Over the last 12 months the Dow Jones Stock Index has fallen nearly 20%. Considering how battered real estate has been relative to other parts of our economy, you’d think Folsom home prices haven’t fared much better. But, in actuality, the Folsom median home price has remained essentially flat. In June 2008, it was at $384,000, and in June 2009 it was $382,000. It feels great to live in a community that has weathered the real estate down-turn better than others in our region. Since real estate prices in the Sacramento region peaked in August of 2005, the median home price in Sacramento county has fallen 54%. In Folsom, only 30%.
Also, here is a wonderful article that details how many home renters are becoming home owners as the difference between their old rent payment and new mortgage payment has become marginal. Give it a read.
Buying is now cost-effective for some renters
As you may know, President Obama and the US Treasury have developed a program called “Making Home Affordable” that aims to allow homeowners to refinance at competitive rates even though they may not meet traditional credit and/or home equity requirements. I believe this program has the potential to open doors for millions of Americans to refinance into super-low fixed rates despite their falling home values, and I want my clients to be the first to seize this opportunity.
The program was announced in early March, and it has taken several weeks for the lending industry to determine how to best implement the program. Over the last two days, however, the following feature highlights of the program have been announced:
Loan-to-value percentages of up to 105% will be allowed, meaning homeowners who have little to no equity may be eligible to refinance
No mortgage insurance will be required if the current loan did not originally require mortgage insurance
No credit score minimum, but you must have solid mortgage payment history
Loans up to $417,000 will be eligible
Primary residences, vacation homes and investment properties are all eligible
Only loans that are currently owned by Fannie Mae or Freddie Mac will be eligible
Beginning next week, “Making Home Affordable” refinances will be offered by two of my top lenders!
My team and I will be working over the weekend to exhaustively review hundreds of our client’s situations to better determine who may be eligible for this unprecedented program. Simply email me at to indicate you would like me to research your eligibility and contact you as soon as possible. Also, don’t be shy about forwarding my blog to your friends, family, neighbors, and co-workers who may benefit from this program. I’m sure you have someone you care about that needs this refinance opportunity to improve their financial well-being. It would be my honor to take care of your loved one in the same trusted manner I have done for you over the years. Remember, referrals are the heart of my business.
As your committed mortgage and real estate consultant, I am excited about proactively working with you in the coming days to take advantage of this long awaited and valuable opportunity.
Does the current economy have you reaching for the panic button? If so, I hope to calm your nerves and set the record straight about credit markets. If you have two eyes and a pulse, you’ve undoubtedly been reading and watching reports about the wacky economic conditions our world is facing. These stories paint the picture of frozen banks refusing to lend to anyone: small businesses can’t get loans, the state of California can’t get loans, and home buyers can’t get loans. I don’t know about businesses and governments, but I am here to tell you that home buyers are not only getting loans in the current “credit crisis”, but they are getting competitive rates as well. Let me repeat myself: mortgage loans are still competitive & available for qualifying borrowers.
The only way I know how to prove this is to give you the examples of clients I am working with RIGHT NOW:
1.) 1st-time home buyer Mr. B has a 714 credit score and can document his income. He has a 5% down payment that he is taking out of his retirement accounts penalty-free. His rate is currently locked and approved for a 30-year fixed loan at 6.5% without paying any additional mortgage insurance.
2.) 1st-time home buyer Ms. S is a Veteran who qualifies for 100% financing from the federal government. The seller is paying her closing costs too, so she is buying her home with literally no money down and obtaining a 30-year fixed loan at 6.5%.
3.) 1st-time home buyer Mr. C has a marginal credit score of 646. However, his 10% down payment along with his $40K in the bank are allowing him to qualify for a 30-year fixed loan at 6.5% with monthly mortgage insurance.
4.) Home-buyer Mr. L has a 20% down payment and awesome credit. He is obtaining a 30-year fixed rate at 6.00%.
I emphatically share these examples to give you the straight scoop. Some of these clients are not “perfect” borrowers, yet financing is still available to them. While the media, who is feeding off our fear, is convincing us our global economy has screeched to a halt, their message is not entirely true. I assure you that the mortgage industry is still “liquid,” meaning money is flowing from banks to borrowers at healthy rates.
This letter hopefully counters the barrage of over-inflated hysteria you’ve been reading about credit markets; specifically the mortgage market. I don’t doubt the fact our economy is facing serious and unprecedented issues, but I refute the over-generalizations that are being made about credit markets. This is not an attempt to find a silver lining, but rather a simple matter of fact. Mortgage financing is still readily available to help home buyers take advantage of the low prices in our housing market.
Rather than reaching for the panic button, I urge you to stay grounded through these uncertain times. Don’t follow the herd out of fear. Lastly, take action to help fix our country’s troubles; get to the polls on November 4th and make a difference.