FEDS Are Raising Rates --- Now Is The Time To Deal With That Uncomfortable Mortgage Payment!!

Are You As Uncomfortable In Your Mortgage Payment As This Penguin Is In His Suit? 

As you may be aware, the Federal Reserve has already begun its path to raising interest rates.  We are expected to see an additional 1.0% increase by the Feds over the next year.  Because of this, there will NEVER be a better time to revisit your mortgage to make sure that you are in the best loan structure possible.

Here are several items that you could benefit from:

• Cutting your term to a 15 or 10 year mortgage -- rates on these mortgages are EXTREMELY low and could have your mortgage paid off for good in a very short time
• Values HAVE increased!!!  This may allow you to get rid of PMI or even roll a higher rate second mortgage into your first at a lower rate
• Move from a higher rate government loan, such as FHA or Rural Development, to a lower cost conventional mortgage 

 Regardless of your situation, there may never be a better time to review your current loan.  As always, I will be able to do this quickly and with as little stress as possible.

Call or E-Mail me soon!!  734-433-0922 or jon@mykalamortgage.com

Imagine Being Able To Step Back In Time To Get Something You Missed!!

Rates have moved down --- but not for much longer --- I think this is a WINDOW OF OPPORTUNITY that is going to slam shut by mid year.

The Federal Reserve's actions/comments at the end of 2013 drove mortgage rates back up, and at one point, even breached 5.0%.   Rates have now pulled back, so if you are considering buying a home or refinancing or taking advantage of the government's HARP Refi, now is DEFINATELY the time to do so.  This is an opportunity that actually allows you to "step back in time" and grab the rates we saw at the mid point of last year.

If you are considering buying or building, I have a fantastic article, The Cost of Waiting.  This article
explains the relative increase in the cost of your potential home if rates continue to go up.  You can call or e-mail in order to receive a FREE copy for yourself or a friend.

By the way, if you are wondering about Home Values in the State of Michigan, here is a great article I found on Zillow.com -- http://www.zillow.com/local-info/MI-home-value/r_30/

Who Esle Would LIke To Build A New Home?

With the substantial rebound in the local real estate markets, and the lack of viable homes available, many people are looking at building a new home to solve the "lack of inventory" problem.

I am excited to announce the release of our new JUST BUILD IT! Construction Loan.  This loan offers a down payment of only 5%, allows for just one closing, so that your rate is locked in up front and provides for flexible terms over the length of your intended construction project. 

In addition, this loan is very Builder friendly, and provides a service oriented support group to assist builders with managing the draws.

Some of the most frequently asked questions regarding this program are provided below:

Is my rate locked at closing ? We have both One Note & Two Note Construction Loans.   One Note Loans provide the ability to lock your end mortgage rate at closing and there is no need to refinance upon construction completion.  The Two Note closing provides a more flexible end mortgage amount, but your end rate is not locked and you will be required to refinance your construction loan upon completion into an end mortgage.

 How will my payments be structured throughout the process? During the construction of your home, you will be responsible for making interest only payments on the amount drawn on the account. When construction is complete, your loan will be amortized according to the permanent financing you chose.

Am I required to Escrow Taxes & Insurance?  We do not collect escrows for taxes and insurance during construction.   Because of this you are responsible for paying any of these bills that come due during construction.  Upon completion of construction, you may be required to establish an escrow account.  This is dependent upon your loan program and Loan To Value.  Generally loans under an 80% Loan To Value are not required to have an escrow account.

 What is the minimum down payment required for a construction loan?  For loan amounts under $417,000.00, our minimum down payment is 5%.

 Can Land Equity be used to meet down payment requirements?  If your land has been owned for 12 months or more, we can generally use the appraised value of your land for down payment requirements.  If your land is owned for less than 12 months, potential equity may be used, but the value will be dependent on how the land was acquired.

 What do I need to begin the construction process?  Upon receipt of a fully executed Building Contract, including specifications and plans, we can begin your construction loan process if you already own your land.  If your land is being acquired as a part of the construction process, we will also need a fully executed purchase agreement and legal description of the property.

Close Your Home Loan In 2 1/2 Weeks!!

