Robert's Blog

Mortgage Insurance Changes

We have seen Private Mortgage Insurance rates climb.  We just received an announcement that the factors for Monthly PMI (the most common form of PMI) have gone up.

Why?  Much like any insurance company, they do not want to pay out... since they have been paying out more in the past year they have raised rates... You see similar issues in states that have had high pay outs on home owners insurance for storm damage, Fl, LA etc.... Even in NJ Home owners insurance is higher near tidal water because of hurricane pay outs in other states.

What does this mean to you? Increased payments of course. here are a few examples for a 200,000 mortgage with 3%, 5%, 10% and 15% down:

• 3% down (not as common) was $138.33/month NOW $175.00/month
• 5% down WAS, $131.67 per month. It is NOW $156.67/month
• 10% down Was $86.67 per month. It is NOW $103.33/month
• 15% down Was $55.00 per month. It is NOW $63.33/month

 As you can see the difference is not as bad as you increase the down payment.  Historically 15% down loans never go bad so there is less risk, while the lower the down payment the higher the risk, thus higher premiums.

Now more than ever, FHA is more likely to be the way for you to buy a home when mortgage insurance is required (Even with the new changes in FHA MIP )

In the past I would advise that less than 10% down FHA would be the best way to go, now it is something to consider for any down payment lower than 20%. A comparison needs to be done to be sure the right program is picked for YOU. Keep in mind that Conventional loans have interest rate add ons below a 720 credit score.... FHA does not have Interest Rate Add ons for loans at all. There are some lenders that will put their own add ons for loans they feel are risky, (sub 620 credit score is common for add ons).

Now more than ever you need a Loan Officer that understands your needs and will review your scenario to pick the best option for YOU!

I have said it before: What was old is new again. FHA is still one of the BEST ways for some one to buy a home with a low down payment.

Have a great weekend

Rob

Robert Rauf

www.RobertRaufhomeloans.com

(732)740-0175

PMI Changes

With the declining market and increase in foreclosures we have seen Private Mortgage Insurance rates climb.  We just received an announcement that the factors for Monthly PMI (the most common form of PMI) have gone up.

Why?  Much like any insurance company, they do not want to pay out... since they have been paying out more in the past year with increased foreclosures they have raised rates...

(ever try to get home owners insurance near tidal waters?  this is a common theme too)

What does this mean to your buyer? Increased payments of course. here are a few examples for a 200,000 mortgage with 3%, 5%, 10% and 15% down:

• 3% down (not as common) was $138.33/month NOW $175.00/month
• 5% down WAS, $131.67 per month. It is NOW $156.67/month
• 10% down Was $86.67 per month. It is NOW $103.33/month
• 15% down Was $55.00 per month. It is NOW $63.33/month

 As you can see the difference is not as bad as you increase the down payment.  Historically 15% down loans never go bad so there is less risk, while the lower the down payment the higher the risk, thus higher premiums.

Now more than ever, FHA is more likely to be the way for your buyers to buy a home when mortgage insurance is required (Even with the new changes in FHA MIP )

In the past I would advise that less than 10% down FHA would be the best way to go, now it is something to consider for any down payment lower than 20%. A comparison needs to be done to be sure the right program is picked for the buyer. Keep in mind that Conventional loans have interest rate add ons below a 720 credit score.... FHA does not have Interest Rate Add ons for loans at all. There are some lenders that will put their own add ons for loans they feel are risky, (sub 620 credit score is a common spot for add ons).

I have said it before: What was old is new again. FHA is still one of the BEST ways for some one to buy a home with a low down payment.

Have a great weekend

Rob

Robert Rauf

www.RobertRaufhomeloans.com

(732)740-0175

Saturday July 19th is the thirty first annual wooden boat festival. This is the largest wooden boat show in NJ and admission is FREE!

Sponsored by the Toms River Seaport Societythe show will be held at Huddy park on July 19, 2008.

For directions you can click on the link above.

There will be a lot to do at the festival, beyond looking at beautifully varnished works of art

There will be a few "new" old boats at the show, one of them just arrived from Florida after an extensive restoration, Atlas, a 57 foot Trumpy Motor Yacht, that was originally built for Ralph Atlas, the president of Atlas Tire corp.

here are a few shots from last years festival:

Sorry Tamara, they got your name wrong:

Being the Sailor, I need to post a few Sail boats here too!

