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HARP 2 refinance program in MN and WI

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HARP 2.0 refinance program details in MN and WI.

St Paul, MN: The much anticipated revised HARP Refinance Program (HARP 2) is now in effect, making it much easier for underwater home owner to refinance their mortgage into today’s low mortgage rates.

The two biggest guideline changes to the HARP 2 program include the POSSIBILITY of unlimited Loan-to-Value and the POSSIBILITY to refinance even if you have Private Mortgage Insurance (PMI). This opens up financing opportunities for seriously upside home owners who have kept up with their current mortgage obligations.

There is a LOT of misinformation out there... The reality is NO LENDER ANYWHERE can promise you a HARP 2 refinance approval WITHOUT having a full application and submitting that application through either Fannie Mae or Freddie Macs automated underwriting computers (AUS).

 

Who owns my mortgage loan?

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Who owns my loan?

Minneapolis, MN: Until recently, no one really needed to know, and no one really cared who ultimately owns their mortgage loan. Home owners receive their monthly statements, and make their monthly payments, to their mortgage company (or mortgage servicer).

With numerous program available to assist homeowners, including HARP 2, the Home Affordable Refinance Program, which require the loan be owned by Fannie Mae or Freddie Mac, it is very important to know who, and if they own your mortgage loan.

There are usually a few people involved in your loan process:

  • The Originator: The company who did the original loan. This could be a bank, broker, or direct mortgage company
  • The Servicer: The company now providing the statements and accepting the payments is only providing the service of billing, statements, customer service, etc. This company could also have been your originator.
  • The Investor:  This is usually not the company that provided the funds originally to make the loan, but a company that may hold your loan permanently, or sell it off to someone else, like Fannie Mae and Freddie Mac. Many times this company also becomes your loan servicer.
  • Actual Owner / End Owner: This could be a bank, mortgage company, or some kind of investor group. For a large number of homeowners, this is Fannie Mae or Freddie Mac.
Who owns my mortgage loan? – Click to find out

 Click here for a HARP 2.0 Lender in MN and WI

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What day of the month is best to schedule a home closing?

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I just read this on a site primarily for Real Estate Agent:

“For the first time home buyer who is low on Cash, I would highly recommend closing at the end of the month.”

WOW…   As a licensed mortgage professional, I completely disagree with this statement from Real Estate Agents!” The days of interest scare, and false illusion of some serious savings has caused many problems for many people over the years.

My advice: CLOSE WHEN IT IS CONVENIENT – Not simply at the end of the month.

On any mortgage loan closing, you start paying interest the day you sign. Many people tell you to close the end of the month because you will save a lot of month in closing costs by doing so. This is misguided advice.

You are NOT paying “additional” closing costs – you are simply paying interest starting the day you purchase the home. Close whatever day makes most sense for YOU!

Let us take a $200,000 loan, 30-year fixed, at 4.00%

  • If you close March 30th, your first payment is 32 days away (May 1). You pay two days of interest at closing ($44.00)
  • If you close April 2nd, your first payment is 58 days away (June 1). Sounds great, but you will pay an additional 28 days of interest at closing ($622.22)

Appears to be some significant savings – but lets do more math. With either closing date, your mortgage (loan only) payment is $954.83.  So if we assume the 60-day window of the “closing month” and when the first payment is due using either method, and calculate what each person will have needed to pay out-of-pocket including their June 1st payment, we get:

  • Option 1:  Pays $44 for two days of interest plus two mortgage payments  = $1953.66
  • Option 2: Pays $622.22 at closing, plus one mortgage payment = $1577.05

Completely opposite of what the Realtor said, you actually just saved $376.61 by closing on the 2nd day of the new month, versus the last day of the last month.

Another aspect – The last week of every month, is extremely busy for both the Closing Agent and your mortgage lender. There is a larger possibility that an error may be made during this time. You may also find the Closing Agent much more relaxed and personable if she doesn’t have 8 other closings scheduled the same day as yours. Anytime between the 4th and 24th of the month are good days to close.

Moving considerations: Let us say you expect to closing on your new home and move out of your current residence the last day of the month. You give notice to your landlord to end your lease and arrange for movers or to rent a truck. Then, your loan closing gets delayed for 5-days. This happens ALL THE TIME, especially with foreclosures and short-sales. You are now homeless! New tenants could be moving into your apartment, and the movers are going to charge you for wasting their time. You could be forced to live in a motel for a couple of days!

