There has been much confusion over what the government has done to help support the housing market and home owners. There are a variety of plans that the government has been implementing, some successful, some not. Below is a list of a few:
• Fannie Mae DU Refi Plus – This program offers higher loan to values and combined loan to values than previously allowed. If you have a second mortgage, this program works well as long as your current second lender will allow the refinance even though the equity that you have in the home is negative.
• Home Loan Modifications – With this program your current lender would change the term of your current loan, often times converting an Adjustable Rate Mortgage to a Fixed Rate Loan or lowering your rate. However, in nearly all of these modifications, you must be late on your mortgage to qualify.
• First Time Homebuyer Tax Credit – This is perhaps the most successful program. The government is giving a true tax credit for up to $8,000 to qualifying buyers and allowing them to amend their 2008 Tax return to receive it shortly after closing. You must own the home for 3 years to not have to pay the money back to the government. You must close by November 30, 2009 to be eligible.
Please do not hesitate to call if you have any questions about the individual programs.
Showing posts with label mortgage planning. Show all posts
Showing posts with label mortgage planning. Show all posts
Monday, July 20, 2009
Monday, July 6, 2009
How Mortgage Interest Rates Work
Today I had a client ask me a simple question but one that I surprisingly do not hear very often:
How do mortgage interest rates work?
My answer was not quite as simple but I thought I would share it. Basically, interest rates move based on the perceived threat of inflation. In a sense, they are based on how the country's economy is faring. If the economy is doing well there is a greater risk for inflation which pushes long term interest rates higher. Conversely, if the economy is performing poorly then in general the greater risk is for deflation which causes interest rates to move lower in an effort to stimulate the economy.
Inflation is defined as a rise in the general level of prices of goods and services in an economy over a period of time. The more the cost everything rises, the greater the need for higher interest rates to increase the cost of money.
As I said, the answer is not as simple as the question but I hope it creates a sense of understanding of interest rates.
Matt Hanson
Mortgage Planner
Founder
Thriving Artist Alliance
How do mortgage interest rates work?
My answer was not quite as simple but I thought I would share it. Basically, interest rates move based on the perceived threat of inflation. In a sense, they are based on how the country's economy is faring. If the economy is doing well there is a greater risk for inflation which pushes long term interest rates higher. Conversely, if the economy is performing poorly then in general the greater risk is for deflation which causes interest rates to move lower in an effort to stimulate the economy.
Inflation is defined as a rise in the general level of prices of goods and services in an economy over a period of time. The more the cost everything rises, the greater the need for higher interest rates to increase the cost of money.
As I said, the answer is not as simple as the question but I hope it creates a sense of understanding of interest rates.
Matt Hanson
Mortgage Planner
Founder
Thriving Artist Alliance
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