Attached is a great article in the Wall Street Journal about the problems with the administration's "Making Home Affordable" program. It just doesn't work. Maybe if we all scream loud enough someone on the hill will hear.

Click HERE for article

Stay steady, it's that simple. Until we are way out of this unknown name economy there is no way rates will go up, or said another way, no way that the government can let them. If they do, then we have big problems and ultimately your interest rate will not matter. But back to the question, rates will stay steady because there is now way out of this lousy economy other that to get housing turned around. Housing will not get turned around until money is cheap. Most people don't really view it as cheap right now. Good, maybe, but not cheap, not compared to the rates we enjoyed just a few short years ago. Yes, some feel cheap money is what got us into this problem, but one thing is for sure, it's the only thing that will get us out. Something has to get the ball rolling, cheap money is that something.

Today you can get 3.625% on a 5/1 ARM with 1% origination and standard closing costs. You can also get 4% with no points. Interest only will only be an 1/8th (.125%) higher on the rate. 4.625% is available for a 30 year fixed rate with 1% origination and 4.875% with no points at all. Better yet, you can get 5.25% fixed for a refinance and have no closing costs. Yes, that's NO COST! Of course you do have to pay for the appraisal up front, but that is reimbursed back to you by us at closing/funding. It's Friday afternoon and rates are starting to go up for the first time in quite a while. Hopefully it's not a trend and just the normal end of the week jitters. Stay tuned.

With so many foreclosures and empty homes on the market most new home purchasers will have to make repairs and updates immediately upon moving in. Since most purchasers in today's market are first time homebuyers with not a lot of savings they will have to either finance these costs on credit cards or borrower form mom or dad or worse, just not make the needed repairs at all. Why not include all repairs and improvements into the purchase loan? The Renovation Loan program allows you to include all funds needed for repairs, remodeling, additions, new roof, new kitchen remodel, etc. all into the new loan with one low payment. Simple....and by the way, the improvements will increase the value of your home and actually add equity!

Some of the efforts by our government to allow some relief by refinancing are actually just starting to work. Took long enough. Big news today, one of the mortgage insurance giants actually improved their guidelines to actually allow cash-outs refis up to 85% LTV. This is a good sign and combined with low rates may be an opportunity for some depending on your individual situation.

More than 60% of all refinance applications started in the last two weeks will never close. Why? because the banks still require a method of determining the fair market value of a home that is not designed to deal with our current market situation. We all know this is a historical time in our country's economic history, but we also know that difficult times require change. Until the government steps in and requires banks to make reasonable accomodations for the current situation and forces them to lend the money that the government has given them to lend, this mess will continue, and your home will continue to lose value. Folks, the banks are scared. They are frozen. They do not know what to do. I hate to say it, but the government needs to take the money back it gave to the banks and lend it out themselves.

Many lenders/investors are running out of money and basically making your rate lock commitment worthless. Many of the warehouse lenders are maxed out due to the flood of locks this past week and many of you that think you locked in a rate this past week will wake up Monday to find out there is no money. If you locked with a broker or lender recently you need to call them up and find out who the end investor/bank is, because if it's not one of the major banks, chances are you are screwed.

Think something is wrong with all this bailout money talk? Well, where there is smoke there is fire. Wachovia, the bank that basically went under for making risky "pick a payment" loans, has now borrowed bailout funds (from you and me) and now they are lending them out! Wait, but to who? You didn't guess it... They are lending the money to their OWN employees at below market rates!. Yes, that's right, rates are very low right now and even though you would be lucky if you got 4.75% (30y fxd) with no points this past week, Wachovia employees are getting 4.25% at NO COST whatsoever! What a great way to spend federal funds intended to stimulate the economy. It just keeps getting better, doesn't it.

It depends on your situation. Different answers for different situations such as selling now, maybe in 3 years, adding a new family member, or maybe you haven't touched your house in 10 years. Whatever your situation  you may want to read this article about the new Harvard Joint Center for Housing study about homebuilding and remodeling and comparing them with overall economic activity. Go to http://www.mortgagenewsdaily.com/09222008_harvard_study_home_building_and_remodeling.asp

If you have the ability to decipher it then it may be helpful. If you have a need to remodel then you may want to consider a renovation loan that allows you to finance improvements with a new purchase or just refinance and add to your current mortgage. The advantages are better rates than credit cards and better terms. Email ot text me with any questions.

info@jsmtgco.com or 8033165042 to text

Barney Frank and company are making a last ditch effort to save the "Down Payment Assistance (DPA)" program that allows borrowers to get 100% financing using the FHA's loan program. It was scheduled to be banned at the end of this month (Sept.), but may still have life. DPAs are basically where you finance your down payment. The seller jacks the price up by 4% then gives you 3% back at closing for your down payment (required for FHA loans). Where does the other 1% go? To a non-profit agency, go figure that one out. But hey, it works. If this program isn't re-upped then you may want to consider another option, the USDA Guaranteed Rural Housing program. It provides 100% financing. The only drawback is that it's not available in all areas. If you are looking for a new home in an area on the edge of town however, you may be in luck. Send me an email with the address of your prospective home and I'll let you know if it qualifies. You can also go to our website dedicated to this program at www.0downcarolina.com . Text your questions to 3165042.