Excellent Rates!

The turmoil in Washington has certainly produced one
thing….
LOW INTEREST RATES!
There are really 3 factors that have pushed mortgage rates back to
historically low levels.
1. US Debt Ceiling Uncertainty

The debate in our government on how much to cut or not to cut, to raise or not to raise has everyone on edge and preferring safe haven securities over stocks.

2. European Debt Issues

What started in Greece has now spread to Italy, Portugal and Spain
and more European countries. As the debt that these countries owe
loses value it has driven investors to treasuries as well.

3. A Slowing US Economy

Recent reports have the US economy losing steam. Earlier in the
year positive reports had mortgage rates on the move higher. The last
month has had the opposite affect: poor economic data has mortgage
rates moving down.

If you have been thinking of purchasing or refinancing now is the time to act.
Whether you think you cannot qualify or have no equity I am willing to exhaust every option we have to try and lower your mortgage
payment. We know rates are headed up. Let me help you before they do.

Call me today at 503 -385-4050 or email at karen@landmarkprofessional.net.

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Credit Score Changes

Credit scores have become an even more important factor in the home-buying or refinancing sector than ever before.  Today’s borrowers must have a minimum of a 620 middle credit score, for each borrower, to obtain financing.  Conventional financing (Fannie/Freddie) have just adopted this standard as well.  

 Rumor has it that this may jump to 640 soon for all FHA, VA and Conventional financing.  Some lenders and investors have already passed this on as an “overlay”.  This means that while the specific program doesn’t have that requirement the investors-the ones with the money- are making this a requirement to loan.

 To obtain the very best interest rates for a conventional loan, your middle credit score must be 740. If you are applying jointly for credit then both borrowers’ middle scores must meet this requirement.

 Keeping your credit on time is, now, more important than ever.  We are getting close to the Christmas holiday, remember that credit card balances over 30% of your limit will also negatively hurt your credit scores as well or having too much credit.  Don’t be tempted to open all the store accounts just to save 10-15% on purchases. This can be dangerous. New credit, inquiries, and too much credit can also negatively affect your credit scores. 

 If you are planning on home financing anytime soon, keep your holiday purchases in check. Try paying cash for gifts, staying with a budget or better yet, what about home made Christmas gifts?   My parents still have some of my old homemade gifts and they treasure those more than anything we ever bought for them!  Remember, it’s the thought and the spirit in which a gift is given not the expense of it that makes gift giving special!

5 Things You Need to Know to Refinance

  With mortgage rates dropping to record lows, it’s no surprise that more and more homeowners are looking to refinance.  But while some borrowers will be able to turn these compelling rates into real savings, not everyone can get in on the action. To better understand the refinancing process, here are five things you need to know to refinance in today’s market. 

1. Despite the attractive rates, you will have to thoroughly review your financial position before determining whether or not now is the time to refinance. A good rule of thumb is if your mortgage rate is a full percentage point or more higher than current rates, you should consider refinancing. If your rate is above 6 percent currently, then it is a good time to think about it.

2.  While 720 is still considered by some to be a solid FICO score, it’s not good enough to obtain the best rates in today’s refinancing market,  Instead, borrowers will need a FICO score of at least 740. “FICOs are everything,”   Borrowers that don’t have this score can still refinance, but they will face higher rates, which may make refinancing not make sense.

3. Home equity can be another significant barrier to refinancing today.  Zillow says roughly one in seven American homeowners actually have negative equity—meaning they owe more on their mortgage than their property is worth. In order to qualify for refinancing,  homeowners will have to have a minimum of 3 percent equity in their homes. In addition to solid credit and home equity, you will also need to be able to document income in order to qualify for refinancing. 

4. Loan fees lenders charge are another major consideration. Costs to refinance can be 2 ½ to 3% of your loan amount.  The fees that you should be paying need to be low enough so that you can recoup your money through the break in the interest rate in a reasonable period of time–usually under four years. If you are planning on moving in a short time then it may not be cost effective to refinance. Borrowers have three main options for paying such fees. Those with enough cash may want to just pay the fees up front. Borrowers with less cash on hand may be able to opt for a higher interest rate instead of paying the fees. A third possibility is to have the fees tacked on to the principal of the mortgage. The key is to chat with your mortgage professional about structuring the fee payment so that it makes the most economic sense for you.

5. Be patient: The wave of refinancing applications comes amid a period of significant downsizing in the lending industry. That means there are fewer employees on hand to handle the surge in business. As a result, expect slower turn times.  It can take 20-30 days to know if your loan has been approved. It can take up to 45 days to complete the entire transaction.

Carmen’s Money 411

http://ori.cnbc.com/id/15840232?video=1020209296

This is a clip from Carmen’s show on CNBC talking about the 4% proposed rates for purchases.  They also mention refinancing and that it is best not to wait for a hypothetical event that may never happen.

Don’t get me wrong, 4% rates would be incredible, but what if they don’t come?  How many months do you wait and lose out on the monthly savings that you could be enjoying now? OR worse case scenario, lose out all together because your home value has declined even more?

  I truly don’t have the magic answer to these questions.  We all have to ask ourselves for our own piece of mind and our own situations what is best for our family and their needs.  I am happy to help you explore the options out there for you, but it is your decision.

 karen@landmarkmortgage.com