Guest Blogger's archive

It’s April, the month when Boston gets back into high gear!

The month of April brings new energy to the Boston area, temperature changes, symbolic sporting events, spring blooms and more… Most importantly, an abundance of NEW apartment inventory!

Increased Apartment Inventory - the “rental season” in Boston has now begun. It is the best opportunity to be exposed to the maximum number of units, as approximately 90% of the city moves during the next few months. We currently have access to units available NOW through Sept 1st!!

Red Sox Opening Day – Baseball season has officially begun, our hometown Red Sox kicked off the season in a home opener against their all time rivals the New York Yankees! Boston took the win, Boston Red Sox: 9 - NY Yankees: 7 – we’re looking forward to get season!

Marathon Monday - The Boston Marathon, the world's oldest annual marathon will be held on Monday April 19th. Be prepared for delays!! Visit: http://www.bostonmarathon.org/default.asp for more information.

Spring Blooms – March Showers, bring April Flowers! Watch for the blossom trees, tulips and daffodils as they bloom creating picturesque sites throughout the Public Garden, along Commonwealth Avenue and the beautifully landscaped brownstone entries.

Street Cleaning - Street Cleaning is in full affect as of April 1st. If you brought your car with you to school and/or you commute in, be sure to look for the “street cleaning” signs. Otherwise, you may find your car with a parking ticket and/or worse, having to get your car out of the tow lot! Visit: http://www.cityofboston.gov/publicworks/sweeping/ for more information.


We have an abundance of NEW Boston apartments coming available; please feel free to contact one of our advisors if you’re looking to find your ideal apartment.


 

Follow these guidelines to fix or help your current credit score.

What To Do

•    Order your credit report and search for errors. You can get free reports from    annualcreditreport.com. Dispute mistakes!  Please keep in mind there are an alarming amounts of  mistakes on Credit Reports because of the amount of credit people have and have applied for.

•    Pay your bills on time. Your payment track record accounts for about 40% of your FICO score.

•    Be patient. Negative information like late payments will generally drop off your credit report between five to seven years

•    Maintain a healthy mix of credit. A blend of revolving; such as credit cards and installment loans can help boost your score.  This is even more important over the past few years with some of the new regulations.

•    Apply for your own credit cards. Have 3 open lines of active credit at all times.

What Not to Do

•    Don’t max out your available credit. Keep credit-card balances low relative to your credit limit.  This is even more important under newer regulations (again – which ones?).  My personal suggestion is to never have a 30% credit balance or more borrowed on a credit limit.  Example: $10,000- limit on a credit card, never go above a $3000- balance on that credit card, etc.

•    Don’t dawdle when shopping for the best rate on a loan. Confine loan shopping to a few weeks so that credit inquiries won’t weigh on your score.  Please do not have 10 Banks pull your credit in 10 days.

•    Don’t open up a bunch of credit-card accounts you don’t need, thinking the higher lever of available credit will boost your score. Your FICO score will generally drop a few points with each new account.

•    Don’t close old credit-card accounts in an attempt to improve your score.  You’ll lower your total available credit, which could damage your score.
Ask me how to increase your score in 90 to 120 days?

Take out two new lines of credit (Yes, believe it or not I said take out two new credit cards) and use one for gas and one for groceries. I would suggest getting major Credit Cards (Visa, Mastercard, Amex, etc.) Use them, pay it off, use them, pay it off, use them, pay it off, etc.  Never adding any additional monthly debt, paying all of the charges off every single month.  This method will add 20 to 40 points to your Credit Scores in months.

Sources: Fair Isaac, WSJ Research

Questions? Comments? Use the form in the sidebar or call me!
bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.
 

Mortgage Market
Mortgage Interest Rates are up .125% the past 48 hours and .25% on some mortgage products.  I would expect to see worsening Mortgage Rates this afternoon as well.  And possibly tomorrow. Yikes.