A Better Plan: allow for a 5-7 day overlap between closing and moving. In the long run, it is not nearly as expensive and it will sure give you peace of mind.

Moving trucks/movers: Go price out moving trucks. They are significantly cheaper if renting in the middle of the month versus when everyone else is moving at the end of the month.  The “cash strapped” buyer could have easily spent the difference in the cost of a moving truck.

TIPS FOR A SMOOTH HOME LOAN CLOSING – by a guy who has been to thousands.

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Condo Insurance – What you don’t know can cost you a lot of money

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What you MAY NOT know about Condo insurance

Get a FREE Condo Insurance HO6 Policy Quote

Newer lender regulation REQUIRE people owning a condo and even some town homes to get homeowners insurance. This policy is similar to a “renters insurance policy“, but is actually called an HO6 policy.

If you or one of your clients owns a Condo or a Townhouse, there is an important coverage to consider.

It is called “extended protection”.  this coverage protects the owner for any damages that may occur that the owners association will not pay because the master policy for the association has a deductible of $5,ooo or $10,000.

If for example, the owner grills out on the deck and gets too near the vinyl siding and damages it,  the association will make them fix it but will not pay for repairs until the deductible is reached.  So the owner may be on the hook for that 1st  $5,000 or $10,000.

With extended protection,  insurance will pay the damage up to the deductible.  And the coverage is relatively inexpensive.

Why you should wait for HARP 2.0

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Why you should wait until April to get a HARP 2.0 Loan

Just a few years ago, consumers with weaker credit getting a conforming mortgage loan (one designed to be sold to Fannie Mae or Freddie Mac) got a great deal.  If you barely qualified with a low 620 credit score, you got the exact same rate as someone with an excellent 800 credit score.

Wait for better HARP 2.0 Interest Rates

When the mortgage markets collapsed and the housing agencies started hemorrhaging cash, they instituted new fee policies known as Loan Level Pricing Adjustments (LLPA) and Adverse Market Delivery Charges (AMDC) as a means to fix their balance sheets on the backs of homeowners that were still able to obtain loans.

The fees were intended to price loans based on the risk inherent in each loan. LLPA is the more significant of the two fees. It adds fees to a loan based on loan type (purchase, rate and term refinance or a cash out refinance), loan to value, and credit score. To illustrate the impact of the LLPA, a borrower with a 620 credit score will pay a rate nearly 1% higher than a borrower with a 740 credit score.

Because of the inherent risk of HARP refinance, most consumers over 80% loan-to-vale have been hit hard by AMDC and LLPA requirements

HARP 2.0 – Best Change Worth Waiting For

As part of HARP 2.0, AMDC and LLPA rules have been changed, providing consumers who wait a potentially much better interest rate.

  • Reduced fees charged by the agencies on loans with a loan to value in excess of 80%.
  • On loans with amortizations of 20 years or less, the LLPA and AMDC are eliminated.
  • On 25 and 30 year loans, the cap is reduced, which means the borrower with the lower score in the example above saves another .25% in rate.
  • Removal of loan to value cap on fixed rate mortgages (effective March 17th 2012) – no equity, no problem. In fact, negative equity refinances will be allowed.

Eliminating the fees on 15 and 20 year loans is significant. Rates on those loans are already well under 4%, so this should open up HARP refinance opportunities for borrowers that are interested in the rapid principal reduction that comes with shorter amortization mortgages.

Not Until After March

When lenders underwrite loans, the first step is to log into Fannie Mae or Freddie Macs computers to get an underwriting decision. These two agencies have indicated lenders won’t be able to do that until sometime around March 17th. To get the better mortgage rates from HARP lenders, you need to wait!

One caution about the changes to the loan to value cap; sometimes lenders do not adopt changes announced by the agencies word for word. Some overlay their own underwriting guidelines and they are always more conservative. While Fannie and Freddie may state they don’t have a loan to value limit for fixed rate HARP loans, many lenders will have a cap.

The agencies continue to tweak their programs with the goal of improving the performance of the loans in their portfolio. If you haven’t refinanced yet, maybe this change is the one that will benefit you.

Stupid Appraisers?

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FHA guidelines state that a house has to meet MPR (minimum property standards) for existing houses, and MPS (minimum property requirements) for new construction. FHA is very concerned with the three S’s: Safety, Security, and Soundness.

When a Realtor was asked what the three FHA S’s were, he replied, “Stupid, more stupid, and seriously stupid FHA appraisers,” which I thought was pretty funny, however, a little off the mark. The three FHA S’s have to do with the following:

Click here to READ the FULL STORY

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New Mortgage Statement to eliminate confusion?

