Refinance even if you lost market value

 Home Loan Refinance, mortgage, Mortgage Everett, Refinance Everett, Refinance Seattle, Seattle Mortgage Companies  No Responses »
Feb 042012
 

HARP 2 actually works and promises to help thousands of home owners. Wonder of wonders the government has made a program that will actually help underwater home owners who have lost market value. When was the last time you could say that a government program actually works the way they wanted it to? Don’t be confused by who services your loan, that’s who sends you the bill each month,  it’s who holds your loan that’s important. So look it up, see if Fannie Mae or Freddie Mac owns your loan by using the links below. Did you think you would miss out on these low rates, again? Have you tried to refinance and couldn’t because you didn’t have any equity? Did your second mortgage prevent you from refinancing? Did your mortgage insurance company say no to your refinance? Has your home lost market value? Is your mortgage balance over market value by more than 105%? Has this affected your credit score so now you’re below 620? If you looked into HARP before but were the fees to high? Did the lender add on “loan level price adjustments” so that the closing costs were bloated? So that the new payment wasn’t lower than the original or so close that it didn’t matter. Was the new mortgage balance so high it just didn’t make sense. Were the low rates they offered you not the one offered in the ad? The new HARP 2 program will help thousands of home owner refinance and take advantage historically low rates. The old HARP 1 program didn’t address the many problems of negative equity mortgage insurance, second mortgages and low balled appraisals. But now the new HARP 2 program fixes these and many other problems. Fannie Mae and Freddie Mac have been working with the mortgage insurance companies (MI). The MI companies know that if the borrower is allowed to refinance they will be in a better position to keep making payment. The same strategy works for second mortgage holders. The old HARP program stopped at 105% of market value but HARP 2 doesn’t. But with the real estate values falling so fast that many lost 25-50% of the value of their homes so the 105% limit stopped many from refinancing. Well here are the high points of HARP 2.

  • MI (mortgage insurance) is now transferable. New insurance can be issued by any provider.
  • The is no cap on the loan to value so appraisals will not be needed in most cases. These means market value doesn’t matter.
  • Closing costs or loan fees have been lower and set. No add-ons euphemistically called “loan level price adjustments”.
  • Your loan must be held by Fannie Mae or Freddie Mac and originated before May 2009.
  • You must have made the last 6 payments on time and have no more than 1 late in the last 12 months.
  • The program has been extended to end of 2013.
There are web sites to check to see if your loan is held be Fannie Mae or Freddie Mac. Here they are Fannie Mae. And here is Freddie Mac. You can take advantage of these low rates and you don’t have to use your current lender. I suggest ou contact a responsible mortgage broker because they will save you money and hassle.
One last what should I write about next? Please comment below.
Twitt
 Posted by JAJohnson at 5:46 pm  Tagged with: , , , , ,

It is cheaper to Buy in Seattle area than it is to rent

 mortgage, Seattle Mortgage Companies, VA mortgages  No Responses »
Jan 302011
 

Yesterday I met with some clients to discuss getting a mortgage instead of leasing another apartment. They are renting a 3 bedroom 1 bath apartment in Everett, a suburb of Seattle WA, for $1210 per month. She called me to ask about finding another rental. I told her that I don’t deal in rentals but maybe if she wanted she could buy a home for the same money as what she rents.
At first she didn’t believe me but I had proof. I went to an agent friend of mine and we searched the MLS for homes for sale in Everett, WA. To no surprise we found many homes for sale below $200,000. Our parameters were minimum 3 bedrooms, 1.75 baths and 1000 square feet and no short sales. Well there was 28 homes in Everett all of them ready to go. Given that her son is on active duty he can buy with his VA mortgage and her as a co-signer. The full payment for a $169,000 – 3 bedroom, 1.75 bath, 1250 square foot home with a 2 car garage is $907 per month. That’s with a 5% fixed 30 year mortgage with an APR of 5.22%. Add taxes and insurance they are at $1097 and that is less than the rent they are paying now.
Next we had to address her poor credit. After pulling a tri-merge credit report we knew she would not qualify for a home mortgage until she got her credit to the magic 640 score. It may take her a few months to get there but so what. Because you see even if it takes 6 months to fix the credit there will still be homes for sale she can afford. And if she didn’t fix her credit 6 months from now she will still be renting and still have poor credit.
Let’s examine this in greater detail.
What does it take to buy today?
First you need a 640 middle credit score. That is not hard to do but may take some professional help. I know of half a dozen repair services that will get you to 640 in a few months. There is a cost but again so what. Imagine what you can save if you have decent credit. Well the next time you renew your car insurance you will save a few bucks, the next car you buy a car you will save a whole lot more and so on. So even if you have to invest $400 to $500 to fix your credit, again so what.
Next you will need a down payment. If you must buy in the city you will need 3.5% down. On a $200,000 home that’s only $7000. That down payment can come as a gift from relatives, your boss or a 401K from savings. On a $175,000 home it’s only $5950 down. How much was your tax refund?
Or you can buy out in the country east of Hwy 9 and get a home for ZERO down. Or if you or someone in the family is a veteran you can buy anywhere for ZERO down.
Interest rates of a fixed 30 year mortgage are in the low %5 to high 4% range.
Given low interest rates and low home prices you simply can’t wrong.
Consult a good loan officer and find out if you can take advantage of this once in a lifetime opportunity of low mortgage rates and low home prices.