Economic Data
 Thursday's bond market has opened in negative territory again following stronger than expected inflation news. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .375 of a discount point. The Labor Department reports that January's Producer Price Index (PPI) rose 1.4% while the core data reading rose 0.3%. Both of these readings were well above forecasts, meaning inflationary pressures were stronger at the producer level of the economy than many had thought. This is certainly bad news for the bond market and mortgage rates because inflation erodes the value of a bond's future fixed interest payments, making them less appealing to investors. They are then sold at a discount, leading to higher yields and rising mortgage rates.

Yesterday's afternoon release of the FOMC meeting minutes didn't reveal many surprises. The most notable was a minor upward revision of their expectation for this year's unemployment rate. They also reiterated a prolonged period of high unemployment and slightly raised inflation targets for this year. But the news was not welcomed in the bond market and is likely contributing to today's selling, especially after this morning's stronger than expected inflation readings.

The Labor Department will be in the forefront again tomorrow when they post the more important Consumer Price Index (CPI) for January. This index measures inflationary pressures at the very important consumer level of the economy compared to today's release that measured the producer level. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially on long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.1% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall. However, after today's PPI results, traders may be skeptical of getting favorable results tomorrow.
 

Overall, the most important day of the week will likely be Friday/tomorrow with the CPI being released, but this week has been very active days for mortgage rates. In other words, be prepared for an active week or two in the markets and mortgage rates.

Lock/Float
If I was closing on a Home Mortgage in the next 0 to 15 Days - LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days - LOCK
If I was closing on a Home Mortgage in the next 30 to 60 Days - LOCK
If I was closing on a Home Mortgage in the next 60+ - LOCK

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Questions? Comments? Use the form in the sidebar or call me!

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:

bc@SmarterBorrowing.com   617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.

By Michael Ciavarini, Boston’s Certified Mortgage Planner

WASHINGTON DC - FHA like the banking sector, must also maintain capital ratios [reserves]. With the increased popularity of FHA in the absence of other alternative products they now insure about 30% of all new loans. FHA is nearing the limits of loans they can make based on their capital ratio [reserves]. In an effort to fix this problem, FHA will be raising their upfront mortgage insurance premium fees (UFMIP) from 1.75% to 2.25%. Additionally, they have requested approval for an increase in the monthly fee as well. They will also limit the high Loan-To-Value (LTV) financing to borrowers with a 580 credit score; a score under 580 will now require at least a 10% down payment (note: most lenders will not finance under a 620 FICO).

Definition

FHA - the Federal Housing Administration is not a bank. It is an insurance company that insures loans funded by the US Treasury. FHA is not a tax payer funder agency. It is self funded by the borrowers Up Front Mortgage Insurance Premium (UFMIP). What this article is saying is FHA needs to raise this figure if they are to insure more loans.

Ratios - what the article is referring to is the amount of reserves FHA has in relations to the amout of loans they are insuring.

Example

There are two types of Mortgage Insurance in play on every FHA loan.

1. UFMIP (Up-Front Mortgage Insurance Premium)

2. MIP (Mortgage Insurance Premium)

UFMIP is calculated currently as 1.75% times the base loan amount thus for a $350,000 loan the UFMIP is:

$350,000 * 1.75% = $6,125 which is at 4.875% $32.41 per month.

This amount can be paid in cash by you or the seller as a seller concession at closing or added to your base loan amount and financed as part of the loan as most do. Where does this money go you ask? To the United State Treasury to build reserves used to pay on defaulted FHA insured loans. This is FHA’s reserves. This premium is now going up 0.5% which in this example is:

$350,000 * 2.25% = $7,875 which is at 4.875% $41.68 a month

Thus the increase for this borrower is $1,750 or at 4.875% $9.27 a month. Increases are never a good thing but the impact to you the borrower is tolerable for the opportunity to put less down.

To offset the cost have your seller buy your rate down an eight of a point. Now the increase is free for you.

For information on how an FHA loan works or a seller concession give me a call and I will walk you through it.

