If you’ve been in your home for 5 years, you may want to consider refinancing. Think of your refinanced mortgage in terms of 15 or 30-year increments because most banks refinance in these time allotments. If you are looking to lower your monthly payments, this can better prepare you for a financial emergency, as it will allow wiggle room for you to build up a savings each month. Keep in mind this will mean you will be paying off your mortgage longer. On the other hand, if you’re anxious to pay off your mortgage and can handle an increase in monthly payments, consider a 15-year refinanced mortgage that will allow you to pay off your loan more quickly. Examine your finances and think of what you can realistically afford when deciding on how to refinance your home mortgage.

Unfortunately, the first time homebuyer’s tax credit has not been extended, unless you are a member of the military. The other exception is if your home is in contract to be purchased by April 30, 2011 and you have filed for an extension. If this is not the case, and you have missed out on this wonderful government program, there are still tax deductions you can take advantage of. The interest you pay on your mortgage is tax deductible, but there are limits to this tax exemption depending on whether or not you and your spouse are filing jointly. Speak with an accountant, or your trusted mortgage lender to make sure you are reaping all the benefits of the mortgage tax deduction. If you are a first time homebuyer, your best bet is to save for a sizeable down payment for the home of your dreams.

One of the reasons mortgage rates change so dramatically is a simple case of supply and demand. If homes are being sold rapidly, then mortgage rates are lowered. On the other hand, if the housing market is in a slump, many banks will increase their rates. In other words, more buyers give lenders flexibility when adjusting their rates. Inflation also affects mortgage rates. When the economy grows at a rapid rate, often times the Federal Reserve will increase rates to slow it down and prevent inflation. These instances are highly complicated, and often not black and white. Speak with a qualified mortgage lender you trust to discuss your lending options. Communicate your financial situation and figure out the best rate that will fit in your budget.

100% financing loans require no down payment to purchase a home or qualify for a mortgage, which is helpful to people with great credit, but without a lot of cash. However, these loans contain a certain amount of risk for borrowers, and could leave them susceptible to skyrocketing rates as property values decrease. While the interest rates for these types of loans are typically lower than others, the monthly payments are still much higher. Many mortgage lenders recommend that homebuyers who participate in 100% financing loans maintain secure financing, and allow for no margin of error in their budgets, in case the economy fluctuates. In doing so, homeowners can protect themselves from inconsistent mortgage rates. Is a 100% financing loan right for you? Talk with a mortgage lender today and decide if the risk is worth the savings.

Freddie Mac is responsible for much of the tracking of home mortgage rates, and has reported that all types of rates have dropped in recent weeks including 5-year adjustable rate mortgages, and 30-year fixed mortgages. This low-rate mortgage trend has encouraged people to purchase homes, in wake of the current mortgage crisis. In fact, according to the National Association of Realtors, home sales increased by almost 7% last month. Check with your trusted mortgage lender to discuss the mortgage rates in your area. Despite the current economy, with mortgage rates steadily declining, this could be the best time of year to begin the process of purchasing a home. While real estate trends tend you fluctuate, this could mean good news for those looking to purchase homes. Hopefully this is good news for the real estate market, and for homebuyers.

Once this form has had the chance to be used for a while, I believe it will be a plus for the industry as a whole. And while it odes some really good things it also makes it virtually impossible to close a loan quickly. Appraisals cannot be done quickly and you have to wait at least 3 days and sometimes up to 7 days after the GFE have been released in order to close the loan. This simply means that loan officers, processors, closers and title companies will have to be on top of their game at all times because the process will no longer allow much leeway. It will be more and more important to get it right and get it right the first time. So whether you are a consumer or Realtor, working with an experienced loan officer will be very important from this point forward.

There are still a few federal and state programs that can help some people who qualify but the best thing to do is to make sure your credit is above 620, you have at least 3.5% to put down for FHA and at least 5% for a conventional loan and you have a good consistent income coming in. The industry as a whole is going back to very basic lending practices and that means you have to show and prove yourself worthy of getting credit extended to you because banks and investors want to make sure they get their money back. May sound harsh but that is the nature of the business.

One of the reasons for this is that, most of the time, we don’t get all the information until the last minute from the closing attorney’s office and the homeowners insurance company’s. This will have to change in order for us to comply with the new rules. The basic thing you need to remember is if the APR is 1/8^th a percentage point higher or lower than the latest GFE disclosed, another GFE has to be disclosed and you must wait 3 days if emailed or 7 days if mailed before you can close the loan. This could be a problem if this all happens right before the loan lock expires so you need to be aware that this is now a variable in the process. Everyone I know who is in the mortgage loan business is doing everything possible to create a succinct process so that we can all benefit from these new rules; especially the buyers.

One of the hoops is to complete the First Time Home Owners Education Class put on by THDA and to sign a second mortgage against the home for the $7,000.  This is an interest free loan AS LONG AS YOU PAY IT BACK ONCE YOU GET THE FIRST TIME HOMEOWNERS CREDIT BACK ON YOUR TAXES.  If you don’t pay back the loan it is a pretty steep interest rate and payment schedule.  You must also meet all the other income requirements and qualify for a Great Rate THDA loan and work with a qualified THDA lender.

It’s a great way to get some down payment money if that is all you lack to making your home ownership dreams come true!

This past week has been a rough one for some of the people I have talked to, all of who have multiple houses and are paying their bills and mortgages on time.  The issues have to do with being self employed and not showing enough income on taxes and wanting to refinance a second home for cash out.

Since every loan is basically a full documented loan these days it means that you have to prove your income.  There is no more stating an income or doing a no-doc loan.  These loans, at least for now, are a thing of the past and no one expects them to come back any time soon, if ever again.  Lenders want to see income and it needs to be income that has come in over the last 2 years, or capital gains income that has been consistent for 3 years.

The other restrictions have to do with cash out refinances.  There are no cash out refinances for second homes, period.  The only loans that you can get above 85% cash out are through FHA and they are still at 95% though we have heard that they are lowering it to 85% as well.  We just don’t know when.  So if you think you are going to take advantage of this low interest rate, you may want to think again if you can’t prove your income, meet the debt to income ratio or try to get cash out with little or no equity in your home.  It can be a tough row to hoe and the only way to see if you can qualify is contact your lender and go through the motions.