agree that vacation rentals should be regulated. Especially with some of the extreme examples that the Burgess used, citing:

“We have whole floors of apartment buildings that have been taken off the housing market,” he said. “We have entire buildings that essentially have become hotels.”

The “hosts” or owners who are gobbling up condos and essentially creating a hotel are a real minority and, in my opinion, should be treated more as a hotel and subject to zoning. However, folks who own just one property should be allowed to do so as a vacation rental without the 90 day limit restriction.

Should the regulations go through, limiting home owners from being able to use their properties as a vacation rental beyond 90 days, we won’t see these homes becoming long term rentals or helping the housing market. Many vacation rental home owners really enjoy the hosting aspect and meeting guest on vacation or business travel. What I think we will see is frustrated host eventually just sell their vacation homes during this hot market and again, that Seattle home will not be added to the long term rental stock.

Some neighborhoods, like West Seattle, lack hotels (we have one small motel) and actually need short term rentals to serve the neighborhood. Especially considering the alternative of just trying to get out of West Seattle and into a downtown Seattle hotel when West Seattle is where you want to stay.

From the Seattle Times article:

“The 90-day cutoff would affect just 20 percent of listings for entire houses or apartments in Seattle, according to a recent Airbnb report, Burgess says. The December report said almost 80 percent of entire-home listings here are rented for 90 nights or fewer per year…

“We don’t know how many of those are primary residences,” Burgess said. “But imagine if we put 300 homes back on the long-term rental-housing market. That would be worth a lot. To build 300 new units would cost more than $70 million.”

Burgess is looking at only allowing those who live on the property as their primary residence to be able to rent the homes longer than 90 days. His figures of having this impact only 20 percent of the listings is probably inaccurate.

I sincerely hope the City Council will take some time to do more research before impacting 3800 properties.  And a majority of those homes will not go back on the market as long-term rentals.

If you own a vacation rental in Seattle, I recommend that you reach out to your council member to share your story.

The Death of Mortgage Blogs

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iStock_000017972256XSmallThere is a buzz going on among fellow mortgage bloggers about how days may be numbered for mortgage blogs. This is as a largely the result of guidance issued by federal regulators late last year specifically on social media. When I first read this guidance, my initial response was “so what? This is pretty much what lenders are supposed to be doing anyhow”… stuff like properly quoting rates, not being misleading to consumers, etc.  It’s also my opinion that this seems to be written in favor of mortgage banks and not mortgage companies. The big banks seem to not want loan originators who have or express their own opinions.

After more thought and discussion with other mortgage bloggers, I can see the real issue is the compliance factor. Many mortgage companies are already stretched with the cost of compliance with just the day to day operations of originating mortgage loans. It’s my understanding that some lenders have made the decision to just not allow their loan officers to have any independent sights or social media sights (like Facebook or Twitter) as this is the easiest route…no extra compliance cost (additional personal hours) and less risk.

Blogs typically have information released freely and quickly. There are times that I have done “live post” when I’m covering an event, such as the Fed testifying before Congress or to illustrate how something like that may impact mortgage rates. I’m not sure it’s feasible for a compliance officer to be able to regulate and approve everything that a loan officer says or does with social media – imagine a person having to approve any comment or update you put on Facebook or Twitter… it’s simply not realistic and it’s no longer “you” being social or in the moment – it’s you-approved by your employer.

The thought of me no longer being able to blog or to no longer have my  blog, The Mortgage Porter, which I began back in 2006 is absolutely depressing. I really enjoy writing and sharing information with my readers about mortgages, including the process of financing a home and various mortgage programs. At times, it’s even been therapeutic by allowing me to vent or “rant”.  Blogging and social media has brought me so many wonderful opportunities and experiences that I would not have had as a non-blogging mortgage originator.

When I began my blog, it was because of a lack of information, or actually because the wrong information was being shared by the media about loan officer licensing. I never dreamed anyone would read it or that people would actually decide they want me to be their loan officer because of the information I freely shared with them – information that they could not find anywhere else!  I use my blog to share information with potential clients – like “what is a letter of explanation” and sometimes, I’ll write a post just to address an answer to a clients question… if they’re asking it, odds are somebody else is searching for that answer too.

I fully agree that content on mortgage blogs must be compliant – however doing away with mortgage blogs is a travesty.

Less information and less transparency is never good for the consumer.