With the Holidays fast approaching, you still have time to be in your new home before they are upon us.  If you have an accepted Purchase Agreement on a home, contact us immediately to begin your loan applicaton.  In order to accomplish this AMAZING request, I am even making myself available over the weekend to accomodate your needs.  Call me by cell phone at 734-223-8555.  Let us show you how our PREMIER Mortgage Planning Service and over 20 years of experience can benefit you and your family by moving into your new home JUST IN TIME FOR THE HOLIDAYS!!

Government Shutdown -- How Can This Affect Applying For A Mortgage?

With the Government Shutdown now going on its 4th day, I thought I would add provide you with my "opinion" and several facts about home loans in relation to the shutdown.

 We are a very RESILIENT country.  Every issue, including the Great Depression, the 911 Tragedy, to even our most recent Financial Crisis in 2008; we have survived and grown from the experiences left in the wake of those calamities.  By no means am I equating the current Shut Down to these events --- I’m just stating that we are a country composed of ambitious, creative, faith bearing, resolute people that will ALWAYS find a way!

 This is NOT the first time our country has experienced a “Shut Down”.

It is a FACT that most of the Shut Downs that we have experienced have only lasted a period of a few days!!

I recall the last “shutdown” in the 90s, when I was relatively new to the mortgage business and at the time was fearful that FHA loans were going to be eliminated!!  The issue was resolved in short order and we moved on to continue writing loans as normal – as a matter of fact, I don’t recall even one loan being affected back then.  (The 1995 Shut Down only lasted 5 Days)

 Based on MY OPINION, the current Shut Down will also be resolved in short order.  I whole heartedly believe that we will not see any lost business or “blown up” deals over this event.  The Markets tend to agree with me as well --- The Dow Jones and S&P have only had marginal vairations since the Shutdown.  

Having said that I am confident that we will be past this “news festival” shortly, here are the FACTS related to the Shut Down.  Below is a statement regarding our bank's stance and its relation to lending today:

• Fannie Mae and Freddie Mac are not impacted because their operations are paid for by fees charged to lenders.
• The FHA will be able to endorse single family loans during the shutdown.
• The VA will be able to continue to issue loan guarantees during the shutdown.
• USDA employees have been furloughed. If the shutdown is short, the impact should be minimal. If the shutdown is extended this will affect the Rural Development program. Please proceed with caution and communicate to your borrowers how the government shutdown is affecting this particular loan program.
• In their shutdown contingency plan, the IRS has indicated that they will not process any forms, including tax transcripts. As a result, we expect the processing of these forms to stop until further notice.

So, with this in mind, the only current impacts, IF this is prolonged, is RD funding, 4506 transcript review and VOEs of federal workers that may be affected.

Again, personally, I think we will see this resolved by the early next week.

 I have also attached a link below regarding 7 MYTHS related to the Shut Down.

http://watchdog.org/108182/7-myths-about-a-federal-government-shutdown/

 

 

Featured Loan -- Month of October - 5% Down -- NO PMI!!

For the month of October, I will be featuring and promoting a unique loan program that is actually slated to go away in November.  This program has been an INCREDIBLE money saver for many of my clients over the last 24 months and I am sad to bid it farewell.  However, before it goes by the wayside, like so many other loan products over the last 5 years, we are going to give this old friend a glorious send off!! 

The 5% Down, conventional mortgage, with no monthly PMI, is a fantastic program and can be a HUGE money saver to qualifying borrowers.  For example, if the monthly mortgage insurance on a $150,000 FHA loan is $168 per month.  Not having to pay that extra cost would equate to saving over $2,000 per year!!!

For more information regarding this soon to be forgotten program, please call me for a personal review.

Life Is All About Change!!

In the ever changing environment of the mortgage industry, Kristy and I recently made the decision to migrate our Mortgage Planning Services to Northpointe Bank.  Northpointe is a Michigan based bank that embraces the same fundamental principals of lending and client service that Kristy and I adhere to.  We are extremely excited about the move for our clients, our agents and buidlers and ourselves.  Please call or visit.  We look forward to hearing from you!!

Round 1, 2, 3......

Will it ever end? QE 1, 2 and 3? The Feds are once again making an attempt to improve the housing market by lowering rates and with the looming bond crisis in Europe, investors are supporting the Feds with their buying of US Treasuries and Mortgage Backed Securities to help drive up bond prices and thus reducing rates again.

With 30 year fixed rate mortgages now under 4.0% and 15 year fixed rates in the low 3s, rates continue to move south.

