Stop Whining!

Yes, I know the market sucks....

Yes, we hear that the MLS is too full of listings and that sellers need to get real.

Yes, I know that you might have to go work construction for a little while to bridge the gap.

Yes, I know that you have kids to feed (me too).

We all know these things and by talking about them, lamenting them, and feelign sorry for ourselves, we're just living into a reality of failure!

So I challenge you today to:

1. STOP WHINING
2. Get off your ass!
3. Do something about it! -- call an old client, call a prospect, visit an open house, write in your blog (or respond to mine!). I don't care...just DO SOMETHING!

"Things may come to those who wait....but only those things left by those who hustle"
--Abe Lincoln

ATTN: SLIME BALL MORTGAGE BROKERS

If you follow this blog...you know that I HATE slimeball brokers that take advantage of their clients, their lenders, the governement and YOU!

I made this sign to sum it up....enjoy.

Did My Rate Change Today?

The pace at which mortgage rates change each day is quickening. This pie chart puts it in pictures.

In the last 2 months, mortgage rates changed mid-day nearly 75 percent of the time. This means that an offered rate at 9:00 A.M. is likely expired by 4:00 P.M. (and has probably even spoiled by High Noon).

One rate sheet used to last an entire day, making life supremely easy for buyers in need of a home loan. Lately? Not so much. Mortgage rates are as volatile as the stock market, plunging and soaring at any given moment and leaving confused rate shoppers in its wake.

I advise talking to multiple lenders, but doing it smartly. A few extra hours to "shop around" may end up increasing your mortgage payment because rates have ticked higher in the meanwhile.

On the other hand, if rates fall during that time, your payment could drop but for some strange reason, that sort of luck seems to be reserved for the other guy, now doesn't it?

So, we don't know what rates will do, but we know that they'll do it quickly. The best way to approach markets like this is to be ready to commit to a lender if you can lock in a comfortable monthly payment.

If rates fall after closing, after all, you can always remortgage to a lower rate later.

Remodel Instead of Move?

It's just EXPENSIVE to buy a house in Steamboat Springs these days. Why not upgrade your current place using a home improvement loan!

If you’re thinking about taking out a home improvement loan, there are several options to consider. First and foremost, your mortgage consultant needs to know why you want a home improvement loan. Here are some factors to take into consideration.

· How long have you been in the home?
· Will the improvements increase the property value?
· Are you making improvements to increase energy efficiency?
· Will improvements be made in one fell swoop, or in stages?
· What is the current outstanding balance on your mortgage?
· What is the appraised value of the home?
· How much will the improvements cost?
· What improvements will be tax deductible?
· Do you have other revolving debt that you would like to pay off at the same time?
· Are you making improvements because you plan to sell the property?

The buyers of newly-built homes are often tapped out after making the initial down payment and closing costs, including upgrades to amenities and the inevitable need for new furniture. Shortly thereafter, they realize they’d like to make additional improvements to really have the home of their dreams.

If you’re planning on putting down roots, landscaping may be in order. The developer may have been kind enough to make the front yard a perky green, but if the back yard is a disturbing brown color sparse with weeds, you may be entertaining the vision of a pool or deck.

Look into the option of a Home Improvement Loan with a fixed interest rate as a 2nd Trust Deed. This type of loan does not require you to have equity built up in the existing mortgage. The maximum loan amount could go as high as 125% of the current appraised value of the home, and you can make the improvements yourself or go the extra mile and hire a contractor if the job requires architectural design, permits and inspections.

The Major Overhaul

If you have built up equity in your home and are geared up for some major renovation, the Home Equity Line of Credit (HELOC) is probably your best bet. This adjustable loan allows you to use your equity as a line of credit, so if you have improvements that are phased in over time you can simply write a check when you need to pay a bill.

It’s like a having a credit card with a much lower financing rate. In fact, the HELOC can be used for any reason at all – even paying off that credit card debt. In most cases, this action turns that revolving debt payment into a tax deductible payment with a lower interest rate. The HELOC is generally a 2nd Trust Deed, unless it is used to pay off and replace the 1st Trust Deed.