Good thing I have a back up career! 

Stay tuned.

Seattle RE BarCamp will be here soon!

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This year Seattle RE BarCamp is actually going to be south of Seattle at the Center Point Conference Center in Kent (south of Southcenter Mall and north of the Showare Stadium)… so technically, we’re calling this “Greater Seattle reBarCamp”.  Regardless, this event will be taking place on March 13, 2014.

This event is an “un-conference” where topics (which tend to be about social media or related to real estate) are decided by the attendees the morning of the event. You literally submit topics on subjects you would like to learn more about (such as word press, for example) or perhaps you have a great idea that you would like to brain storm with a group of like minded people… the possibilities are endless. The only thing really not allowed are presentations or sales pitches.

This years event is going to be cozier than our last Seattle RE BarCamp (which was humongous)… so we are charging $10 for tickets in advance – which will include a boxed lunch from Alki Bakery.  If you decide that you’d rather show up the day of, without a ticket, the cost will be $20 assuming we’re not sold out (as I mentioned, space is limited).

Jay Thompson will be kicking off the event with a quick “rules of the road” to refresh attendees on how to get the most of your REBC experience. Drip coffee and some pastries are being provided by Alki Bakery (first come/first serve).

Want to join us?  Learn more here… and buy your tickets!! 🙂

2014 Conforming and FHA Loan Limits for Greater Seattle

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Conforming and FHA loan limits for 2014 have recently been released. Conforming loan limits will remain the same as 2013. However, FHA loan limits are being lowered in 2014 from $567,500 to $506,000 for a single family dwelling.  The 2014 FHA loan limits are effective with case numbers obtained January 1, 2014 through December 31, 2014. So you can start your purchase or refi transaction during the last few weeks of this year and still have the higher 2013 FHA loan amount as long as the case number is obtained prior to January 1, 2014.  FHA loan limits do not apply to FHA streamlined refi’s.

The following loan limits for 2014 are for King County, Snohomish County and Pierce County:

Conforming and FHA 2014 Loan Limits:

1 Unit: $506,000
2 Unit: $647,750
3 Unit: $783,000
4 Unit: $973,100

 

 

 

Home Buyer Education Seminars

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I am teaching two Home Buyer Education Classes this month sponsored by the Washington State Housing Finance Commission.  Anyone who is interested in buying a home can attend – our class is not limited to first time home buyers.

Home buyers who are interested in programs offered through the Washington State Housing Finance Commission, such as the Home Advantage Program with down payment assistance, are required to take a WSHFC sponsored class.

If you’re interested in attending a class where I will be teaching, you have two opportunities this month:

  • Saturday, July 13, 2013 from 11:00 am to 4:00 pm in West Seattle at the High Point Library. My co-instructor is Ira Sarachoff.
  • Saturday, July 20, 2013 from 11:00 am to 4:00 pm at the Greenlake Library in Seattle. My co-instructor is Jim Reppond.

Lunch is being provided at both of these classes… however, if you have dietary restrictions (or you’re a picky eater 🙂  you may want to bring your own sack lunch.

Both classes are FREE. If you’d like to attend, you can rsvp here.

I’ve always felt that an important part of a mortgage originators job is to educate their clients and make sure their questions are answered before they get to the signing table. I’m very excited to be a part of the Washington State Housing Finance Commission’s program.

Upcoming Changes to FHA Mortgages

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In a recent press release, HUD has announced several changes coming soon to FHA mortgages. FHA mortgages are popular with home buyers because they allow for lower down payments (currently as low as 3.5%) and FHA mortgages tend to be more flexible with credit scoring and debt-to-income ratios. Another reason why home buyers may lean towards is an FHA mortgage in the greater Seattle area is because the allowed loan amount for a single family dwelling is $567,500 compared to $506,000 with a conforming mortgage.

