Mortgage Industry Update - What the News Doesn't Tell You

I thought this would be a good time to give every one a quick update on the Colorado mortgage industry. Every time the Fed lowers the fund rate we receive a lot of inquiries on what is happening to the mortgage rates. Along with the Federal Reserve lowering the rates over the last few months, there has been a lot of mortgage talk in the news lately; subprime/ARM bail out, guideline changes, and mortgage reform.

We will start with the Federal Reserve lowering the rates and where rates stand now. Typically, the Fed's lowering the funds rate has little or no impact on the mortgage rates, however, it will lower your rates on credit cards, home equity line of credits, and short term mortgages. It also may have an impact on your ARM, depending on what index your loan uses. Please call us and we will review your current loan with you to see what, if any, affect it may have on your ARM. With that being said, mortgage rates are still great. You can purchase a house with NO MONEY down and receive a 30 year fixed rate of 6.25%.

The subprime/ARM bailout has been receiving a lot of news lately. I'm not going to go in to specifics or if I agree with the plan or not. What you need to know, is the current plan will help very few people in America and you should not count on the government to help you save your house. If you are having a tough time paying your bills or your loan is going to adjust in the next 12 months, contact us immediately before it's too late. There is a lot we can do to help you restructure your mortgage and advice that we can provide to help you through these tough times. At the first sign of trouble call us, it's better to be safe than sorry and you will be surprised what we can do.

There has been a lot in the news about guideline changes and it's a lot tougher to obtain a new mortgage now. While a lot programs have disappeared or changed guidelines, most of the programs that were affected were exotic mortgages (interest only, negative amortization, hybrid ARMs). There a lot of great mortgage programs that are available and offer great rates and flexible terms, like no money down purchases.

Ahh, and now my favorite subject, mortgage reform. Although mortgage reform has not been in the news as much as some of the other topics, it probably has the biggest impact on you and all home owners. I always get a kick out of people trying to make rules, laws, and guidelines for industries they no nothing or very little about. It reminds of the the Holiday Inn commercials, where people are playing roles they no nothing about but are ready to handle they situation because they slept at Holiday Inn. To give you an idea on how bad are elected officials can screw things up, there was a bill introduced in Colorado that would require you to have $40,000 in equity in you home at all times regardless of the value of your house. Which means, you would have to have at least a $40,000 down payment to purchase a house. The good news on this front, it appears that are elected officials have received some good advice from professionals in the industry and are not going to screw things up too much. However, I would recommend every one to stay tuned and be involved.

Once again, for the most of us our house is the largest asset we have and biggest purchase we will ever make in our lives, make sure you do the proper research and ask questions any time you become confused. Don't be that that person that spends more time planning lunch or their weekend than their financial future.

Prosperity Financial
Your Mortgage Manager

http://www.colomortgages.com/
http://www.myproserityfinancial.com/

Lafayette, Colorado


Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates

When does your Mortgage Adjust?

With over 2.5 million mortgages schedule to adjust in the next 12 months there is a good chance that you have an adjustable rate mortgage (ARM) or know some one that does. If you have an ARM there is no reason to panic, with a little planning you shouldn't have a problem with finding a new loan that you can afford, BUT you MUST plan a head. A majority of people suffering problems or facing foreclosure becuase their ARM adjusted was because they DIDN'T PLAN!!! The mortgage industry has changed drastically over the last 6 months and it may cause a problem for you when you try to refinance.

Start developing a plan 6-12 months before your ARM adjusts. Talk to a mortgage lender and have them look at options that are available to you now. Even though rates are historically low, most likely your payment is going to going to increase and is important that you know in advance how much higher your payment will be (especially if you have interest only ARM). If you know 6-12 months in advance that your payment is going to increase by $300 you can develop a budget now, that will help you afford the higher mortgage payment.

With the elimination of programs in the mortage industry over the last six months, you might also have a hard time qualifing for a new mortgage. Not only have programs been eliminated, guidlines are now, much more strict making it difficult for many to qualify for a new loan. Talking to a lender in advance will help you understand why you don't qualify now, and provide time for you to make adjustments so you can qualify in 6-12 months.

Also, in a few areas in Colorado houses have depreciated, therefore, your house may be worth less than what you currently owe on your mortgage. While you might still be able to refinance your mortgage, it will be more difficult and the extra time will ensure that you find a new mortgage before your existing ARM adjusts.

Another thing to consider, is that you may be better off selling your house and down sizing to smaller house that is more affordable. I know, it's not the best time sell your house and you may have to offer it at a reduced price, but the more time you have to sell your house the better chance you have. Also, it's a great time to buy a house, there are a lot of great houses available at reduced prices which should offset the money you lose when you sell your current house. If you end up losing a little money, it's still better than losing your house in foreclosure.


Prosperity Financial, LLC
http://www.myprosperityfinancial.com/
Your Colorado Mortgage Manager