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Classify this under Government solution without a problem.

Under the 2010 Frank – Dodd Financial Reform Act came a lot of mandated changes that won’t fix anything, but created a lot of extra paperwork and bottlenecks for the housing and mortgage industry. One of those items was the creation of the Consumer Financial Protection Bureau.

I just read that the CFPB is out to make reading your monthly mortgage statement easier!  Was this really a problem? I’ve had plenty of mortgage loans from all sorts of different servicers, and I’ve never been confused.

According to many consumer protection group, confusing monthly statements has been a huge contributor to the current housing mess.  Huh??  I’m not fan of the large banks, but is this really a problem the government should be mandating?

The CFPB is apparently required under the 2010 law to put new mortgage servicing rules in place to help consumers. The law has specific requirements for mortgage statements, including a phone number and email address for the customer to get information about the loan, as well as information about housing counselors.

The newly created Consumer Financial Protection Bureau has finally developed a proposed new one page “standardized” monthly mortgage statement supposedly designed to provide clear information about your loan.

The prototype released Monday included a breakdown of how much of the monthly payment went to principal, interest and escrow. The form also detailed the outstanding principal, maturity date, prepayment penalty and, for adjustable-rate mortgages, the time when the interest rate could change.

Many servicers already provide such information on monthly statements, but there are no industrywide standards.  Initial reaction from servicers to the agency’s proposal was positive.

You can see a working draft of the standardized statement on its website, www.ConsumerFinance.gov, and give  input before a version of the form formally is proposed this summer.

WE EMPLOY PEOPLE TO DO THIS?  This is what is wrong with this country!

What do yo think?

 

 

$25 Billion Mortgage Settlement for lender abuses?

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FEDERAL GOVERNMENT AND STATE ATTORNEYS GENERAL REACH $25 BILLION AGREEMENT WITH FIVE LARGEST MORTGAGE SERVICERS TO ADDRESS MORTGAGE LOAN SERVICING AND FORECLOSURE ABUSES

$25 billion agreement provides homeowner relief & new protections, stops abuses

WASHINGTON–U.S. Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced on 02/09/12 that the federal government and 49 state attorneys general have reached a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future…

To read this press release in its entirety, look below:

The Real Story behind the story

Foreclosure abuses? This is a complete overstep of the government, a very bad precedent, and a major reason why this country is going down hill fast.

Whatever the reason, I’m sorry you lost your home to foreclosure.  I really am. But the bottom line is simply this.  You signed a promissory note. You promised to pay back the home loan. Period.  It didn’t say you promised to pay back unless...   Unless, you lost a job, unless the house lost value, etc. Nowhere in the documents did it say the bank was required to write down your mortgage balance, nor agree to any sort of loan modification.  The bank is a business.  They took a financial risk giving you a loan because of your promise to pay it back.

The abuse?  First a little background. When a lender forecloses on someone, they have to meet certain protection guidelines, including things as timely notice of impending action, etc. Ultimately, an officer of the company must sign off on the final foreclosure action, certifying the company has followed all required guidelines.

With the overwhelming new rush of foreclosures, the banks couldn’t keep up. So did they make a error. Yes. The banks did make a mistake. No doubt about it.  But what they simply did is rubber stamp the foreclosure certification, and used people other than an officer of the company to sign the document.

The government, after receiving a lot of pressure from consumer groups, and people desperate to save their home, ended up forcing the banks to this $25 BILLION agreement. The agreement will PAY, YES PAY people who were foreclosed on $2000. Many of those still in their home will have their balance written down by an average of $20,000.

Really? Should maybe the banks get their hand slapped.  Sure.  But to the tune of $25 Billion?  Of course not.  The underlying issue shouldn’t be that banks had someone not authorized sign a document, it should be the fact that people (on average) were over two years behind on the payments, and we are now rewarding them.

Bad precedent…  really bad!

 

——————- Full Press Release ——————-

 

Read more

New FEE (hidden tax) makes mortgage loans costs more

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In December 2011, Congress reached a last-minute deal to fund the payroll tax cut extension. The payroll tax extension will provide a 2% tax reduction for individuals making up to $106,800 – so the tax extension will be very helpful for many Americans who are struggling during these tough economic times. But like so many things in our tangled economy, there’s a flip side. In this case, the tax cut deal has a rippling effect that will impact the mortgage world.

