Gary McNinch Realtor Renton WA Real Estate

How To Know If You're Eligible For A Making Home Affordable Refinance

April 4, 2009, marked the official start of the Making Home Affordable refinance program.

Expected to help 5 million homeowners, the Making Home Affordable program "looks the other way" with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.

Not every homeowner is eligible for a Making Home Affordable refinance, however. There are 3 basic criteria that must be met.

First, your existing home loan must be backed by either Fannie Mae or Freddie Mac. Thankfully, both companies provide online lookup services. Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac's site requires your social security number. As of the past day there have been 40 million inquiries on this site.

Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home's value by more than 5%. The math formula is (Mortgage Balance) / (Home Value). If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable. Since home values in Renton have dropped this may be a huge factor in the south Puget Sound home market. You can sign up for a free online real time MLS home market snapshot to see the current value of your Renton home. It is a great tool to watch the Renton housing market.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

1. If you didn't pay mortgage insurance prior to refinancing your Fairwood home, you won't have to pay it after refinancing -- even if your loan-to-value exceeds 80%.
2. All refinances require income verification -- even if the original mortgage was a stated income loan. Stated income loans were one of the problems that created this mortgage mess in the first place.
3. Second mortgages cannot be paid off using loan proceeds -- they must be subordinated

There are other guidelines, too, and both Fannie Mae and Freddie Mac have dedicated portions of their website to the Making Home Affordable program. To the layperson, unfortunately, the information may be a bit technical.

Even the government's fact sheet can be a little dense at times.

Therefore, if you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan (nearly 50% are). If they are, pick up the phone and call me and I will direct you to great loan officers that I trust who will help you to plan next steps.

And don't forget, if you are refinancing a home in Kennydale, this program ends June 10, 2010. Give us a call, send an email, twitter us at RentonHomeFinde and we can help you discover if this program works for you. Gary McNinch Team Renton Wa Realtors.

The number of homes under contract to sell is rising, another signal that the housing market may be regaining its footing.

As reported by the National Association of Realtors, Realtor.com the Pending Home Sales Index gained 2 percent in February. The report measures MLS-listed homes in "pending" status -- sold but not yet closed.

Pending Home Sales is not a perfect statistic, though, by any means.

For one, the Pending Home Sales Index doesn't account for non-MLS listed homes including For Sale By Owner properties and mass foreclosure auctions. In certain markets nationwide, these two categories represent a large percentage of the overall transaction volume. In our market of Renton and Kent homes there are few FSBOs and not a huge amount of foreclosures, at least yet.

Secondly, Pending Home Sales samples just 20 percent of all MLS-based transactions -- hardly a complete listing.

But most importantly, a "pending" home sale is not the same as a closed home sale. A lot of things can go wrong between the time a home goes under contract and the supposed closing date. For example, the Renton home inspection could fail, the contract could fall apart, and/or the buyer's financing could be denied in underwriting. Or as in the last post I wrote, a buyer can goof up the program. All reasons why you need a Renton Realtor to cover the more than 100 parts of the process of getting a home bought or sold.

All things equal, though, Pending Home Sales is a fair forward-looking indicator for the housing market as a measurement of buy-side demand for homes.

When Pending Home Sales rise, it's tells us that buyers and sellers are matching up, clearing out market inventory. And actual home sales often follow "pending" ones -- 80 percent of Pending Home Sales will close within 60 days. Things are looking up.

The Gary McNinch Team, Keller Williams Realty Southeast Sound, Renton WA Realtor have been helping our great clients buy and sell homes before the market jumped up crazily. And better yet we have been ahead of the market as it has went down slowly. We study the housing market to stay ahead of the game. Give us a call, send an email or twitter us with a tweet tweet tweet.

With mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and first time Renton home buyer opportunities.

The downside of today's unexpectedly-low rates, though, is that some 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 conforming lenders as long as 2 months to complete.

This is double the time needed as recently as six months ago.

Because there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals for your Renton home 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 by the bank, and being turned down. We have years of experience and lots of satisfied customers and we know the right tips and will keep your home purchase on track.

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. Make sure you call the Gary McNinch Team your Renton WA Realtor and we will give you the names of one of our preferred Renton Mortgage and Home Loan Officers.

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

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. To discuss the Renton housing market, Kent condo market or just what the rest of the economists are saying give me a call. Hit the link to get a live market snapshot straight from the MLS. More good news and good housing info from the Gary McNinch Team Renton Realtor.

(Image courtesy: LA Times)

This came in an email and I haven't been able to find out other info or who to attribute to this great photo. Enjoy this.