Even if you don't have a subprime loan and even if you have excellent credit the subprime (less than perfect credit) mortgage industry problems are spilling over into the mainstream and having an impact on everyone and everything including the economy. From the fact that there are fewer sources of money (and they are dropping daily) to the tightening of credit standards and requirements for more downpayment security, the effect is gaining momentum like a snowball. Combined with the slumping real estate market the subprime chaos is dragging the economy down and worsening the real estate market. With fewer sources of funding and more potential buyers locked out, the real estate market will only worsen. Along with this the rates for prime mortgages are not dropping as they should or normally would because there is a "concern" among investors that the subprime situation hasn't hit bottom yet. If that isn't enough most people are taking a "wait and see" approach to buying new homes or refinanicng to get cash out (to spend and help the economy).

Yes. There are several loan programs that allow you to finance improvements at the same time you are purchasing the property. The key to structuring the financing to best fit your needs requires a solid understanding of the pros and cons of different programs. One of the most important features of the loan program is what method it uses to determine the value used to determine the Loan-to-Value. Some use the purchase price plus the cost of the improvements and usually offers a maximum LTV of 95%, or in other words requires a down payment of 5% minimum. Another method uses the "as completed" or the estimated value after the improvements are made. This can sometimes improve your borrowing power by reducing the down payment required, reducing PMI (private mortgage insurance) that may be required, and in some cases reducing the interest rate. This can also be advantageous in situations where income and asset documentation alternatives are needed. JS Mortgage Company is one of the only lenders offering a rehabilitation loan that allows up to 97% LTV financing of purchase price and renovation costs under Fannie Mae's MyCommunity Mortgage program. The MyCommunity product is designed for first time home buyers, low to moderate income borrowers, and borrowers who do not have funds for a downpayment.

If your purpose is to take equity (cash-out) out of your home to payoff other debts, payoff an adjustable home equity loan, remodel, or any other worthwhile endeavor, then this is a good time. Why? Because the market is poised to have a significant rate drop within the next 18 months. So why shouldn't you wait until then? Well, if you need the cash now then why wait? If you structure your loan correctly you can still take advantage of lower rates when that happens and secure a good rate now in case they don't. The products that are now available will surely change due to the overall credit problems affecting the mortgage industry. Another good reason is that when you "cash-out" now the banks charge additional fees and/or higher rates because it is considered "risky" when you take cash out and reduce the collateral's positive equity. When and if you choose to refinance during the coming rate drop period it will be a win-win situation because the loan will not be classified as a "cash-out", because you will only be refinancing the new balance that includes the cash out that you already received. And, the rates will be lower meaning your monthly payment will be less. And, if you planned ahead and structured the loans properly, you will not be incurring closing costs twice.