Read the full story:

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Top two myths about Real Estate Agents

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With millions of web sites to look at for home for sale listing, it is becoming more and more common for people to feel they don’t need the help of a licensed Real Estate Agent.

More specifically, people seem to ONLY be calling listing agents for the properties you want to see. The thought behind this I suppose is “I can get a better deal if I don’t involve another agent and contact the listing agent directly.”

While the listing agent loves you only calling them, here is why is is usually a costly mistake for home buyers.

Myth # 1- I will get a better deal if I call the listing agent directly.

That listing agent is contractually bound to do what is in the best interest of the seller, and that means getting the highest dollar amount for the sale of the home. NEVER disclose your top dollar or financial ability to get a bigger mortgage loan to them because by law they have to go back to the seller with this information.

Remember…your goal is to pay as little as possible, while the seller’s agent’s goal is to get as much as possible for the seller. No matter what a Real Estate agent claims, this is a clear conflict of interest.

Myth # 2- I can find more homes for sale by calling more than one agent, or looking at multiple web sites.

The days of each real estate office having big books of only their companies listing are long gone. It is mutually beneficial for all Real Estate Agents to have all properties in the same database (call the MLS – or Multiple Listing Service)

All Real Estate Agents in the same area therefore pull the same list of homes available  for sale from the same multiple listing service database. Local agent sites typically interface with the local MLS site a minimum of once per day. If a new house for sale gets added today, EVERYONE local should have it listed tomorrow.

If you saw a home on Zillow, or some other national site, but that particular home didn’t come up in the local agent’s site, remember sites like Zillow & Trulia are NOT updated as often as the local MLS database real estate agents can pull from are. If it is not on the local MLS…  chances are the house that you saw has already been sold or is already under contract.

More importantly, the opposite is more often true. You find a home on a local real estate web site but NOT on the national sites. This is because some local companies do NOT report to the national systems. In my area (Minneapolis / St Paul, MN), the biggest player in the market (Edina Realty) recently stated they will no longer let their listing be show on the big national sites.  This means if you are looking at home for sale here, but on a national site versus a local site, you a NOT seeing over 20% of this areas listing!

The bottom line is the smart move for home buyers, and especially first time home buyers in MN and WI, is to use the services of a good, licensed local real estate agent in any home purchase transaction, and save yourself a lot of time by only looking at one LOCAL REALTOR web site.

Can you qualify for a mortgage with bad credit?

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Can you qualify for a home mortgage loan with bad credit?

FACT: The mortgage and credit crisis which exploded onto the scene in 2007 has eliminated bad credit and bruised credit mortgage loans. Lenders simply don’t offer bad credit sub-prime home loans anymore.

What’s Your Credit Score?
Every lending facility uses guidelines to determine your credit worthiness. Upon reviewing your application, you’re given a credit grade and a determination regarding your loan’s approval or denial. Lenders DO NOT give loans to those with bruised credit anymore. If you are denied by a one lender, contacting 10 more probably won’t help. Click here for some general criteria used within the lending industry to determine credit.

What credit score do I need for a home loan?
Generally speaking, in today’s mortgage world, if your middle credit score is below 640, it is very unlikely that you will qualify for home loan financing no matter what anyone tells you or you see elsewhere on the internet. With a score below this level, you really should save yourself the hassle. Stop attempting to find mortgage loans, and work on improving your scores instead.

Review your credit score?
If you are not sure what your credit score is, you should officially find out. Apply for the mortgage loan, and let the mortgage lender review your exact situation. DON’T ASSUME YOU CAN’T QUALIFY!

CREDIT PROBLEMS & ANSWERS

Late Payments
If your credit has multiple RECENT 30, 60, or 90 plus day late payments, you probably won’t qualify. Especially if those late payments occurred LESS THAN than two years ago. Lenders want a clean recent payment history. Check HERE for some general criteria used within the lending industry when you have late payments.

Credit score graphCollections, Judgements, Tax Liens
If your credit history indicates unpaid collection accounts, most “A” grade loan lenders will require these amounts to be paid off before the loan is funded. FHA typically will ignore them if they are under $500, and more than 2 years old. Medical collection “usually” are ignored. Judgments’ (you got taken to court & lost), are almost always REQUIRED to be paid off before approval.

