Archive for the ‘Know Your Mortgage’ category

Federal Reserve Board Schedules LO Compensation Webinar

March 11th, 2011

Federal Reserve Board Schedules LO Compensation Webinar

3/11/2011 On March 17, 2011 at 11:00 am PST the Federal Reserve Board is holding a webinar on Loan Officer compensation. You can click the banner to register for it. We’re not sure how many can get in so good luck! Big Shots at the SEC got busted for watching naughty stuff on their office computers. Frank and Brian eat crow over getting beat up on the Bank of America, and Lennar stories aired early this week. Have a great weekend and thanks for watching the TBWS Daily Show!

The Cost of Walking Away From Your Upside-Down Mortgage

February 15th, 2011

Owing more on your mortgage than your home is worth (being upside-down on your mortgage) & continuing to make the payments, may seem like a bad investment. But the alternative-choosing to default on your mortgage even if you can afford the monthly payments-will take a significant toll on your credit rating. This is called “strategic defaulting & is increasing  in frequency in some parts of our country where property values are decreasing.

While it may seem like a good idea to simply stop paying and walk away from a bad investment, keep these factors in mind when you consider strategic default.

  • The default will remain on your credit report for seven years.  Since credit scores are based on information in your credit report, the foreclosure will greatly impact your credit scores during those seven years.  Securing other credit at reasonable terms and rates will be difficult, if not impossible, during that time.
  • Potential lenders aren’t the only ones looking at credit reports these days.  Insurers, employers and even cell phone companies are considering the credit worthiness of those who want to do business with them. By impacting your credit report, a strategic default may affect your ability to get a job, secure insurance and enter into important service contracts.
  • Fannie Mae, the government-controlled mortgage giant, announced policy changes that will make you ineligible for a new Fannie-Mae-backed mortgage if you walk away from a current mortgage that you actually could afford to pay. This ineligibility will last for seven years from the date of foreclosure.
  • In some cases, the debt that foreclosure “erases” may be recorded as income, which means you will have to pay taxes on it.

Alyson Canepa, ABR, CDPE, CRS, e-PRO, GRI, SFR, SRES
Accredited Buyer Representative

Certified Distressed Property Expert
Certified Residential Specialist
Seniors Real Estate Specialist
203k Specialist
ReMax Traditions
2204 18th Avenue
Longmont, CO 80501
303-912-4663  cell
303-942-4331  fax
www.AlysonSellsHomes.com

Get the Process Started Now

December 8th, 2010

The loan process is not what it used to be.  In the not so distant past, we used to be able to start a new refinance and get it closed within 3 weeks.  Lenders were a lot more streamlined and were staffed to handle the amount of loans they were getting.

But because of new regulations and a large influx of business (due to such low interest rates), loans are just taking longer to get done.  So what should you, the consumer do?

Get started now.  If you are thinking that you would like to refinance but are going to wait until after the holidays, you could be missing out.  Rates are still good but all indicators point to rising rates in the near future.  If you wait until after the holidays to start the loan process you could end up paying a higher rate.

The reality is that because of longer timelines to get a new mortgage, a refinance started now most likely won’t be closing until after the New Year.

We all make New Years Resolutions to get our finances in better shape but why wait to start those resolutions until after the 1st of the year.  Getting started now will give you a head start and ensure that procrastination doesn’t cost you more money.

What could I really Save?

December 8th, 2010

In the last couple of weeks, the mortgage industry has seen interest rates bottom out and start to move back up.  Most analysts believe that we have tested the lows and now the Fed wants to get inflation back to its target of 2% and to do so, it will start raising interest rates.

Even so, you can still get great interest rates.  It is still possible to get your rate in the 4% but if you don’t act soon, you may miss that window.

Let’s look at some examples of what the principle and interest payment on a $200K mortgage would be over a range of interest rates:

Interest Rate                   Monthly Payment

4.50%                                  $1013.37

4.75%                                  $1043.29

5.00%                                  $1073.64

5.25%                                  $1104.41

5.50%                                  $1135.58

5.75%                                  $1167.15

6.00%                                  $1199.10

Now someone could look at this and think, “The difference between 6.00% and 5.00% is only ~$126/month; That is not worth the cost of refinance.”  But you have to remember that this is just comparing different rates for the same loan amount.  If a borrower had an original loan amount of $215K at 6.00% and has had this mortgage for 5 years, their payment savings would like more like this:

Original Payment at 6.00% = $1289.03

New Loan Amount $205K

Interest Rate      New Payment       Monthly Savings

4.50%                  $1038.70                 $250.33

4.75%                  $1069.38                 $219.65

5.00%                  $1100.48                 $188.55

Now I know that the odds of this being your example situation are pretty slim but this example is designed to show you that even though we have seen the bottom of interest rates, rates are still good and can save you thousands of dollars in interest.  But you do not want to wait long.

Success Stories #2

August 25th, 2010

Over the last few months, The Kunselman Team has had the opportunity to work with some wonderful clients with unique situations, and was able to get them the perfect mortgage solution to fit their needs.  We would like to highlight a few of these situations here.  The names have been changed but the scenarios are real.

Client #1 John
John is a single dad with two kids heading off to college over the next 3 years.  John owns two properties (his home and a rental condo).  The condo currently has a 15 year first mortgage and a HELOC.  The rent he receives for the condo is less than what his two mortgage payments are so every month, he has a negative cash flow.  He has been making the payments just fine but realizes that with the upcoming expense of college, he needs to better his monthly cash flow.  The solution that The Kunselman Team found for John was another 15 year mortgage that lowered his payment enough so that he now has a positive cash flow on his rental property.  The refinance of this investment property did not require an appraisal.  John also refinanced his home at the same time.  The combined monthly savings of both properties was $415/month.  This will help John substantially in the next few years.

Client(s) #2 Jim and Sarah
Jim and Sarah have been in their home for about seven years.  They have looked into refinancing in the past but because of flat or declining home prices in their neighborhood, it just never made sense.  The Kunselman Team found a new loan program that would not only reduce their monthly payments but shorten the term of their loan by three years.  In eight years from now (when they may be moving) they will have an additional $22K in equity as a result of going with a 20 year mortgage, instead of another 30 year.  In addition, this refinance require no new appraisal for Jim and Sarah.

Client(s) #3 Fred and Mary
Fred and Mary bought their home just over two years ago.  They had good credit and because of their unique situation, they had to do a stated income loan to purchase the home at a rate of 6.375%.  They were concerned that they would not qualify for a refinance since the last time they applied for a mortgage, they were stated income borrowers.  The Kunselman Team reviewed their tax returns thoroughly and were able to show enough income so that Fred and Mary were able to lower their interest rate to 4.50%.  This lowered their monthly mortgage payment $200.

These are just a few examples of the unique situation that The Kunselman Team has come across in the last few months.  The only thing that is certain anymore is that EVERY LOAN IS UNIQUE! Give The Kunselman Team a call to see if we can help with yours.