8 things you shouldn't do if you are refinancing

With mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities.
The downside of today's unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business. As a result, the process of underwriting and approving new mortgage applications is taking some lenders as long as 2 months to complete.
With all the lending guideline changes of the past fwe years, it's important for applicants to remember that mortgage approvals can be revoked at any time prior to funding.
As mortgage applicants, there are many events that are out of our control -- job security and health matters, for example. But there are also events that are within our control.
Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process. It may be the difference between being approved and being turned down.

1. Don't buy a new car or trade-up to a bigger lease.
2. Don't quit your job to change industries
3. Don't switch from a salaried job to a heavily-commissioned job
4. Don't transfer large sums of money between bank accounts
5. Don't forget to pay your bills -- even the ones in dispute
6. Don't open new credit cards -- even if you're getting 20% off
7. Don't accept a cash gift without filing the proper "gift" paperwork
8. Don't make random, undocumented deposits into your bank account

Now, avoiding these items may not be practical for everyone. For example, if your car lease is expiring and you need a larger vehicle, it doesn't mean you can't buy the car -- just check with your loan officer first to be sure the new payments won't "break" your approval.
The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of downpayment.
Mortgage lending is full of "gotchas" and with underwriting times stretching to 60 days, it's a lot more likely that a mortgage applicant will trip into one. Following these 8 rules, though, is a good start.

Mortgage Rate Forecast for the week of 3/30/09

The stock markets made strong gains last week but the mortgage markets barely moved in the wake of the Treasury's "toxic asset" plan.
After carving out wide trading ranges on most days, mortgage pricing ended the week about where they ended
From an economic standpoint, though, last week was an interesting one.
-Existing home sales showed unexpected strength
-New home sales showed unexpected strength
-Data showed home prices rising unexpectedly
In addition, consumer confidence rose unexpectedly, too.
To rate shoppers, these "unexpected" developments are warnings worth heeding because mortgages trade on expectations of the future. And "the future", you'll remember was widely expected to be an economic abyss.
This is one of the many reasons why mortgage rates are so low right now -- during uncertain times, investors flock to safe investments. But when those expectations change, mortgage rates usually do, too.
And quickly.
Our current recession has been thus far called "housing-led" and was predicted to last several years. Last week's data, however, provides at least some evidence that the recession may be ending; that the economy may find its way forward sooner rather than later.
Indeed, even members of the Federal Reserve now call for a turnaround starting in as few as 6 months.
For now, market reaction to the unexpected data has been tepid. Therefore, watch for developments over the coming weeks and -- perhaps more importantly -- keep an eye on the investor mindset. If bond markets start to sell-off en masse, mortgage rates could jump higher by quarter-point leaps at a time.
Meanwhile, this week, the biggest data release is Friday's jobs report. It's expected to show unemployment reaching to 8.5% with another 656,000 Americans losing their jobs in March. As before, if the data isn't as bad as expected, watch for stocks to rise and mortgage rates to go with them.
Even with a trickle of good news starting in the housing sector, the Fed and the Treasury still have a strong interest in keeping interest rates low - I think the target is the 4.5 to 5.0% range on the 30 year fixed.

Last Call for FHA cash out refinances

If you're in want of a cash out refinance, the most liberal cash-out program in town is about to make qualification more difficult.
Effective April 1, 2009, the FHA is reducing the maximum loan-to-value on cash-out refinances by 10 percent, dropping the loan size limit from 95% of the home's value to 85%.
In its official press release, the FHA days it's making the change to "limit its exposure to undue risk".
It also lists the following cash-out requirements:
With less than 12 months since the purchase date, a home's value cannot exceed its original purchase price -- even if home improvements were made.
A homeowner must be current on his mortgage payments to qualify
A second, verifying appraisal may be necessary, depending on loan traits
Co-signers may not be added to the mortgage note in order to qualify
The last day to register a FHA 95% cash out refinance is Tuesday, March 31, 2009. The loan does not need to be "locked" -- only registered.
after April 1st, the highest Loan to Value for any refinance will be 85%. FHA loans are for loan amounts up to $303,750 in the Charlotte Area. If you think you could benefit from a refinace to get some cash to pay off other debts, buy a second home, or other reasons, please call us at 704-541-1171 or visit www.Piedmont-Mortgage.com.

Immigration Policy Could Solve Housing Crisis

An interesting editorial in the WSJ proposes allowing immigrants to be allowed in the US if they buy a home - eat up the excess inventory, stabilize prices, buy furniture, start companies. If they sell or rent in the first two years, they have to return home, after 5 years, they would get permanent resident status. Read more here: http://online.wsj.com/article/SB123725421857750565.html. This is a bi-partisan idea that has a lot of merit - maybe add net worth, education, or job skills requirements - attract the best and brightest who are able to immediately contribute to society.

New Home Sales Figures Show Unexpected Improvement

The national housing market got its third piece of good news in 3 days:
Monday: Existing Home Sales up
Tuesday: Home values appear higher nationally
Wednesday: New Home Sales up
And although national real estate statistics are irrelevant to the local markets in which real estate transactions happen, to a country of would-be and wanna-be home buyers, repeated positive news on housing can be a strong signal that it's time to get off the sidelines.
At least, that's what the data is showing us. According to an industry trade group, first-time home buyers accounted for half of all sales of previously-owned homes.
The stimulus package's $8,000 tax credit likely played a role in this 50 percent figure, as well as sagging home prices in most markets and low mortgage rates nationwide.
But lest we carried away, we can't forget that February's New Home Sales is still the second-lowest tally on record and that two months of data doesn't define "turnaround".
On the other hand, if the trend continues through the Spring Buying Season, we'll likely look back at Winter 2009 as the low point in housing.

Will the Mortgage Relief Program Help YOU?

The Original Objective: When the White House first introduced the "Making Home Affordable" program in February 2009, it was positioned as a mortgage program with two goals: 1)To help financially-needy homeowners get the mortgage relief they needed, and 2) To help homeowners who’ve lost equity to qualify for today’s low rates
The Result Of The New Program: On March 4th, the U.S. Treasury finally introduced new details about Making Home Affordable. It also created an ”Am I Eligible For Making Home Affordable” form on its website. It’s pretty handy, you should also check IT out.
In the press release, the Treasury detailed the President’s original plans from February. Mostly, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.
Get ready to read though, the modification guidelines are a thorough 17 pages long and leave little question about the whole loan modification process, and how it must be carried out. I guarantee it’s not an easy process. Loan modifications aren’t new, they’ve been around for a while.
The Disappointment: For as much that was as said for helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for who’s homes value have declined significantly. This makes it practically impossible for these folks to refinance.
For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The “refinance plan”, in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is “about the same or less” as the amount owed on his first mortgage may be eligible.
Until Fannie or Freddie release details on this (none as this is written), you can pretty much call this a tease. There’s nothing available that is different at this point.
If after browsing the website, you still have questions about the Making Home Affordable program, call me or your mortgage lender with specific questions. Realize if you call your current mortgage servicer, they will be overwhelmed with phone calls and you will just be dealing with someone in a call center each time you call. If you are in the Carolina's and prefer talking with the same person each time, I’d be happy to help! All of my contact information is on the right side of this page.

From The IRS : The First-Time Homebuyer Credit Form

From The IRS : The First-Time Homebuyer Credit Form
As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.
True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.
Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.
For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".
In addition, Form 5405 highlights the math behind the tax credit. In general, the First-Time Homebuyer Credit is equal to the lesser of:
$8,000 for homes bought in 2009
10 percent of the home's purchase price
Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".
Form 5405 is a comprehensive reference. However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances. There is no substitute for professional, paid advice.