Michael Ciavarini is a Certified Mortgage Planner for GuaranteedRate Inc.,  and a Radio Personality on Boston Money Matters talk shows. This strategy and his others have been featured on WBZ TV 4 News. Michael is a YouTubber, Blogger, Videographer and the creator of the V-PMP (Video-Personalized Mortgage Plan) which are revolutionizing the way Real Estate is presented, financed and sold. To view Michael’s videos visit his blog at http://BostonMortgagePlanner.com and subscribe to his RSS feed. 

Feel free to contact Michael at: mikec@bostonmortgageplanner.com, tel (617) 532-3972 preferred.

Blog: http://www.bostonmortgageplanner.com Corporate Site: http://www.guaranteedrate.com/mikec
Follow Michael on Twitter at http://www.twitter.com/BosMtgPlanner
Subscribe to his YouTube Channel at http://www.YouTube.com/michaelciavarini
 

Welcome to the New World of Federal Housing Authority (FHA) Mortgage Financing!

Bad news for FHA borrowers looking to apply in 2010. Qualifying guidelines have tightened up significantly, and borrowers face higher costs in the form of fees associated with the application process.

There is some good news.  A rumored increase in the minimum down payment, from 3.5% to 5% of the purchase price, did not come to pass.

Here are the changes the FHA did roll out:

•    Maximum seller contributions were reduced from 6 percent to 3 percent.  Sellers can now credit a maximum of 3% to buyers for Closing Costs, Prepaids (City/Town taxes and Insurance) instead of the previous 6%.  This means borrowers will have to show up at the closing or signing of the Sales Contract with more cash.
•    The "upfront" MIP (Mortgage Insurance Premium) charged on all FHA loans is increasing from 1.75% to 2.25%
•    Applicants hoping to borrow with a 3.5% down payment will need a minimum FICO score of 580.

What do I think of all of this?
You should have seen this coming...I've been telling you for a few months now! When the subprime mortgage market collapsed, FHA loan programs picked up some of the slack. The government actually encouraged the trend by changing some of the program guidelines and working to speed up the notoriously slow approval process.
The huge increase in the number of FHA loans, however, also increased the risk profile of the average borrower. Meaning more defaults and higher costs to Uncle Sam. The highest percentage of foreclosures right now are clients with FHA mortgages. The increased insurance premium is designed to increase the funds available to pay off defaults, while tightening guidelines aim to reduce that average risk profile.

If I was a potential Borrower I would get my ducks in a row...  Make sure I have as good as possible FICO scores and a down payment.

I predict that we will see that 3.5% to 5% hike the minimum down payment soon, along with higher minimum thresholds for FICO scores.

But wait - it's even worse than that!
Banks, Brokers, Direct Lenders, etc.  have their own set of "FHA guidelines."  In most cases, these are even stricter than FHA guidelines.  I know of one Bank that will be going to a 700 minimal FICO score requirement for FHA financing in the near future!
The answer is to start to lay the foundation immediately, even if you don't expect to borrow the money for some time. Establish a relationship with a bank. Do some research (or have a qualified loan officer do it for you) on which lenders have the best guidelines for your situation. It may mean switching your accounts to a new bank to start building a solid borrower profile. Make sure you have yourself aligned with a lender that will approve your FHA financing based on their FHA guidelines.

FHA - Federal Housing Authority Website http://www.hud.gov/offices/hsg/fhahistory.cfm

bc@SmarterBorrowing  617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry.
Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021
Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.
 

Have we ever come into a year with so many questions regarding mortgage financing?

•    What will happen with mortgage interest rates?
•    Will banks continue to have tighter lending guidelines?
•    How much will you need as a down payment?
•    How important is my credit score?

Please memorize this Blog Post for answers to your mortgage questions.

1.  Credit Scores

Please, please, please have the best possible credit scores when you submit your mortgage application for purchase or refinancing.  A mid FICO score of 740 or higher for a borrower and/or co-borrower will get you the best mortgage financing interest rates you can get today.  Keep a close eye on your credit scores, check them to make sure there are no errors.  You can get one free Credit Report per year from the three credit bureaus (Experian/Equifax/TransUnion) from www.annualcreditreport.com. Do it.

