What does a Bond Chart tell you?

The beautiful thing about a Bond Chart is that it tells you where Bond prices have been and where Mortgage rates have been.  Can they tell the future?  Sometimes.  Here's how.

I study the bond charts all day long and I understand there are economic data or world news that negatively or positively influences the prices of bonds.  If bond prices go up, rates go down.  And vice versa, if bonds go down, rates go up.

So back to "how can the bond charts tell the future"?  The answer is simply this: History repeats itself.  You either love or hate history and it's the same with watching bond charts.  You either love it or you hate it and I love bond charts!

Because I watch Bonds all day long, I get familiar with floors of support and ceilings of resistance and can advise with a learned level of confidence a direction a client might consider and whether they should float or lock their interest rate.

Divorce and splitting equity in a home with a mortgage loan

Many times divorce requires one or the other of the ex-spouses to refinance the home mortgage.  The refinance accomplishes two things: 1) removes the other ex-spouse from the mortgage and the warranty deed and, 2) creates funds to pay out a portion of the home's equity to the ex-spouse signing off their interest in the home.

There are MANY options for refinancing to accomplish divorce decree requirements and finding the right one for the individual situation requires a broad product mix to be available.

My lending experience has uncovered the complex rules regarding the length of child support receipts, the amount of child support which can be counted when looking at the divorce decree and age of the children, and how much of the income can be be counted as a percentage of the total household income. 

I also rely on my trusted CPA Professionals to advise my clients on tax issues and questions when they arise.  A few examples of tax implication questions I have come across in the past: 1) divorce and property division, 2) 1031 exchanges and what benefit would be served by considering it, 3) equity division through home refinancing and future purchase of another property, and 4) future rental home purchase with equity coming from a divorce settlement.

I enjoy helping with divorce and equity division loans and will share my knowledge and expertise to make sure all parties are happy with the results. 

Top 3 Mortgage Application Hot Spots

As I thought through the past 6 months of loan applications I realized how important it has been to remind my mortgage loan clients of 3 things.  These 3 things speed up the processing of their loan application, prevent delays in processing, and document their file with critical information in advance of when it is needed (at final underwriting, which is just before closing, and can hold up closing).  These 3 items of special importance are worthy of their own Blog Post!

The importance of borrowers NOT applying for credit (going to RC Willey's to shop for furniture and applying for credit), or allowing a creditor to access a credit report (a harmless test drive at the car dealership?) cannot be overemphasized!  With new credit inquiries the file may need to go back to underwriting, after a new credit score is calculated, and what if the credit score drops?  The mortgage rate may now be higher or what if the score is on the cusp of approval, drops 3 points and now is DENIED?  Don't shop for credit, don't allow credit pulls.  Don't!

Don't change employment!  This one is self explanatory.  Even with warnings, I have had borrowers do it.  What if the new job has a mandatory probationary period?  Don't change jobs!

The last item is a "heads up", we need this as soon as it happens.   As soon as the Earnest Money Check clears the checking, savings, money market, stock account; PROVIDE proof that the check has cleared the account (front and back of the check, withdrawal of the cashiers check with a copy of the check face, bank statement showing check has cleared the account).  This allows a CREDIT of the earnest money to be given at closing.  IMPORTANT!

IRA withdrawal for down payment for first time home purchase

If you have been saving money in your tax deferred IRA and now want to buy your first home, how can you get your hands on the money locked up in your IRA without a penalty?  WITHDRAW IT!  Here is an excellent article to explain the details..and call me if you would like to review your mortgage options. 

Why Buyer's Should Get Off The Fence

In this article, why should I start with interest rates as to why potential buyer's should get off the fence?  Strong economic factors are weighing in on interest rates daily and when the recovery gets feet underneath it, rates will move up quickly and not look back to the levels we have today.  Rates today are the best we have seen since December 13, 2010 and we have had 8 consecutive weeks of dropping mortgage rates.

Housing prices are officially in double dip territory and prices are allowing buyer's to see dreams come true with homes prices and low interest rates giving them a payment that fits into their budgets.  Considering the home mortgage interest tax deductibility safe for now in our tax code, the advantage of interest and private mortgage interest tax breaks figures favorably into future homeowners benefit balance sheet.

And add mortgage financing into the mix of reasons and this may be the biggest factor of all to consider buying a home now.  FHA has recently been talking about increasing the down payment from 3.50% to 5% and conventional lenders are consistently sending a message of higher return (higher interest rates) for higher risk borrowers (lower credit scores and higher debt to incomes).

A strengthening economy inevitably pushing rates higher, the highest affordability index since 1963 (home price, household income and low interest rate measure), and looking at potentially a more difficult loan qualification situation in the future are the 3 reasons I believe buyer's should get off the fence.  Read more here about why buyer's whould get off the fence. When you have mortgage questions, call me for a personal consultation regarding your financing options.

How are the summers of 2003 and 2011 the same?

According to a S&P/CaseShiller Home Price Index report just released, home values in the United States in April 2011 have returned to an average level of value which was last seen in the summer of 2003.

Excellent purchase opportunities continue for first time home buyer's and for investor property purchasers.  With the home affordability index at the best level seen since 1963, call me if you would like to review your purchase options. 

Why loans are now FULL Documentation with NO exceptions

"I have NEVER been under the microscope in ANY of my other mortgage loan applications like I have been this time!", said my "perfect" (they really were a perfect borrower) investment property borrowers after visiting with them about some underwriting conditions in my office the other day. 

Many things have changed in the mortgage lending world over the past 3 years; some occurred subtly and other suddenly.

Why are ALL loans now so accurately and completely documented?  This is the subject of my Blog post today.

Counseling IS an effective tool to PREVENT Forclosure!

The probability of staying in your home (if you are in financial difficulty) can be increased dramatically (in certain cases, up to 200% improvement in your chances) if you receive financial counseling! 

The latest report from the Homeownership Preservation Foundation (HPF) makes a compelling argument for continuing support of Home Owner Counseling opportunities be made available to struggling homeowners.

During my loan application process I have a form that which says (and this is how I explain it, in layman's terms): "The mortgage company doesn't want your home back.  If you get in trouble, they will offer counseling and will help you stay in your home."

Until I read this article, I wondered if the mortgage servicing companies really had success with their customers who went through counseling.  Here is the article which tells me that we are successful in helping homeowners stay in their homes: Counseling is an effective tool to prevent foreclosure

Happy 4th of July!

On July 4th we celebrate our country's birthday, the freedoms we enjoy, and the American way of life! We hope you have a happy Independence Day. Thank you for choosing us for all of your mortgage needs.  Marty

VA Loans are Excellent for Active duty, Retired and Reservists

VA doesn't guarantee you will qualify (#1 wrong assumption I have heard over the years from Veterans I have helped), but the VA loan is awesome!  ZERO down and NO monthly private mortgage insurance!

Benefits and Q & A about why VA loans are awesome! I am ready to help with your VA questions.  Contact me at 801-540-5108. 

The American Dream and Government Intervention

A poll taken a week ago by The New York Times and CBS News indicates that 9 out of 10 respondents think buying a home is a good investment and worth the up and down value ride they experience.  45% say the Government should do more to help the Mortgage market problems and 53% want Government to give direct financial benefits to borrowers in financial trouble.  Almost none of the respondents want the tax deduction for mortgage interest to go away (this has been included in several Government budget balancing scenarios).  Read the entire American Dream article here.