Mortgage Secrets…Learn What the Experts Say

Shopping Around?

Here’s the Inside Scoop on How to Do It Right!

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!

1. What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2. What is the next Economic Report or event that could cause interest rate movement?
   (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.SilverstarFinance.com and hit the “market update” link at the top of the page – this is where we put recent news and blog posts that are important to you when it comes to buying, refinancing, or investing).
3. When Bernanke and the Fed “change rates”, what does this mean… and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).
4. Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

Be smart… Ask questions… Get answers!
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“We should never allow ourselves to be bullied by an either-or. There is often the possibility of something better than either of those two alternatives.”
~ Mary Parker Follett

Something to think about.

45% of retirees aged 55-75 surveyed in April 2009 have either not calculated how long their assets are anticipated to last during their retirement years or they have never given the issue any thought.
~source: Society of Actuaries

Are you prepared?

• Are you saving $$ on autopilot each month?
• Is your debt under control or managed correctly? Especially your Biggest Debt…your mortgage?
• Do you have a financial plan in place?
• Do you know what tax laws can benefit or hurt you?

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Did you know?

It’s Financial Literacy Month. And to long with this, please read this perfect quote to think about as you go through this very changing period of time.

“What is” is always shifting. Be aware of the shift in order to create the life I want.

Please take a moment to watch my SHORT, yes it’s true, it’s only 1:56 mins, video

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So the question is, do you qualify for the any of the new mortgage programs?

Since last week, I have been contacted repeatedly by clients, friends and family wanting to know if they qualify for any of the mortgage relief programs that have been signed into law over the past few weeks.

More details have been released by Fannie Mae and Freddie Mac on how they will handle refinance transactions authorized by the Home Affordable Refinance program. The complete details of both programs can be found by accessing the program guides from Fannie Mae and Freddie Mac, but I will point out some of the highlights below to help answer your questions.

Lenders and investors are in a holding pattern as they determine if and when and how they will accept these transactions. Even though this legislation has passed - they are not all required to participate. In all cases loans will have to be refinanced with the existing owner of the loan today. Meaning, if Fannie Mae is the owner of your loan, the loan must be delivered to Fannie Mae and underwritten according to their guidelines. The same is true for Freddie Mac.

So how do you know if your loan is owned by Fannie or Freddie?

You have the ability to do this by contacting your loan servicer (company that sends you your mortgage statement) and asking…or you can do this by using the links below. If you need help, I can submit the information for you, simply send me a copy of your current mortgage statement. Note that your property address must be entered exactly as the agency has it on file, or it may not be found (ie: Rd or Road? St or Street?

• Does Fannie Mae Own Your Mortgage?
• Does Freddie Mac Own Your Mortgage?

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What Lenders Learned During Prior Refi Booms

First off, what is happening with interest rates and reduced yield spread premium? 15 years ago it wasn’t uncommon to see nice buy-up schedules on many products, with an increased yield spread premium being offered in return for a higher interest rate. But then along came the refinancing frenzy of 1993 and 1998, followed by the grand daddy refi bonanza of 2002 to 2003. As home loan rates dropped ever lower over the years, you can imagine how the investors felt as they watched loans turn around to be paid off in a relatively short time, as increasingly lower rates made it attractive for clients to refinance, sometimes multiple times in a year. These losses on loans were very costly to lenders.

So…after learning their lesson many times over…the lenders got smarter and started to reduce the amount of par premiums, followed by making those premiums more expensive by demanding even higher rates in return for a smaller premium and have now nearly eliminated that premium pricing which cost them so much money in the past.
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Attitude is Everything!“A good goal is like a strenuous exercise- it makes you stretch.”
~Mary Kay Ash

For some reason, when we can’t see the future clearly, we tend to see things as becoming worse rather than better. However, the optimistic attitude that gave us the world we now live in is what is needed to take advantage of the fantastic opportunities all the despair and market uncertainty is generating today.

Attitude is Everything

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I was in the process of recording a video this week but I’m loosing my voice and the video was just not turning out so great.

So ….Continuing on from “Why Houses Make Great Investments”…that I wrote to you about a couple of weeks ago.

What a GREAT environment we’re in for buying real estate….yep that’s right, I said “Great“. I’m sure you’ve read or heard by now how fantastic interest rates are, hopefully you read my email from last week. =) And…you know that homes are on sale and investment earnings are down.

So, how does this affect your plan?

People who are self-employed who will not be getting a pension from their employer, myself included, need do some extra planning to put money aside for our retirement. And now, especially in today’s income and investment environment, it’s difficult to have enough money to save, right?!

Alright so even if you aren’t self-employed and you’re expecting a pension, how secure is it? Probably not something you are going to rely on solely, right?

So what are your alternatives. Although there are many, real estate happens to be an exce

llent choice. Think about your own Estate / Retirement plan, you do have one right? Use this simple form below to start thinking about how rental income can help your bottom line.

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It sure is crazy what’s happening out there and I completely understand many of the concerns I’ve been hearing from you. That’s why I spend my time studying the market everyday and proactively staying on top of the changing landscape in the lending industry, so I can help you make great, well-considered choices for you and your families future.

So Why Buy Real Estate Now?

Many people are struggling to decide if it’s the right time to buy real estate. Although we haven’t seen the bottom yet, who knows exactly when that will happen? I don’t have a crystal ball, do you?

But what do we know for certain? There are Two Ways to Make Money with Real Estate

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FUNDS TO CLOSE for FHA

As the up and downs continue, many of my clients call wondering how they are going to get the funds needed to purchase a home. There are many alternatives available depending on their own particular situation but FHA may be the answer they are looking for. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

After today’s election, I believe that many people are wondering if the market will return to “normal”. Personally I think we are in for a very long hall in regards to the ups and downs of not only the real estate market but the economy in who. Regardless of anyone’s personal views, it is always prudent that to meet with your client to determine how much and from where they are going to get their down payment and closing cost funds. Below are just 3 of the 22 Important Ways to know well ahead of the closing date before your client starts shopping. Make your transactions smooth sailing from start to finish by being knowledgeable from day 1.

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Article Written by Teresa Boardman of Inman News

I rarely put up articles that others have written but, in this case, it was so well written that I felt it necessary to give credit where credit is due!  Enjoy!

I am writing this today from Main Street America, the very same street that we have heard about on the news as the $700 billion financial rescue package was being discussed. I can almost see the street from my desk, but not quite.

It is lined with trees and brick buildings with shops in them. There are several restaurants, some bars, coffee shops and antique shops. The business owners I have talked to tell me that business is slow, it has been for months, and will continue to be slow in the coming months.

Our country is in the midst of an economic catastrophe, fueled by huge amounts of consumer debt that cannot be paid back to the financial institutions that lent the money. I know this is an oversimplification, but it gets at the heart of the problem. If borrowers cannot pay back the loans, the banks that lent the money are in jeopardy of insolvency, which puts our global economic system at risk.

The Republicans blame the Democrats, who blame the Republicans, and we all blame the lenders. They lent money to people who could not pay it back. There were subprime loans, no-doc loans, interest-only loans, exotic loans and no-down-payment loans, as well as widespread mortgage fraud.

There are a lot of people in this country who are financially overextended. Our national government is overextended to the tune of $10 trillion. We are nation of borrowers. For some, it starts with student loans. They seem to be the gateway loans that kick off a future of borrowing for cars and houses and using credit cards to buy everything else.

Americans are in debt before they are old enough to legally drink. The credit industry has a role in all of this, as they mail credit-card applications to children, but they would be out of business if people did not want to borrow money.

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