This shot is Mostly of A-cats but if you look at the one on the left, it is one of only 2 Sand baggers I know of... That is "BEAR" Its Sister ship is "BULL" They no longer use Sand bags for ballast, now they use Bags of Water.  Believe it or not the boats below are known to flip and sink on occasion, as they are sailed pretty hard in competitive racing on the Barnegat Bay.

And I need to add just one more shot of an A-Cat.  Below is Raven..(You can see Raven above with the MC R on the sail too)  I am sure there will be at least one A cat at the show, Can you pick me out in the photo?

Food, Floating pieces of Furniture, Activities for the kids and FREE admission... How could you go wrong?

I hope you can come!  Remember to support the Toms River Seaport Society , you can click on the link to find directions and more information and more photos of last years festival.

Rob

Robert Rauf

WWW.RobertRaufhomeloans.com

I stumbled across this 1960 Promotional video on You Tube that showcases Seaside Heights NJ

Click here to see the video

It is close to 50 years old and is presented with a "Disney Like" narration.  The most amazing thing is how accurate it still is for today. It talks about what Seaside Heights and the surrounding areas have to offer to visitors.

Nostalgia at its finest.  It is long, but I think you will find it to be enjoyable, especially if you are familiar with the area.

We live in a great area with more to offer than most people know, and that most of the locals do not take advantage of.

Thank you for the trip down memory lane!

Rob

Robert Rauf

www.RobertRaufHomeLoans.com

This weeks Financial Calendar

 The million dollar question when you are in the process of buying your home and put in your mortgage application: "should I lock or Should I float?"  Here is this weeks news to help you make that decision:

This is a busy week on the financial calendar and it promises to have potential for a bumpy ride. Sunday the Fed Governors and the Treasury announced that they would lend money and buy stock to support Fannie and Freddie. These comments will insure a flow of capital in the mortgage market and makes it very clear that the Fed is supportive of both Fannie and Freddie and will protect their mission of providing financing for residential home purchases.

What it all amounts to is the sky is NOT falling in the mortgage industry as the media would lead us to believe... But if you have read any of my blogs you know the "respect" I have for your typical negative journalism!

Tuesday the 15th and Wednesday the 16th are the big days of the week with Producer Price index (PPI) and the Consumer Price Index (CPI) being the big events of the week.

• PPI on Tuesday is expected to have a 1.3% surge and a core* rate of +.3%.  the most likely scenario is that we will see the core rate match the estimate and will see little market reaction to the number
• CPI on Wednesday will most likely be the true indicator of interest rate direction with an anticipated increase of +.7% and a core increase of +.2%. once again it is anticipated that the consensus estimate will match the real number, in that case we will not see a big move, it is always the surprise in a number that causes movement in a market, the "guess" is typically priced in.
• Also on Tuesday is the retail sales number, it is not anticipated to have any effect on the market especially since it will be thrown off by the economic stimulus checks that have been in every one's mail box.
• Fed Chairman Bernake has double duty Tuesday and Wednesday as he testifies in front of the Senate banking committee and the House Financial Services committee, not anticipated to be much more than a "ho-hum" from the markets
• Thursday has Initial jobless claims from last week and June Housing starts.  Neither are anticipated to have any impact on mortgage rates

*the core rate removes the volatile pieces of the numbers, food and energy to come up with a more stable and reliable number

While it is a busy week, Tuesday and Wednesday have the most potential for moving the markets, and it is probably a wise move to advise locking loans at this point since Today was a great day and we saw some improvement in rates already.

I hope this helps!

Rob

Robert Rauf

www.RobertRaufHomeLoans.com

(732)740-0175

This weeks Financial Calendar

This is a busy week on the financial calendar and it promises to have potential for a bumpy ride. Sunday the Fed Governors and the Treasury announced that they would lend money and buy stock to support Fannie and Freddie. These comments will insure a flow of capital in the mortgage market and makes it very clear that the Fed is supportive of both Fannie and Freddie and will protect their mission of providing financing for residential home purchases.

