JohnsBlog (articles, news, thoughts, advice)

A bill was recently sent through congress known as the economic stimulus package, and just this week it was sent for final approval by good ole GW. 

While it may not be a month or 2 until the actual actions take place, it is a VERY exciting time for those who have been held back from refinancing their larger loans due to scared investors, shaken by recent market activity.  In recent memory, the conforming loan limit across the country has been $417,000.  This has always seemed odd to me, because in some markets that loan amount will buy a mansion, while in others, it will hardly suffice to finance a condo, but now it seems "they" have finally got it right.  There will be regionally based conforming loan limit increases, and early speculation points toward loan amounts up to the $700,000 level being offered with the same low rates as those under $417,000.   This should surely stimulate the economy, as many wealthy homeowners with loans above $417,000 have been left with nothing even close to attractive rates over the past several months.  Think this isn't a big deal?

Take this example....the best rate someone with a $550,000 loan someone can get as of this evening, without buying down the rate, is a 6.5% for a 30-year fixed rate mortgage in Pennsylvania....and thats someone with perfect credit, 30% equity in their home, and proven income.  That's $3,476/month.

With the new proposal, a borrower with this same loan amount would be able to refinance into a 5.5% fixed rate for 30 years, the same as those with lower loan amounts.  The new payment??  $3,122/month...more than $350/month...more than $4200/year...more than $126,000 over the 30-year term. 

These new loan limits could offer some relief to those who took out large adjustable rate loans with tight budgets, and offer great opportunity to anyone who has recently obtained a jumbo loan.  Now is also a great opportunity for builders to market their high-priced homes and sell them at a much lower rate.

This program should be in effect for at least a year to help assuage some of the turmoil the past 12 months has brought about...hopefully sooner than later we'll see the benefits.

Just a side note...anyone out there in the mortgage business looking for a wealth of information check out www.brokeroutpost.com.  Great site with a ton of helpful peers available.

The good days of low rates for mortgages appear to be swiftly coming to an end.  12 months ago all a borrower needed was a pulse and social security number (and in some cases just a pulse) to get a loan.  Today, some lenders seem to be on the brink of requiring blood samples and interviews with potential buyers (ok it may not be THAT bad, but in comparison to the past 12 months, it seems like it!). 

Just as quickly as programs disappeared, I believe we're going to see rates hike skyward over the next couple of months.  In 2 weeks, the Fed is meeting to discuss their monetary policy yet again. Word on the streets (aka from the insiders in the market) is that a .75% cut is expected.  This will bring the prime rate to 5.25% making it a GREAT time to get a home equity loan.  However, with inflation already outside of the Fed's comfort zone, and the US dollar at it's weakest point in years compared to the Euro and the Yen, we're on the brink of inflation becoming a MAJOR concern.  There hasn't been too much talk on the subject recently, as more attention has been placed on the recent economic stimulus package passed by the government, and on the housing and credit collapses of the past year, but I feel there will be a deep impact coming sooner than later.

With the economy being unnaturally stimulated with rate cuts, tax rebates, and liquidity injections, we're seeing slight improvements in the business world.  HOWEVER, it is said that government intervention in the form of rate cuts isn't felt for 6-8 months after the actions are taken.  Rates were first cut in September 07', 6 months ago.  Since then, they've gone down a full 2.25%.  If inflation is already out of the Fed's comfort zone, and the effects of these cuts have yet to be seen, these in ADDITION to the economic stimulus plan could have things get out of control very quickly.  How will bonds react to increased inflation?  VERY NEGATIVELY...what do bonds have an impact on?  Interest rates...bonds go down, rates go up.  2 weeks from now a fed rate cut is expected to weaken bonds a good bit, and over the next few months rate cuts coupled with liquidity injections into the market and an economic stimulus plan could rear its ugly head and drive interest rates much higher than they've been in years.....my advice.....if you're thinking about refinancing, LOCK IN NOW...if you're looking at buying a first home, LOCK IN NOW...if you're on a tight budget and need a good rate to afford housing, LOCK IN NOW.  While home prices are at an all time low, inflated interest rates will make the benefits of buying less for several years, so take advantage while you still can. 