2.  Down Payments

The more the merrier...  I can't stand this saying.  The larger the down  payment, the lower the interest rate on your mortgage. Pretty simple. We've returned to an old rule of thumb on down payments: 20% down will get you the best mortgage interest rate. After a few years of lowered required down payments, the minimums are back with a vengeance.  An example:  A condominium in Greater Boston a few years ago could be financed with no money down. Today financing for that same condo requires at least 10% down payment. One important exception: FHA loans, which are backed by the Federal Housing Administration http://www.hud.gov/offices/hsg/fhahistory.cfm, require only a 3.5% down payment.

3.  Mortgage Interest Rates

Folks...  They are going up, and they are going up soon!  Homeowners: if you are considering refinancing but have not pulled the trigger, please think about it.  Refinance with a lower Mortgage Interest rate and lower your term? Home buyers: if you are on the fence with a specific home to purchase I see Mortgage Interest Rates at 6% by mid to late 2010. Please contact your Real Estate Agent.

Get my take on where mortgage interest rates are headed with my weekly Boston Massachusetts Mortgage Market Update

Here's a link to my recent post on whether to refinance now. Also, the Fed's purchase program is expiring mid 2010 and I would not plan on this being extended again.  No one wants mortgage-backed securities these days so I would expect mortgage interest rates to go up because of this.  All things are pointing towards higher mortgage interest rates in 2010.

4.  FHA

FHA mortgages are amazing and very popular right n0w!  For mortgage borrowers who cannot meet the current tighter guidelines we have in our market, the FHA Mortgage may be the answer.  The average credit score requirement for an FHA borrower is around 690, so if you don't have a 720 or better credit score and a minimal down payment this is a mortgage program you can look at.  Now for the bad news...  FHA loans are more expensive than conventional Mortgage products (although not by much) because there is a insurance premium as well as a tiny bit higher Mortgage Interest Rate.

I blogged recently about the Obama administration announcing tighter guidelines for FHA Mortgage Borrowers in 2010.

5.  Lending Guidelines

Yes, I think guidelines will get tighter. Unemployment is around 10% and the labor market is awful. There is no way credit requirements will get better in 2010...
Questions? Comments? Use the form in the sidebar or call me!
bc@SmarterBorrowing.com
617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.


 

By Michael Ciavarini, Boston’s Certified Mortgage Planner

BOSTON MASSACHUSETTS - The #1 answer when I ask this question in my seminars is call a bunch of mortgage brokers and pit them against each other. That will get you a market rate and really bad service. The answer is the two most powerful words in the mortgage industry and we will get there but first let me show you what you are shopping for. Here is your mortgage.

This equation creates two completely different emotions. The consumers who are commodity based, who get a mortgage describe it in one word adjatives as [fear, debt, liability, and a big bill, ok that’s two words]. Those who plan a mortgage use [asset, value, compound-interest, wealth and arbitrage]. These are my students. Now you qualify for both mortgages. The question is which one would you rather have?

What my students learn from me is you don’t ever get a mortgage, from here on you always plan a mortgage.

There is a book you need to read and at the end of this post I have a FREE contest give-a-way for you.

Price Centric
Today’s real estate market is Price centric, [P] in the equation. But when we study the equation it becomes obvious that mortgages are centered on interest rate [I] and term [N] not price. So as a financial mathematician and mortgage planner, I ask you the question;

“As a buyer, why are you so fixated on [P]rice when it impacts your wealth the least?”

Lesson 1. Define Your Terms
To successfully purchase real estate in a any market you must first define your terms but not as a buyer, but as a seller. Every buyer becomes a seller, even in death. Trust me, your heirs will sell your house. So to properly plan a mortgage I would have you answer three questions.

(1)    What is your desired monthly payment?
(2)    How long will you live here?
(3)    What is your expectation of profit upon sale?