A construction loan is an alternative to the HELOC for borrowers who don’t want to use or don’t have equity, and this type of financing can be used for construction on an existing dwelling. The lender will ask a lot more questions about what the borrower wants to do with the money, and the home owner will need architectural designs, permits and a licensed general contractor on board.

Construction loans are short-term loans that usually require interest-only payments until completion of construction, but the balance is due when construction is done. Most often, that is managed up front by setting up construction-to-perm financing. In this scenario, the loan is automatically rolled over into permanent financing at a fixed rate when construction is complete, and a rate-lock agreement can be purchased to carry the borrower through that period of construction.

Another option – depending on the value of your home and local loan amount limitations – is the FHA 203(k) Program. This financing is designed for the purchase or refinance and rehabilitation of properties that meet FHA guidelines. This is worth looking into if you need to bring a property up to compliance standards, finance eligible energy efficient improvements, or turn a single-family owner occupied dwelling into a duplex to accommodate Mom or Dad!

Just a Facelift, Please!

If you want to sell your home and you simply want to improve the curb appeal, it makes sense to go with a HELOC. Make sure you are aware of the current market value of homes in your area to make sure you’re not going over the limit on the fair market value of your home. You’ll want to get a return on your investment!

If you’ve had your home on the market too long and have not been able to sell, you might want to make some changes to give it a fresh new look and bring back the passion you once had for your home. Your mortgage consultant will help you weigh out your options for financing based on your outstanding mortgage balance, income and credit score.

Regardless of your reason for home improvement, make sure you share your goals with your mortgage consultant. He or she can walk you through the various loan options and confer with your tax advisor to make sure you’re getting the best deal possible.

Why Mortgage Rates Don't Look Like They're Coming Back Down Any Time Soon

This is a REPOST from Dan Green at The Mortgage Reports Blog (www.themortgagereports.com)

If you're shopping for mortgages right now, or are in the process of buying a home, this week was not your buddy.

In early-January -- right up until the surprise 0.750% cut to the Fed Funds Rate January 22 -- mortgage rates were the lowest that they'd been in three years. At the time, market participants were fearful of an economic recession and mortgage rates moved lower with each added ounce of recessionary conviction. Since that cut, though, and through every week since, the fears of recession are ceding to economic hope and recovery.

As a result, the recession-fueled drop in rates from early-2008 is getting ever-smaller in the economic rearview mirror.

Author's note: Eddie Vedder just doesn't look the same without those long, 1991 grunge rock bangs.

Here's a brief synopsis of what drove rates higher this week:

The economic stimulus package passes

A Federal Reserve president says recession won't happen

The World's most respected investor implied that the mortgage market is not so bad

Then, most importantly, it turns out that the American consumer is still spending after all.
Each of these four points show more economic health than Wall Street had expected. That has forced investors to reshuffle their investment portfolios.

The biggest loser through all of this is the bond market; over the past five days, 30-year fixed mortgage rates have increased by as much as 0.625%.

With more Fed speakers and key inflation/recession data coming down the pipe (or it is pike?) next week, expect the volatility to continue.

When in doubt about mortgage rates, stop shopping and start locking. There is very little good that can come from "waiting out the market".

Saving $50 a month won't change your life but wasting $50 a month will eat at you forever.

Historic Fed Move Cuts Both Ways for Borrowers

Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?
Long-term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on historical performance and recent trends.So if you're waiting for long-term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.

What REALLY moves mortgage rates?
Fixed-rate mortgage rates aren't directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.

How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in 20 high-cost areas across the country.

What should you do next?
If you're unsure how the rate-cut or the proposed legislation affects your mortgage, don't worry, you're not alone. There's no one-size-fits-all answer. Give us a call right away. We'll review your mortgage and see what, if anything, can or should be done to make the most of your individual financial goals and needs.