Market Stabilization...weathering the storm

I've figured out how to stablize the US Economy. It happened today, and it seemed to have worked: Close the stock exchange! The US markets closed today for Holiday. There were no mid-day intra-day mortgage price changes, no banks swooping-up failing banks; Just a day to reflect on the past and strategize for the future. The future is certainly uncertain. Your decision to Refinance or Purchase will be based on your level of Pleasure or Pain. I am advising clients for longer-term security to face the inevitable turbulent times ahead. There are plenty of lenders willing to work with most clients. The sweet spot now is the 750,000 loan size and under. Those people on adjustable loans can lock in security of a 30-year loan now. Certainly in SF and Marin County on that size loan, take the Fear (pain) out of your future and Secure (pleasure) an new loan with Pat Townsley. I provide you with peace-of-mind and service. Call me to discuss your needs and options: 415-485-1776. Licensed mortgage broker. http://www.ptre.net/

America is Conforming!

New Federal "conforming" loan limits are now in effect. Prepare for the marketing onslaught. In some areas of the US, the Conforming rate has gone from $417,000 to $729,750. It's supposed to help US homeowners both in Refinance and Purchases by giving slightly easier loan underwriting and improved rates over the "Jumbo" loans (aka Non-conforming). The only Rub right now is that rates are bit too high TODAY for it to really do much good. We need the policy makers to drop the discount rate by 1 full point, then we've got some gas. Here in California, we'll see some good opportunities for many homeowners.
In closing, don't think we're an island here in the US. What we do impacts the world, and what the world does impacts us. It's a global economy, so make sure you're watching out for your own best interests as the blue planet plays financial hopscotch. Position yourself with secure diversified assets and a long term position on your mortgage whenever possible. Your broker: Pat Townsley, 415-485-1776, www.ptre.net

Cash out while you can!

It's been said that cash is king. With home values being "challenged" by today's real estate downturn, it's getting harder to refinance debt consolidation loans, cash for improvements, cash for investments or even to simply Fix or Lower your monthly payment. Please read the article below on utilizing your equity line Now if you need "padding." Also, I highly recommend that you look at the refinance opportunities (and purchase as as well) right now as the banks are getting tighter and tigher. Regardless of any stimulus package, eventually all borrowers, even the best borrowers, won't be able to finance real estate. One action that will help would be a cut in the Discount rate, but until that happens by at least a full point, real estate concernts will continue to drag down the entire country. Take action. Let's Talk: Pat Townsley, Mortgage Broker. 415-485-1776. http://www.ptre.net/

What goes up, must come down...

Mortgage rates are taking a beating this week; Almost a full point increase. I'm looking at the CNN home page and their breaking-news headline "Home Equity Slips Below 50%." That's a horrific sign. Another reason to access your equity line now (if you need it for Anything: see my blog under this posting). Rates reacting to bonds, sentiment and demand. For 15 years, I've been saying: Rates are going to do one of three things: Go up, Do down, or stay the same (on any given day). They've had quite a run-up, testing the top-band of resistance to how fast and high they can go. What will help? An immediate strike by the Fed on the Fed Discount Rate will ease things up on mortgage rates, but with the perceived "risk" to lenders, we should expect rates to remain in the 6%'s for the next few months. It wasn't too long ago when they were at 8.5%. Again, the Adjustable loans are now giving the lowest rate, now fully indexed at 3.87%. That's a sweet rate, but it comes with a bit of cost and less long-term "security." If your Fixed rate ARM is about to Adjust, rates in the 6%'s are STILL a better play than taking the hit on the adjustment. Keep that "Blue Sky Thinking" and stay positive in the face of adversity! Pat Townsley, Mortgage Broker. 415-485-1776. http://www.ptre.net/

Banks closing Home Equity Lines

How's your house of cards? Let's consider your home equity line. The interest is a tax deductible item up to $100,000 on your primary and/or vacation home. Now, you may have some “room” left on your home equity line that you’re counting on as “padding” for a rainy day. WARNING: Lenders are CLOSING existing equity lines. The process of elimination has already started. You may get a simple letter in the mail saying Your Account Has Been Frozen. It’s nothing you did, it’s just the market, the lender and a surprise. Not all surprises are good! If you even THINK that you need to pad your cash accounts, are considering paying off credit debt, buying a car or doing some upgrades around the house in the next SIX MONTHS…or if you think your INCOME is going to be impacted and your only reserves are within this Equity Line, it is the opinion of this mortgage broker that you BORROW IT NOW and put it somewhere earning a few bucks. You can always pay it back, take the tax write off on interest and call it a wash. Ask Yourself: WHAT IF my home equity line was frozen tomorrow? Call me for more information and the best new loan programs in this ever-changing market. Pat Townsley, Mortgage Broker. 415-485-1776. http://www.ptre.net/

(WARNING: If you have NOT accessed your equity line in the past 12 months CALL ME BEFORE you pull money out of your equity line! Borrowing money off your line is considered "Cash Out" when consolidating a new first and 2nd mortgage in any upcoming Refinance and WILL IMPACT your Loan To Value and possibly a new rate if you're planning on a Refinance!)

Understanding Soft Markets in California

The entire State of California has been has now been classified as a "Soft Market" area. In short: A fear of falling home prices. If a lender was to loan on your home based on an appraisal done today, it could drop even lower, putting the bank in a higher risk loan position. Previously, certain areas or counties were picked out. Now, the entire state is suspect. From this general blanket, banks have further identified regions and counties for even higher risk...so every bank has some type of "Grade" or Scale to rate the severity of the risk. Some do an "A to D" rating, other resort to name calling from Soft to Severe: Soft Market, Distressed Market, Severely Distressed Market.

How does this impact you? It impacts your Loan To Value and it may impact your rate on a new loan. On a purchase or refi, banks will whack 5% right off the top of the loan-to-value in Soft Market areas to 25% off and increase rates in Severely Distressed Markets. Even Marin in now a "soft market" but it's got a good rating. Sonoma is increasing in risk, and Napa is considered a Severely Distressed Market. Call me for more information. Take action to refi before rates increase and your loan to value becomes unfinanceable (that's a real word with dark overtones). Pat Townsley, Mortgage broker: 415-485-1776. http://www.ptre.net/