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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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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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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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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Quote of the Week:

Know What You Don’t Know

“The doors of wisdom are never shut.”

Benjamin Franklin
~ Inventor    

Good Afternoon!

Please take a moment to watch this very quick video about something I’m going to try out, Question and Answer emails / videos:

http://www.vimeo.com/1610110

Forward this email to your friends and family so that they can watch the video, too.

QOTW - Q & A Introduction http://www.vimeo.com/1610110“This week I talk about how doing the opposite of what we’re taught or what we think we should do is usually the right thing to do, surprisingly. Also, I’d like to introduce my new Question and Answer idea that I hope will be useful to all of my viewers. If you have any questions that you would like me to address by video, email, or privately, send them to me via email at kkooiman@silverstarfinance.com.

Here is an example of a recent Q & A that I read online through one of the companies I learn from: Read the rest of this post

Right now we are in a Different time…right?  And like any rough time in our economy, being positive and truthful is necessary.  Most of what you are hearing and seeing is negative and down right depressing.  But I have to say, if you’ve been reading my weekly emails [ come on, I know you have =) ], you will have noticed that there are a lot of positive things happening not only at Silverstar but in the real estate market as well.

When was the last time that you could buy a home in Southern California at such a discount?  And when was the last time you could buy cash flowing investment real estate?  And think of how much lower your property taxes will be or could be?  Like I said, Better is Always Different.

Well Guess What???  The time is now, even Alan Greenspan agrees.

Alan Greenspan told the Wall Street Journal last week that we are witnessing a 100-year event. That could possibly mean that in his opinion our housing crisis surpasses that of the great depression of the 1930s. (Different)

“The truth is, this problem will not be fixed from the top down. It will only be fixed from the bottom up. Courageous positive individuals need to take action now to clear excessive inventory (one house at a time) before pricing will normalize.” (Better)

Even though the government is trying to implement new policy to help homeowners survive, the market turn around will ultimately come from homes being bought by people who are qualified to buy their first home and investors who are purchasing rental properties.  Everyone needs a roof over their head so don’t think that real estate is a bad investment or it’s a bad time to buy.

True, this is a different (better) time to buy that and requires different strategies and qualifications.  I know what it takes to buy a foreclosure or an auction property based on experience, not based on what someone else is saying.  I also know the importance of financial security and how to help you develop a road map to manage your debt and cash flow.  We have been helping our clients for years develop their blue print.  Change is good, working with someone who changes is even better.

How Silverstar is Different
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With foreclosures steadily on the rise, one of the questions that has been surfacing is the possibility of homeowners simply walking away from their mortgage because they owe so much more than someone who just bought a foreclosure on the same block.

I’ve heard the term “buy & burn” used lately to describe someone who goes and purchases a new home that could even be in the same neighborhood at a cheaper price and then turn around and walk away from their current home and loan. The resulting default or foreclosure wont matter to them at this point because they’ve already closed escrow on a new less expensive home. I guess they just have to make sure they are set for a few years while their credit takes a huge hit.

Yes this is fraud and it is definitely NOT the right thing to do but people are doing it. I’m not sure if it is desperation or simply they don’t feel obligated to stick to what they originally agreed on. Either way, I think people that are doing this will definitely get what’s coming to them down the road and I don’t know how they could sleep at night.

What happened to personal responsibility? I guess if these people were lending out their money, they’d be ok with someone sticking it to them as well?!! ha ha. It’s just sad that so many people made really bad choices and now they are just dumping their problems onto everyone else across the board! Okay, Ok enough with my personal tirade….back to the point.

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Quote of the Week:

“It is not the crook in modern business that we fear, but the honest person who does not know what he is doing.” ~Owen D. Young

Research has confirmed that one out of every three homeowners have no idea what kind of loan they have. If you and/or any of your family members find yourself in that category, I have set aside some time to review their loan and provide advice to determine what to do next.

When a family member, friend or neighbor needs advice about buying/selling/borrowing, please don’t keep me a secret because you want them to get the best possible result and be delighted that you introduced me, don’t you?

All anyone has to do is give me a call to talk about their own situation or equally as important, to give me the name and number of someone they think will benefit from a relationship with a trusted adviser.

Rarely do I send out the same video twice but, in this case, it’s such a no brainer (saving money) that I would hope everyone would inquire after watching the video. Will you do me a favor? Will you please forward this email to those who you work with or better yet, to a Human Resources person who is authorized to forward this to the entire company ? I’m sure your fellow co-workers/friends/teammates will certainly appreciate their company looking out for them by way of giving them a way to save hundreds, if not thousands of dollars each and every year. This will, of course, spread the word about what we do here as well. Let’s just call it another win/win for everyone. Read the rest of this post