Archive for January, 2014

Are you or any of your clients still thinking about refinancing?- By Barb Crea

January 31st, 2014
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Maybe they tried last year and couldn’t get it done.  Well, it’s not too late – YET! The Fed has started to taper the stimulus that has been artificially keeping interest rates low. The taper is expected to be completed by the end of 2014 and it’s predicted by both the National Association of Realtors and the Mortgage Bankers Association that interest rates will be about a percentage higher than they are now.

With the economy improving and property values increasing, more and more people are gaining equity in their homes every day, giving homeowners options they didn’t have a year ago. Maybe home improvements or putting on an addition are in the cards. Maybe it’s purchasing a lake home or investment property and refinancing the primary residence will help accomplish that.

Below are possible refinance options based on loan type:


CONVENTIONAL LOANS:

  • Regular Conventional Refinance – Cash-out and no cash-out options available with terms between 10 and 30 years. No cash-out refinances available up to 95% of the property’s appraised value.
  • Have a Home Equity Line of Credit (HELOC) – You may have enough equity to combine the 2 loans into one mortgage, eliminating the concern of higher payments on that adjustable rate HELOC down the road. Little short on equity; we still may be able to refinance your 1st mortgage to a lower payment and re-subordinate your existing HELOC.
  • HARP (Home Affordable Refinance Program) – Think you still owe more than your home is worth? If your current loan is owned by Fannie Mae or Freddie Mac, you may be able to refinance if your loan balance is greater than 80% of your property value. The following websites can be used by homeowners to determine if their loan is owned by Fannie Mae or Freddie Mac.

Fannie: http://www.fanniemae.com/loanlookup

Freddie: http://www.freddiemac.com/mymortgage

FHA LOANS:

  • Regular FHA Refinance – Cash-out and no cash-out options available with terms between 10 and 30 years. No cash-out refinances are available up to 97.75% of the property’s appraised value.
  • Lower your monthly payment with a FHA Streamline Refinance – Does not require an appraisal, the original property value substitutes for the appraised value on the new refinance. This option saves you the cost of the appraisal, and no worries if you’re a little short on equity.
  • If your current FHA loan was closed and endorsed by FHA prior to 6/1/2009, you may benefit from dramatically reduced mortgage insurance when doing an FHA Streamline Refinance, saving you thousands of dollars in mortgage insurance premiums.
  • Non-occupying co-borrowers can be added to a loan to help the occupying borrower qualify for the refinance. Read the rest of this entry »

KCM believes 2014 is going to be phenomenal, maybe the best year of our careers – make it YOUR best!

January 24th, 2014
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Each month Steve Harney, founder of Keeping Current Matters (KCM), puts together a report packed with tools and information we need to guarantee success in any real estate market. The folks at KCM believe it’s not only important to know what is happening, but also why it’s happening and how to simply and effectively communicate it to our clients. Their January Monthly Market Report covers how 2012 was the year of RECOVERY, 2013 was the year of STABILIZATION and 2014 will be the year of GROWTH!

KCM’s 3 reasons why 2014 is going to be a year of substantial GROWTH in the industry:

Across the country the economy is starting to come back – This is the #1 reason KCM believes there will be a lot of repeat home buyers. Many people who currently own a home are going to sell and move up, move down, or move sideways. Trulia is calling 2014 the year of the repeat buyer. As prices continue to escalate, more and more people are entering into positive equity and are now able to sell their home without bringing money to the table.

The potential Impact of Immigration Reform – The Bipartisan Policy Center states “Demand for housing units increases as new immigrants enter the economy and form households, accelerating the current housing recovery and fueling growth in this sector of the economy.” According to their study, if we go ahead and do some sort of immigration reform housing is going to be impacted by the sum of $68 billion a year. That’s the projected annual increase of spending on residential construction. It’s expected that some sort of immigration reform is probably going to pass. Depending on the strength of the reform, NAHREP thinks the number of people that might form a new household and purchase a house is up to as many as three million families. Many of these people are living in this country now, but are afraid to purchase a home because they don’t know if they’re going to be allowed to live in this country tomorrow. Now, all of the sudden they have a path to citizenship and they feel comfortable buying a home. Read the rest of this entry »

EXCITING NEWS… By-Barb Crea

January 10th, 2014
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Minnesota Housing has made some positive changes to their income calculations for the Start Up, Mortgage Credit Certificate (MCC), and Step Up programs effective January 29, 2014. Between January 8th and January 28th either the current income calculation requirements or the requirements effective January 29th may be used to qualify borrowers.

Start Up and MCC Eligibility Income Requirements effective January 29th require the income of ONLY the following people:

1. The mortgagor(s)

2. Any person who is expected to both live in the residence AND sign the note

3. Any person who is expected to both live in the residence AND is a legal spouse of the mortgagor

Start Up and MCC (first-time homebuyer) loans permit co-signers effective January 29th. Co-signers are not vested in the title to the property and may or may not reside in the property. If the co-signers live in the residence being financed, their income MUST be included in the Eligibility Income calculation. If the co-signers DO NOT live in the residence being financed, their income IS NOT included for Eligibility Income. Other changes to the types of income required for Eligibility Income also take effect, including the requirements for the treatment of rental income, educational assistance, and income from custodial accounts. Call The Kate Wilson Team at (952) 853-0222 for more details or visit www.mnhousing.gov. Read the rest of this entry »

Looking back on 2013 and forward to 2014! – by Randy Cullen

January 3rd, 2014
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Looking back on 2013, especially the last quarter of the year, we all felt the dysfunction in Washington with the government shut down and last minute budget deals.  I think we kept the makers of Advil and Excedrin busy as we tried to ease the major headaches that came from all the drama.  Now that the President has signed the bipartisan budget deal we avert another shutdown and turn our attention to the next cliffhanger- the debt ceiling.  You just cannot make this stuff up!

Ben Bernanke’s term as Chairman of the Federal Reserve will expire on January 31st and his replacement, Janet Yellen, will take the reins.  The Federal Reserve has been keeping interest rates low with bond purchases, a program known as Quantitative Easing.   This monthly asset purchasing program of $85 billion will begin to taper in January.  With signs of an improved economy and lower unemployment, Bernanke felt that a slow and gradual pull back was in order.  Tapering has been rumored for months and now becomes a reality. 

There is another potential impact for rates as the Fed begins to taper.  The FHFA, or Federal Housing Finance Agency, will initiate a planned fee increase on mortgages.  These fees will cause rates to increase for some with less than perfect credit.  The new director, Mel Watts, will assess the risk and impact they will have when he takes office and may look at these increases as unnecessary.  Some investors are holding off for a few days before they implement the changes just in case they are put on hold. We will keep you posted on this issue and the impact it will have on borrowers. Read the rest of this entry »