Lesson 2. Create Your Own Mortgage Terms
Always work from your exit which you defined in lesson 1. Those who worked from entrance, hence pre-approval have made headlines since 2006. They lost their homes due to poor to no exit planning. Their exit was based on unsustainable appreciation projections and euphoria and when both disappeared euphoria turned to depression with the disappearance of their wealth. They got a mortgage with no regard for proper exit planning. This cannot happen to you when we clearly define your exit regardless of [P]. Now, from your exit terms we work backwards to define your mortgage parameters [I] and [N] (interest and term). Let me show you.

Example
Let say your answers are $1,600, 5 years, and $58,000 (these are the #1 answers in my surveys of first time home buyers in Boston by the way). Your terms for exit will determine your interest rate [I] which is directly tied to your wealth which is answer 3, $58,000. You desire $58,000 at sale in 5 years. Simple. The final component is Appreciation. Here we consult our Realtor to calculate accurate trends right down to the street and building you are buying. It is critical that you use a Realtor.

If the appreciation rate is 0% we use zero. If it is negative we use negative. If it is slightly positive we use 0%. We paint no blue sky. This money has to be there for you. It is the basis for your buy. After all, what do you want from your Real Estate? I assume you desire profit to buy your next property, right? Without that profit ($58,000) you don’t have a down payment for your move. This is why great care is taken by myself and your Realtor to ensure accuracy.

Now, What were those TWO WORDS?
Let us recap. We have determined your exit strategy. We have found a property that satisfies our quick sell requirements. So let’s make an offer. What about [P], Price? We rely on your Realtor and if necessary my appraiser to determine the Fair-Market-Value (FMV) which is your offer. We pay FMV but we want more don’t we? We want the $58,000, the pot at the end of your rainbow. To get it, we must buy down the rate because our calculations require a rate far less than the market is offering. So what do we do?

We employ the most powerful two words in the mortgage dictionary, SELLER CONCESSION. Did you know the seller can give you 6% of the sale price? With that we buy down your rate, pay out closing cost preserving your wealth, pay out PMI, pay off rent left on your apartment lease and so forth. We take all of the savings and divert it to an investment vehicle that matches your term of ownership [N] so there is no surrender charge. If your closing cost are $6,000 we get the seller to pay for it and we send the $6,000 to your investment vehicle and so on. The power of the SC is the compounding of savings it creates. This is wealth beyond what you could have ever imagined. In most cases it out paces appreciation

Interest Rate
Let say the prevailing rate is 5% but we require 4% for maximum principle pay down which is Equity which is wealth generation. To get 4% we buy down the rate using discount points and bill it to the seller. We take the monthly savings and route it to your investment vehicle or extra principle payments (which I do not recommend).

Why would a seller agree to this?
Because any sale with a seller concession is a win/win. The seller in return for their generosity receives FMV for their property [P]. Remember, our offered price produces your wealth. If you can buy a property and exit out with the $58,000, enjoy living in it and the added investment from the tax benefits, wouldn’t you pay FMV for it? Sure you would. For the seller the money they give you is less than a price reduction and you are buying their property. They can now move on with their life. Also the seller can claim the funds given to you as an expense against the profit of the property on their tax return.
 
Here is the true benefit. The Secret.
I sit with the seller on your behalf and provide FREE mortgage planning for them. I determine their parameters and get them a Seller Concession twice as big as the one they gave you because they are trading up which cancels anything they gave you but they still get the tax write-off. This is the POWER of the SELLER CONCESSION. THIS IS THE PIECE EVERYONE LEAVES OUT. The seller gets what they want, a low cost mortgage on their new expensive home, an exit strategy where they had none, their home sold and you get your $58,000. Now when we come back to sell your house in 5 years, we will put a seller concession on your property using a V-PMP to entice buyers to buy it and get you one on your purchase. It never ends... Every property should have a seller concession. Those who do not know about this are placing low-ball offers on multiple properties and leaving so much wealth on the table with no guaranteed of profit or exit. They are [P]rice centric and wealth blinded. Do share this post.

