If you are thinking about or are in the process of refinacing your Sonoma County home and you need to ask the current holder of the second deed of trust for a Subrodination agreement, then be forewarned that as of June 31st, they will force you to lower your line amount to a 75% CLTV (combined loan to value). What that will force you to do is to consider the effects of a lowered line amount or may force to pay down the balance of the existing HELOC to the 75% level. Or what most borrowers will do is simply not be able to take advantage of lowering the rate on their first and not complete the refinance.
What makes matters worse is that you and your lender have put in a lot of time into gathering all the information necesary for the first loan. You have also paid upfront for an apprasial($400 to $600) and the lender of the second has had the audacity to ask you to pay a subordination agreement fee of 200$, which by the way is non refundable even though you may not be doing a subordination. Everyone in the process has gone through considerable effort only to find this out at the very end of the process.

And the worst part of the deal is that the new loan typically lowers your rate, thereby reducing your monthly payments. You might even be consolidating some other debt lowering your overall debt burden. By not allowing you to refinace the holder of the second is actually increasing the likelyhood of default on both the first and the second deed of trust. This just doesn’t make any sense. But what does these days in the lending industry.

When Sonoma County Sellers consider various ways to sell their house, one thing that should be considered is the carrying back of paper in order to make the deal work. It may sound funny for a Mortgage lender to talk about seller carry backs but it is a really useful tool.

I am not talking about the whole first but say you had a 300,000 dollar house to sell. The buyer can scrape together 35,000. The buyer is looking at a 90% first which carries with it PMI and a higher interest rate that maybe they can’t qualify for. Yes they could look at FHA finaincing but the problem still exists…high debt to income ratios.

The soloution would be for the seller to carry a 10% second, interst only, at a prevailing interest rate for 5 years. It solves the probelm of the high mortgage payment and the Private Mortage insurance. Think about it. It just might save your deal!

Mortgage rates have hit a 50 year low but there just aren’t many borrowers that can qualify. It appears that while rates are low, that folks have lost their impetus to buy real estate. May be everyone is on vacation. But in the mean time there are some fabulous deal out there.

Crreative finanincing is a buzz word of the past but there are certain things that future buyers can do to help themselves. First and foremost is to get preapproved. At least sit down with a mortgage lender and figure out what you can qualify for. It is getting more and more common for listing agents to put in their remarks that they won’t consider showing the proerty to a buyeer that isn’t preapproved. That may be a bit harsh but it does put the problem into perspective. There are just too many variables to leave it up to chance. GET PRE APPROVED!

I know, I know…you have heard it before but really…This time they really are the lowest that they have ever been. I can’t think of a better time to buy or refinance. I am so sure they are at the bottom I even locked my own loan yesterday. 30 year conforming fixed rates are in the middle 4’s depending on a whole variety of factors. I locked A high balance interest only at 4.375% fixed for 10 years yesterday. If you wanted to go 7 years you could be in the high 3’s, interest only. Think what that could do to your monthly payment. Yes you have to qualify and your house has to appraise but we are figuring it out and we are doing loans. Call or email me

Spring has Sprung and shortly, there is going to be a buying demand of Sonoma County Real Estate like there is every spring. But two coinciudental things happened yesterday and today that are going to effect that.
It was reported in Money Matters that Santa Rosa Real Estate had the highest appreciation in the country over the last month…6%. Buying demand has already started. Also, interest rates rose about a .25% becuase the Gov’t is trying to sell more t’bills and people aren’t buying so they are having to make them more attractive by raising the note rates. Interest rates are rising. Do you find that coincdental? Do you also find it coincdental that gas prices go up in the spring right before the big driving season. NO I didn’t think you did. The Gov’t has also stated it isn’t going to buy any more Mortgage backed securities after March. That too will put pressure on rates. And then there is the tax credit for home purchasers, first time and old hands, that expires at the end of April. Believe me when i tell you, that now is as good a time as you may have for the next 30 years to buy that home. Think about it…5%, 30 year fixed finaincing plus 8000 dollars back to you after you close and more inventory to select from than there will ever be. Now is the time ladies and Gentlemen. You need to get preapproved for a loan BEFORE you shop for that home so go to my website and fillout the online loan application and we will have you running in mere moments. Next month will be more difficult…I assure you. Also if you want free access to the MLS drop me a line and i can set you up for FREE.

