Over the last three months we've had several calls from people just like you wanting to refinance, but because they're current appraised value is as high or higher than their current loan, there was nothing they could do.

That is until now!!  

Starting October 1st Freddie Mac will allow servicer to servicer refinances up to 125% loan-to-value!

What does this mean to you?  Well, chances are good that Freddie Mac owns your loan and if that's the case then you need to listen up close!

See, before now in order to participate in the REDICULOUSLY LOW interest rates you had to return to your current bank.  In a lot of cases, those banks were out of business or no longer originating any new loans...so you were basically out of luck!

Now, however we have a solution for you.

You need to immediately go to https://ww3.freddiemac.com/corporate/ and check to see if Freddie Mac owns your mortgage.

If Freddie owns your mortgage and you're wanting to take advantage of interest rates currently as low as 4.75% then give me a call right away.

As always, these rates won't stick around long...maybe not even through the end of the day, which means if you don't act right now it could end up costing you thousands of dollars over the life of your loan.

I know, I know...you hear that line all the time, but in this case it's actually true.  

Did you know that a difference of only a half percent (.5) on a loan of $200,000 is a difference of nearly $23,000 over the life of your loan?  TWENTY-THREE THOUSAND DOLLARS!!!  That's a new boat, or a couple trips to Europe or part of a college education!

Take advantage of these rates right now!  And if you think this could help a friend or neighbor then feel free to forward this message to them as well.

Let’s be honest, Most of us didn’t know this. We probably know, however, that during the 2009 MTV Video Music Awards this week, Kanye West stormed on stage as Taylor Swift was receiving the Best Female Video award.

In reality, the news about the space shuttle is more relevant and should be more important to our future. But as normal people, we block out a lot of the information that can benefit us and latch on to what we find, or our friends find, interesting at the moment.

If you’re like me, you get tired and numb of all the numbers being thrown around. Anything political or financial puts a bad taste in your mouth and whether you really care about the MTV awards or not, it is more interesting although not more important at the moment.

Here's another tip that you'll probably gloss over unless it's relavant to you at this very moment.

I had a client ask me today if it made sense to buy their rate down since rates were already so low.  It's a great question and it honestly depends on each individual situation.

There is a formula we use to determine the "break even point" of the discount point buy down.  Here's the formula:

Total cost of the buy down / (Payment before the buydown - payment after buydown) = Number of months before you break even on the cost.

For example...let's say you were getting a $200,000 loan at 5.0% and your payment is $1,075.  You want to know if buying down your rate to 4.75% is a good deal.  The cost to buy the rate down is 0.75 points or $1,500.  Your payment at 4.75% will be $1,045 a month. 

Using our formula, if we take $1,500 / ($1,075 - $1,045) = 50 months.  This means that it will take you exactly 50 months (4 year and 2 months) before you even break even on the buy down.

So, does the buy down make sense?  Well, if you're only going to be in the house for two or three years then NO!  But if you're planning on being a "lifer" then it would make a big difference in your total out of pocket.

Have a similar question?  Shoot me a line or give me a ring.  I'd love to speak with you!

Last week I introduced you to the new article I wrote call "The 5 Biggest Deal-Killers of Your Next Home Mortgage - Which One Will You Make?"

We talked briefly about the first and second mistake.  First, not knowing the status of your credit at all times and second, assuming that because you're an A+ borrower you won't have to jump through any lending hoops.

Today we're going to talk about the third, fourth, and fifth deal-killers.  These three issues are getting more scrutiny than ever before.

3.  Debt-to-Income (DTI) Ratio. 

This ratio measures the amount of total monthly debt against the amount of total gross income of the borrower.  Before the mortgage meltdown if a borrower had a high DTI we were able to explain it away with other strong compensating factors of the borrower's file.  Now, however, there is less wiggle room then ever before.

So, what can you do about your DTI ratio?  Eliminate any unnecessary debt.  Don't know what that means?  Remember when Dad used to talk to you about "needs" versus "wants"?  Well, that should get you started here too.

If you're current debt-to-income ratio is higher than 50% you need to figure out how to eliminate monthly installment payments.

Items used to calculate DTI are house payments, auto, boat, RV, or motorcycle payments, student loans, credit card monthly payments, department store and other revolving accounts (tire stores, Chevron cards, etc.), lines of credit, quick cash loans (i.e. Money Tree), and any other monthly installment loans or accounts.

If you don't NEED it, get rid of it.

4.  My buddy's little boy always asks me "Hey, how much money you got?" 

Now, no one expects you to have enough money in the bank to pay cash for your house…but the bank sure makes it seem like it!

Listen, don't get discouraged here…we're all in the same boat.  We'd all love to have a million bucks in the bank just lying around waiting on us, but let's face it very few people have adequate liquid assets these days.

The biggest deal we look at when talking about assets is a term banks use called 'reserves'.  Essentially they want to know if you slip on your next ice skating trip and are out of work for a few months, how long will you be able to make your house payment.  Most of the time the banks will want to see a 'reserve' (remember, that's just a fancy banker term for savings) of six month's worth of your current mortgage payment (with taxes and insurance).

So, for example, let's say that your new proposed mortgage payment is going to be $1,220 including taxes and insurance.  In most cases, you'll need to have $7,320 sitting on the sidelines somewhere.  Now, this is NOT the case with FHA, VA, and most first-time homebuyer programs.  

Bottom line…the bank wants to see that you have the ability to save a little money and use it if you need to.  They want to see liquid assets such as 401k, checking and/or savings accounts, stocks, bonds, CD's, IRA's or any kind of other account.  

In other words…No, Bubba, you're 1979 fully restored, totally radical AMC All-wheel drive Eagle (do you remember those things?) does not constitute as an asset to the bank.  Even though you're SURE it's worth a mint, they'll want to see something in the bank.

5.  SHOW ME THE MONEY, JERRY! 

The amount of money you make each month is really irrelevant to the transaction as long as you can document enough monthly income to cover your DTI.  However, when it comes to making money, the banks want to see a track record of being able to make money.  So, employment history comes into effect here.

If you're one of those people who have made a career out of changing careers then there are a couple things you'll want to know when looking to get a new mortgage.  First, nearly every single loan product out there is going to require a two-year work history WITHOUT any gap in employment.  That means if you decided to take a three-month 'fishing sabbatical' last year you're going to have a hard time convincing the bank to give you some money.

Second, Verification of Employment forms are ordered on nearly all loans now.  What's that you ask?  That's a form that's sent over to your employer to verify your wages, date of hire, last pay raise, and a couple other minor employment questions.  You wouldn't think this would be that big of a deal, but we've had several loans held up because of this one little piece of paper.  So you'll be best to let the boss know someone from the bank will be calling, faxing, or emailing over a paper.  We need it back, don't throw it away…thank you very much!

Unfortunately, these aren't the only things killing deals these days, but if I had to load my quiver full of deal-killing arrows it would have these five for sure.  Most of the problems I see on a day-to-day basis would fall in one of these five categories.  There are ways to work with or around the issues in order to get your deal done.  That is why it's so important to work with a professional.

I'm in this business to stay.  I'm not just waiting it out until I find something better.  I strive to become educated in the industry so I can provide you the best possible option currently available.  So, even though Cousin Eddie told you he'd "Hook you up" with your next mortgage…you may want to consider dealing with someone who knows how to structure the deal to make it work.  

If you have something specific you'd like to ask me about your personal deal then shoot me an email or call.  I'm happy to answer your questions and help you prepare to avoid "The 5 Biggest Deal-Killers of Your Next Home Mortgage."