Posts Tagged ‘interest rates’

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with GMAC Mortgage.  Email Chuck at chuck.walden@gmacm.com or call 678-725-8076. Website is www.ChuckWalden.com

The market is better.  Rates are low.  Home prices are rising.  BUT what if there was more?  Hopefully, I can answer some of those questions and give you a way to move more property, make more money, and do an even better job for your customer.

What if a lender offered to pay the majority of the closing costs?  Would this help your negotiations?  Of course it would.  What if closing costs and seller concessions weren’t an issue?  What if you could throw out the standard 3% seller concessions because it wouldn’t even matter?  Talk about a negotiating tool.  Wouldn’t it be awesome if your buyer could come to the table with just their down payment.  Do you think they would remember that and refer more business to you?

What if a lender guaranteed you would close on time?  I know you’ve heard that before.  BUT, what if they offered to pay your buyer $500 if they didn’t close on time?  Do you know of any lenders that want to pay money to a buyer.  I don’t.  Talk about motivation.

What if a lender communicated with you constantly so you never had to “wonder” what was going on with the transaction?  Have you ever had to pick up the phone and ask?  My bet would be yes.  Wouldn’t it be great if you knew when the file came out of underwriting?  Or, that the appraisal and title are in and there are no issues?  Even if there are issues, you want to know.  You need to know.

What if you felt like you had control over every transaction?  You knew your buyers or sellers were in good hands.  You knew that they were getting the best deal out there.  You knew that you were going to close on time. 

Maybe this sounds like a perfect world to you and there’s no way this could ever happen.  I challenge you to find out.  My job is to make the purchase of a home as stress free as possible.  With some of the lowest rates in the industry, guaranteed to close on time, most of the closing costs paid by the lender, and communication throughout the process……Is there anything else you, your buyer, or your seller needs?  If there is, I would love to hear about it.

If you’re interested, I would love to talk with you to show you how this is a reality.  These tools will no doubt help you to grow your business, receive more referrals, and make more money.  Feel free to email me at chuck.walden@gmacm.com or call me at 678-725-8076 anytime to discuss how I can do this for you.  It’s new to your market so be the first to take advantage and don’t delay.

For decades, grandparents have passed on the knowledge that the best investment you can make is homeownership.  You will have a fixed payment for 20 to 30 years.  At the end of that term, you can live without a house payment. If you need the money, sell your home and rent.

Even though the housing market started to crash in 2006, I believe that our grandparents were right.  Let me give you some examples.  Home prices have gained 42% since 2000.  The market has lost 4%.  According to Trulia, it is cheaper to purchase a new home in 72% of America’s cities than to rent.  In case you haven’t heard, interest rates are at all times lows.  With low rates and low values, you are getting more bang for your buck and keep dollarsin your pocket.  One thing is sure.  Rates and values will start to rise.

I wanted to talk about this today because I know a lot of people are on the fence and are trying to time the market.  Now is the time.  Don’t hesitate … make a decision.  Homeownership is an American dream that we shouldn’t take for granted.  But, just like our grandparents once told us, it is the best investment that you can make.

If you read my blog post back on October 14th, I mentioned how I would fix the current refinancing problem and the reasons there was a problem to begin with.  Well, I didn’t have a crystal ball, but it looks like our government has come up with a workable solution for homeowners who are underwater with their appraised value.  The highlights are below:

Highlights included:

  • Geared towards borrowers who refinance into lower amortization periods.
  • Allowing LTVs to 125% and above.
  • Eliminating new appraisals where there is a reliable estimate of value.
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by the FNMA and FHLMC.  (This was the primary reason most investors did not offer LTVs above 105% on the current HAMP programs.)
  • Extending the end date for HARP until Dec. 31, 2013.

Loans eligible for the new plan:

  • Loans that were originally sold to FNMA or FHLMC before May 31, 2009 with an LTV of 80% or above.  If you are unsure who purchased your loan, below are the links for Fannie Mae and Freddie Mac.

Implementation Dates:

FHFA is the agency that regulates both Fannie Mae and Freddie Mac, but both Fannie and Freddie have not released any additional information on HARP Phase II.  Per the news release, they will “issue guidance with operation details…by November 15”, and at this time we should have a better idea how these changes will affect their current DU Refi Plus and LP Open Access programs.  Delivery of these loans to the agencies is not expected to be available until the first quarter of 2012.   

Pricing:

There will be an adjustment to your new interest rate due to the increased risk of a higher LTV (loan to value).  However with the reps and warranties fees being lowered or waived, quality borrowers, historically low rates, and loan level adjustments that benefit borrowers in shorter term mortgages; most lenders are optimistic pricing will be reasonable.  Initially expect a wide variance of market prices as lenders estimate where pricing should be until the first HARP security is actually priced in the first quarter of 2012.

