Mortgage Lender Atlanta

2012 Will Be the End of Low Mortgage Rates

Jim Duffy — Tue, 24 Jan 2012 19:16:40 +0000

If you are a frequent listener to The John Adams Radio show every Saturday, then you have heard me say that these low, low rates that we have enjoyed in Georgia and the Southeast for several weeks now are set to jump.

Now, let’s take a few minutes to go deeper on the reasons why mortgage rates will rise soon. Something the radio format does not allow us to do, where this medium does.

First, take a look at the chart below showing the falling rates over the past year. I know, I know, this is the 10 year Treasury and I constantly preach that rates are not priced off the 10 year Treasury, but rather off Mortgage Backed Securities (MBS). True. But the two move in the same direction 87% of the time, and trend in the same direction. So for today, this will do the trick.

You can see how low rates are right now – never lower since the 1920′s. So if you are considering an Atlanta are refinance, an FHA Streamline refinance, a VA refinance or a conventional refinance, then act now. The HARP 2 Refinance will be opening up soon.

Click here to get a quote

Now, there are four reasons why rates are set to rise.

1. The Federal Reserve Asset Purchase program: The Federal Reserve announced at the end of 2008 that they would begin a program in 2009 to purchase Treasuries and Mortgage Backed Securities, in an effort to stimulate the economy. The initial program was $1.25 trillion to purchase these assets. Then the bailout allotted another $600 billion to purchase treasuries and MBS, and the Operation Twist & Shout, you may recall, added another $400 billion to switch short term instruments for longer term instruments.

And, all that buying has played a major role in keeping mortgage rates down. But that is expected to end in 2012, assuming the economy finds some solid footing. And with a major buyer of MBS out of the market, rates will rise.

2. Economic Uncertainty: When the economic outlook is uncertain, investors flock to the safety of certain returns, safe and predictable returns that MBS and treasuries offer, and away from equity markets. But, as safe as those are, they are not high returns.

As the economy improves, such as adding jobs for the past 14 months and as housing bottoms out, like it is doing in many markets, then investors will re-direct assets to riskier investments that hold a promise of greater payouts. Rates will rise as this happens as well.

3. Sovereign debt crises: Greece and other countries in the Eurozone have been in the news a lot as their sovereign debt crisis plays out before all of us. I have spoken of Greece and the other countries involved a lot here, and how their woes are helping keep our mortgage rates low, since it is driving investors to our shores to buy the safe haven bets that are our bonds.

Well, this is still the case. But Greece may have come up with an acceptable solution, after writing down their bonds by 70%. Not pretty, but it could have been a lot uglier. And Italy, Spain and others are still working through their problems – and the UK has not even made the headlines but has very large debt issues.

So long as that is playing out, investors will keep buying US bonds, including MBS. But that will reach an endgame at some point. Then our rates will rise.

4. And, finally, Inflation: Inflation and mortgage rates are like oil and water. They don’t mix. If inflation is on the rise, and many signs are that it is, then rate have to rise. The reason is simple. If an investor buys a mortgage backed security at, say, 4%, and we reach a 4% rate of inflation, then the investor’s real return is 0%. Safe or not, 0% return is unacceptable to most.

Rates are about to rise. If you are considering an Atlanta area refinance, then act now. And, if two or more of these factors happen at once, then rates won’t rise gradually, but they will jump like a wound spring. Don’t wait.

Click to get a free rate quote, or call me at 1-800-MY-LOANS (1-800-695-6267).

Atlanta HARP 2 Refinance Loan

Jim Duffy — Sun, 15 Jan 2012 14:57:59 +0000

Excitement is growing over the upcoming Atlanta HARP 2 refinance program, that will allow homeowners who are under water on their mortgage to refinance, and take advantage of these low, low mortgage rates.

We will be able to begin closing these loans in March of this year, 2012. In the meantime while waiting for that program to open up, you can do a little homework to make sure that you qualify for this new program.

Is your loan owned by Fannie Mae or Freddie Mac? Check Fannie Mae Lookup here, then check Freddie Mac Lookup here. And remember, Fannie and Freddie do not “service” loans. So who you send your monthly payment to is not important here.
Was your current loan closed prior to May 31, 2009? To be HARP 2 eligible, that is the cutoff date.
Is your mortgage current for the past 12 months? You can only have 1 30 day late payment in the past year, and no late payments in the past 6 months to be eligible.

