1,599 grants remaining

Besides the $8,000 dollar tax credit for first time homebuyers, there is now a $6,000 grant for anyone that purchases a new-construction home. The guidelines are pretty much the same as the federal tax credit except the home must be new construction and the buyer does not have to be a first time homebuyer. There is some excellent information about it on the utah housing website.

Obama's Tax Credit

A lot of people have asked me about the new first time homebuyer tax credit and how it compares to the old $7,500 tax credit/loan. The two biggest differences that I can see is 1. It is for $8,000 and 2. It is not a loan but a legitimate tax credit that you don't have to pay back!! Sounds pretty sweet to me. One way to think about it is if you buy a home for $100,000, the real price is $92,000. Frankly I wish I were a first time homebuyer so I could take advantage of this incredible opportunity. For more information, I found this article on yahoo.com... First Time Homebuyer Tax Credit

New way to contact me!

So I just found this meebo widget and thought it could be a great way for people to contact me with their mortgage questions. Whether I'm online or not, and whether you are a current client, a potential client, a realtor friend checking on a deal, a friend, or just somebody with a mortgage question, I hope you will feel free to use this new chat platform. Contact me anytime!

Yield Spread Premium

In short, yield spread premium is the rebate that the lender pays to the mortgage broker. The amount of that rebate depends on the interest rate that the borrower agrees to. For example, a loan officer might offer a borrower an interest rate at 6% and the lender (e.g Countrywide) would pay the mortgage broker a 1% ysp (e.g. on a loan amount of $100,000, the ysp would be $1,000) At an interest rate of 5.75% the ysp might only be .5%, or $500 on a 100k loan. In the past it hasn't been required that the loan officer disclose the ysp to the borrower and it was kind of a secret. But that is changing and it is now required that the loan officer disclose the ysp on the good faith estimate (usually around line 814). This is great news for borrowers so that they can see if they are really getting a good deal on the interest rate. Word to the wise...anything above 1% ysp and you could probably find a better deal elsewhere.

Is it time to buy?

Sorry for not posting for a while. I have been pretty swamped with all of the refinances that people are requesting. While I was looking at my list of current clients I realized that 90% of them are clients who are refinancing and only 10% are clients that are purchasing a home. This got me thinking about a couple things. My first thought was that maybe I am the only loan officer in town with this ratio and I need to do a better job marketing to real estate agents (in 2009 I have the goal for 40% of my business to come from real estate agents. Right now it's like 10%) After talking to some of my loan officer colleagues that had similiar situations I thought "why aren't more people buying homes?!" With interest rates as low as they are and the first time homebuyer tax credit of $7,500 Iwould think that everyone would be scrambling to purchase a home. I've come to the conclusion that the media has poisoned everybody with the fear that they are going to lose their job and be foreclosed on their home. So a couple things need to happen...People need to stop listening to the media and Obama needs to push the "recession off" button in that secret room in the White house.

4.25% on 15 year fixed!!

Today an FHA 15 year fixed got as low as 4.25%. That is the lowest that Wasatch Mortgage has ever seen in it's 10 years of existence. The other nice thing about a 15 year fixed FHA loan is that if the borrower has 10% equity they will not pay any monthly mortgage insurance.

Rates!

Have you ever felt like you were running around like a chicken with your head cut off? Well, that's pretty much how I felt Wednesday morning when I arrived at work and saw that interest rates on a conventional 30 year loan were at 4.5%. I mean, what do you do when you know that everyone and their dog needs to know about this information and you know that there isn't enough time to tell all of those people. Well, after I calmed down I was able to lock in a couple of borrowers that had done applications with me and I called everyone I knew. Unfortunately, rates did not stay low for long, and within 2 hours rates had risen back to 5.125%. The moral of the story is...when you are thinking of doing a refinance, get your application submitted as soon as possible so that your loan officer has the opportunity to lock your rate in when rates drop significantly.

Testimonials

"I've recommended my buyers to John Neil and Wasatch Mortgage Solutions regularly. John establishes a good raport with my buyers and offers a competitivc good faith estimate. John answers their questions and processes his loans efficiently and avoids delay. John holds the record for my quickest loan processed from offer to funding in 8 business days while still offering the most favorable terms for my buyer. Both my buyer and I were impressed with John's capabilities and expertise. I'm glad I've used John's services in the past and plan to continue calling on him in the future"
- Patience Fisher, Bonneville Realty

"I refinanced my home about 5 months ago, and Wasatch Mortgage hooked me up with John Neil. What a pleasant surprise. I told him what my needs were and what my situation was at the time, and he immediately went to work for me. He sincerely listened to me. He presented me with three options that I could do, with no pressure. He was very informed in the mortgage industry, and also had a very good association with a title company that I ended up using. He thanked me for having good credit, and he even called me up a couple of months after helping me get the loan to see how I was doing. In talking with him at that time, he went way beyong the call of duty, and hooked me up with an individual that would be willing to list my business that we are trying to sell. I would recommend John Neil to anyone that is trying to get financing on a home. I have gone through this process 4 times now, and my experience with John and Wasatch Mortgage Solutions was my best experience"
- Robert Willmore

"John was at all times prompt, courteous and professional. He explained loan options clearly finding us the lowest rate. I recommend him highly!"
- Marsha Ray

When does it make sense to refinance?

I have heard some people say that you have to improve your interest rate by a full percent to make it worth it. Others say a 1/2 percent is enough to make it worth it. The fact of the matter is that there is more to it than just the percentage that you improve your rate. It's really quite simple actually. You just have to find out 2 things: 1. When is my break even point? (which is calculated by dividing the % cost of the refinance by the % improvement in the rate. For example if the closing costs are equal to 2% and you improve your interest rate by 1% than your break even point is 2 years.) and 2. How long do I plan on staying in the home? If your break even point is 2 years and you plan to stay in the home for at least 3 years than it is to your advantage to refinance. I recently refinanced a client who was planning on selling their home in one year. Because of this, it didn't make any sense to do the refinance if they paid closing costs. We were able to structure their new loan so that they still lowered their interest rate without paying any closing costs. The moral of the story is that everybody's situation is different and a good loan officer should be able to help you understand why it does or does not make sense to refinance.

Morgage Rates Coming Down

It's Tuesday, November 25th and mortgage rates have come down dramatically today. A 30 year fixed is at 5.375% and a 15 year is at 5.25% (The spread between the two is smaller than it has been historically). But this is great news for home buyers and those interested in refinancing! Call me at 435-770-2709 if you would like to see if it makes sense for you to refinance.