The Seller Concession
It is the most powerful two words in the mortgage business but it is also the most miss-understood, miss-used and most underutilized feature to any mortgage Fixed or ARM. The Seller Concession was designed specifically to create wealth for buyers and to aid a seller in selling their property during difficult markets. To often it is miss used as a $3,000 credit only to be added to the sale price. Never ever use that strategy as that creates debt tripling the cost of what you paid off. Never agree to this type of offer.

The Contest
To learn the proper technique and to see an example of the Seller Concession the way it is intended to be used in a mortgage planning model view my video; but before you press play let’s give you the question you have to find the answer to in the video for your FREE copy of The Last Chance Millionaire.

In the video I state which lending institution does the best job of the Seller Concession?
(A)    Fannie Mae
(B)    Freddie Mac
(C)    FHA
(D)    Tony Soprano (forgit about it!)

Ok, now you can click PLAY!

http://www.youtube.com/watch?v=gPIGBtyo2w4


Give Away Contest
Everyone should read the book The Last Chance Millionaire by Douglas R. Andrew. I will give you a FREE copy if you can answer the question right during your FREE consultation. Call me to book a FREE home buying consultation and receive your book.

Take-a-Ways

1.    Never get a mortgage. You PLAN a Mortgage
2.    Always use a Realtor
3.    Start by clearly defining your exit parameters then work backwards
4.    Your Exit parameters define your rate. Never shop for a rate. Define it.
5.    Offer FMV with a Seller Concession. Low-ball offers never build wealth. It’s just a couple of bucks.
6.    Invest your savings. Compound the seller concession into massive wealth. Double what was given.
7.    If your term of ownership is 60 months or less, never buy into a building with sales constraints.


Michael Ciavarini is a Certified Mortgage Planner for GuaranteedRate Inc.,  and a Radio Personality on Boston Money Matters talk shows. This strategy and his others have been featured on WBZ TV 4 News. Michael is a YouTubber, Blogger, Videographer and the creator of the V-PMP (Video-Personalized Mortgage Plan) which are revolutionizing the way Real Estate is presented, financed and sold. To view Michael’s videos visit his blog at http://BostonMortgagePlanner.com and subscribe to his RSS feed.

Feel free to contact Michael at:
mikec@bostonmortgageplanner.com, tel (617) 532-3972 preferred.
Blog: http://www.bostonmortgageplanner.com
Corporate Site: http://www.guaranteedrate.com/mikec
Follow Michael on Twitter at http://www.twitter.com/BosMtgPlanner
Subscribe to his YouTube Channel at http://www.YouTube.com/michaelciavarini

 

By Brian Cav

The answer is most likely yes!

Borrowers are taking advantage of rock bottom rates to refinance their home mortgages. Mortgage interest rates are at all-time near record lows! Homeowners are using the opportunity to adjust the terms, payment and interest rate on their loans. This "rate fiesta" might be coming to a halt soon, though - in 2010 the government will stop buying mortgage-backed securities. Without this enormous customer, rates will start to climb. Here's what the Wall Street Journal had to say earlier this week about the recent surge in applications and the coming market changes:

Last week’s post-Thanksgiving shopping rush also saw a surge in mortgage applications, with loan application volume up 8.5% from Thanksgiving week on a seasonally adjusted basis.

But mortgage rates rose modestly last week, to an average 4.88% from 4.79%, according to the Mortgage Bankers Association, ending a six-week run of declining 30-year fixed rates.

The boost in applications was driven primarily by refinance interest, and the MBA’s Refinance Index gained 11% from the previous week, while the Purchase Index was up 4%. New home loan applications were driven almost wholly by demand for government-backed loans from the Federal Housing Administration and other federal agencies.

Mortgage rates have been at near-record low territory for the last couple of months, but the big question is what will happen next year, when the Federal Reserve is scheduled to end its purchase of mortgage-backed securities that has helped push rates down for much of 2009. (Nick Timiraos, WSJ real estate blog, 12/9/09)

Refinancing could save you a considerable amount of money over the life of the loan and potentially improve your overall financial outlook!

How would refinancing now help you?