Then you are on your way to being Atlanta HARP 2 refinance eligible. You will have to qualify in every other way, credit score, income verification, etc. But, in most cases an appraisal will not be necessary, and there is an unlimited loan-to-value.

That is very good news for many homeowners. I cannot tell you how many homeowners around metro Atlanta I have spoken with who love owning their home, it is where memories are created, and family is kept safe. Yet, due to the market around them, many of them wonder if they should be considering short selling their home, and buying elsewhere. Most don’t want to do that; but pure economics is making them consider it.

Now those homeowners who love their homes will have the payment relief to give them the confidence to stay put, continuing building their lives and their families within the home, and know that with time the market will return and they will be happy that they stayed in the home.

If that is you, then I am happy to tell you that this program can do a lot of good for you. I would be honored to help you with this refinance that allows you to stay in your home, where your heart truly is.

Just fill out this form to be included on the list of the first HARP 2 refinance candidates.

And, if you have any questions, feel free to give me a call and I and my team will do our best to get you the answers, 1-800-MY-LOANS (1-800-695-6267).

Want to Buy a Home in 2012

Jim Duffy — Fri, 06 Jan 2012 01:36:51 +0000

Turn on the news or log onto the internet and one story has jumped out for 4 years now: Housing.

The most common narrative is “The housing crisis continues…and we need housing to lead us out of this economic downturn” with the subsequent commentary of ailing homeowners and wondering when, or if, the economy will turn.

Well, let’s take a moment to break through all of that negativity, flip that coin, and look at the positive of this market.

If you already own a home that you have owned for several years, then yes, you will have to bite the bullet to sell that home. A recent client had a home to sell, which would have easily sold for $350k just a few years ago. But they had found their dream home, and wanted to explore selling and buying the dream home. They sold, for $272K. And went dragging their feet to the closing table all the way.

But, they then put that behind them and focused on closing on their dream home. A home that sold in 2007 for $1,200,000. They picked it up for just $835K. And at a jumbo mortgage rate that was lower than the conventional mortgage rate they had on their previous home.

Win.

All fine and dandy for that buyer, you say, ‘who can afford that size home in this economy, anyway?’ Must be part of the 1%

What about the rest of us, first time home buyers dipping a toe in this water with fear and trepidation.

Easy. If you have a good job and are planning on putting down roots in your area for some time to come, meaning a few years, not a few months, then you really, really need to consider buying a home right now. Set in roots, be part of a neighborhood, and buy your home, your security for yourself and your family, right now.

The numbers have never been better. Currently, even with pretty good credit scores, Atlanta area home buyers – and home buyers throughout the Southeast – can qualify for a 30 year fixed rate FHA loan in the high 3′s.

Yes, right. A 30 year fixed rate in the 3′s. With a fair credit score.

Okay, so that is reason #1 to buy now.

Reason #2: Home prices are at or very near their trough. By some accounts we are at the bottom of home prices. By other accounts, home prices in general could drop another 5-7%.

Want to know what I think? I think home prices will drop a little more in general. Gaasp!! (Then why is he telling me to buy now?)

Easy. I think home prices may drop a bit more from here, but not until mortgage rates rise. And when rates begin to rise, in earnest, they are likely to rise very quickly, spooking home buyers into offering less, because homes will be far less affordable.

Then we will hit an equilibrium again. Home prices will stabilize, then eventually rise.

The next largest objection to buying a first home: Coming up with the down payment.

Look for a very important post here next week on a terrific down payment assistance program, where I can help a first time home buyer in the Southeast to get a grant to cover the down payment. Very exciting – so subscribe on the left side of this page to the RSS feed to get that news as it breaks.

And, if I can help you with a free rate quote, click here, or call me with any questions regarding your specific circumstances, at 1-800-MY-LOANS (1-800-695-6267).

Housing in Your New Year’s Resolution

Jim Duffy — Fri, 30 Dec 2011 18:56:21 +0000

2011 flew by, and now 2012 upon us. Time for New Year’s resolutions, a plan to make one or another aspect of our lives better by this time next year.

I looked for a solid statistic about how many of us keep our resolutions; and although I could not find anything I would call scientific, a general consensus seems to be that between 92-94% of us actually keep our New Year’s resolutions.

So, this year, I propose you and I scrap our New Year’s resolutions, and instead formulate our New Year’s Plan. As with any plan, it needs to be specific and written. A resolution might be, ‘I want to exercise more and get in better shape’. A plan is more specific, ‘I will be out the door to the gym every Monday, Wednesday and Friday by 6am to make my appointment with my new Personal Trainer’.