Twitt
 Posted by JAJohnson at 2:37 pm

Seattle Lagging Economy and Everett Real Estate

 Everett real estate, Homes for Sale Everett, Real Estate Everett, Seattle Mortgage Companies  No Responses »
Jan 182010
 

Will Everett Real Estate Experience the Same Lagging Economic Effect?

In Snohomish county and real estate in Everett only one home in 53 has received a notice of default. Seattle is doing much better at 1 in 80. The national average is 1 in 45. The usual rate for real estate in Everett is 1 to 1.5 in every 100 homes.

Everyone who pays any attention knows that the Seattle Metropolitan Area has a lagging economy. Our economy lags by 4-8 months versus the rest of the nation. What does that portend for the next year or so?

God I hate to have nothing but bad news to talk about

Foreclosures or “Notice of Defaults” have increased, as Seattle mortgage companies well know, by about 60% in 2009 over 2008. But the Seattle and Everett real estate markets still haven’t seen the worst of it yet. So while we haven’t completely caught up we seem to be working at it. My guess is that the value of homes for sale in Everett will face downward pressure for the next 12 to 18 months.

Because foreclosed homes are almost always sold at a discount, sometimes a huge discount, they will continue to exert a downward pressure on prices. I have addressed how we could mitigate that pressure by changing the way appraisals are done, see my blog post, that isn’t going to help until enacted.

The foreclosure pressure is not letting up soon. We can expect from 3,000,000 to 3,500,000 homes enter foreclosure in 2010. Do you want to ask my why? I can say in with 3 words, JOBS, JOBS, and more JOBS”. And it not just the loss of jobs but the loss of high paying jobs. When you go from $75,000 per year to $55,000 it hurts your ability to pay mortgage loans. What tells us that is the fastest growing sector of foreclosures is the 30 year fixed rate mortgage. The very one that used to be the bed rock of real estate in Everett and the rest of the nation.

I may be getting strident here. But I want you to know if you don’t do something about this our nation may be damaged for an entire generation.

Now so you realize that I am not calling the sky is falling. Here is a bit of good news 3 States have foreclosure rates of more than 10% and they are Nevada, Arizona and Florida. In Washington, Clark and Pierce were the only counties in which more than 2 percent of homes were sent a notice of default last year.

We desperately need quality leadership at the state and federal level. I believe that we need leaders who have experience in business. I want to see Everett real estate recover its value.

Jim Johnson and comments are always welcome.

Twitt
 Posted by JAJohnson at 8:38 am

Everett Mortgage Now is Time to Refinance Everett

 Homes for Sale Everett, Refinance Everett, Seattle Mortgage Companies  9 Responses »
Jan 162010
 

Interest rates will NEVER get lower than they are now

Bad Economic News But There Some Hope for 2011

If you were ever going to consider refinancing Everett you might consider now the time to do it. Now is the time to buy if you can. Homes for sale Everett will never be cheaper because interest rates will never get lower. By the end of 2010 interest rates are expected to be around 6.25% to 6.5% for a fixed 30 year home loan.

I am not drinking the Obama Kool-Aid. Every time I hear the MSM (main stream media) saying we are coming out of this recession I want to puke. I see 10.1% unemployment. But the real unemployment numbers are closer to 22%. I see a very telling statistic in the unemployment numbers. A way to gauge the level of a recovery is how long workers have been unemployed. 27 weeks unemployment is the measuring point. Well the percentage of workers unemployed longer than 27 weeks is about 40%. That means we are developing a chronic long term unemployment problem. This is the same problem the Europeans have. In fact the Mortgage Bankers Association predicts 10.1% for 2010, 9.4% for 2011 and 8.3% for 2012. But these numbers are very deceiving. They don’t count people who have run out of benefits. They don’t count people who are under employed. They are deliberately misreported by the government to make the numbers look better. Now by European standards this level of unemployment is not bad. By American standards this is unacceptable. If you are considering refinancing Everett it is hard to do if you don’t have a job. When you have homes for sale Everett nobody can buy Everett real estate without a job.

If you are in the business of refinancing Everett the next 2-3 years look very bad. Again according to the Mortgage Bankers Association the dollar volume of homes for sale Everett will improve slightly in 2010. But they predict that the volume of homes that refinance Everett will fall by 65%. That makes 2010 a train wreck for mortgage brokers Seattle or anyone else who originates home loan refinancing.

There is a bit of a silver lining in this dark cloud. The numbers on foreclosures are terrible in California, Nevada, Arizona and Florida. When they are taken away it doesn’t look quite so bad for the rest of us. Now if Mr. Obama begins to see that destroying the economy is not in his best interest maybe we will survive this. So your efforts to refinance Everett may not be in vain.

Jim Johnson and comments are always welcome

Twitt
 Posted by JAJohnson at 5:19 pm
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