Low Mortgage Rates  Now Available to Those with Depreciated Home Values.


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“Making Home Affordable Program,” which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

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One of the initiatives in this program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

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.Who is eligible?

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You may be eligible if:

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  • You own and currently occupy a one- to four-unit home.
  • Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
  • You are current on your mortgage payments.
  • The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
  • And, you have a stable income sufficient to support the new mortgage payments.

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How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?

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Simply call or email me. I’ll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

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I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?

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Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less, you may qualify. The current value of your property will be determined after you apply to refinance.

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If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?

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No. But the good news is, you may qualify for the Modification Initiative. Contact me to discuss your situation and review your options.

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I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?

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As long as the amount due on the first mortgage is less than 125% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

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Will refinancing lower my payments?

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That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.

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However, if you are paying interest only on your mortgage, you may not see your payment go down. BUT… you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

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What are the terms of the refinance and what will the interest rate be?

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All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate.

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The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

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Will refinancing reduce the amount that I owe on my loan?

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No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

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Can I get cash out to pay other debts?

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No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

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How do I apply for the Refinance Initiative?

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Call or email me today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately.

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As part of the discussion, we may need to look at the following information:

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  • Recent pay stubs to help determine your gross (before tax) household income.
  • Your most recent income tax return.
  • Information about any second mortgage on your house.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all other debts.

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A similar program is Available for those with FHA mortgages (Streamline Refinance).

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Contact Paul  for more information

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www.PaulCantor.info

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Mortgage Payment Savings

It’s no secret that mortgage rates are at record lows. But according to many so called “gurus “, it only makes sense to refinance if you can save x or y amount of dollars. Don’t let all the guru noise or internet-babble discourage you from checking things out for your own situation.

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For example, consider someone who just purchased a home or refinanced their $200,000 mortgage several months ago. They might have a mortgage rate of 5.5%. Many “experts” would say it’s not worth it to refinance unless they can lower their rate by a full 1% without paying points. However, what if they paid $4,000 in points and closing costs and bumped up their mortgage balance to $204,000? Here’s what their situation might look like:

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Old Payment = $1,135.58

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New Payment = $1,033.64

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Payment Savings = $101.94

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If they save the $101 @ 4.5% they will have: If they save the $101 @ 6% they will have:
$6,782 in 5 years $7,047 in 5 years
$15,271 in 10 years $16,552 in 10 years
$25,897 in 15 years $29,373 in 15 years
$39,210 in 20 years $46,666 in 20 years
$76,698 in 30 years $101,456 in 30 years

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Wow!!

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If this represented your situation, and you listened to all the “gurus” telling you not to bother refinancing, you would actually LOSE up to $101,456! Do yourself a favor. Put that $101,456 back in your pocket by calling me today! Although I’m not promising that you will qualify to save exactly this much money, I will help you save as much money as possible in your situation. As a Certified Mortgage Planning SpecialistTM(CMPS®), I am committed, qualified and equipped to help you evaluate your options and make smart choices. Contact me for more information

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Email

(804) 433-1510

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Money Magazine suggests to:

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1) Take a Vacation Abroad

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2) Refinacne to a Shorter Term

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3) Look for HIgher Yield Bank or Credit Union Accounts

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Three ways to profit from falling rates.

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www.PaulCantor.info

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In this statement made today, HUD has announced new Mortgage Insurance Premiums will go in effect October not September:

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“Last week, FHA Commissioner David H. Stevens announced plans for implementing FHA’s new mortgage insurance premium structure. As we work to publish a Mortgagee Letter, it is our intention to announce that based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010..


“Over this past week, the industry responded with support of the new fee structure, but voiced strong concern about having system changes ready in time to meet the original September 7, 2010 deadline. Since these system changes impact regulatory disclosures, lenders expressed they must have the additional time to implement and test systems. FHA took this feedback seriously and has accommodated the need for additional time.”

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www.paulcantor.info

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Fed Open Markets Committee will reinvest in treasuries.  Good news for mortgage rates..

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Today’s FOMC meeting has adjourned with no change to key short-term interest rates. However, the post-meeting statement did give us a bit of a surprise that was quite favorable to the bond market and mortgage rates. In the statement the Fed indicated that they expect the economy to grow at a slower pace than estimated at the last FOMC meeting in late June. They renewed their “subdued” outlook for inflation, which is the key point for the bond market and the indication that they expect to keep key interest rates at their current level for an “extended period.” That leads market participants to believe that the Fed is still concerned about the economy’s ability to expand and maintain momentum.
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The surprise came from an announcement that the Fed will use funds from its holdings in mortgage bonds to buy more government debt. What this means is that the Fed is taking its interest payments and reinvesting them int o the economic recovery. This will be a much smaller campaign than we saw from them last year and early this year, but it is still considered good news. The goal is to help keep long-term interest rates low, such as home mortgage rates and corporate bond rates, in an effort to spur more spending and economic activity. The general consensus is that the impact this will have on the economy is minimal, but it does show that the Fed is attentive to current conditions and is ready to take more measures if needed..
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The financial markets have rallied after the announcement was made, particularly bonds. The stock markets erased a good part of their earlier losses, while the bond market extended its morning gains.

