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Home Tacoma's #1 Mortgage Expert - Kevin Tinsley

Tacoma's #1 Mortgage Expert - Kevin Tinsley

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Global Banks Unite in Unprecedented Rate Cuts

10-11-08
Tacoma's #1 Mortgage Expert - Kevin Tinsley

alltechmortgage refinance Home loans, Mortgage Rates Tacoma

Global Banks Unite in Unprecedented Rate Cuts

Ben Bernanke and the Fed brought financial aid to the streets, lowering the Federal Funds Rate and Discount Rate by 0.50%. In an unprecedented emergency move, central banks across the globe joined in lowering interest rates.

This move follows Washington's passing of the $700 billion Rescue Plan. From Wall Street to Main Street, a common concern has been heard by Washington. "We need money... no, let me rephrase that...we need cheap money."

Rates Could Rise From Here
Home loan rates have benefited from the weakness in the financial markets. Fixed rate mortgages remain very attractive. However, the Fed lowers short term interest rates to shore up financial markets. This could cause home loan rates to rise in the coming weeks and months if confidence returns to the stock markets.

ARM Holders Take Notice!
Anyone that has an Adjustable Rate Mortgage (ARM), take note. The London Interbank Offered Rate (LIBOR) has soared from uncertainty in financial companies...And six million home loans in the United States are tied to LIBOR which determines the interest rate at the time of adjustment.

If you know someone with an ARM, let them know potential trouble lies ahead and the time to act is now.

What Should You Do Now?
Call me. We can go over your situation to determine how you can benefit from the actions. I look forward to hearing from you.

Kevin Tinsley Tacoma's #1 Mortgage Expert

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Fed Cut Rates Interest Rates by 1/2% What does that mean for Lakewood Area Homebuyers?

10-09-08
Tacoma's #1 Mortgage Expert - Kevin Tinsley

The Federal Reserve along with other central banks around the world made a concert unprecedented coordinated interest rate cut of 1/2%. Trying to stabilize the financial markets, the Federal Reserve is pulling out all the stops trying to jump start our economy. The immediate reaction to the interest rate cut in long term interest rates was negative. As a matter of fact we had several of our wholesale lending partners reprice their loans throughout the day. Interest rates increase anywhere between .25% - .5% in discount points. Looking ahead, I would expect interest rate for home loans to vary in a range of 5.25%-6.00% over the next few months. Also, we have not experienced any shortage of lenders making loans. Contrary to the media reports, we are closing loans everyday!

Kevin Tinsley Tacoma's #1 Mortgage Expert

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Wild Markets, The Fed, and Opportunities

10-07-08
Tacoma's #1 Mortgage Expert - Kevin Tinsley

Wild Markets, The Fed, and Opportunities

Uncertainty in Financial Markets Could Cause Dramatic Rise in Existing ARMs at Next Adjustment
If you or anyone you know has an Adjustable Rate Mortgage, this is an important point to consider. Many ARM loans are tied to the London Interbank Offered Rate (LIBOR). In fact, there are six million loans in the United States that use LIBOR to determine the interest rate and as the name suggests, many banks use this rate to lend money to each other.

But, today, banks lack confidence that the money they lend will be paid back. In light of what has happened with Lehman Brothers, IndyMac Bank and others, as well as AIG, banks are requiring much higher rates on LIBOR to offset the added risk.

The Federal Reserve Left Rates Unchanged but...
The Federal Reserve met yesterday leaving the target rate unchanged at 2.00% but just like LIBOR the actual rate being charged by banks to each other is closer to 6.00%. This again suggests that those with ARM loans should consider a refinance into historically low fixed rates.

What Happened?
Financial companies have been under attack. IndyMac was the largest bank to falter in twenty years. What brought IndyMac down was their exposure to defaulting loans. This sapped investor confidence and drove down the stock price until they filed for bankruptcy.

Following IndyMac, we saw Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch succumb and were either forced into conservatorship, to close their doors, or to sell themselves. AIG, the world's largest insurance company was also impacted, forced to make a deal with the U.S. government to stay in business.

What You Can Do Now?
I'd be happy to go over your loan situation and help you understand how the recent events may affect you, and how you can best be protected. Additionally, chaotic times like these often present opportunities. I look forward to hearing from you.

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I'm Buying a new home and want to keep my current residence as a rental

10-01-08
Tacoma's #1 Mortgage Expert - Kevin Tinsley

As of today, October 1st there are some new guidelines to keep in mind when keeping your current residence as a rental or 2nd home.

I. Purchases: Conversion of Primary Residence to Second Home or Investment Property

Conversion to Second Home
Both the current and proposed mortgage payments must be used to qualify the borrower for the new transaction and 6 months PITI for both properties is required to be held in reserves. The reserve requirement may be reduced to 2 months PITI for both properties if there is documented equity of at least 30% in the existing property, based on a full appraisal minus any outstanding liens. Use of the previous residence as a second home must be reasonable; otherwise, it must meet the following requirements for conversion to investment property.

Conversion to Investment Property
Both the current and proposed mortgage payments must be used to qualify the borrower for the new transaction and 6 months PITI for both properties is required to be held in reserves. The borrower is permitted to use rental income to offset the housing payment for the previous residence if there is documented equity of at least 30% in the existing property, based on a full appraisal minus any outstanding liens. The rental income must be documented with a copy of the fully executed lease agreement and receipt of a security deposit from the tenant and deposit into the Borrower's account. Rental income may not be used if 30% equity cannot be documented or if the LTV on the proposed mortgage is greater than 80%. A property that is pending sale but will not close prior to the date of purchasing a new primary residence will be treated as an investment property for qualification purposes.

If you planning to purchase in the near future, feel free to call our office and we can run the numbers to see how this effects you. (253) 472-1500. Please note this is a Fannie Mae/Freddie Mac change and we still have access to some local deposit based lenders that do not follow the above guidelines.

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