Ouch. Sounds like that one is going to hurt – but in a good way.

And now let me propose that you include real estate in your plan for the new year. Why this year, in 2012, you might ask? Simple, as my friend Snap likes to say, “In real estate right now the planets are aligned, Mars is aligned with Jupiter and the moon is in the fourth quadrant“.

Fill out this form to get a rate quote for your mortgage.

Okay, I always wonder just a bit what he means by that as well; but what is certain is that Atlanta mortgage rates are low – as of this writing they are back to their lowest point EVER. That fact aligns with the low, low prices on homes and with an inventory that is mostly either short sale or bank owned homes, and banks are really starting to loosen up and just make the deal to move properties off their books.

And the only objection to not buying other than personal finances are not in line yet, is that home prices could fall further, that we have not hit bottom yet. And that is where I love this graphic from KCMblog:

Sure, prices by some estimates may drop another 4-7% before we see a bottom.

But as that happens, mortgage interest rates will certainly rise. And a 1% rise in interest rates equates to a payment equal to a 10% drop in price.

None of the economists that I follow are predicting that much of a further fall in home prices. So, the conclusion would be to take advantage and buy now – to take advantage of the stars and planets aligning.

Then the only question left is How to take advantage of this perfect housing market? We are all different and at different stages in our financial lives and situations. So, let me give you a few ideas, and hopefully you will incorporate the appropriate ones into your life plan for 2012:

Buy Your Own Home: Whether single or if you have a family, there is no better way build wealth and protect your security than to own your own home. For some credit is an issue and needs some work to rebuild good credit; and for others coming up with the down payment is a difficulty. My team and I can help with both, if you are committed to buying a home in 2012.
Pick up an Atlanta Investment Property: Few better ways exist right now to diversify your investments and really increase cash flow, with tax advantages, than income producing real estate. I work with some of the best wholesale groups in town, and would love to help you fit that into your plan. Oh, and we have some great Atlanta investment property loans.
Buy a Second Home: If you are in the enviable position to buy a home at the beach or in the mountains, then what better way to get away (from Atlanta traffic!) and relax…and more importantly to create memories with your family that will last a lifetime. Many people do not realize that conforming loan rates for a second home are exactly the same as for a primary residence. And, many more don’t realize that jumbo loans are available and priced very aggressively for second homes as well.
Refinance: With rates this low, who would not consider refinancing?

Out of an A.R.M.: Many people are still in an Adjustable Rate Mortgage. If your plan is to stay in the home long-term, then you really, really need to look at a long or short term fixed rate loan. I don’t think rates will rise dramatically in the near future; but when they begin to rise, they will shoot up. And that ARM will feel like it just got beaten in an arm-wrestling tournament with Bruiser. Get out now, and fix that rate.
Shorten the Term: If your goal, like many, is to be completely out of debt as soon as possible, then let’s look into a 15 year or a 10 year fixed rate loan. With rates this low, you may be surprised by how affordable that has become.
What if you are Underwater?: So many Atlanta homeowners owe more on their mortgage than their home is worth. If that is you, then you may qualify for a HARP 2 Refinance, and that program will open up soon. Check out if you qualify HERE.
Lower that FHA loan rate: A lot has changed with FHA loans, specifically the FHA Streamline refinance. No appraisal is needed, so it does not matter what you owe, and no income is calculated. So long as you are employed full time and have not missed a mortgage payment in the past 12 months, then you can very easily refinance into a streamline FHA refinance.

Fill out this form to get a rate quote on any of these programs. Just make note in the comments section what you are looking for, and we will try to help.

So, bring in the New Year 2012 with a plan to make real estate part of your life this year. Call me if you would like input on implementing your plan: 1-800-MY-LOANS (1-800-695-6267).

I hope that I can help make your New Years Plans a reality this year.

Christmas Greetings from All of Us

Jim Duffy — Thu, 22 Dec 2011 21:22:34 +0000

We are closing our last loans for the year, and thankfully with the team we have seen them all to a good close. It has been a tumultuous year in the mortgage industry, and the team we have put together has weathered the storm well, and grown in both number of loans completed for you, our friends and clients, and the smooth closings that you have come to know us for.

We with you a merry Christmas, and a prosperous New Year as we look to 2012. All the best to you and your family.

