July 15th Week in Review

There was a bit of turmoil in the world of economic news and this typically bodes well for rates and in corresponding fashion that is how the week turned out. As the uneasiness continues in the market, we may see one more dip in rates, though no one can predict the actual rates day to day, we can say that there is the possibility they will hold for the near future (or until August 2nd). I would suggest that if you haven’t refinanced or looked into it…now may be the time.

• Cash Out Refinances – Less than 6 Months Ownership – Currently most investors still require a minimum of 6 months for the owner to be on title in order to complete a cash-out refinance. We sell directly to Fannie Mae and so we have the option of using their exception policy to this rule. We can now complete the cash-out refinance for borrowers that have owned the home less than 6 months and had previously purchased the home for cash or through a LOC. Who this helps?

o Investors – Buyers at an auction that plan to rent the home. Instead of dealing with financing up front, they can pay cash and then enact the financing after to recoup some of their investment.

o Auction Buyers – There are not a ton of people that do this, but some have the means to buy their home with cash and then just need to get the cash back after the purchase is complete.
If you have someone that might fit the above or even a different scenario not mentioned, have them contact me and I can see what we can do.

• FHA Concessions and Loan Limit Changes – Don’t forget that FHA does allow up to 6% seller concessions to go towards closing costs and pre-paid items. Plus Fannie Mae and Freddie Mac have incentives for Buyer’s agents and buyer’s with the properties they have on their books (Homepath and Homesteps). Take advantage of these opportunities! On October 1, 2011 the Maricopa County Loan limits will change and go from $346,250 to $271,050. This is a drop in purchasing power of $75,200 through FHA. Keep that in mind as you work with your clients.

• US Debt Ceiling, Causes Market Uneasiness – Here is a nice piece that offers a bit of explanation into what the debate is all about. At the end of it all is the horrifying realization (I know…strong language) that we, the U.S. can’t get its act together. I do know that I work to stay within the lines of my obligations with bills and make sure that what comes in doesn’t go below what is spent. Unfortunately, the government hasn’t held to that scenario and so here we stand. I don’t know how it will all end…who really does. But I can say that it should be an awakening and call to action for those in charge to better manage what we do. I am by no means an expert, but I do know that something needs to change. Apparently you can’t spend your way out of debt…sometimes I really wish you could. But unfortunately, the only way out is with sacrifice.