HLS update on 105% refi’s without mortgage insurance…

[Anonymous]

[quote=HLS]For many people, the lower payment will be cheaper than renting on an after tax basis.
Because they need a place to live, it is the answer for many people.
[/quote]

This doesn’t add up. They have to refi at the current market price, which means their loan/payment would be the same if someone purchased the house under the same terms (which is what will happen after the foreclosure).

If the new owner then rented it back to the original owner, the rent would be lower than the total payment. The tax deductions are not enough to offset this. We are still nowhere near price/rent ratios that would give immediate positive cash flow to investors.

One of the goals of this plan is to eliminate the transaction costs of the foreclosure/eviction/vacant property/repurchase cycle. Many people that are being foreclosed upon will end up right back in similar properties as renters, but the process of getting there is enormously inefficient and wasteful.

The plan gives homeowners an opportunity to essentially purchase their own house again at market prices and finance it at market interest rates. They can do this without the cost of moving out, trashing their credit, and then attempting to buy again. (Only the middlemen benefit from these costs and it does nothing to benefit the overall economy). If the original purchase was much higher than the current market price, then the homeowner must come up with the difference – not the taxpayer.

The plan is limited to 105% LTV. I think that is probably being too generous, but it does minimize the risk to the taxpayer (and the slippery slope argument about the numbers changing could be made in either direction).

I don’t see this as an attempt to keep prices “artificially high.” Those properties that are hopelessly under water will foreclose as they should. The plan is an attempt to ease the market correction and minimize the transaction costs of a sudden shift in prices. In a free market, the losses should be borne by those who took the risk, and this plan does not do anything that drastically changes this.

Of course the plan is also an attempt to demonstrate that government is taking action instead of being passive. Any elected official from any party would do this, because they would not be in office long if they chose to do nothing in a time of “crisis.” (In other words, the Obama-bashing is a distraction and adds nothing to what could be an otherwise interesting debate).

So part of the motivation for the plan is to create the appearance of decisive leadership. Perhaps it is not optimal, but this is one of the few disadvantages of living in a democracy.

And BTW: many of us are very happy with our stucco boxes.

[HLS]

[quote=paramount]I’m looking at the Refinance Program, although according to the Fannie Mae web site the refinance rates are currently 5.16%.

As for myself, I’m already at 5.1% fixed 30 years.

Still, resetting my loan back to 30 years will reduce my payments….

I just want to break close to even (monthly) when I rent out our house.

In California 105% LTV won’t be that helpful I suspect[/quote]

There is not “one” interest rate that applies to every loan across the board. There is a matrix table with pricing hits for credit score and LTV.

For those that qualify and plan on being in their home for at least 3 years, the best thing to do is to get into a 4.50% fixed rate.
It will save thousands in the long run.

Most people, including mortgage “professionals”. do not know how to figure or explain the cost benefit of refinancing into a lower rate.

Dividing the total cost by the monthly savings is what 99.99% do, but it isn’t correct.

The fact is that every single person with a rate above 4.50% is wasting money with their current payment every month. The higher the current rate, the more they are wasting.
Whether or not it makes sense to refi is a different matter.

Also, nobody has to stick to a 30 YR amortization. You can create your own term by adjusting your payment.

The 4.50% 30 YR fixed is available on rental properties also, but most people are too shortsighted to see the longterm guaranteed benefit.

It amazes me how foolish most people are with their mortgage decisions, but then I come in contact with other “mortgage professionals” that they are asking for advice and understand why…

[HLS]

[quote=paramount]I’m looking at the Refinance Program, although according to the Fannie Mae web site the refinance rates are currently 5.16%.

As for myself, I’m already at 5.1% fixed 30 years.

Still, resetting my loan back to 30 years will reduce my payments….

I just want to break close to even (monthly) when I rent out our house.

In California 105% LTV won’t be that helpful I suspect[/quote]

There is not “one” interest rate that applies to every loan across the board. There is a matrix table with pricing hits for credit score and LTV.

For those that qualify and plan on being in their home for at least 3 years, the best thing to do is to get into a 4.50% fixed rate.
It will save thousands in the long run.

Most people, including mortgage “professionals”. do not know how to figure or explain the cost benefit of refinancing into a lower rate.

Dividing the total cost by the monthly savings is what 99.99% do, but it isn’t correct.

The fact is that every single person with a rate above 4.50% is wasting money with their current payment every month. The higher the current rate, the more they are wasting.
Whether or not it makes sense to refi is a different matter.

Also, nobody has to stick to a 30 YR amortization. You can create your own term by adjusting your payment.

The 4.50% 30 YR fixed is available on rental properties also, but most people are too shortsighted to see the longterm guaranteed benefit.

It amazes me how foolish most people are with their mortgage decisions, but then I come in contact with other “mortgage professionals” that they are asking for advice and understand why…

[HLS]

[quote=paramount]I’m looking at the Refinance Program, although according to the Fannie Mae web site the refinance rates are currently 5.16%.

As for myself, I’m already at 5.1% fixed 30 years.

Still, resetting my loan back to 30 years will reduce my payments….

I just want to break close to even (monthly) when I rent out our house.

In California 105% LTV won’t be that helpful I suspect[/quote]

There is not “one” interest rate that applies to every loan across the board. There is a matrix table with pricing hits for credit score and LTV.

