|NMLS # 249035|
|A Direct Lender|
|NMLS # 249035|
|A Direct Lender|
It seems like every other person I meet is applying for a loan modification on their mortgage. The general feeling seems to be, "Why not? It might work."
For those of you who want a better understanding of how we got into this global economic mess, National Public Radio has several programs that have podcasts you can read, watch, or listen to that summarize and define a lot of the terms we see tossed around in the news today. They posit some non-accusatory and intelligent explanations both of how financial systems work and where things went wrong. I'm not saying I agree with every word, but I think it's well-balanced and worth absorbing. Knowledge is power. Check it out at:
How to navigate today's mortgage environment, Part 2.
First, have you been reading the newspaper lately? Well, stop it.
Let's look at other options for finding out what's going on in the lending markets. For starters, I called Ann Bedrossian at Lockheed Federal Credit Union (818-621-2758). She says they have lots of money to lend right now, their deposits are way up. And if you have decent credit and at least 10% down, you can get under 6% mortgage interest on a 30-year fixed loan up to $1 million. To join the Lockheed Credit Union, you pay a $25 application fee, that's it! Call Ann for the latest rates and programs, you might be pleasantly surprised.
I know there is scary news out there. I know everyone thinks the real estate market is on the biggest slide downward ever. But now is the time to be a contrarian! Do what Warren Buffet says, get greedy when everyone else is afraid.
If you are in the market for purchasing or refinancing a home today, you need to pay close attention to the mortgage news, and listen to responsible, knowledgeable professionals.
From Kirk Thomson, How To Plan Ahead For The New, Lower Conforming Mortgage Loan Limits in 2009. Conforming mortgages are limited by loan size, based on average housing costs around the country. Since 1980, as home prices have increased, so have conforming loan limits. The current conforming loan limit on a single-family home is $417,000. Earlier this year, as part of the Economic Stimulus Act of 2008, Congress authorized temporary increases to the conforming loan limit in high cost regions, as defined by median home sale price. In Manhattan, for example, where more homes sell for more than a million dollars than sell for less, mortgages as large as $729,750 are considered "conforming".
Beginning in 2009, however, that loan limit changes. Effective January 1, conforming mortgages will be capped at $625,500 in high cost areas, and $417,000 everywhere else. Therefore, homeowners in high cost areas whose mortgaged amounts exceed $625,500 are now operating on a defined timeline. Switch to a cheaper conforming home loan prior to December 31, 2008, or risk paying the "jumbo premium". This includes homeowners with: Two mortgages -- one for $417,000 and one for "the difference." An ARM that was begrudgingly accepted because jumbo fixed rates were too high. An expensive jumbo fixed rate mortgage. In addition, home buyers in the $800,000-900,000 price range may want to move up their closing dates. Today, at those price levels it takes a 20 percent downpayment to get access to conforming money. In 2009, it will take 30 percent.
My comment: In the last couple of months, FHA financing has been a great alternative to jumbo or "jumbo light" programs, because it is the only way many people have been able to obtain loans with less than 20% down payments. Keep in mind that FHA loan limits will also be decreased from $729,750 to the $625,500 limit. We'd better go shopping!