 This could be awesome news for about 5 million households who could benefit from this program.  As more details come to light, I will continue to provide updates.

Did you know, that according to the National Association of Realtors, 13,452 homes sell every day? Everyday, I speak with many people regarding purchasing a new home. Without fail, I am constantly asked, is now the right time to buy? In my opinion, there are two very important parts to the equation. First, are home prices going to fall further? Maybe or maybe not. The dollar amount that home prices may fall will not effect your ability to purchase and you may miss out on the once in a lifetime deal that everyone is looking for. Second, are rates going to fall further? Maybe or maybe not. We have all heard on the radio and television that rates are at an all time low. Guess what, we have been hearing that for over a year. The difference in payment between a 4.5% rate and a 5% rate may only be $45 per month.
 
 
My opinion is this, if you find a home you love, buy it now. Throw away all the speculation and buy a home that is probably listed at an all time low with an interest rate at an all time low. You can’t go wrong. The market is prime for a comeback. We are already seeing homes receive multiple offers the first week it is listed for sale. Find the right home, call me to get preapproved so you are armed with a valid approval, and buy it. Now is the time.

HomePath properties are held by Fannie Mae.  When purchasing one of their properties, you can apply for a HomePath mortgage.

The Benefits:

1)  These loans allow you to put down as little as 3% if the home is going to be used as a primary residence.  The ability to put down as little as 3% on the purchase of a new home is amazing.  As you know, when you move into a new home, there will be costs for a lot of “little” things and the ability to keep more money in your pocket is very beneficial. 

2)  No appraisal is required. Many home buyers don’t understand the value of not having an appraisal done on a property.  For example, if you are using FHA financing, the appraisal process is very thorough and if the appraisal notes items on his report such as replace damaged siding, repair rotten wood near windows,or replace smoke detectors, then these items will need to be repaired and a reinspection must be ordered to verify these repairs have been completed.  A typical cost of a FHA appraisal is $445 plus the cost of the reinspection can add up when considering your closing costs.  Not to mention the extra time involved have these tasks accomplished.

3)  Mo mortgage insurance.  I really don’t like mortgage insurance.  I understand it’s value and what it accomplishes but it is money vanishing into thin air.  Personally, I would rather know that every payment I make is going towards paying down the balance on my home.  Typically, rates on HomePath mortgages are higher than a traditional FHA loan.  However, if you take into account the mortgage insurance on a FHA loan, the payments are often very close.

HomePath financing is also available for investors looking for deals on investment properties.  Often, an investor knows that he or she will need to put down 20% when purchasing an investment property.  HomePath Financing allows you to put down only 10%.  As investors know, cash is king.

You can search for HomePath properties at www.HomePath.com .  You can search by zip code,county,etc.  I encourage you to use this website as a tool for your next home purchase.  It will help you narrow down your choices and make your life a lot easier considering all of the tools available on the web today.  Call me or email me with questions anytime.

The questions:  What happens if rates have dropped and I would love to refinance my home?  What if I owe more than my home is worth?  I get calls everyday asking these same questions.  These homeowners have an interest rate in the 5% range or higher, would love to save money, but…..  Have rates dropped? Yes. Have home values dropped?  Yes.  Fannie Mae does have a program called Refi Plus that will allow you to refinance in this situation, but only up to a certain limit.

The solution:  What if our esteemed government released a program that would allow everyone, regardless of appraised value, to do that.  The program could be strict and simple.  Allow homeowners who have not been late on a mortgage payment in the last 12 months, have a DTI (debt to income ratio) less than 45%, and a credit score over 720 to use this program.

The benefits:  Are you kidding?  They are endless but let me name a couple.  First, this program would keep homeowners from giving up and walking away from a home in which they are currently upside down.  Thus, less foreclosures.  Less foreclosures = higher home values.  Second, if I refinance my home I will have more money in my pocket every month. Common sense tells me that the more money I have, the more money I will spend.  Do you think this will help the economy?  Of course it will.

Who’s with me?  We have got to use some common sense in order to get our great country out of this recession.  A simple tweak in the mortgage products that are being offered will do the trick.

With mortgage rates down and property values in the gutter, it is an excellent time to buy a home.  If you purchased a home between early 2006 and late 2009, you need to look at refinancing.  Depending on the interest rate you currently have, you could save tens of thousands of dollars on your mortgage.

For example, if purchased your home in 1995 with an interest rate of 9% on a $280,000 loan it would cost you $812,000 over the life of your loan.  If you purchased in 2010, with a 4.25% interest rate on a $280,000 home it would cost you $495,000 over the life of your loan.  That is a savings of $317,000.  Now I know we could all find a use for that money!

If you need someone to analyze your situation, call or email me.  I will answer your call, return your email, and overwhelm you with service.  Mortgage rates change daily and there is no time like the present.