April 31st marks the last day you can have a property in contract and still qualify for the first time home buyers tax credit of 8,000$. This great gov’t subsidized tax incentive is responsible for a great many of the transactions that have occured the last 6 months. Don’t wait. Get preapproved today by going to my web site, filling out the information and we will have you ready to make offers in a couple of hours. You are not the only one that has procarastinated and soon the opportunity will be lost.
If you are not a first time home buyer you will recieve a 6500$ tax credit if you buy a house before the deadline. Sonoma County real Estate just isn’t going to get any cheaper and with these phenominal incentives going away, it will just get tougher.
Interest Rates are great right now with APR’s as low as 3.625% for a 5/1 ARM. Give me a call, 707-431-9715 or email me at hunt.conrad@prospectmtg.com right now. Don’t wait. Time is running out!

The Real Estate Mortgage Apprasial process is really tough on everybody these days. The biggest problem is that as a Sonoma county lender I have seen as much as a 30% decline in some area values over the last 2 years. The perceived “mental equity” makes it tough on sellers to come to grips with the reality that, if they want to sell their homes, they are going to have to make a serious concesion to what they think there house is worth because the comps out there will not support what they want. Refinances also are experiencing great scrutiny by lenders because of the declining value.

As a first time home buyer, you are probably looking at homes in the lower price range and because of the strong foreclosure market, there have been a lot of sales and comps for apprasialers to use. But that won’t stop a lender from asking for a second or reveiw apprasial. This appraisal is usually done on a computer by some one not local or familiar with the area of the subject property. Having relationships in the past with appraisers was a great benefit to the borrowers and the entire real estate industry but regulators spurred on by ignorant politicians have imposed a new layer of separation, asking us mortgage lenders to use complete strangers not only to us, but to the area. This has created an apprasial process that is inaccurate in general and disfunctional at best.
There are no real safe guards against a “bad” apprasial but as a Sonoma County Mortgage lender for 20 years I can have a few things I can do that can protect a borrower from an unexpected apprasial value. An internet lender can’t possibly see the problems coming but I can. Give me a call to see how I can make your appraisal and entire mortgage loan process be a smooth and effective one especially in these turbulent times. 707-431-9715. hunt.conrad@prospectmtg.com

Everyone thinks that the most important part of the loan process is getting the lowest rate.  But if I asked you which was more important to you…getting the lowest rate or the lowest cost of money which would you choose?

The reality is no one gets the lowest rate.  Most people get a competitive rate.  The diffrence between the same priced loan at a specific rate between companies might only be .125%.  In other words, the most expensive company might be offering a rate at 5.125 for one point and the lowest might be 5% at one point. 

Now this is with all things being essentially equal and this is where the hard part comes in because no one loan is truly the same.  As lenders, we try to fit everyone in to the same box but everyone is different.  Even if we took the same loan and gave it to two different lenders, they might look at it completely differently.  Why you might ask.  Because beyond the computer overlays, there are still people required to make decisions of interpretation of various guidelines.  and those interpretations could ultimately effect your pricing or rate.

When looking for a rate look for a lender that is going to give you an honest explanation of how rates work.  I have heard advertisements for 30 year rates at 3.5%.  They make it sound like it is fixed for 30 years but they are obviously trying to trick you in to calling.  they are called teaser rates for a reason.

Use some one you trust.  Some that has been around, especially these days has a reputation that has allowed him or her to survive this tumultuous period.  for the most part, all the bad guys are gone.  You are really looking for some one you can relate to.  So don’t shop for “best Mortgage rates” .  Search for someone you want to do business with.  In the long run it will be the best investment you ever make.changes.

So you are either already looking for a house or you are just beginning and a realtor just told you to get Pre qualified.  Great Advice!  Getting pre qualified for a home mortgage before you even set out the door to look at houses makes all the sense in the world.  In today’s ever changing financial climate, getting approved for a mortgage loan can be very time consuming and arduous.  Time and effort that are way better spent up front in the home search process than after you have already found a house you want to make an offer on.

