Here we are, well into a new year and an economy that leaves some things to be desired. Although I am seeing an increase in home purchases, especially for first time home buyers from the Realtors® that I work with, the decrease in home values is still troubling to say the least when working on refinance transactions for my past clients. In too many cases, the value of the property has gone down and getting a refinance done has been significantly harder. I have to think the reason the purchases are up has to do with low rates and the first time home buyer $8,000 tax credit.

Now, for the good news regarding refinances, and please share this with your friends, neighbors and relatives:

Very shortly the President’s “Making Home Affordable Program” will kick into high gear. This program will allow refinance of your current mortgage if it is financed through Fannie Mae (FNMA) or Freddie Mac (FHLMC) up to 105% of the value of the home on a rate and term refinance. Currently, these loans are not available for loans with mortgage insurance or for loans over $417,000 in Lane County. Additionally, if there is currently a second mortgage on the property and they will agree to subordinate their lien, there is no limit on the combined loan to value (CLTV). If the current loan does not have mortgage insurance, no mortgage insurance is required for the new loan. Right now, we are in preliminary “roll-out” and only getting the basic information about how the program will work when actually implemented which should be soon.

Although FHA has lowered to maximum loan to value on their cash out refinances to 85% of value effective with new case assignments today, they will still allow rate and term refinance to 96.5% of value and will allow streamline (FHA to FHA) refinances with no appraisal and no loan to value requirements.

Additionally, VA allows 100% purchase, cash out and rate and term refinances. They also have a streamline (VA to VA) refinance with no appraisal and no loan to value requirements.

In regard to what I was saying about the unlikelihood of rates moving much lower – last Friday, Jack Koskinen, interim chief executive of Freddie Mac, said that home loan rates are near the bottom and that any further decreases will be small.  Mr. Koskinen commented on mortgage rates after he attended the meeting between President Obama and the CEO’s of the financial services companies on Capitol Hill.  If you have been sitting on the fence waiting for that 4% rate…now is the time to purchase or refinance as rates are at historically low levels, and not likely to move much lower. Now you have a rate forecast from one of the big guys that should know. Does he? I don’t know but the only time you can tell when you are at the bottom of the rate slide is when you are on the way up. The only ones that get the absolute lowest rate are the ones that are very lucky.

Standard refinances are still available and at outstanding rates. Call or e-mail and I will be happy to get that information to you, however, be prepared to answer some questions. Rates are not “one size fits all” any longer. There are adjustments to rate for purpose, loan to value, credit score, loan program and property type. You can reach me at 541-342-7576, fill out the contact form below or e-mail me at fchamberlin@alpinemc.com. I am here to help.