•    Refinance to a lower interest rate which will lower your monthly payments.  What is your current Rate?
•    Convert your current Adjustable Rate Mortgage (3/1, 5/1, 7/1, or 10/1 ARM) to a fixed- rate loan, which will keep your payments safe from possible interest rate increases. The 30 year fixed is at a all-time low, lock it in and give yourself piece of mind
•    Shorten your loan's term to save even more money. 25 year fixed? 20? Can you afford a 15 year fixed mortgage payment?
•    Combine a first and second lien to a single loan for simplicity and savings. Debt consolidation to one loan!

You may also be able to tap into your home's equity with a cash-out refinance and use the cash to fund home improvements, college tuition, or other major expenses.

What To Do:

1.  Submit a Refinancing Application via Phone, Email, Web, etc.
2.  Mortgage Refinancing Application gets Processed and Approved
3.  Pass along your Approval Conditions and Disclosures, Appraisal gets completed and Approved
4.  Schedule a closing 45 (+/-) Days from Application Date

• Wikipedia - Refinancing http://en.wikipedia.org/wiki/Refinancing
• bc@SmarterBorrowing.com 617.771.5021

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 year of experience in the Financial Industry.

Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021
Reprinted with the permission from www.SmarterBorrowing.com

Please visit http://smarterborrowing.com/ for additional Blog Posts, etc.


 

By Brian Cav, a Mortgage Banker in the Greater Boston Area with over 10 years experience in the Financial Industry.

 Okay, this is the first time I have ever done this.  From here on out while I am in Mortgage Banking I am going to take the fourth quarter of the previous year to do some analysis of what I have read, heard, viewed, etc. and I am going to roll out my annual predictions! Here goes what I have from 4th quarter 2009 and looking into 2010... Yikes
 
Drum roll please...

SmarterBorrowing.com will dominate!

Obviously...

The 30 year fixed Mortgage will be close to 6%

We have had a 30 year fixed in some cases as low as 4.625% on a purchase with 25% down in 2009 (Not including Conventional High balance of $523,750-.  This is a huge change...  Please think about purchase/refinancing now.  Combined this with with First Time HomeBuyer and Tax Credit extended thru April 2010.  These all time low record mortgage interest rates will be long gone very soon.  The government will soon no longer be buying mortgage-backed securities and inflation is soon to catch up.
There is still no 30 Year Fixed Jumbo Mortgage which is attractive to Buyers
But this is okay... Jumbo 5/1 ARMs are the product to go with!  Banks/Credit Unions/Direct Lenders don't like 30 year fixed jumbo mortgages right now...  and looks to be a while before credit markets get better

The Real Estate Market will not get better until 2011

Ouch... Sorry folks but I think its the truth.  Here's why...

•    All of the Washington Mutual Option ARM Mortgages that were originated a few years back are up first and second quarter of 2010.  This means there will be more foreclosures hitting the market starting 2nd quarter 2010.
•    The Homebuyer Credit and extended Tax Credit are done in April...  Please do not count on this nice little gift from the Government to be extended. Again.
•    PS  The Fed's Fannie Freddie purchase program is done at some point in 2010 as well.  Wow, maybe there are more than a few reasons as to why this Real Estate Market has another year or so to get better.
Well, sounds like a great time to buy in the next few months if you ask me.

Everyone, and I mean everyone will LOVE my Monthly and sometimes Bi - Monthly SmaterBorrowing.com Newsletter : )

Tougher to qualify for FHA Loans

Darn...  Borrowers will need to bring more cash to the table, minimum FICO scores will be increased, a hard back end qualifying percent of 45%  (monthly percentage of debt to gross income a Bank will allow) and the days of a 6% seller's concession are long gone. Down to maybe 4%, 3%...?  Get your credit were it needs to be, save for a down payment, and do not plan on such a credit towards closing costs and pre-paids at the closing.

Brian Cav is a Mortgage Banker in the Greater Boston Area with over 10 years experience in the Financial Industry. Feel free to contact him at:
bc@SmarterBorrowing.com, tel 617.771.5021

Reprinted with the permission from www.SmarterBorrowing.com

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