Cost effective ways to improve your home

This article from Smartmoney.com is about cheaps ways you can fix up your home.

The top five things they suggest:

1.) Paint – This can be the best way to update your home. A fresh coat of paint will do wonders for the look and feel of your home.

2.) Basic Maintenance - Any one can do this. Install new light switches, make sure your plumbing is sound and other little affordable projects around the house.

3.) Energy- Efficiency Upgrades – It might be time to upgrade the toilets or the water heater. Many products on the market today are more efficient then they were 10 years ago. The best thing about this, you might save on your monthly bills, while making your home more attractive to the market.

4.) Install New Fixtures – Upgrade the lights, shower heads and faucets will make home appear newer. Many fixtures are cheap and very easy to install.

5.) Landscaping – New mulch and plants will give your yard better curb appeal and add to your resale value.

Can you refi?

I found this article on Marketwatch.com today. It is titled “Battle Plan for Refinancing Your Mortgage”. This story provides you a good outline on why it’s a great idea to refi right now, but why you might not be able to. Since 2007 mortgage funding has dried up. It has become harder then ever for people to obtain a mortgage. The biggest factor in getting denied for a loan is equity.

Since home prices have plummeted since 2006, equity is getting harder to come by. Some statistics state that 62% of all homes are underwater. This means that 62% of homeowners owe more on their mortgage then their home is worth. At the same time, this stat is a little bit skewed. Home prices are locally, not national. Some homes in MN have not gone down in value as much as other homes.

I suggest that you read this article and then find out if you can qualify for a mortgage. Rates have never been lower then right now. Please contact me if you would like an honest look in to your mortgage options.

http://www.marketwatch.com/story/a-battle-plan-for-home-refinancing-2009520548520

The 4-C's

This article was posted on bankrate.com and provides a great mnemonic called the “Four C’s”

The four C's

· Capacity,
which refers to the adequacy of the borrower's income to pay
the interest
and principal due on the loan, plus property taxes and homeowners insurance.

· Character,
which refers to the borrower's track record of paying debts
as evidenced by
his or her credit history and credit score.

· Capital, which
refers to the borrower's down payment (or equity) as a
percentage of the
current value of the home.

· Collateral,
which refers to the safety and soundness of the home and
the value of the
home as determined by an appraisal relative to the agreed-upon
purchase
price.
-
Greg Gwizdz, national sales manager for Wells Fargo Home Mortgage in Des Moines,
Iowa. 7/10/2008

If you are okay according to the four C’s you should be able to get a mortgage. You might also be able to obtain a mortgage if one of these C's is a little weaker then the other one.

For example, you have a ton of equity (>35%) and have a lower credit score. You will be able to get a loan or vice versa, you have little equity, but a terrific credit score.

The truth is that there are tons of products on the market for consumers. Don’t be too concerned about not getting a loan if you live within your means and have a good credit score.

http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp

Mortgage and Econ News

http://www.msnbc.msn.com/id/29827248/

'If you had a pulse, we gave you a loan'

Dateline ABC has a decent piece on the current mortgage fiasco. It is well done and a good look into the current crisis on how toxic mortgages work in the system and how they were made/sold. Warning, watching this might make you a little ill.

Rolling Stone Article

“The Big Takeover” by Matt Taibbi is a good read on how this current crisis is not about money, but rather power. I found this a story very good and well informed.

http://www.msnbc.msn.com/id/29827248/

Wild Day in the market...

What a wild day in the market today. The past week has been a roller coaster in the stock market and housing market. Today, 3-23-09, is no different. First we had Timothy Geithner, the US Sectary of Treasury; announced his plan on how the US government is going to move bad assets off the books of the banks. Read the article here.
http://online.wsj.com/article/SB123776536222709061.html?mod=mktw

The second biggest news of the day comes from the National Association of Realtors.

Existing home sales grew 5.1% in February against expectations for a 0.9%
decline, and following a 5.3% drop in January, according to the National
Association of Realtors.

http://www.mortgagenewsdaily.com/03232009_existing_home_sales.asp

The bottom of the Real Estate market might be in sight. With historically low interest rates and cheap home prices, the market is moving. There are two other variables that might still affect the bottom. The first one is the unemployment rate. If people keep losing jobs, then homes will still come down in price. Second, if banks start to release all of their foreclosures on the market then it will add to the supply and hurt demand, thus triggering lower prices.

Have mortgage rates hit there bottom?

Yesterday mortgage rates fell off a cliff again. They are back in the 4.375% - 4.5% range, down from 5.25%. This large drop was due to the government interaction in the bond the market. A story posted on Marketwatch.com today hints at the theory that mortgage rates might not go any lower then they are today.

“It's hard to make the case for a quantum leap below 5% given
everything we are seeing now," said Nancy Vanden Houten, an economist at Stone
& McCarthy Research Associates. She anticipates rates could hover between 5%
and 5.25% for a while, she said in an interview Tuesday. "I think it's more or
less found a bottom."

Nancy Vanden Houten might be right on this. How much lower can they really go? I’m not sure and I don’t think anyone really does. If you are in the market for a new home or looking to refinance I would suggest that in the next month you think about taking action. One thing is for sure, someday rates will go up and it will be a long time/if ever before they dip below 5% again.

As always please contact me if you have any questions!

Source

FHA and VA Mortgage

This article on Bankrate.com is a good read on why a person might consider an FHA loan or VA loan.

If you are a Veteran then the VA option might be a great choice. Not only can you buy home with no money down, but you also might be able refinance up to 100% of your property value.

If you are not a Veteran then an FHA loan might be a good option for you. These home loans allow you to take out more cash or pay off more debt then a conventional loan. In regards to purchasing a home the FHA loan only requires 3.5% down payment, rather then 5% with conventional. Although, FHA may sound like a great option, it costs a little bit more then a conventional loan.

Please have a mortgage loan officer review your personal situation to find out what product works best for you. Make sure you receive more then a single option from your loan officer, so you can compare the cost between the different types of loans and then you will be able to make an educated choice.