Don’t Believe Home Mortgage Rate Hype

A couple of days ago it was reported in the Wall Street Journal online that the Treasury is considering an option that would lower interest rates on new home loans down to 4.5% fixed. This has put the home buying and refinancing public into a minor frenzy as we continue to receive calls about our new "low rates". The problem is that rates simply aren't quite that low yet. Like everything the Treasury and the Fed are doing these days this may….., or may not happen. The reality is that an unnamed source at the Treasury reported that they are "considering" dropping interest rates down. Nothing has happened and may not happen. Everything about this "bailout" has been hit and miss with no real structure or plan attached to it so we'll see.

The problem with reports like these is that they cloud the facts about the already positive side of the mortgage market and have the unintended impact of slowing the very market they are trying to speed up. When people hear reports like this they naturally hesitate in completing a loan transaction to either buy or refinance hoping that what they hear may actually come to fruition. This hesitation could easily cause many people to lose out on a great deal.

Rates are FANTASTIC! Make no mistake about this. For the last two weeks we have had rates that have challenged any rates we've seen in my 40 yrs. There are several factors that contributed to this environment that I won't go into here but needless to say, if you are looking into a loan or a purchase, do it now when you know, with certainty, you are going to get a great deal. Pigs get fat and hogs get slaughtered so getting greedy and pausing to see what happens might be a recipe for not getting a good deal. If you're buying a home keep in mind that you won't be the only one who knows rates dropped to 4.5% if they do. Your seller will know it and expect a higher demand for his home and other potential buyers will know it and be willing to compete for the right home. Believe this, it is far more expensive to get in a price war on a home than it is to get a slightly higher rate. If you are refinancing, how low do you need??? Rates are at a level where after taxes the money is nearly free. I know people who have 25% credit card rates who will wait to see if they can get an extra quarter lower in interest. Again, don't get greedy.

I guess what I am saying, and will continue to say is that you NEED to act today. Rates are very low, prices are VERY low and sellers are hurting. Take advantage of this while you can. I know I am.

 

Call me if you have questions at 541-342-2535 or email me at jeff@evergreenpacificmtg.com. You can also go online to www.jeffnunley.com .

Millionaire Homeowner Magazine Goes Online

For over a year now I have been publishing a magazine called Millionaire Homeowner. Until now, I've only been able to do a very small printing for my best clients. With all of the great technology out there I felt that there must be a better way to get this fantastic publication distributed. As of this month I am now able to produce a fully indexed digital copy of the magazine. The link is included here, I hope you enjoy it as much as those people who have been receiving it. I am extremely proud of what has been accomplished. Click HERE for your copy and then please, forward the link to everyone you think would be interested and we will include them in the distribution.

Don't Believe the Hype

As I speak to Realtors all over the country I hear the same thing over and over "people think they can't get a loan to buy a house". Thanks in large part to the media's constant negative reporting on the credit crisis it is no surprise that many would be buyers feel hopeless and won't even try to get financed. After all, getting a home loan already ranks right up there with a root canal so why go through the embarrasment and invasion of privacy just to be told no. I believe that many people who want a home mey even forgo getting one just out of the fear of rejection.

For all the hype though there is money available. Sure, we don't do much 100 percent financing any more and you can't buy a home without a decent income or credit but there are some great programs out there that are fully funded and ready to help would be buyers. FHA, VA and Rural Development are all great programs with low or no downpayments and easy qualifying.

Frankly, now IS the time to buy a home. Rates are low, money is available and homes are cheap, in some areas, really cheap. It's this kind of economic environment where the smart get rich by getting the good deals others leave, or in many cases, put on the table. I know, thiings won't be getting easier for quite a while and economic fear rules the day but now is the time to ignore the media, be brave and do what's right for you.

Don't let some talking head determine your future. If you want more information visit the video network at www.jeffnunley.com.

Foreclosed Properties Build Future Wealth

ABC News recently released a report on bank owned or REO properties. In summary, people who buy these properties today will make big money in the future.

Watch the video here:

http://abcnews.go.com/video/playerIndex?id=6286291

To your success.

Jeffrey

An open letter to our readers

Amidst all the uncertainty surrounding the economy, I've had a number of calls from my clients concerning the tumultuous real estate and mortgage markets. As such, I wanted to take a few moments to address some of these concerns and shed some light on the reality of the situation.

 

The Real Estate and Lending industries are in fact going through a necessary correction. The industries became saturated with fly-by-night companies looking to make a quick but short on offering any real value.

 

Contrary to numerous reports in the media, mortgage funds are still readily available. The credit markets are tight, but it has yet to have any real significant impact on the availability of mortgage financing. Although 100% loans are all but gone, 3% down loans are still readily available, even for buyers with less than perfect credit. Most of the reports you are hearing about the rapidly disappearing mortgage products have to do with loan programs that were very common in coastal areas.

 

There has never been a better time to purchase real estate. With inventories at a higher than average level and extremely low interest rates (slightly under 6% for a 30 year fixed rate mortgage as of the writing of this letter) this truly is a wonderful time to move-up or purchase a vacation home. For first –time home buyers there is a window of opportunity that has never before existed to take advantage of a $7500 tax credit! I like to call this the "perfect storm" of opportunity. If you know anyone who is even considering purchasing a home, especially first-time buyers, please let me know!

 

If you have an adjustable-rate mortgage now may be the WORST time to refinance to a fixed rate. Adjustable rate mortgages are tied to a specific index that changes with the ebb & flow of economic conditions. If your ARM is tied to the 1-year treasury you may be in line for a rate reduction! On the other hand, if your ARM is tied to the LIBOR you may be in for a significant increase. Regardless, my suggestion is to consult you're your mortgage professional for an audit. As I mentioned earlier, many mortgage professionals have left the industry. Those who are "left standing" are likely the professionals. If you need a referral to a highly qualified professional mortgage planner please give me a call.

