Posts Tagged ‘mortgage rates’

Loan

Loan (Photo credit: Philip Taylor PT)

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

It’s time to act.  If you have been patiently waiting for better rates and better home prices, 2013 could be your last chance.

1.  Move if you’re a buyer – Rates are still awesome and you may never hear the words “it’s a perfect time to buy a house” again.  Interest rates are expected to increase this year.  Higher rates mean more money out of your pocket and the amount of home you can afford will decrease.

2.  Be picky about your lender – Always ask your friends and family who they trust or have used in the past.  I guarantee that you will not only find out who to use, but you will definitely find out who not to.  Talk with the recommended lenders about service and turn times.  Buying a home can be the most stressful event in your life.  Closing on time should not be taken for granted.  GMAC Mortgage has a closing on time guarantee. Trust me.  Your agent and you will appreciate not having to worry.

3.  The fat lady hasn’t sung until the loan closes – At the risk of sounding strange….closing a loan is a battle.  It doesn’t matter if you have an 800 credit score, no debt, and a seven figure income.  You must work hard with your loan officer as a team.  If they need something, get it now.  Putting things off even one day slows down the process.  Three things I always tell me buyers.  First, do not accept any money from anyone until your loan closes.  What if we need an updated bank statement and there is a large deposit listed?  This is a problem and even more documentation is needed.  Second, do not apply for any credit until the loan closes.  Do not apply for any credit cards so you can get a discount of the new stove for the new house.  Your credit will be monitored and if an inquiry pops up, more documentation is needed.  Third, do not quit your job.  Now, I know this sounds crazy, but I have seen it happen on the day of closing.  You have to have a job with income.

4.  Check your credit annually – www.annualcreditreport.com is a great website to track your credit.  If you are planning on buying a home later this year, pull your three free reports and make sure that every item listed is in fact yours.  If not, take the steps to correct it.  Take a look at your credit card balances.  Generally speaking, you never want to go over 30% of the credit limit.  People tell me all of the time that they pay it off in full every month.  Great, but that will not matter if I check your credit and you have a $750 balance on a $1000 limit card.  Keep that balance at or below $300.  Do you have a MasterCard, Visa, AMEX, Kohl’s, Target, Sears, and Discover cards?  That’s too many.  Available credit is also a factor in determining credit scores.  If you’re interested, call or email me to discuss how to tackle this problem.

5.  Get preapproved – A good real estate agent will never show you a house without you getting preapproved first.  Some still do, but I think you would agree that it’s a waste of time and money to drive you around only to find out later that you don’t qualify.  Find out how much house you can afford and then proceed from there.  Lenders (good lenders) will give you exact figures on payment and a price range you should concentrate on.  It is imperative that you are armed with this knowledge before you Google the first area to start looking.

2013 I going to be a great year, but change is ahead of us.  Please let me know if I can help in any way.

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.

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.

If only chicken little were around today!  He would be having a great time with all of the economic news hitting the press.  But, I think you would agree, he would be confused.

With the end of the government backed home buyer tax credit looming and the promise of the Fed to discontinue the purchase of Mortgage Backed Securities(MBS), rates must be rising.  They have to be, don’t they?  Aren’t the markets poised for this?  Oh, but wait a minute…….Mr. Bernanke said today in his testimony, that the phase out will be dependent on the markets.  Is he now backing off?  Can he afford to let rates rise into the 6’s by summer?  I don’t think so.  My bet is that rates don’t rise by summer.  No, I don’t have a crystal ball, but I feel as if I’m betting with Wall Street as opposed to going against them.

Nevertheless, if you are seeking to purchase, do not delay!  Rates are still very low and, obviously, the deals are out there.  http://chuckwalden.frostmortgage.com/