However, this low interest rate environment has still not stabilized the housing market as foreclosures continue at a record pace and a weak job market has many would be buyers sitting on the side lines waiting for a bottom. Interestingly enough we have seen several markets in Michigan actually begin to increase in value.

In regards to refinances, many have already benefited from the Home Affordable Refinance Program (HARP) and a new revision to the program is slated to take affect this coming March 2012. Under this revision, eligible home owners will be allowed to refinance REGARDLESS of the value of their homes. Currently there are caps between 105 - 125% of the Loan To Value.

In addition, the current fees that are associated with the HARP loan are being revised, providing further incentive to many borrowers who may currently qualify but have refained from refinancing because of prohibitive costs.

Mortgage Rates At 2.99%?!?!

The recent drop in rates over the last 30 days has presented multiple opportunities. Home buyers are able to take advantage of significant discounts in home prices, coupled with extremely low payments, to make housing more affordable than ever.

I have also been advising current clients that this is a perfect opportunity to utilize low mortgage rates to cut the term on their existing mortgages --- many of my clients are taking advantage of this and moving to 15 and even 10 year mortgages.

For clients who are being VERY aggressive with the pay-off of their mortgage, we are now offering 5 year fixed rate mortgages below 3%!!!!! Absolutely unbelieveable!!!

To see the effects of selecting a short term mortgage vs. a 30 year mortgage, call or e-mail me, and I can provide you with a detailed schedule showing you the incredible interest savings and how this can help you build wealth by freeing up cash flow after your pay-off, assist in accelerating retirement savings, funding education accounts or to simply live without STRESS being debt free!!

NO-COST LOANS

Refinancing at today's extremely low interest rates can prove to be a tremendous savings. But with increased closing fees and stricter underwriting guidelines, how do you know whether refinancing is right for you?

One sure way to guarantee savings is to use a No-Cost Loan. A No-Cost Loan is designed to eliminate closing fees that often run around $2,000 ---- and even as high as $5-6,000 with some of the new government refinance programs such as the Home Affordable Refinance Program (H.A.R.P.). By using a No-Cost Loan there is no need to calculate a "break even" point or worry about the savings in the reduced monthly payment being enough to recoup the closing fees that you would pay otherwise.

No-Cost Loans will generally have a slightly higher interest rate than a mortgage with fees. Over a longer period of time, a lower rate may save more in interest expense, but the savings on a short term mortgage is almost inconsequential. For example, I am currently recommending 15 and 10 year mortgage options to many of my clients. The time that it takes to recoup closing fees is often near the end of the term on a 10 year mortgage, so a No-Cost Loan provides flexibility and IMMEDIATE savings.

For more detailed information regarding No-Cost Loans at First Place Bank, call me direct at 734-433-0922 or apply on-line at www.firstplacebank.com/jonmykala. A direct link to the application can be found to the right of this blog.

Having A Hard Time Finding A Nice Home?

With foreclosures at an all time high you would think that you would have your choice of homes in the market. But the reality is, the inventory of nice homes is dwindling.

What can you do to help with this dilemma?

Consider adjusting your focus. If you are looking for homes in a lower price range with the hope of "making improvements", you will often find that after all of the time and costs involved with purchasing a "rehab property" that you can buy a slightly higher priced home in better condition, better neighborhood and also save yourself the headache and frustration related to buying a rehab home.

If you are looking for a property in need of attention, you should also investigate a rehabilitation loan to help you with funding your new project. Rehab Loans are extremely useful tools, but you should be fully aware of all the issues related to a rehabilitation loan and the risks associated with this type of loan.

For more information on rehabilitation loans or further suggestions that may help you with finding your dream home, please call my office for an individual consultation.

Will Mortgage Rates Blow Up?

There has been much talk lately about the Feds raising interest rates to fight off the potential risks of inflation from a recovering economy. As far as I can see, this is a mistake that will only exacerbate a problem that we have not yet solved.

While some of the Fed Governors continue to point to signs of a recovering economy, based on economic data, it doesn't take a rocket scientist to know that a significantly large portion of interest only and adjustable rate mortgage loans are coming due in the next 18 months. This is going to present a wave of more foreclosures and cause additional inventory on real estate market that is already full of supply.