Bankruptcy & Foreclosures

  • If your bankruptcy is more than two year old, you can usually be approved for an FHA loan with as little as 3.5% down.
  • If your foreclosure was recorded is OVER least three old, you may qualify for an FHA loan with as little as 3.5% down payment.
  • If your bankruptcy is older that 4 years, and you have good re-established credit, you may now qualify for an standard conforming loan.

    • High Debt Ratios
    If your income-to-debt ratios are too high, you can either reduce your personal debt (i.e., pay down your debt), obtain a debt consolidation loan, pay down your debt with funds from the sale of personal assets (boat, camper, etc.), select a lower interest rate ARM loan, or add a co-mortgagor. 

    Is a debt consolidation loan for you?
    If you have any late payments on your record, part of the reason may be because of high credit card debt. If you qualify, you can pay off all of your high-interest credit cards into a low debt reduction refinance loan which may be tax deductible (unlike credit cards, which are NOT tax deductible).

     

    What is your home worth? Find out for free

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    What is your home worth today? Wish you could get a free appraisal?

    Many homeowners are curious about the appraised value of their home. An actual appraisal is expensive, and county tax records do NOT always reflect true market value. As you may be aware, home values are constantly fluctuating, and with the decline in average values, it is important to have an accurate idea of what your home is worth.

    There are many sites that claim to give you are idea, including Zillow, Trulia, and more. It is also a well known fact those sites have very questionable data, giving values that range from close, to crazy far off. The big problem is, where is the data they use coming from and how accurate is it?

    There is a better free tool to answer the estimated appraised value of your home question. This system uses the Freddie Mac Home Price Index ( FMHPI ). FMHPI is calculated using a repeat-transactions methodology. Repeat transactions indexes measure price appreciation while holding constant property type and location, by comparing the price of the same property over two or more transactions. The change in price of a given property measures the underlying rate of appreciation because basic factors such as physical location, climate, housing type, etc., are constant between transactions. Averages of appreciation rates for different geographic areas and time periods are calculated using statistical regressions and the index values are derived from these averages

    While the estimate may not be the actual or appraised value of your property, it can be a much more accurate than Zillow to gauge fluctuations and trends in your market which affect your home’s value.

    CLICK HERE FOR A FREE HOME VALUE ESTIMATE (MN and WI properties only)

     

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    HARP 2 not ready until March 15th – Why?

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    HARP 2 – Not ready until March 15th, 2012
    Minneapolis, MN: There is a lot of consumers interested in a HARP refinance in MN and WI. The Home Affordable Refinance program allows home owners who have lost value to still refinance their homes are today’s low HARP  refinance rates.  HARP has been available since mid 2009.  HARP 2, which was announced in November 2011 removes some restrictions, and should help many more home owners refinance their home loans.

    Officially, the the HARP 2 program started December 1. Unofficially, most lenders won’t be offering it until after March 15th, 2012. Let’s explore and understand why?

    The original HARP program, which allows a home owner to be underwater on their home mortgage loan up to 125% loan-to-value is available today.

    THE BIGGEST DELAY: Simple. Software. When a lender “underwrites” a loan, they actually do so through an AUS, which stands for Automated Underwriting Systems. The computer software evaluates the application, and gives an answer. The underwriter then verifies the computers decision. For example, the software may give a YES answer, then ask for pay stubs to verify income. The underwriters job is to then review the pay stubs to make sure the submitted income is the actual income.

    Both Fannie Mae and Freddie Mac need to reprogram their computers, and they’ve indicated this will become effective March 15th.

    BENEFITS TO LENDERS OF AUS: Can a lender “manually” underwrite a file?  Sure, but the biggest benefit of submitting a file through the automated systems is all about liability. Contracts with Fannie Mae and Freddie Mac protect a lender against liability for underwriting mistakes made by the lender of the original mortgage if the software said YES. Therefore smart lenders are not likely to take on the additional risk of a manual underwritten file.

    THE RULES: Another major issue is simply getting the rules written, and distributed up and down all the lender channels. While Fannie Mae and Freddie Mac have indicated what their rules are, remember that they don’t actually lender to consumers. Lenders lend. Fannie Mae and Freddie Mac simply buy loans from lenders. Therefore there is still a large amount of risk to lenders. Each individual lender needs to review new rules, consider the risk, decide if they even want to participate in the enhanced HARP 2 program, then write their rules and push them out to the Loan Officers on the street.

    THE BOTTOM LINE: Look for most lenders to start pushing out HARP 2 Refinance rules about the middle of February 2012, but not actually doing them until after March 15th, 2012.  Furthermore, expect a huge rush of customer looking to take advantage of the program, creating massive delays with the banks.

