Ask The Underwriter at 2rHouse.org

The most recent upgrade promises to add some exciting functionalilty to this site. It appears to have gone without a hitch, but if you encounter problems, please contact me and let me know exactly what you experienced and what you were trying to find.

I hope you like the new look as much as I do.   Here’s what’s new besides the look:

Mortgage rates are now available on the site.  You’ll find the overnight average for almost every kind of mortgage loan program out there, provided by Bankrate.  Here’s the link:

Current mortgage rates 

Home equity line of credit rates are on the same page, featured right below the first mortgage rates.

We’ve also added mortgage loan calculators to this site so you can figure out the monthly payment for the loan amount you’re considering.  There are first mortgage calculators and home equity loan calculators right under the first.

Mortgage loan calculators 

The other change you’ll notice is that the blog has been moved over to make room for better navigation through the articles.  There are still many articles left to move into the directory, so if you don’t see what you’re looking for, it’s probably still buried here in the blog.  Just do a quick search.  We’ll get those additional articles moved in a few days.

In the meantime, you can return to the main index here:

Home 

During the next few days, the site will be going through an upgrade. I hope that everything goes smoothly, but leave an apology here in advance just in case. Hopefully all the kinks will be worked out by Monday and you could see some real improvement in looks and functionality long before that.

Thank you for your patience. Please bookmark the site and come back soon.

It’s a pretty quiet time of year for housing starts and new home purchases. It still happens in December for sure, but May and November are usually the peaks and December is definately a slower pace than the rest of the year. If you’re a buyer, it might be a good time to find a bargain.

January is the time if you’re a seller. Buyers begin the search in earnest as the year turns and while they may not actually be knocking on your door yet, they are thinking about it. Take the time to plan minor fix-ups and improvements that will improve your curb appeal. Clear the clutter inside and make your space seem bigger and more inviting.

Buyers: this is a good time to work on improving your credit score. It’s possible to raise your score 20-50 points in a few months. January is when the good appliance sales and home furnishings are at their lowest prices. If your FICO score gets you higher rates, you’re not making progress, are you?
Start working on your credit now and by late spring, you could see enough improvement to get into a home.

Above all else, pull your family around and enjoy the winter Holiday season. Merry Christmas, Happy Holidays, and a blessed New Year to all of you.

The Feds raised rates again yesterday. Now the base Fed rate is 4.0%, highest in several years. The signal given at the meeting was that rates would continue upward until inflation was knocked back. It’s time to batten down the hatches, fasten your seat belts and get ready for the ride.

In case you haven’t picked up on how this works: when the ecomomy slows down, the Feds drop the rates to encourage you, the consumer, to spend more by borrowing. You borrow with the low rate plastic in your pocket and you pay with the low home equity rates on your debt consolidation loan.

You don’t worry about doing this because 1. A warming economy means less unemployment and more money for those with jobs. 2. Everybody does it and it doesn’t really seem like anything more serious than “the way things work”.

I got off the topic a bit – my point was that until we absorb the increasing cost of fuel and everything that has to be moved across the country using fuel, plus everything else we use petroleum products for – we have to live with ever-increasing interest rates. This is how middle America eventually goes under, just to begin again in a few years.

Is there advice buried in here somewhere? I’m afraid that too many of you are going to ignore the signs of impending debt overload and upward spiraling payment shock. After all, its close to the holidays and who wants to think about money right now? Not me. But my housing expense isn’t going up until the next tax bill or insurance premium.

I’ll try to be very clear as I wrap up here. I recently added a sponsor who put what they do right in the name of the company. The wrap-up to this post will be their one-line commercial for what I’ve been trying to tell you for over a month now: Get the bills paid down or off and get the house payment as under control as you can so you can survive the ride of the next year or so.

The old rules about when to refinance are about as helpful as Old Wive’s Tales, which means that if the old rule fits the circumstance, then use it. If not, ignore the advice.

When I started in the business the rule of thumb was to refinance when rates dropped 2%. That reasoning was based on the cost of refinancing, which usually included all new documents, plus an origination fee and discount points that could add 3 or 4 percent to the transaction.

In the last few years we have seen a new habit develop, which was good and bad for the financial health of the average American family. Refinancing was almost painless and almost always resulted in a significant payment savings. Paperwork has been reduced by the lenders to the point where refinancing was almost as painless as a six month dental check-up and just as valuable.

Many families were able to free up some substantial cash that was previously going to the interest only and use that money for improvements, debt reduction, investment, or education purposes. That contributed to the family’s financial health and to the US economy both. Spending and consumer purchases in general increased because cash flow increased.

What’s bad about that? Not that much really, unless you have never lived through a cycle like the one we are approaching. You need to understand that as rates rise and the economy slows down, it will be harder and harder to qualify for refinancing. If you are left holding one of those teaser rate adjustable mortgages, your lifestyle is going to be severely cramped as that rate goes up and up over the next couple of years.

If your income situation changes at all, be prepared for qualifying issues that you may not have faced before. When foreclosures increase (and they are) lenders get very careful about throwing their money around. If you find yourself downsized or suddenly self-employed, you may no longer qualify.

So what’s the bottom line here? Take a look at your mortgage situation TODAY. If you have an adjustable rate, it is time to consider one last refinance while fixed rates are still very affordable. If your mortgage is OK, but your debt load is causing concern, then a home equity loan might be just the thing to consolidate and get you on track for cleaning up your over-spending habits.

There is no reason to think the sky is falling on Chicken Little here. When you take control of your finances and know where you stand, the ups and downs of economic conditions don’t have to force your hand. This time of year is extremely popular for refinancing and home equity loans anyway, since many people settle down at the desk when summer is over and take a look at the financial picture before year end. My advice is to do that TODAY.