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Read: More  Economy needs more help, Fed says MarketWatch First Take – MarketWatch.

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www.PaulCantor.info

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HUD has been asking for this, and congress has finally delivered.  HUD now has the authority to increase the monthly MIP (Mortgage Insurance Premium) on FHA loans and plans to begin doing this next month.  FHA loans with case numbers issued on or after September 7, 2010 will have lower up front (typically financed) mortgage insurance premiums but higher monthly premiums.   This will translate into higher monthly payments and less people qualifying for loans.

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The bill that passed congress is expected to be singed b President Obama shortly allows FHA to almost triple the monthly premium, which could mean the equivalent a rate increase of 1.125%.   Initial plans by HUD are to increase the monthly MIP to the equivalent payment increase of 0.33% to the mortgage rate.

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If anyone is considering buying a home or refinancing talk to your loan officer now to avoid this hidden cost

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www.PaulCantor.info

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Treasuries and mortgage rallied Friday on yet another weaker than expected employment report for July; job gains were less than expected and lower revisions in June non-farm jobs pushed the bellwether 10 yr note to new lows at 2.82%, previous to Friday’s decline the 10 yr had built strong resistance at 2.88%. This morning the stock indexes are better thus pressuring the rate markets. At 9:00 the 10 yr note -3/32 at 2.83% and mortgage prices off 1/32 (.03 bp). There are no economic releases today to think about. At 9:30 the DJIA opened +30, 10 yr note -4/32 2.83% +1 BP and mortgage prices -1/32 (.03 bp).

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Tomorrow Treasury begins its quarterly refunding with $34B of 3 yr notes auctioned at 1:00. Of more interest tomorrow, the FOMC meeting will conclude with its so-called policy statement at 2:15 pm. The statement is always very short and usually has nothing new; the statement will likely re-iterate for the umpteenth time that the Fed will keep rates low for an extended period, that the economy is slowly recovering, that consumers are still consolidating, and that unemployment and the housing sector are keeping consumer spending from increasing much.

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The key economic data this week doesn’t hit until Thursday and Friday with weekly claims, July retail sales, July CPI and the mid-month U. of Michigan consumer sentiment index. Treasury will conduct auctions on Tuesday, Wednesday and Thursday, borrowing another $74B from taxpayers to fund the expanding federal budget deficits brought on by failed stimulus, bailing out the big banks and falling tax revenues. Meanwhile in Washington politicians from both sides of the aisle are giving themselves raises and while no tax increases are likely until after the Nov elections, the tax increase talks are picking up momentum.

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This Week’s Economic Calendar;

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Tuesday;

8:30 am Q2 productivity (+0.1%)

Q2 unit labor costs (+1.4%)

10:00 June wholesale inventories (+0.4%)

1:00 pm $34B 3 yr note auction

2:15 pm  FOMC policy statement

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Wednesday;

7:00 am MBA mortgage applications

8:30 am June trade deficit (-$42.5B)

1:00 pm $24B 10 yr note auction

2:00 pm July Treasury budget deficit (-$169B)

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Thursday;

8:30 am weekly jobless claims (-14K to 465K)

1:00 pm $16B 30 yr bond auction

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Friday;

8:30 am July retail sales (+0.5%; ex auto sales +0.2%)

July CPI (+0.2%; ex food and energy +0.1%)

9:55 am U. of Michigan consumer sentiment index (70.0 frm 67.8)

10:00 am June business inventories (+0.2%)

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So far this morning the rate markets are managing to hold Friday’s gains with the stock market hanging around unchanged.  The coming Treasury auctions will likely keep rates in a narrow and relatively unchanged area as long as equity markets keep focused on the weak economic outlook. That however is where the rubber meets the road; the equity markets remain convinced all is right and consumers don’t matter as much in this recovery. Amazing how the spinsters can paint a picture any way convenient.

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20 Year Fixed Rate Mortgages are becoming the popular choice for many home owners.  Most home buyers and home owners only think fix rate mortgages come in two varieties:  30 year fixed and 15 year fixed.  Actually fixed rate home loan notes are written in many other terms including 4o year fixed, 25 year fixed, 20 year fixed and 10 year fixed rate mortgages.

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Many want a fifteen year loan as the rate is lower that that of a thirty year loan but do not like the payment.  The solution is often the unknown twenty year mortgage.  20 year fixed rate mortgages split the difference between the 30 year and 15 year options for those who can afford to spend more money on their monthly housing payment.

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www.PaulCantor.info

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3 cheap ways to make your old kitchen feel new.

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According to a an article at the Drudge Report the Obama administration is about to make an executive order, that will direct Fannie Mae and Freddie Mac to forgive debt on loans that have balances over the value of the homes securing the mortgages.  They are also reportedly going to ask the GSE’s to ease underwriting guidelines.  This may open the floodgates for refinances.  According to experts this would be a last ditch effort to influence elections as it would be hard for the administration to get anything passed though both houses of congress before the November congressional elections.

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www.PaulCantor.info

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