What it all amounts to is the sky is NOT falling in the mortgage industry as the media would lead us to believe... But if you have read any of my blogs you know the "respect" I have for your typical negative journalism!

Tuesday the 15th and Wednesday the 16th are the big days of the week with Producer Price index (PPI) and the Consumer Price Index (CPI) being the big events of the week.

• PPI on Tuesday is expected to have a 1.3% surge and a core* rate of +.3%.  the most likely scenario is that we will see the core rate match the estimate and will see little market reaction to the number
• CPI on Wednesday will most likely be the true indicator of interest rate direction with an anticipated increase of +.7% and a core increase of +.2%. once again it is anticipated that the consensus estimate will match the real number, in that case we will not see a big move, it is always the surprise in a number that causes movement in a market, the "guess" is typically priced in.
• Also on Tuesday is the retail sales number, it is not anticipated to have any effect on the market especially since it will be thrown off by the economic stimulus checks that have been in every one's mail box.
• Fed Chairman Bernake has double duty Tuesday and Wednesday as he testifies in front of the Senate banking committee and the House Financial Services committee, not anticipated to be much more than a "ho-hum" from the markets
• Thursday has Initial jobless claims from last week and June Housing starts.  Neither are anticipated to have any impact on mortgage rates

*the core rate removes the volatile pieces of the numbers, food and energy to come up with a more stable and reliable number

While it is a busy week, Tuesday and Wednesday have the most potential for moving the markets, and it is probably a wise move to advise locking loans at this point since Today was a great day and we saw some improvement in rates already.

I hope this helps!

Rob

Robert Rauf

www.RobertRaufHomeLoans.com

(732)740-0175

If you are reading this you are probably aware that I spent last week With my sons Boy Scout Troop (I am one of the assistant Scout masters)

The highlight of the trip had to be Rock Climbing.  I talked my son into Rock Climbing the first day and we were both glad I did, he walked away with a Merritt badge and I had a lot of fun.

Our first climb (sorry no photos) was only about 40-50 feet, I did the easy route first, made it to the top with out much difficulty, then did the hard one, Which was actually easier for me than the first... maybe it is because I am taller and have a larger wing span than the average person???  either way it was easy...

 We start each day climbing picking up our gear and hiking to the wall, crossing a wide stream hopping from rock to rock.  Friday's hike took us across the stream in a different spot, up a steep slope to an ominous granite wall. Our climb last Friday was WOW... GREAT, HIGH  and a bit overwhelming at first. Unfortunately I don't have any pictures of me doing it, but here is my son starting off on the highest climb, (that I did before he did) No photographic evidence, just my word that I did it too!

At this point he is probably (above shot) is  about 40 feet up on a 115 foot climb

There he is most of the way up, that clip above his head is at 115 feet.  He beat me, I got up to about 1 body length away and said... Close enough!  You cant see it but you cant climb straight to it, you are actually upside down to get to it...

That's him at the top, a little blurry, but considering I was WAY below him and only had my cell phone not that bad!

Here he is on his trip back down:

I Was proud of him, no hesitation and right up... a little prodding at the top to get him to beat me, but he has a little of my "a" type personality and kicked the butts of some older kids that froze 5 feet off the ground.  I am not sure if these pictures really show the height. At the base of this cliff up is well over 100', and it drops off below where we were about 50' to the river below.

It was a great way to round out the week. I cant wait to do it again! 

Rob

Robert Rauf

www.RobertRaufHomeLoans.com

It is official, I traded in my tent and cot for a real bed and flushing toilets!

I was at Ockanickan, a Boy Scout camp in PA.  This was the first time I committed to a full week of camp, in previous years I have spent a few nights at a more local camp, but this time I dove in for the entire time.  My previous camp experiences have been rather dull, Sitting around with out much to do. This one was quite a bit more fun.

to start with, Here is a picture of my luxury accomodations for the week:

I was lucky enough to have my own tent rather than share with some one, and at least I had a view

There was a path just about dead center of the photo with ripe raspberries everywhere... and a long trip down to a creek, down a rocky hill with no path.. it made for a fun hike down, and a cardio building hike back up!