For those that qualify and plan on being in their home for at least 3 years, the best thing to do is to get into a 4.50% fixed rate.
It will save thousands in the long run.

Most people, including mortgage “professionals”. do not know how to figure or explain the cost benefit of refinancing into a lower rate.

Dividing the total cost by the monthly savings is what 99.99% do, but it isn’t correct.

The fact is that every single person with a rate above 4.50% is wasting money with their current payment every month. The higher the current rate, the more they are wasting.
Whether or not it makes sense to refi is a different matter.

Also, nobody has to stick to a 30 YR amortization. You can create your own term by adjusting your payment.

The 4.50% 30 YR fixed is available on rental properties also, but most people are too shortsighted to see the longterm guaranteed benefit.

It amazes me how foolish most people are with their mortgage decisions, but then I come in contact with other “mortgage professionals” that they are asking for advice and understand why…

[HLS]

[quote=paramount]I’m looking at the Refinance Program, although according to the Fannie Mae web site the refinance rates are currently 5.16%.

As for myself, I’m already at 5.1% fixed 30 years.

Still, resetting my loan back to 30 years will reduce my payments….

I just want to break close to even (monthly) when I rent out our house.

In California 105% LTV won’t be that helpful I suspect[/quote]

There is not “one” interest rate that applies to every loan across the board. There is a matrix table with pricing hits for credit score and LTV.

For those that qualify and plan on being in their home for at least 3 years, the best thing to do is to get into a 4.50% fixed rate.
It will save thousands in the long run.

Most people, including mortgage “professionals”. do not know how to figure or explain the cost benefit of refinancing into a lower rate.

Dividing the total cost by the monthly savings is what 99.99% do, but it isn’t correct.

The fact is that every single person with a rate above 4.50% is wasting money with their current payment every month. The higher the current rate, the more they are wasting.
Whether or not it makes sense to refi is a different matter.

Also, nobody has to stick to a 30 YR amortization. You can create your own term by adjusting your payment.

The 4.50% 30 YR fixed is available on rental properties also, but most people are too shortsighted to see the longterm guaranteed benefit.

It amazes me how foolish most people are with their mortgage decisions, but then I come in contact with other “mortgage professionals” that they are asking for advice and understand why…

[HLS]

[quote=paramount]I’m looking at the Refinance Program, although according to the Fannie Mae web site the refinance rates are currently 5.16%.

As for myself, I’m already at 5.1% fixed 30 years.

Still, resetting my loan back to 30 years will reduce my payments….

I just want to break close to even (monthly) when I rent out our house.

In California 105% LTV won’t be that helpful I suspect[/quote]

There is not “one” interest rate that applies to every loan across the board. There is a matrix table with pricing hits for credit score and LTV.

For those that qualify and plan on being in their home for at least 3 years, the best thing to do is to get into a 4.50% fixed rate.
It will save thousands in the long run.

Most people, including mortgage “professionals”. do not know how to figure or explain the cost benefit of refinancing into a lower rate.

Dividing the total cost by the monthly savings is what 99.99% do, but it isn’t correct.

The fact is that every single person with a rate above 4.50% is wasting money with their current payment every month. The higher the current rate, the more they are wasting.
Whether or not it makes sense to refi is a different matter.

Also, nobody has to stick to a 30 YR amortization. You can create your own term by adjusting your payment.

The 4.50% 30 YR fixed is available on rental properties also, but most people are too shortsighted to see the longterm guaranteed benefit.

It amazes me how foolish most people are with their mortgage decisions, but then I come in contact with other “mortgage professionals” that they are asking for advice and understand why…

[sdduuuude]

[quote=HLS]I still tell people that foreclosure is their solution, not their problem….
[/quote]

I quote you regularly on this, by the way, both online and in face-to-face discusstions. It’s the truth.

[sdduuuude]

[quote=HLS]I still tell people that foreclosure is their solution, not their problem….
[/quote]

I quote you regularly on this, by the way, both online and in face-to-face discusstions. It’s the truth.

[sdduuuude]

[quote=HLS]I still tell people that foreclosure is their solution, not their problem….
[/quote]

I quote you regularly on this, by the way, both online and in face-to-face discusstions. It’s the truth.

[sdduuuude]

[quote=HLS]I still tell people that foreclosure is their solution, not their problem….
[/quote]

I quote you regularly on this, by the way, both online and in face-to-face discusstions. It’s the truth.

[sdduuuude]

[quote=HLS]I still tell people that foreclosure is their solution, not their problem….
[/quote]

I quote you regularly on this, by the way, both online and in face-to-face discusstions. It’s the truth.

[sdrealtor]

I also use that quote regularly and never knew whom to attribute it to. Thx dude, now I know.

If your pal is in town, make sure he knows about the Wine event on Sunday.

[sdrealtor]

I also use that quote regularly and never knew whom to attribute it to. Thx dude, now I know.

If your pal is in town, make sure he knows about the Wine event on Sunday.

[sdrealtor]

I also use that quote regularly and never knew whom to attribute it to. Thx dude, now I know.

If your pal is in town, make sure he knows about the Wine event on Sunday.

[sdrealtor]

I also use that quote regularly and never knew whom to attribute it to. Thx dude, now I know.

If your pal is in town, make sure he knows about the Wine event on Sunday.

[Author]

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