Thinking about buying a home?  Maybe you should act now.  Proposed  and slated changes to FHA loans will mean it will be tougher and more expensiveto buy a home.  Read this article from MarketWatch:

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Homebuyers beware: Tougher rules for FHA loans – MarketWatch.

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www.paulcantor..info

Inquire about qualifying for an FHA Mortgage

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Yes many home owners who owe more on their homes than the value of their homes are able to refinance at today’s low mortgage rates.  FHA streamline refinances are available without requiring an appraisal and without documenting income (employment is verified).  Also Fannie Mae is allowing many of the loans it holds to refinance without a new appraisal through the Fannie Mae Refi Plus program.

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Go ahead check into it while rates remain low.

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www.paulcantor.info

e-mail Paul

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The Fed last week at its FOMC meeting came as close as it likely can in assessing the near future for the US economy as declining; “The pace of economic recovery is likely to be more modest in the near term than had been anticipated”. The Fed can’t outwardly get much more negative without a self-fulfilling prophesy; the statement ratified what was becoming increasingly obvious even to the bulls that staunchly resisted reality. At the meeting the Fed, increasingly concerned that the economy is teetering, initiated another quantative easing move when the FOMC said the Fed would continue buying treasuries, using pay downs on the $1.25T of MBSs it holds from last year. A clear sign the Fed “hopes” lower rates will help—-pushing on a string however, low rates alone will not stop the economic slide. The wake-up call should be obvious; until consumers are confident their jobs are secure and the housing sector improves lower rates won’t do the job.

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This week brings us the release of four reports that may influence mortgage rates, but only one of them is considered to be highly important. With no relevant auctions or speeches on tap, I suspect we will see much less movement in mortgage rates this week compared to the past couple of weeks. There is no relevant data scheduled for release tomorrow, so look for the stock markets to drive bond trading and mortgage rates.

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This Week’ Economic Calendar:

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Tuesday;

8:30 am July housing starts and permits (+1.2% and -2.3% respectively)

July Producer Price Index (+0.2%, ex food and energy +0.1%)

9:15 am  July Industrial Production (+0.6%, +0.1% in June)

July Capital Utilization (74.5% frm 74.1% in June)

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Wednesday;

7:00 am  MBA weekly mortgage applications

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Thursday;

8:30 am  Weekly Jobless Claims ( -9K to 475K)

10:00 am July Leading Economic Indicators (+0.2%)

Aug Philadelphia Fed Business Index (+7.5 frm +5.10)

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Three of the week’s four reports will be posted Tuesday morning. The first is July’s Producer Price Index (PPI) that gives us an indication of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for an increase of 0.2% in the overall and a 0.1% increase in the core data reading. A larger increase in the c ore data could push mortgage rates higher Tuesday morning. If it reveals weaker than expected readings, we may see mortgage rates improve as a result.

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The second report of the day is July’s Housing Starts data. This report gives us an indication of housing sector strength and future mortgage credit demand. However, it isn’t considered to be of high importance to the bond market or mortgage pricing and usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts. It is the least important of the week’s reports and is expected to show a small increase in construction starts of new homes. The lower the number of starts, the better the news for the bond market, as it would indicate a weaker than expected housing sector.

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July’s Industrial Production is the third. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important to the markets, but will likely not have much if an impact on mortgage rates due to the importance of the PPI reading. Current forecasts are calling for a 0.6% increase in production.

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The Conference Board will give us its Leading Economic Indicators (LEI) for July late Thursday morning. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates Thursday if the stock markets remain calm. It is expected to show an increase of 0.2 % in the index, indicating minor economic growth over the next couple of months.

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Overall, look for Tuesday to be the busiest day of the week with the PPI being released. The rest of the week will likely be influenced more by stock prices than anything else, which may be quite volatile. Therefore, keep an eye on the markets and maintain contact with your mortgage professional if you have not locked an interest rate yet.

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This video explains why now is a great time to buy investment properties and benefits of holding them in an IRA.

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www.PaulCantor.info

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Freddie Mac announced the results of its quarterly Product Transition Report Thursday.  Two quotes from  Freddie Mac  Chief Economist, Frank Nothaft sum it up:

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“Average interest rates on 30-year and 15-year fixed-rate mortgage loans fell pretty consistently through the latter half of the quarter, hitting 50-year lows in June according to Freddie Mac’s Primary Mortgage Market Survey®. The ability to lock in a principal and interest payment at below 5 percent for 30-years is rare enough. The fact that a 30-year fixed-rate mortgage can be obtained for 4.5 percent or a 15-year mortgage for 4.0 percent is an amazing opportunity for borrowers.”

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“The share of borrowers shortening their amortization terms is at its highest level in six years. In the second quarter of this year, 30 percent of borrowers who originally held a 30-year fixed rate loan refinanced into a 15- or 20-year FRM. If the borrower had a 30-year fixed rate loan at a 6.5 percent interest rate and a $200,000 principal balance, they could refinance and cut their payment by about $250 a month with a new 30-year fixed-rate loan or for about the same monthly payment as their old loan they could save some $70,000 in interest over the life of the loan with the shorter 20-year term loan.”

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www.PaulCantor.info

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The worst is over for the housing market according to a Reuter’s article.  It predicts no double dip for housing prices in major US Markets.   A slight increase in values is predicted.  Don’t get the champagne out, unemployment is high, lenders have tightened up guidelines and there is a lot of supply on the market;  it will take some time before we see soaring prices.

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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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