 

Interest rates may be on the decline in the next few months. Economic conditions are ripe for improvement. Interest rates can and do move swiftly so it is imperative that your mortgage professional have an active management system in place to notify you of market conditions. Again, if you need a quality referral please give me a call.

 

 

How Does a Wall Street Bail-Out Bill Affect Main Street?

Large and small companies across the globe rely on access to

money markets to finance their daily operations, including

inventories, and payrolls. Lenders routinely make loans to these

companies, and to each other, to make it all happen. When lenders

have confidence in these markets, and investors have confidence in

this system, we have a functional marketplace that, for the most

part, is sustained by competition. When confidence in this system is

shattered, however, like it has been recently, credit becomes

expensive and scarce to all parties, and small and large companies

alike can choke to death waiting for the short-term capital it needs

to fund its long-term success. This directly affects you and your

family. It means a slower economy. It means more lay-offs and less

new job creation, which often means lower home values. It also

fuels volatility in the financial markets that, as we've seen, can

wreak havoc on your savings, retirement, and other investment

accounts.

It is estimated that some $70 trillion in total global investment

capital is available, which would be great news if our financial

systems were functioning with confidence – and that's what the

Rescue Bill is basically about. Like it or not, the US Government

has been given unprecedented power to invest $700 billion in our

financial systems in two main ways. First, as much as $250 billion

to purchase stock in US banks, providing the banks with badly

needed money. Second, through the purchase of certain assets to

help stimulate more liquidity in the credit market. Another initiative

will provide government guarantees for the short-term loans banks

make to each other to run their daily operations. More importantly,

these actions are in concert with similar practices by other

governments and central banks.

None of these actions will solve our problems completely or save us

from recession, but here's the good news. It is a positive step in the

direction of stabilizing the markets. The other good news is that

several other measures were tacked on to the bill to help build your

confidence in the markets. Unfortunately, there just isn't enough

space in this short newsletter to cover them all. We will briefly

highlight a couple of them, but our best, most practical financial

advice is to create your own plan for the future with your financial

professionals. Don't make any rash decisions without speaking to

the experts you trust to handle your investments. If you need help

finding a financial professional you can trust, we'll gladly provide a

referral. Just give us a call. We'll review your mortgage and create a

plan that fits your individual financial goals and needs

Changes in FDIC Limits

As part of the Rescue Bill, Congress also increased FDIC deposit

insurance from $100,000 to $250,000 for all of an individual's

accounts at a single institution. For one year, joint accounts,

retirement accounts, and trust accounts are insured separately.

This means a married couple can insure up to $1 million at a single

bank, by making a few simple adjustments. Changes also affect

revocable trusts, allowing the same amount of insurance for

beneficiaries, such as your children. That means, a married couple

with three kids could create enough qualifying individual and joint

accounts to protect up to $1.5 million. It's important to note that the

FDIC has never failed to pay a single dime of insured money when

banks have failed, so you won't have to make a run on the bank or

hide your money in your mattress anymore. Small businesses will

also benefit from new increases, as well as the confidence that

comes with this kind of insurance.

New and Extended Tax Incentives

Within the 451 page Rescue Bill are nearly 100 tax code changes

that directly affect individuals and business owners, including

education deductions, sales tax, energy credits, and even new

disaster aid. Other tax breaks, which were due to expire, were

extended, including property tax deductions, the Mortgage Debt

Forgiveness Act, and the shield for the Alternative Minimum Tax

(AMT). The property tax provision, set to expire in 2008, has been

extended to 2009, and allows up to $500 ($1000 for joint filers) in

deductions in addition to the standard property tax deduction –

even if you don't itemize! The Mortgage Debt Forgiveness Act,

extended to 2012, was designed to protect those who already lost

their homes due to foreclosures from facing an additional tax

penalty for qualifying cancelled or "forgiven" debt of up to $2 million.

And, finally, the Rescue Bill also saves about 23 million Americans

from the dreaded AMT, a kind of extra tax that some people have to

pay on top of their regular income tax created by the Tax Reform

Act of 1969.

These are just a few of the potential tax benefits created or

extended by the Rescue Bill. As always, there are specific

qualifying standards, and so it is essential to speak with a qualified

tax professional about these and other tax benefits that could help

you lower your tax bill and increase your confidence in today's

tumultuous financial markets.

Increased Federal Loan Limits Lower Price Tag on Hundreds of Thousands of Loans

 

One immediate benefit of The Economic Stimulus Act of 2008 is the increase in loan limits for high-cost areas of the country. By raising the Federal Housing Administration's loan limits on what qualifies for lower-cost FHA, Fannie Mae and Freddie Mac loans, the bill could help a quarter of a million families purchase or refinance their homes at a lower cost. Combined with record low interest rates, the change could improve the financial picture for many now facing foreclosure. The options and loan ceilings vary, however, from county to county and only a Certified Mortgage Planner can weigh all the options to determine if a new loan makes sense for an individual homeowner.

 

The increase is only temporary, however, so homeowners looking to shed the premium they pay for subprime or jumbo loans required to live in their state need to act quickly to take advantage of these federally-guaranteed loans.

 

FHA loan limits that will range from $271,050 to $729,750 with the largest loans available in high-cost metropolitan areas such as New York, Los Angeles, San Francisco and Washington, D.C. But even smaller markets could see increased activity in the housing market when the new loans become available. In Eugene and surrounding areas we did not have any increase in the Fannie Mae limit but did have an increase in FHA limits to $343,750.