Is it Time to Refinance?

Lowering your interest rate
The interest rate on your mortgage is directly tied to how much you pay on your mortgage each month–lower rates usually mean lower payments. You may be able to get a lower rate because your credit score has improved or because of changes in the market conditions. A lower interest rate can make it possible for you to build equity in your home more quickly.

Adjusting the length of your mortgage
You may want a mortgage with a longer term to reduce the amount you pay each month, or you may want to switch to a shorter-term mortgage with a lower interest rate.

Changing from an adjustable-rate mortgage to a fixed-rate mortgage
If you have an adjustable-rate mortgage, you may find yourself uncomfortable with the prospect of your payments increasing.  You may want to consider switching to a fixed-rate mortgage to give yourself the peace of mind of having a steady interest rate and monthly payment.

Are you Eligible to Refinance?
Determining your eligibility for refinancing is very similar to the approval process you went through with your first mortgage.  Your lender will consider your income, assets, credit score, other debts, the current value of the property, and the amount you’d like to borrow.  If your credit score has improved, you should be able to get a loan at a lower rate.

What will Refinancing Cost?
It is not unusual to pay 3 to 6 percent of youroutstanding principal in refinancing fees.  These expenses are in addition to any prepayment penalties or other costs for paying off any mortgages you might have.

Reasons not to Refinance

• You’ve had your mortgage for a long time.
• Your mortgage has a prepayment penalty.
• You plan to move from your home in the next few years.

U.S. home sales up 20% from last year

U.S. home sales up 20% from last year. During the 30-day sales period ending July 5, approximately 211,000 homes were sold in 98 of the top 100 metropolitan statistical areas, research firmDataQuick said Thursday.

Sales overall rose 12% from the same period a year earlier and 10.6% from 2009 levels.

Home prices also went up with the median price hitting $193,000 on July 5, up 6% from a year ago and 4.3% from three years ago.

In a little over a month, the median sales price rose from $186,000 to $193,000.

The DataQuick report analyzes 66.25% of all U.S. home sales, excluding the key markets of Louisville and Wichita.

Unemployment Rate Unchanged in June

The U.S. unemployment rate remained unchanged at 8.2% in June, the U.S. Bureau of Labor Statistics said Friday.

Still, nonfarm payroll employment grew by 80,000 jobs in June. Overall, the number of unemployed Americans – roughly 12.7 million – stayed the same.

Paul Dales, senior economist with Capital Economics, said, “The 80,000 rise in U.S. payroll employment in June provides further evidence that the U.S. economy has lost momentum since the turn of the year, but that the recovery is not yet in danger of grinding to a complete halt. The 80,000 gain compared with increases of 77,000 in May and 68,000 in April. Jobs growth has therefore stabilised at rate much slower than the average gain of 226,000 seen in the three months to March.”

The data shows many workers are discouraged – or displaced employees who are not looking for work – because they believe there are no jobs available for their skill sets, the Labor Department said. Overall, there were 821,000 discouraged workers in June, a decline of 161,000 from a year earlier.

“The remaining 1.7 million persons marginally attached to the labor force in June had not searched for work in the four weeks preceding the survey for reasons such as school attendance or family responsibilities,” the Labor Bureau said.

The professional and business services segment added 47,000 jobs in June with temporary help accounting for 25,000 of those jobs. Management and technical consulting services added 9,000 jobs while computer system design and related services added 7,000 jobs.

The health care sector continued to add positions, with the segment producing 13,000 new jobs.

Jobs data from the ADP National Employment Report released a more optimistic report Thursday, saying the private sector added 176,000 jobs from May to June. Meanwhile, unemployment insurance claims declined, according to government data.

While the more optimistic report kept the market from a negative reaction, the overall U.S. unemployment rate remained unchanged in June.

Read the full article on Housing Wire: Unemployment rate unchanged in June

Changes to Principal Reduction Program to Help More Homeowners

When you want to attract attention and help people, sometimes you have to challenge the status quo.

Case in point: Keep Your Home California. The $2 billion, state-run mortgage assistance program has been approved for some major changes to its Principal Reduction Program.

Keep Your Home California has just eliminated the mandatory dollar-for-dollar match for participating servicers – basically the companies that collect the mortgage payments – and now funds 100 percent of principal reductions up to $100,000. Before, servicers and the federally funded program split the financial responsibility with a maximum of $50,000 each.

Of course, servicers must still be registered for California’s Principal Reduction Program and agree to an interest-rate adjustment and/or term modification to ensure homeowners have affordable and sustainable monthly mortgage payments. The sustainability is important because there is no long-term benefit if a homeowner is approved for the program but cannot make the payments down the road and the home eventually falls into foreclosure.

Keep Your Home California officials are hoping that by accepting the financial burden, more servicers will join the Principal Reduction Program and more financially strapped homeowners will get the help they need.

Currently, 20 servicers participate in the program, including Bank of America, the only big bank to sign up. In comparison, Keep Your Home California has about 70 servicers participating in at least one of its four programs.

So far, a little over 1,100 homeowners – worth a combined $69.5 million — are funded or in the process of getting money under the Principal Reduction Program.

Keep Your Home California will disburse the dollars during the first year under the Principal Reduction Program, rather than the previous three installments over a three-year period. In addition, the forgivable loan will extend from three to five years, meaning homeowners will not have to pay back the money if they remain in the home and make the mortgage payments for five years.

Get more details about the Principal Reduction Program.

Read the full article featured in the Wall Street Journal.

Speeding Up Refinances

While many large financial institutions are facing backlogs of mortgage applications as more homeowners take advantage of low interest rates and the government-sponsored Home Affordable Refinance Program (HARP), borrowers looking to accelerate the refinancing process are finding some relief from brokerages and community banks that are not servicing HARP loans.

Making sense of the story, Speeding Up Refinances:

• HARP borrowers typically refinance with the banks that originally serviced their loans, because those banks already have their information and, according to the Mortgage Bankers Association, “There’s potential for it to be a less painful process.”
• Still, tighter lending standards precipitated by the mortgage crisis have made for an arduous application process.
• Mortgage brokers are reporting an increase in business from those looking to streamline the process.  According to one broker, a benefit of working with a mortgage broker is that they have direct contact with the banks and can keep track of the application as it goes through many hands at the bank.
• Borrowers also might want to consider refinancing with a community bank, especially those that do not service HARP-eligible borrowers and are able to respond quicker to non-HARP refinance requests.

Read more: Speeding Up on Refinances

Happy 4th of July from Team Marin!

Have a spectacular day!