The positive comments yesterday from the Feds regarding the potential extension of the Asset Purchase Program for Mortgage Backed Securities, was encouraging. I do hope that our Fed Insiders look at these practical matters and don't react to soon to 'interpretive data'.

What's New In Mortgages For 2010??

As we approach a New Year, be prepared for more stringent lending standards. The new Good Faith Estimates to be released in 2010 will be another step forward in protecting the consumer against predatory lending practices, especially the "Bait & Switch" tactics used by many unscrupulous lenders during the peak of the mortgage boom. I personally am glad to see this type of regulation. However, other tighter underwriting guidelines will have a negative impact on the availability of credit and only exacerbate the issue of a weak economy in my opinion.

In general, new home buyers would be wise to take advantage of the combination of low house prices, historically low interest rates and government funded subsidies through tax credits, but take an ultra conservative approach that allows you to pay-off debt, including home mortgages, at expedited rates.

Stay tuned for the launch of my program in 2010, THE BIG PAY-OFF, as our country reconsiders the definiton of weatlth & debt in the New Economy.

Homeowner Affordability & Stability Plan

The long awaited Homeowner Affordability & Stability Plan was launched last week. As with any government backed program, it has its advantages and disadvantages.


How do you know if you are qualified for refinancing under the plan?


I have broke it down into several steps that I take for my clients:

1. First determine who the original investor of your mortgage was. If Fannie Mae, any lender eligible to origniante refinances under the Affordability & Stability Plan can help you with your refinance. If Freddie Mac, ONLY the current lender servicing your loan can help. If your loan was through any other lender than Fannie Mae or Freddie Mac (examples: a local credit union, a non-conforming or sub-prime lender, etc.) you will not be eligible for the Plan.


2. Next we review credit scores and income to determine qualifiying eligibilty and if any additional 'delivery fees' will be required for utilizing the Plan.


3. After receiving credit, we make our best attempt, with your help, to determine an estimated value range for your home. Even under the Affordability & Stability Plan, the current value of your home has an impact on your eligibility for the program and the potential fees related to refinancing under the Plan.


4. Upon completing these first 3 steps, we will determine the costs/fees of the new loan and the corresponding interest rate. This allows you to determine the potential savings/benefits to you in terms of real numbers.

Points of interest about refinances under the Affordability & Stability Plan

• It DOES NOT allow you to consolidate or roll in a second mortgage. If you have a 2nd mortgage on your home (ie: home equity loan, line of credit, home improvement loan) I suggest calling the lender and asking them if they will subordinate the loan to a new 1st mortgage originated under the Affordability & Stability Plan. If the sum of your first and second mortgage exceed 95% of the new appraised value, you can expect to pay up to 1.5% of your new loan amount in a 'delivery fee' plus normal closing costs.
• Condos - if your current appraised value is requiring you to utilize the Plan and your loan was originally sold to Fannie Mae, you will pay an additional delivery fee of 1.0% of your loan amount.
• Credit Scores - if your loan was sold to Fannie Mae, credit scores have a substantial impact on the fees associated with your loan. Additional 'delivery fees' can begin at .25% of your loan amount and go as high as 3.0% of your loan amount.
• Appraised Vaules also have a considerable impact on the fees associated with your loan. If your mortgage amount exceeds 95% of the appraised value you can expect to pay as much as 1.0% of your loan amount in an additional 'delivery fee'. Loan amounts exceeding 105% of the appraised value will be ineligible for refinancing under the Affordability & Stability Plan. In some instances, appraisals may not be necessary. Fannie Mae and Freddie Mac each have their own version of automated property valuations.

For more details regarding the Homeowner Affordability & Stability plan, you can call my office direct at 517-783-1780 or e-mail me at jmykala@fpfc.net

Time To Eat Crow...I Guess The Feds Can Do 4.5%!!

OK, so everyone is wrong on occasion and I'm no exception. We are now seeing rates below 5%. While a 4.5% 30 year fixed rate has yet to materialize, I have locked clients at 4.5% 15 year and 4.75% 20 year mortgages. If you are on my client list, you will be receiving a notice next week regarding our Financial Stimulus Package (FSP) Refinance. For those who are eligilble this is truly an unprecedented opportunity to cut your interest expense by THOUSANDS - litterally!

My average client will save over $50,000 with this program WITHOUT increasing the current monthly payment.

