Mortgage Help?

In a customer service industry like the mortgage business one must always try to bring the utmost professionalism to the transaction.  After all we help people with their largest asset and it is always a high stakes game.    Judging someone's financial picture and then determining their viability is a big responsibility, and not one we take lightly.   It is always our goal to listen to anyone and everyone we can and to do whatever we can to truly help.  

Unfortunately the industry has changed and there are so few loan programs available these days.  It is very difficult to qualify for a new loan, and so many families are no longer afforded "help".  While I applaud some of the product eliminations, I think it wrong to be so exclusive.    

We work with clients to the best of our ability, but if we cannot find someone to buy the loans we cannot offer them.   With guidelines so strict we often have to decline families that really should get a loan.   Appraisals come in low, income doesn't qualify and various other events happen that cancel the transaction.  Clients end up angry with us, because we are the messenger in these events.  I guess that is just part of the job. 

My hunch is that programs will loosen and funds made more really available, but there is no telling when that will happen.  Hopefully sooner rather than later...

Where have all the FHA mortgages gone?

As a concerned homeowner or soon to be homeowner you might be asking yourself that very question.  The market has changed, that is for certain...but has it disappeared?

Most loan programs have been eliminated.  Many deservingly so, but others are just victims of the collateral damage of the refinance boom of the past 10 years.   Investors are gun shy and they are all trending ultra conservative, leaving you the consumer with very few options.

The changes and industry shakeup will be a good thing long term, but it is a tough run right now for everyone involved.   Buyers, sellers, refinancers, mortgage brokers, bankers etc... Everyone is trying to make sense of the business and are hoping they can still make loans happen.

FHA loans have become the safety net for many, but it is very important to understand one very important fact.  It is not a sub-prime replacement at all.  It is a return to make-sense lending based on the true story and entirely designed to help clients either stay or get back on track.   

The guidelines are broad and there are many options.    At the moment however, the buyers of these loans have begun to implement their own restrictions leaving many more people out in the cold.  They need to realize that their guidelines are too restrictive and they are turning away good clients that will pay their loans back.  We all can only hope that soften their stance and start getting back on track themselves...

Out of debt in the New Year...

Christmas brings with it good times with the family, reflections on the year that has passed and unfortunately a lot of credit card debt. All those gifts you bought came with a price, and you end up having to pay it off in the months that follow. I suppose that is your unwanted Christmas gift to yourself.

Many people will jump on the yellow brick road and try to pay off those bills over time (a nearly impossible task indeed) Many will fall behind and damage their credit in the process. Few will take the time to really sit down and determine what makes the most sense for them--consolidate their debt into one manageable payment.

A mortgage refinance in the New Year makes a lot of sense. Mortgage rates are still at historic lows with people (even those with fair credit) qualifying for 30 year fixed rates in the low 6's. Credit card rates are typically much higher, and this is a great way to save on unnecessary interest charges. Also, if you close a loan in January of 2008, your first mortgage payment will be due March 1. This means you will have some relief in payment for awhile.

Starting the New Year with a list of resolutions for a better you is important. Perhaps a new mortgage should be on yours?

Fix my Arm Mortgage

ARM loans were certainly en vogue over the past few years. The lower initial rate made homes much more affordable to people looking to get involved in the American dream of home ownership. Cost of living was high, and real estate prices inflated. In order to get something respectable, people were forced to stretch to make it work. ARM loans, especially interest only ones were the only way to go for most.

Now people are starting to experience the downside of those ARMS. As they begin to adjust and payments increase they are forced into action. Due to depreciation or some major change in their lives, they now don't have the same options they had back when they last took out a loan. Equity has diminished, and some lenders don't see them in the same light as before. Standards in lending have changed, and anybody with less than perfect scenarios are being left out in the cold. Now they are not in the driver's seat as they perhaps may have been in the past. Even with no change in behavior, nor any delinquent credit people are no longer able to get the coveted "prime" loans.

This is why taking a look at your ARM now, and exploring a fixed rate alternative is highly recommended. Even if your ARM will not adjust for awhile, a fixed rate loan might make most sense. Rates on 30 year fixed loans are still (historically speaking) very low. Instead of waiting until you "need to" make a change, you might want to do something when you "can" make a change.

FHA loans Saving lives

As the mortgage market has taken big hits this year, homeowners have been left out in the cold. Banks have closed, programs dried up and options have decreased drastically.
Many Americans have gotten by over the past few years, by constantly tapping into the equity in their homes. As values have softened, and available credit has tightened refinancing has quickly become a very difficult task. Now we are facing all time records in foreclosures nationwide, which of course is a very bad thing.

The Federal Government has stepped in and loosened some of their guidelines to help make funds available to Americans in need. FHA lending is currently helping people save their homes, and get their lives back on track. HUD has worked diligently to evaluate their guidelines and to create programs for today's mortgage market. Ultimately we all have one goal--help people stay in their homes, and have manageable monthly mortgage payments.

These programs are in no way meant to replace the wild west mentality of the sub prime market of late, but rather to employ a true common sense mentality when analyzing a homeowners life. Sometimes things happen that are out of our control, and everyone could use some help getting back on track. FHA loans can help you do just that.

The Mortgage Gloom?

I have noticed recently that a lot of mortgage companies are going out of business or are facing major woes in today's economy. Of course the shift had been anticipated, but it has become increasingly clear that many of these companies did not take the necessary steps to hedge their bets. My high school Lacrosse Coach always used to say "Failing to prepare, is preparing to fail." I guess they could have used his advice.

I think it is actually a good thing that these recent developments are leading to a reduction of mortgage broker/banker options. There have been way too many companies in our business that know very little about what they are doing and have been putting clients into the wrong loans. This business is not about tricking or pressuring a client through persuasion to take out a loan. We have an obligation to listen, evaluate and provide the most sound option. I believe that sales is defined as helping people make decisions that are good for them.

While the mortgage industry seems to be in disarray, it is still a fundamental component of the US economy. There will be a great deal of mortgage business this year, and every year thereafter. The big upside for Joe Consumer, is that after this shake up they are more likely to find a company that is capable and that actually cares. Companies like us are highly optimistic of what lies ahead.

Happy New Mortgage

As the year comes to an end, we often reflect back on the year that has passed. We also feel compelled to make some resolutions on what we will/will not do in the coming year. This past year has been an interesting one in the Real Estate Business to say the least, and I anticipate that '07 will be even wilder. I for one am very excited for it...

Some Highlights: New Fed Chairman, Housing market has cooled, Democrats took over Congress, Economy has faired pretty well, no hurricanes hit the mainland...Things are looking good.

Here are my top 5 reasons to take out a new mortgage in the coming year:

1) Rates are still very low. They have not gone up drastically (as had been anticipated) so money is still very cheap to borrow! Make the move now to get out of your ARM loan or high rate fixed loan.
2) The housing market has slowed, putting buyers in the driver's seat. Low rates to borrow money cheaply + lower purchase prices= time to buy!
3) The foreclosure market is booming. While foreclosures are definitely a very negative thing for the victim, and should be avoided at all costs they do present an opportunity for investors. Now is a great time to capitalize on this type of investment.
4) Second mortgages make a lot of sense when rates are low. A junior loan even at 12% is better than borrowing on a credit card at 20%.
5) You need to get rid of those HELOC's ( Home Equity Line of Credit). When Prime was at 4% these were attractive, but now that it is at 8.25% it isn't so strong. As Prime goes up so does your payment. These are risky, so it makes a lot of sense to refinance out of these loans and into one new fixed rate loan.
Just some thoughts....

Happy New Year!