In baseball, it doesn't matter how nice a catch is after a fly ball makes that first bounce off the ground.  On a rollercoaster, there's sheer excitement flying down a hill, accompanied with anxiety as the coaster slowly clangs upwards on the next.  So it is with mortgage rates.  As we're on an uphill climb, many are wondering what happened to the excitement as we watched them creep lower and lower on a daily basis for a little more than a week until they bottomed out, and then just as quickly skyrocketed back.

Now here we are, with rates back in the low 6's (for a 30-yr fixed rate) where they have been steadily for the past year.  For a week and just a week, you could have gotten your hands on a lovely 5.25% 30 year fixed rate.  How about a 4.75% 15-year fixed?  How about a 4.125% ARM?  Beautiful sites, those low rates are to the eyes and the wallet.  Many of my clients took advantage of this time.  One person was originally looking for a 30-year fixed, and ended up with a 15-year mortgage with a similar monthly payment...saving them THOUSANDS over the life of their loan.  Another locked in for a $60,000 that will save them $75,000 in pure interest over their current mortgage over the next 30 years.  It's a beautiful thing, however many other people waiting until it was too late.

I consider myself a pretty good loan officer and consultant to my clients, and being so requires hard work, good follow up, and a memory for what everyone is looking to accomplish with their finances...this was the reason I called one client, reminding them that I could out perform their current mortgage bigtime, giving them the cash-out they needed to put into their business and for their childrens expected college expenses.  GREAT IDEA, they thought.  GREAT IDEA, I knew...I advised locking in at a 5.375% (compared to the 5.875% they currently hold).  This particular client decided not to lock in...advised me against it, holding off until they reached 5%...I strongly advised catching the downslope and not missing out.  After many calls, I became fed up with my clients stubborn attitude and desire to catch rates at the bottom, so I advised him to call me when he was ready and knew what he wanted to do.....I received a call today, 2 weeks later....he got busy...he missed out.  EVERYONE seems to want to catch the very bottom, the very moment rates are their lowest.  Thing is, that moment is brief, and the rise in rates happens so quickly many take worse deals because they waited.  Lesson to be learned is to grab onto a good thing and run with it.  If you have something great, and it gets better, then you're lucky.  If you have something great, and want something perfect, and then miss out completely, you're foolish.....remember, it's better to be known as an outfielder who game in and game out makes plays and wins golden gloves than the one who can make sportscenter highlight catches, but leads the leagues in drops...

Lets hope theres another opportunity in the very near future for those who missed this ball to make another great catch!

Now more than ever it is vital to have a high credit score.  In addition, it is extremely important to get incorrect items removed that may be bringing your scores down.  As unfair as it may seem, someone with a 679 FICO score is getting an entirely different loan than someone with a 680, so to ensure EVERYONE is getting the very best of what I can offer, I have teamed up with a trusted and powerful legal team who will handle all of your credit repair for a price that takes value to a new level.

I've seen bankruptcies, judgments, delinquencies, and old derogatory marks removed, as well as minute items which hurt your score little by little such as inquiries.  Please call me or send me an e-mail today at jmeussner@stonebridgemortgage.com for more information about how to get your credit fixed to obtain the financing you deserve at a rate you desire.  This is also an OUTSTANDING tool to reduce your monthly debts by qualifying for credit cards and auto loans at much lower rates.  Remember, the prime rate (which credit cards are based on in most cases) is down to 6%....those of you with 15% and higher rates on your cards are throwing a ton of money away...let me help you get it back in your pocket.

At months end, I plan on taking this website from a place for you to apply or get some basic info to a full-blown mortgage and real estate resource, where you can find information on ANYTHING, as well as contact information for many of my business partners and their other information.

You will be able to complete your entire loan on this site if you so choose.  Also, there will be mortgage calculators, sites for mortgage news and rate predictions, market and other relevant updates, and much, much more.  Please let me know if you have any suggestions, or if there's anything you would like to see added to the site.  Trust me, there will be a TON of info, so I'm sure many of your demands will be met by what I already have planned, but any suggestions are always helpful.  I'm looking forward to a successful launch, and hope you enjoy the updated, more powerful webtool I plan on releasing!