Fed Buying Mortgages

Only a few months after the Fed stopped its $1.25 trillion program of purchasing mortgage backed securities, the Wall Street Journal reports Bernanke and Co. may start buying mortgaged backed securities again.  This is not adding any additional capital to the program but re-investing proceeds from mortaring mortgage backs it currently owns.  Previously it was thought that the funds from maturing bonds would not be re-invested in more mortgage backed securities.

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With rates as low as they are many are refinancing loans at higher rates and the fed is re-cooping some if its investment sooner than expected.  This is taken by many as a sign that the Fed is concerned about the lackluster recovery and possibly a double dip recession.  However this may mean we could enjoy these super low rates a little longer, hopefully fuelling the housing market.  Advice is not to wait for rates to drop further but to take advantage of historic low rates through refinancing or buying a new home.

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www.Paulcantor.info

(804) 433-1510

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US GDP @ 2.4%

Jul 31, 2010

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Cash-In Refinance

Jul 31, 2010

Most of us have heard about a cash-out refinance.  That is using some of the equity on a home to pay down high cost debt or to fund college or home improvements.  Today their is a new trend of Cash In Refinancing.  Home owners are bringing money to the refinance closing  to:

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– Elimiate  PMI.

– Reduce mortgage payments with the combination of lower rate & lower loan balance.

– Reducing term of loan and keeping payments the same.

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Since CDs and money market accounts aren’t paying high rates, many homeowners have decided to exchange liquidity for equity.  Beware getting this equity back into a liquis asset is more difficult that it was a few years back.  Always get advise from a financila planner and / mortgage professional.

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www.paulcantor.info  (804) 433-1510

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by | Categories: main, Refinance | No Comments

4.54%, that is the average 30 year fixed rate mortgage for the week ending July 22, 2010, according to Freddie Mac.  This rate is down slightly (down 0.2%) from the previous week,   the average 15 Year rate for the week ending July 22 was 4.03%.  This makes it the sixth consecutive week of historic low fixed mortgage rates.

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The millions dollar question is how long week will keep seeing these record low rates.

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A recent survey shows a slow recovery, meaning short term interest rates will remain low.

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The  AP Economy Survey projects weaker growth in the coming months as key components of the economy – employment and consumer spending – continue to struggle. (July 29)

Watch the video.

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While this probably means rats for adjustable rate mortgages (ARMs) will remain low for a while the impact in fixed rate mortgages is unknown.  Some foreign economies appear to be rebounding faster the the US economy, which may mean rates on 15, 20 and 30 year fixed home loans may inch up.  Advise here is to go ahead and take advantage of the current low mortgage rates.

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www.paulcantor.info

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Mortgage Check-up

Jul 27, 2010

mortgage check-up

Like an annual physical with a family physician, it is a good idea to perform an annual physical of a mortgage.   For most a mortgage is the most important debt and when managed properly it is a an asset. When performing a mortgage check-up an experienced mortgage planner will look at a persons whole financial picture and in many cases will advise clients to maintain the course. However, life changes such as change in employment, health care, family status, and education needs may alter those plans. A good mortgage planner will help with these changes. Sometimes mortgage rates have dropped and taking advantage of lower rates may save one tens of thousands of dollars.

PaulCantor.info

(804) 433-1510

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The mortgage planning process is different than the typical “shopping for a mortgage” experience.

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The typical shopping for a mortgage experience includes:

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Wasting your valuable time trying to save $25/month by comparing rates, fees and closing costs among different lenders.

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Wasting your valuable time trying to baby-sit the mortgage company you’ve reluctantly chosen to work with.

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Being promised one thing and then getting something different.

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Being “sold” on one mortgage product over another.

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The mortgage planning relationship is about you:

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Receiving valuable financial advice and guidance that can literally save you hundreds of thousands of dollars.

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Trusting a professional who is committed, qualified and equipped to deliver what they promise.

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Experiencing a “concierge” level of service when you are in the market to buy a home, refinance your mortgage or make cash flow changes to enhance your lifestyle.

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Implementing a defined financial plan of action in helping you achieve your life goals and dreams.

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Maintaining an ongoing high trust relationship with a team of financial advisors who can help you make necessary changes in your debt, cash flow and home equity planning strategies.

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This is a relationship, not just a transaction. As such, it requires a defined system of accountability in order to work effectively. The Mortgage Planning Process consists of the following five steps:

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1. Establish and define the client-planner relationship.

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Mortgage Planner Should:

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Ask you for information about your financial situation and your time frame for results and success.

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Gather all the necessary documents before giving you the advice you need.
Clearly explain or document the services they will provide to you.

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Explain how they will be paid and by whom. Unless you are willing to pay a flat fee for mortgage and real estate equity advice, mortgage planners are typically compensated through a commission structure set up with the lenders.

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You Should:

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Clearly explain how financial decisions are made in your household and include all the key decision makers in consultations with your mortgage planner. Be prepared to share personal and financial information with your mortgage planner in order for them to be able to advise you on how best to achieve your goals.

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2. Analyze and evaluate your financial status.

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The mortgage planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your credit situation, real estate equity, debt situation and cash flow.

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3. Develop and present mortgage planning recommendations and/or alternatives.

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The mortgage planner should offer mortgage planning recommendations that address your goals based on the information you provide. The mortgage planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The mortgage planner should also listen to your concerns and revise the recommendations as appropriate.

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4. Implementing the mortgage planning recommendations.

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You and the planner should agree on how the recommendations will be carried out. The mortgage planner may serve as your “coach,” coordinating the whole process with you and other professionals such as CPAs, CFP® professionals, attorneys, Realtors, builders, insurance professionals and other qualified advisors.

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5. Monitoring the mortgage planning recommendations through a quarterly or annual mortgage and equity management review.

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You and the mortgage planner should agree on how you will both monitor your progress toward achieving your goals. During this review, your mortgage planner can adjust their recommendations, if needed, as your life changes. Most often, this process involves periodic assessment of:

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Your fluctuating cash flow needs.

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Changing market interest rates and mortgage strategies.

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Income and career alterations.

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Family changes including:

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Children’s financial needs.

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Caring for elderly parents.

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How your real estate equity and investments are performing from both a cash-flow and “internal rate of return” perspective.

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CMPSinstitute.org

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via Richmond-area home sales jump 23% in 2nd quarter | Richmond Times-Dispatch.

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APR calculations have lost their uniformity.  With the introduction of the new Good Faith Estimate this year the industry has developed and adopted different ways of calculating APR.  The new GFE was supposed to make shopping and comparing loan programs easier.  In many ways it has simplified thing, most notably by requiring all lender fees to be summed up in the adjusted origination charge.  For mortgage originators who do no intend to service the loan the yield spread premium (YSP), costs paid by the lender for the borrower, is sometimes not included in the APR calculation.  When this is the case, the APR is higher for the non-serving lender (broker) versus that of a servicing lender, even though the actual cost to the borrower are the same, Since over disclosure has been accepted by the industry, our processing and closing staff routinely re-disclose TIL statements, as the method for calculating the APR seems to vary by date / document preparer.  We want to make sure there are no hick-ups on your loan that will hold-up closing and sent you a TIL with an APR calculated not including the negative fee being paid for you (YSP).

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The new GFE regulations were created with intentions to help the consumer, but in practice have actually made things more confusing.

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Low mortgage rates and the financial reform act mean that now is the time to buy a home.

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