Next week we will also receive the details behind the new Administration's Home Owner Stability & Affordability Plan. This is of particular interest to many of you because it contains provisions over refinancing your existing loan when your home doesn't appraise.

I will be sure to post the details as soon as I have the information in hand.

In the meantime, I am receiving a lot of questions regarding whether you should refinance now or wait for rates to drop further. To answer that question I am publishing a short video to describe the events that are currently taking place and why I recommend taking advantage of the current low rates as soon as possible.

4.5% Rates From The Feds?? I'll Believe It When I See It!

This morning we have seen a lot of news regarding a push by lobbyists to get the Feds to buy enough mortgage backed securities in the open market to drive rates down to 4.5%.

I say BULL!! I'll believe it when I see it. If their idea of helping the real estate industry is anything like the FHA Secure Programs or the Fannie Mae Hope Loans - its great for political rhetoric, but NO ONE CAN USE THEM!! Out of my 1200 clients - NOT ONE PERSON could use those "historically helpful programs" - so I say BULL!!

I do hope that rates fall to 4.5%, but if they do it should be under normal free market economic conditions, where demand matches supply, where real rates of returns for investors are not clouded with inflationary uncertainty and there are no short term fixes from the government that look great on paper but provide no value to the end user - US - THE TAXPAYERS!!

Here is the BOTTOM LINE: If rates go to 4.5%, without additonal Points, you will be the first to know via my Mortgage Hot Line and Rate Watch Monitor.

More to come...... Jon

We're Not Talking Peanuts Folks!!

Its a beautiful Spring day out there! Hope that the weather stays nice like this for my son's graduation party.

Rates haven't done much since last post - mostly fluctuating betweent that 6 - 6.5% mark.

Next week many of you will be getting my periodic newsletter and this month is a real 'humdinger'. I have a promotion that I will reval. It will be, by far, the Biggest, Baddest, Giveaway that I've ever announced, so you will definately want to stay tuned. As you will see in my newsletter - "we're not talking about peanuts folks!"

OH, by the way - I'm also meeting with one of the Michigan State Housing Development Authority (MSHDA) Representatives next week to do a one on one review of the recent Home Loan Rescue Program, so if you know of someone that could use help on their mortgage I will have more resources to help them. I'll keep you posted. - Jon

Vanished!!

I can't believe that my last entry was March 6th!! Sorry - I bet that you thought that I had vanished...nope....still here trying to read thru and sort out all of the changes that are occurring!

I just wanted to give you a quick update on the rates - in general over the last month the rates have been oscilating between 6 - 6.50%. NOW, please let me disclose that this is the BASE rate - one of the biggest changes to take place in the mortgage industry is the addition of what are called "delivery fees" - what this means is that there is an adjustment made on the rate or fee structure of your mortgage for EVERYTHING from credit scores, to the type of loan, to your loan to value.

Certainly isn't making anything easier in the lending world.

The recent Fed rate cut didn't do much for mortgage rates, other than try to provide more liquidity to the credit markets - in other words, keep things from getting worse.

I will continue to keep you posted and for those of you on the Rate Watch Monitor, I will most certainly make you aware of advantageous drops in the rate when or if they occur.

Watch Your 'Back-ing'

Wow! - Seriously the swings that we are seeing are the worst I have ever seen.

From last Friday, we are up over 1/2% on the 30 year fixed rate - approaching another high that hasn't been seen in the last 3 years.

The news out today is that there are rumors floating around that Mortgage Backed Securities may lose their AAA rating. Remember that the Federal Government provides Fannie Mae and Freddie Mac with full backing in order to reduce the risk to investors. But investors are requiring the highest premiums on Mortgage Backed Securities since 1983. This is why you see the Treasury markets (1-10 year Treasury notes) continuing to go up in price and down in rate, but Mortgages continue to get hammered on price - driving the rates up. OUCH!!!!

I Told You So!

Wish that I would have bet some money on that prediction! We have seen rates come down .25% since last week when I posted my last BLOG. The GDP figures released today were flat and unemployment numbers were higher than expected, giving more strength to the bond market - remember - bad news usually will provide strength in the bond market and lower rates.

A lot of info being released tomorrow, so we could see another very volatile day - hopefully a big reduction. For those of you still floating - all we need is a small window to get those rates locked.

By the way - here is a link to the article this morning:

http://www.msnbc.msn.com/id/23387861/