 Pre qualification is nothing more than making sure you can qualify for the mortgage payment and purchase price of the home size you are looking for.  By providing us with a snap shot of your financial picture (filling out a loan application) and providing the supporting documentation for your income and assets we can then determine exactly what a lender is going to be able to approve you for.  also the process is a s great way to gather additional information about the entire real estate transaction process.  All the costs will be gone over.  Locking in a  rate will be discussed.  What kind of loan program is best for you can be determined.

With out going through the pre qualification process you will usually be wasting a lot of every one’s time including yours.  I have provided my Pre qualification web site address below.  Do your self a favor and fill out a loan application.  Once I receive it I will give you a call, fill in any blanks and get started on your Pre Approval.

pre qualify online
707-431-9715

Revisions include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

By Kenneth R. Harney
December 6, 2009
Reporting from Washington

If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.
Tops on the agency’s list of advice: Cool it for a couple of weeks. Even if you qualify for one of the credits, don’t send in any requests to the IRS quite yet. Wait until later this month when the agency publishes its revised Form 5405 with the key instructions needed to get you a check from the government.

The forthcoming version of the form will incorporate the major changes to the tax credit program made by Congress in legislation signed by President Obama on Nov. 6. These include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.

In a tax bulletin issued just before Thanksgiving, the IRS emphasized that all home purchasers after Nov. 6 “must use this new version [of Form 5405] to claim the credit.” Put another way: If you send in the old version — the one you can currently download from the agency’s website, www.irs.gov — your request for the credit will probably go nowhere.

The legislation — known as the Worker, Homeownership and Business Assistance Act of 2009 — extended the $8,000 first-time home purchaser credit until April 30 for signed contracts and June 30 for closings. The law also created a new tax credit for people who have owned a principal residence for a consecutive five of the previous eight years, and who purchase a replacement principal residence with a signed contract no later than April 30, followed by a closing no later than June 30.

Qualified repeat buyers can obtain credits up to $6,500. For both the first-time and repeat buyer program, the credit is equal to 10% of the purchase price of the house, up to a maximum of either $6,500 or $8,000.

The new IRS bulletin also outlined the agency’s guidance on other important features of the amended credit program:

* Members of the armed forces, as well as diplomatic and intelligence personnel serving in foreign countries, will get an extra year to buy a principal residence and still qualify for a credit. They will have until April 30, 2011, to enter into a contract to purchase a house, and until June 30, 2011, to close on it.

* Anyone who buys a house after Nov. 6 — even those who had intended to get in the door before the previous Nov. 30 expiration date for the $8,000 credit — will now need to comply with several new rules. First, the house cannot cost more than $800,000. Second, no one under age 18 can claim the credit no matter what the circumstances. And finally, anyone who is counted as a dependent on another taxpayer’s federal filings is ineligible for a home purchase tax credit.

* The expanded income limits for purchasers after Nov. 6 range to $125,000 in “modified adjusted gross income” for single taxpayers and to $225,000 for those who file jointly. Singles with incomes between $125,000 and $145,000 may be eligible for reduced credit amounts, as are joint filers with incomes from $225,000 to $245,000. Anyone with an income above these amounts cannot qualify for either of the credits. Under the pre-Nov. 6 rules, taxpayers applying for the $8,000 credit were limited to incomes of $75,000 (single filer) to $150,000 (joint filer).

The IRS continues to offer detailed consumer information resources on the credits, including questions and answers on a variety of home purchase scenarios.

For example, some taxpayers seeking the extended $8,000 credit are uncertain about co-purchase and co-signing situations, especially involving parents and adult children. When a home-owning parent co-signs for a mortgage with a son or daughter, and both names appear on the note, can the son or daughter qualify for the first-time purchaser credit?

The IRS says the parent clearly does not qualify for any portion of the credit since he or she already owns a principal residence. But if the son or daughter has not owned a house during the three years preceding the current purchase, and qualifies on income, he or she can be allocated the entire $8,000 credit.

Similarly, when unmarried individuals co-purchase a house, and only one of them is eligible for the credit, the full $8,000 can be allocated to the eligible buyer.

Distributed by the Washington Post Writers Group.