Can you refi?

I found this article on Marketwatch.com today. It is titled “Battle Plan for Refinancing Your Mortgage”. This story provides you a good outline on why it’s a great idea to refi right now, but why you might not be able to. Since 2007 mortgage funding has dried up. It has become harder then ever for people to obtain a mortgage. The biggest factor in getting denied for a loan is equity.

Since home prices have plummeted since 2006, equity is getting harder to come by. Some statistics state that 62% of all homes are underwater. This means that 62% of homeowners owe more on their mortgage then their home is worth. At the same time, this stat is a little bit skewed. Home prices are locally, not national. Some homes in MN have not gone down in value as much as other homes.

I suggest that you read this article and then find out if you can qualify for a mortgage. Rates have never been lower then right now. Please contact me if you would like an honest look in to your mortgage options.

http://www.marketwatch.com/story/a-battle-plan-for-home-refinancing-2009520548520

How the US got in to this current mess

http://www.msnbc.msn.com/id/29827248/
'If you had a pulse, we gave you a loan'
Dateline ABC has a decent piece on the current mortgage fiasco. It is well done and a good look into the current crisis on how toxic mortgages work in the system and how they were made/sold. Warning, watching this might make you a little ill.

Rolling Stone Article “The Big Takeover” by Matt Taibbi is a good read on how this current crisis is not about money, but rather power. I found this a story very good and well informed. http://www.msnbc.msn.com/id/29827248/

Wild Day in the market...

What a wild day in the market today. The past week has been a roller coaster in the stock market and housing market. Today, 3-23-09, is no different. First we had Timothy Geithner, the US Sectary of Treasury; announced his plan on how the US government is going to move bad assets off the books of the banks.
Read the article here. http://online.wsj.com/article/SB123776536222709061.html?mod=mktw

The second biggest news of the day comes from the National Association of Realtors.

Existing home sales grew 5.1% in February against expectations for a 0.9%
decline, and following a 5.3% drop in January, according to the National
Association of Realtors

.http://www.mortgagenewsdaily.com/03232009_existing_home_sales.asp

The bottom of the Real Estate market might be in sight. With historically low interest rates and cheap home prices, the market is moving. There are two other variables that might still affect the bottom. The first one is the unemployment rate. If people keep losing jobs, then homes will still come down in price. Second, if banks start to release all of their foreclosures on the market then it will add to the supply and hurt demand, thus triggering lower prices.

Have mortgage rates reached there bottom?

Yesterday mortgage rates fell off a cliff again. They are back in the 4.375% - 4.5% range, down from 5.25%. This large drop was due to the government interaction in the bond the market. A story posted on Marketwatch.com today hints at the theory that mortgage rates might not go any lower then they are today.

“It's hard to make the case for a quantum leap below 5% given everything we are
seeing now," said Nancy Vanden Houten, an economist at Stone & McCarthy
Research Associates. She anticipates rates could hover between 5% and 5.25% for
a while, she said in an interview Tuesday. "I think it's more or less found a
bottom."

Nancy Vanden Houten might be right on this. How much lower can they really go? I’m not sure and I don’t think anyone really does. If you are in the market for a new home or looking to refinance I would suggest that in the next month you think about taking action. One thing is for sure, someday rates will go up and it will be a long time/if ever before they dip below 5% again.

Please contact me if you have any questions!

FHA or VA loan

This article on Bankrate.com is a good read on why a person might consider an FHA loan or VA loan.

If you are a Veteran then the VA mortgage option might be a great choice. Not only can you buy home with no money down, but you also might be able refinance up to 100% of your property value.

If you are not a Veteran then a FHA loan might be a good option for you. These home loans allow you to take out more cash or pay off more debt then a conventional loan. In regards to purchasing a home the FHA loan only requires 3.5% down payment, rather then 5% with conventional. Although, FHA may sound like a great option, it costs a little bit more then a conventional loan.

Please have a mortgage loan officer review your personal situation to find out what product works best for you. Make sure you receive more then a single option from your loan officer, so you can compare the cost between the different types of mortgages and then you will be able to make an educated choice.

What is a FICO™ (credit score)?

A FICO score is a credit scoring system that is commonly used by financial lenders to evaluate the borrower. Here's a list of different factors that impact your credit score and their approximate percent of impact.

Types of Credit in Use: 10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very lengthy credit history.

Payment History: 35%--Takes into account (1) many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2) information from public records such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3) details of any missed or late payments, such as the amount, how long ago it occurred, and how late it was.

Amounts Owed: 30%--Looks at (1) the total of all the amounts you owe for all accounts, (2) the mix of amounts owed (credit cards versus installment loans, for example), (3) the number of accounts that have balances, (4) how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5) how much of the original balance borrowed you still owe on installment loans, like your car loan.

Length of Credit History: 15%--As long as you don't have negative information in your file, the longer your credit history, the higher your score.

New Credit: 10%--Considers (1) how many new credit accounts you've opened recently, (2) how long it's been since you opened a new credit account, (3) how many requests you've made for credit recently, (4) how long it has been since lenders have requested credit information on you, and (5) how good your recent credit history has been.



www.fico.com

Tips for making your move a breeze!

Moving is a big decision and it takes a lot of work. Here are simple tips to think about when your planning your move.

Make a LIST. Having adequate supplies will make your move easier, so you'll want to have more than just boxes. You'll need packing tape to seal your boxes, permanent markers to label them, newspaper to insulate breakable objects, and bubble wrap to protect your more fragile belongings. You should be able to obtain boxes from your local grocery store, but if they're out of boxes, try fast food restaurants. You may consider purchasing some plastic storage boxes if you have items you won't be using soon after the move. If you have a few boxes of items that are going to go straight into the attic, for example, plastic boxes might be a wise investment.

Get an early start! Sorting through your belongings will help you decide if there are some things you can part with -- without missing it later on. Even if you end up keeping everything you own, take advantage of the fact that there are items you only use part of the year. If it's summer, you can pack your skis and your winter clothing first, as you won't be using those items for a while. The early phase of packing is the time to pack up that stack of books you've been meaning to read, Christmas lights, holiday decorations, and any other items you can comfortably live without until you've moved into your new place. If you have excess items that you don’t want to throw away, have a moving sale or donate them to a local charity.

Categorize your Boxes. Make sure you label your boxes clearly. When you’re labeling boxes, try to be as descriptive as possible. Instead of labeling sheets and pillowcases "guest bedroom," for example, label them "sheets and pillowcases- guest bedroom," and so on. This will not only help you know where to place the boxes on moving day- it will also help you locate an item if you find yourself needing it before you've completely unpacked.

Start Planning. If you're not planning on hiring a moving company, start recruiting the help of friends and family members early on. In most cases, they'll be happy to help as long as they've been given enough notice, and you'll likely have plenty of time beforehand to ask them in advance. Make sure you call or send an email reminder a week before moving day to remind them. On the day your helpers arrive, be ready! If you make it easier to move, it will make the big day less stressful for everyone.

Remember that everything you can do ahead of time will make your move simpler for everyone, and considering the fact that moving is naturally stressful, the more you can prepare yourself for a smooth moving transition, the better.

What is the $8,000 tax credit for First Time Home Buyers?

Yahoo posted a great article on the new $8,000 First Time Home Buyer tax credit.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Read the article here