Upcoming changes to FHA mortgages include:

  • FHA annual mortgage insurance (paid in the monthly mortgage payment) will increase by 10 basis points on FHA loans. FHA jumbos (loan amounts of $417,001 to $567,500 in King County) will see an increase of 5 basis points. This is effective with case numbers issued April 1, 2013 and later. 
  • FHA mortgage insurance to be permanent.  FHA mortgage insurance on loans with case numbers issued April 1, 2013 or later will have mortgage insurance on the life of the loan. FHA mortgage insurance on loans with case numbers issued prior to June 3, 2013 will still have their mortgage insurance terminate once it meets 78% loan to value and 60 payments have been made.
  • FHA annual mortgage insurance on 15 year amortized mortgages to be 45 basis points effective with case numbers issued June 3, 2013 and later.  Currently FHA mortgages with 15 year terms do not have annual mortgage insurance.
  • Manual underwriting for borrowers with credit scores below 620 and debt to income ratios exceeding 43%. This basically means that even if the automated underwriting system issues an approval – a borrower meeting this criteria will still need to have a human underwriter review the complete application and decide if she wants to sign their name to it.  I believe at our company, our lowest credit score we will accept for an FHA loan is 640.  This goes into effect with case numbers issued April 1, 2013 and later.
  • Minimum down payment to increase on FHA Jumbo mortgages to 5%.  Currently FHA jumbos have a minimum down payment requirement of 3.5%. In King, Snohomish and Pierce Counties, FHA loan amounts between $417,001 and $567,500 are considered to be FHA Jumbo. A mortgagee letter has not been issued yet (as of the publishing of this post) as to when this will happen.

The increases to FHA annual mortgage insurance premiums will not impact FHA streamlined refinances IF the existing underlying FHA mortgage was endorsed by HUD prior to June 1, 2009.   These lucky home owners still qualify for reduced FHA mortgage insurance premiums.

These changes are in effort to help bolster FHA’s capital reserves.  From HUD’s press release:

“These are essential and appropriate measures to manage and protect FHA’s single-family insurance programs” said Galante.  “In addition to protecting the MMI Fund, these changes will encourage the return of private capital to the housing market, and make sure FHA remains a vital source of affordable and sustainable mortgage financing for future generations of American homebuyers.”

If you have been considering buying or refinancing using an FHA insured mortgage and have the ability to beat the April 1, 2013 date when many of the changes are taking place, I encourage you to do so!  FHA case numbers are issued after a bona fide application is in place. If you are in an FHA transaction during the April 1 date, you will want to confirm with your mortgage professional that you have an FHA case number.

 

2013 Mortgage Loan Limits for King County

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rate changesThe 2013 mortgage loan limits for the  greater Seattle area are for the most part, the same as 2012.  The following loan limits apply for homes located in King, Snohomish or Pierce Counties.

Conforming:

1 Unit: $506,000

2 Unit: $647,750

3 Unit: $783,000

4 Unit: $973,100

FHA:

1 Unit: $567,500

2 Unit: $726,500

3 Unit: $878,150

4 Unit: $1,091,351

VA:  

$500,000.

NOTE: Technically speaking, VA loans do not have a “limit”. $500,000 is the highest loan amount for a “zero down” VA loan. If a qualified Veteran wishes to buy a home priced above $500,000, the down payment will be 25% of the difference between the sales price/appraised value (lowest of the two) and $500,000.  For example, a $600,000 sales price would have a down payment of $25,000 ($600,000 less $500,000 = $100,000 x 25% = $25,000).

You can find a complete list of loan limits by county for homes located in Washington state in the “footer” of my blog.

Yours truly will have a painting at Bumbershoot

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I’m very honored to have been included in this years Seattle Bumbershoot.  I recently started painting earlier this year for a hobby. I had (have) no expectations where my paintings may take me – it’s all just for fun.

What is especially fun is to be asked to participate in this year’s Bumbershoot festival at the Seattle Center by Marlow Harris.  Marlow, along with her husband, Jo David, are curating an exhibit to tribute the 50th anniversary of Elvis at the World Fair in Seattle…. Elvistravagaza.

When I dropped off my painting at Marlow’s home, I was blown away by the vast array of the artwork.  Other (I say other as if I’m one of them) artist were drooling….knowing of the other artist…which, I will admit here, I was clueless.. probably after seeing my painting, you might say I’m clueless too!

IF you want to see the artist work for FREE, you can do so on Friday, August 31, 2012…..after that, you’ll need to pay the price of the ticket to Bumbershoot ($45 – $50 a day).

UPDATE 9/3/2012 9:00 AM:  Today is your last chance to see Elvistravaganza, which includes my painting, at Bumbershoot.  The painting is being auctioned with proceeds benefiting Cafe Racer Love and as of yesterday, when I was at Bumbershoot, the bidding was up to $400!  If you’re interested in placing a bid, please contact Marlow Harris ASAP.