Time To Review Your Mortgage?

Here is an article from David Brown, a mortgage planner, advisor, and broker at Residential Mortgage here in Solvang. He always gives me the straight scoop and gets things done where others can’t. It’s very informative and definitely worth the read. Feel free to pass it along to family, friends, and colleagues. Enjoy, Bob

Mortgage Market Happenings
By David Brown, Residential Mortgage Corporation

As your trusted mortgage advisor, this is my year end update to keep you posted on changes in the mortgage market and identify opportunities that may be of value to you. 

If you could not refinance due to the lack of equity in your home the new Obama HARP 2.0 program may help.  If your loan is serviced by one of the following GSE servicing entities you may be able to refinance to a lower rate. Unlike the first HARP program that limited the loan to value the new 2.0 program has higher or no limits.   In fact many will not require a new appraisal.  Click on the below links to see if your home loan is now with either of these servicer’s.  If so, give me a call to discuss the economics of securing a lower interest rate.

Does Freddie Mac Own Your Mortgage?
Does Fannie Mae Own Your Mortgage?

Second are the new loan limits for 2012 by Fannie Mae and Freddie Mac.  For Santa Barbara County the conforming limit is $417,000 and the High Balance Limit is $625,500 for a Single Family Residence.  For 2-4 unit properties the amount will range from $533,850 to $1,202,925 depending upon the number of units and conforming or high balance.  FHA for the first time has higher loan balance limits than the traditional Freddie and Fannie lenders.  The FHA loan limit is now $729,750.  Note that mortgage insurance is a mandatory regardless of the loan to value.

Buying a home or rental property?  In most real estate markets today, it is cheaper to own than rent which allows for more home rentals to generate cash flow.  If you’re in the market you may wish to consider buying discounts from Fannie and Freddie with their “Home Path” and Home Steps” programs.  These allow for buying either rental or owner occupied homes with minimal down payments and no appraisal or mortgage insurance.  These are huge savings and add to the bottom line of the investment.  Here are the links to each: Home Steps and Home Path.

The big questions is where are rates going?  Who would have thought that rates for 30 year fixed loans could be this low? Now 4.125% with no points and 15 year fixed rates at 3.5%.  The FED has made it public that their policy is to have rates low through 2013 with the tools available to them.  However, the global market may tell us otherwise with pending defaults on sovereign debts in Europe.  We can see what has been happening with commodities such as gold and oil telling us inflation is looming. 

I would expect that mortgage interest rates to remain low for the next year.  Probably not as good as they are today but a full 1% increase to 5.125% is still low.  If you have an adjustable rate loan you should have seen some payment relief but for how much longer?  With the looming inflation, you may want to take advantage of low rates for the long term. 

If you find yourself wondering what is going on with mortgage rates. I have a new meter tool on the front page of my website that will give real time market direction.  Just go to Residential Mortgage and add to your bookmark or favorite list.

As always, feel free to call me and help with guidance on the management of your debt obligations and specific scenarios.  Never pay more than you have to in these tough economic times.  Finally, I wish you a New Year with health, love and prosperity.

David Brown
Mortgage Planner
Residential Mortgage
805.686.2321 Phone
805.686.0252 F

We do the work and you get the Credit
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