Christmas and My Faith in America

Jim Duffy — Thu, 22 Dec 2011 11:53:42 +0000

All told, this has been a tough year.

Not for everyone, but for many. Jobless rates are up, if you take historical data into account and ignore some of the New Math that Washington is using. Home values are down, and the Realtors group overstated home sales by some 3 million homes. Europe is melting down, the Euro may not survive and certainly won’t look the same this time next year; and that will spill over across the Atlantic to our shores.

The election of 2012 will be a focus, and will be contentious at best…a drain on America’s goodness at worst.

And yet, here we are at Christmas. A time of love and family, of giving and thankfulness and counting our blessings. And I am glad we are here, for it will be Americans, you and I, who reinforce the foundations of this Country, not government.

Well, here’s how I see it. We will have tougher economic times as a country before things get better. But things will get better, not because of anything government will do, but in spite of everything the government will do. Because we are Americans, and we rise up to a challenge.

We have seen tough times before, many of them. And our relatives and family dug down to their core values and found out who they were and what they were capable of. Just as at the founding of our Country or the civil war or the Great War or the Depression – great men and women rose from those times and great things were accomplished during those times that brought us out.

I believe in America, because I believe in Americans. We know how to sacrifice and we know how to be strong. And, we know how to innovate more than any other nation as a whole. I have lived abroad for long periods, and I have fallen in love with the cultures that accepted me. Each one has some great attributes.

But one thing America has more than any other nation is the innate ability to pull together as neighbors, take risks, support one another and innovate.

Housing will be one area, believe it or not, to lead us out. So will farming and so will medicine. All passions of mine; but housing is my expertise and where I make my living and support my family and my community.

I will tell you, in 2012 you should look at housing as well. If you don’t own a home, then buy one. Home prices could go down more, and I will be the first to tell you that. They could and they may. But mortgage rates will rise more, and of that I’m sure. For every 1 point in interest rate increase, that equals a 10% drop in home value. So, do the math, with home prices this depressed and rates this low, you will do very well to buy a home in 2012.

You can get a free rate quote here.

And, if you have some extra money, invest in a cash flow rental property. As the economy worsens, assuming it will for a short period, more people will not be able to buy and will need to rent. And if inflation takes hold, then rents will increase, while your underlying fixed rate mortgage will remain constant.

Oh, and don’t bite off too much. Hire a property manager to manage the property rather than doing it yourself. Cash flows allow for that now, with no problem.

Are tougher times coming? I believe so. Then we will find our national identity as generations before us have, and we will grow out of this and become stronger, and help our children become stronger, for it.

Look at real estate to help you get through these times and come out wealthier in every sense of the word. Choose housing for you and yours that is safe, among good neighbors where you can care for yourself and your family, and those around you.

And, have a merry Christmas. A special time of love and warmth and spiritual preparation for the tough and the very good times ahead.

They’re Baaack…Extreme Low Rates, That Is.

Jim Duffy — Tue, 20 Dec 2011 00:11:43 +0000

A few months ago I posted a video message about extreme low Atlanta mortgage rates, and some people took advantage and locked in. But the rates did not stay that low for long. They rose…not very high, but certainly off the lows.

I am going to offer a sampling of rates – and long time readers of this blog will note that I do not publish rates very often. That is because so many factors go into pricing a loan nowadays that it is hard to toss out a generic rate. But, that said, here goes.

Well, not sure how long it will last, but take a look at a sampling of rates right now:

The current rates, based on Owner Occupied home, a $260K loan amount, 80% LTV and 760 credit score and full closing costs (but no discount points), are:

30 year fixed: 3.75% (APR 4.014)

15 Year Fixed: 3.125% (APR 3.374)

7/1 ARM: 2.875% (APR 3.052)

5/1 ARM: 2.5% (APR 2.703)

For fixed rates, add .25 to rate to charge NO Origination; and .375 to rate for NO Origination on ARM’s.

Rates can be a bit higher than that for higher LTV’s, lower loan amounts or lower credit scores. But, they are still at the lowest point ever, so wherever you and your loan falls, you should take advantage to refinance, right now.

And, consider it a Christmas present…from the markets, if you will.

Call me to see about refinancing at 1-800-MY-LOANS (1-800-695-6267), or just click to fill out a form for a free rate quote.

You’ll Be Home For Christmas

Jim Duffy — Sat, 10 Dec 2011 17:43:54 +0000

This video and the chart that I show here is the best indication that homes are on sale – and, even better, mortgage rates are on sale.