    LendingTree Settles lawsuit over misrepresentations to consumers

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    Minneapolis, MN: Out-state online lender LendingTree must pay penalties to Charleston and Berkeley counties of South Carolina as part of a $3 million statewide settlement over misrepresenting “When banks compete, you win”.

    Ninth Circuit Solicitor Scarlett Wilson announced Wednesday the settlement with LendingTree. In 2008, Solicitor Wilson and other solicitors from across the state sued LendingTree for failing to make the required disclosures for mortgage brokers who do business in South Carolina.

    “LendingTree misrepresented to consumers their mortgage applications would be competitively shopped for the best rates,” said Solicitor Scarlett Wilson. “This led consumers to believe that LendingTree was working for them and not against them. Whether prosecuting criminals or bad corporate citizens, I’m going to use every option available to help protect the citizens of Charleston and Berkeley counties.”

    As part of the settlement, Charlotte-based LendingTree will pay more than $400,000.00 in statutory penalties to both Charleston ($284,447) and Berkeley ($121,904) counties as part of a more than $3 million statewide agreement.

    The South Carolina General Assembly passed laws protecting consumers that required mandatory disclosures from mortgage brokers. These laws require mortgage brokers to work for the borrower. At the time, LendingTree was using the slogan in their commercials “When banks compete, you win.‟

    “Despite this settlement of the statutory fines, the actual borrowers, who are not known to us, may be able to pursue their own claims for damages against Lending Tree.” said Solicitor.

    Contrary to what many home owner think, you really can NOT get anything better from some out-state online mortgage company than you can from your local Minnesota based mortgage lender.

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    How people find a Real Estate Agent

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    The two most important people in a real estate transaction is your Loan Officer, and your Real Estate Agent.

    Having an experienced person in these two positions will make for smooth, rewarding, successful transaction. So how do people pick this very important person?

    Referral by friend, neighbor or relative is the most commonly cited method sellers used to find their real estate agent.

    Thirty-nine percent (30%) of sellers used a referral to find their agent, and an additional twenty-two percent (22%) used an agent they had worked with before.

    The typical seller only contacts one agent during the selling process, further emphasizing the importance of personal relationships in real estate.

    Sixteen percent (16%) of sellers contacted two agents before selling their home and eighteen percent (18%) contacted three or more agents.

    Among recent sellers who used an agent, eighty-five percent (85%) reported they would definitely (69%), or probably (16%) use that real estate agent again or recommend to others.

    For buyers, the average person talks to 9 agents over the typical 9 month long period from the time they start thinking about buying a home until they actually close on a home.

    Mortgage Interest Rate Prediction for 2012

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    ST PAUL, MN: As the new year begins, there are no shortage of so called “experts” telling us what to expect for mortgage interest rates in 2012.  Mortgage interest rates closed out 2011 at some of the the lowest rates of all time. Some expect those interest rate trends to continue through the first quarter and beyond. Others expect a rapid increase in mortgage rates.

    Who’s right and who’s wrong? A quick look through the newspapers, websites and business television programs reveals “experts” with opposing, well-delivered views. It’s tough to know who to believe.

    For example, here are some predictions for 2012 :

    • Home prices will rise in 2012 (Freddie Mac)
    • Home prices will fall in 2012 (CBS News)
    • Mortgage rates will rise in 2012 (American Banker)
    • Mortgage rates will fall in 2012 (LA Times)

    The issue for buyers, seller, and those wishing to refinance their existing mortgage loans in Minnesota and nationwide is that for many people, it can be a challenge to separate a prediction from fact.

    When an argument is made on the pages of a respected newspaper or website, or is presented on some financial cable show by a well-dressed, well-spoken talking head, we’re inclined to believe what we read and hear. This is human nature. However, we must force ourselves to remember that any analysis about the future — whether it’s housing-related, mortgage-related, or something else — are based on a combination of past events and personal opinion.

    Remember, predictions are simply guesses about what might come next, nothing more.

    I am constantly amazed to hear politians, reporters, and other “so called experts” who have never written a mortgage loan ever in their life tell me how things work in the mortgage business. More annoying yet, is that are a lot these are the same people who makes the laws!

    DON’T HOLD OFF buying a new home or refinancing your existing home because some “expert” says interest rates may drop sometime in the future. Mortgage interest rates are CURRENTLY at all time historic lows. Forget the experts! Jump in today, take the deal, and smile!

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