My Son will be 14 in a few days, he is a Life Scout... (thats just one step away from the biggie...Eagle) I expected to spend my time in the camp most of the time but discovered that they encouraged leaders to participate, so I talked my son and a few others to sign up for rock climbing, with a little cope built in.

What is cope?  (You know you want to ask!) Cope is 1 part team building and 99 parts fun, scary, adventurous... It includes Low Cope which is close to the ground, getting over and through obstacles as a team, and High Cope which is HIGH... harnesses, wires 35 feet above the ground. I have a lot of pictures of my son rock climbing, but only a few of me.. Here is one of me 35' off the ground crossing a wire strung between 2 trees about 60 feet apart.

That is the beginning of the High cope that I did, I first had to climb a swinging rope ladder with rungs just big enough for one foot to fit in and get on the platform on the left, cross to the one on the right and switch to a different set of safety gear. If you look close you will see a wire just above knee height, that is my next step. I had to cross a wire between two trees 35' off the ground

 Here is where the fun comes in, at this point I am crossing a wire 35 feet off the ground with only the occassional rope hanging down to balance myself, let go of one as you reach the other...

At about this point in the crossing I hear the instructor below say "ut oh"... not exactly what you want to hear!  one of the ropes that hang to balance your way across got tangled in a pulley on my safety gear, I was stuck there for a painful period of time as the instructor thanked me for not freaking out... (I did not see much point in panicking!) I shouted down that it wouldn't do me much good to panic, he said you could have wigged out, and appreciated that I did not... and then says to my son, "Maybe its time to ask your Dad for a raise in you allowance.."

To get free one of the cope instructors climbed out on the 2 wires that were about 10 feet above my head, and just his weight popped me free, and I beat him back across to the next platform...(I was tired of waiting!).... and then I got to repel down which was fun and a relief all at the same time!

The following day we went rock climbing... Real rocks, MUCH higher than above... I will post that once I get a chance. The pictures are better than the ones above... (unfortunately I only had my BlackBerry to take pictures with, forgot my camera AGAIN!)

Rob

Robert Rauf

www.RobertRaufHomeLoans.com

Island Beach State Park

WOW! Great news, after I posted a blog on NJ beaches last week I stumble across an article in today's paper about my favorite beach, Island Beach State Park.  Men's Fitness magazine named  IBSP as on of the 10 hot spots to visit in the Summer. National Recognition... There goes the neighborhood!

Did you ever think that a Beach in NJ would be named in a top 10 list?

Island beach is located just south of seaside, it is the southern most tip of the barrier Island that starts with Point Pleasant beach. What makes it so special is that it is a preserved barrier island, approximately 10 miles of shore line on both the ocean and bay side. (so over 20 Miles of water) Here is a Birdseye view:

There is almost no development in the park other than 3 bath houses on the first 3 beaches, the old governors mansion, a nature center. Other than a few outhouses, you wont see many structures on the island. The Road in the park is a straight run right up the middle, and is over 7 miles long. There are parking areas hidden through out the 7 mile stretch. On the ocean side this is one of the only places you can drive on the beach (4x4 necessary with a permit) and one of the only places in NJ that I know that allows you to have a fire on the beach. (South of the bathing beaches at least).  The park has rolling sand dunes, maritime forests, tidal marshes and of course wild life, Fox, Osprey an more. 

The Bay side is where you will find tidal marshes and many small islands on the southern end, great for Kayaking and nature watching. About half way down the Island on the bay side is "Tices Shoal" a narrow point in the island it is a popular anchorage in the summer with and easy walk across the island to the ocean beach.

There are not many places you can go and enjoy a place so Untouched by man. You can be on a beach without being crowded and enjoy a true get away, Definately worthy of a visit!

I hope you enjoyed the quick Tour!

Have a great weekend

Rob

Robert Rauf

www.RobertRaufHomeloans.com

Here are a few important 4th of July Tips

Remember:

1. Buy Beer and burgers TODAY
   
2. Light the fireworks
3. Throw
4. Run... (away from the burning stick of gunpowder!)  It is hard to blog with missing fingers.

and on an important note we shouldnt forget: SUPPORT OUR TROOPS, We would not even have any July 4th celebrations if it wasnt for our troops!

Have a great weekend

Rob