Black Friday came and went, and if you camped out after feasting on turkey for the best of the best deals in electronics, then those deals will pale in comparison to the deals on homes now. Watch this to find out more:

If you don’t own a home now, consider buying your first home in the New Year. Small down payments will get you in; or even a grant to cover the down payment. Click here to get a free rate quote.

And, if you are worried about the stock market right now and are worried about the economic climate, then consider diversifying your portfolio and investing in good, cash flow real estate. Oh, and here is a closer look at the Chart from the video.

I will be happy to get you pre-approved and show you loan options that you qualify for. Call me at 1-800-MY-LOANS (1-800-695-6267).

Another Look At Historic Mortgage Rates

Jim Duffy — Thu, 01 Dec 2011 16:01:18 +0000

I have spoken before about housing being at the height of housing affordabilty. And that is because rates are at all time lows, combined with home prices being extremely low, and incomes being stable for most people.

Well, here is a look back at mortgage interest rates over the years:

As you can see, long term fixed rates are less than half of their historic average of 8.5% over the past nearly 40 years.

So, what do you do with this information?

Buy or refinance, and take a look at my top 5 ways to take advantage of low rates. If you have a home, take advantage to refinance, even if, like many, you have to bring some money to closing to pay down the existing balance. A ‘cash in’ refinance is not pleasant; but the cash flow savings usually far outweighs the pain of paying down the principle balance on the loan. Or, you may even qualify for a HARP 2 refinance.

If you own a home and have already refinanced to a very low rate, then great! Consider buying an investment property or two. The cash flow on a good, solid investment property is superb. And over time that will make for a great investment.

Many people are buying second homes at the beach, one of the many lakes around north Georgia, or in the mountains. Be sure to budget well for that purchase. But if you have it in the budget, then the memories you will make in that second home with your family will last a lifetime.

And, if you know anyone who does not own a home currently, please encourage them to consider buying. It is much cheaper than renting a comparable place, especially after factoring in the tax advantages to owning. And if the down payment is a problem, I have grant money available and several creative loan options for them.

I don’t think rates will stay this low for long – once Europe figures out their path, I think investors will focus on the US, and we will see rates rise here as well. So, take advantage now. You will be glad you did.

Click here for a free rate quote; or just call me at 1-800-MY-LOANS.

Time to Refinance Out of Your ARM

Jim Duffy — Sat, 26 Nov 2011 15:20:20 +0000

If you have an Adjustable Rate Mortgage (ARM) that you have had over the past several years, then you know how happy you have been with the low, low rate.

An ARM rate is calculated based on the Index it is tied to and adding the Margin that it carries. And most ARM loans reset, or adjust, every 12 months. So, it is Index + Margin = New Rate.

A good ARM has a Margin between 2-2.75%, and is added typically to the LIBOR Index or the Treasury Index; the most common over the past several years being the LIBOR.

So, let’s take a look at the LIBOR and what it is doing of late, and why your ARM is so rock-bottom low right now:

Source: Bankrate.com

Focus for a moment on the longer term LIBOR rates, especially the 1 year LIBOR, which is what most ARM loans are connected to. It is starting to rise now. And, it will continue to rise. Why? Well, that is a larger discussion of the macroeconomic state in the Western world. Suffice it to say for brevity that the LIBOR is the rate at which banks lend money to one another, and the banks are beginning to charge more because they don’t see a stable banking environment at present.

I know it is uncomfortable to go from your current ARM rate of 3-3.75% in many cases to a long term fixed rate of about 4%. Your payment is going UP, and you are adding closing costs to your loan at that rate. That is uncomfortable, at best. I get it.

But very soon, you will see your ARM rate rise a little, and then dramatically. Most have lifetime caps of 5 or 6% over the start rate. If like many your start rate was, say, 5.25% on your ARM loan, and you have a cap of 5%, then your very comfortable rate now could dramatically rise to 10.25%. Ouch!

But by that time, long term fixed rates will have risen right along with the adjustable rates. So, my advice: bite the bullet now and refinance into a fixed rate mortgage loan if you plan to stay in your home long term.

Same thing, of course, for a beach house or any second home that you plan to keep. And, for your investment properties? How much do rates need to rise to take you from cash flow positive to upside down and subsidizing your tenants rent by paying the rest of the mortgage out of pocket?

Click and fill out this form to get a free rate quote on that fixed rate loan, or just call us at 1-800-MY-LOANS (1-800-695-6267)