About Outagamie County, WI

SHOPPING AROUND?

HERE'S THE INSIDE SCOOP ON HOW TO DO IT RIGHT!

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS...RUN...DON'T WALK... RUN...TO A LENDER THAT DOES!

1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)

2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, email gtanvas@patriotms.com and request a copy of our weekly newsletter, let us know if you want to be added to my weekly distribution list)

3) When Bernanke and the Fed "change rates", what does this mean... and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).

4) Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

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Be smart... Ask questions... Get answers!

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More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life... but we do this every single day. It's your home and your future. It's our profession and our passion. We're ready to work for your best interest.

SHOPPING... PART 2

Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to "shop" effectively.

First, IF IT SEEMS TO GOOD TO BE TRUE, IT PROBABLY IS. But you didn't really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?

Second, YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don't know until it's too late that cheapest isn't BEST. But if you want the cheapest quote - head on out to the Internet, and we wish you good luck. Just remember that if you've heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs...these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said - we are not the cheapest. Of course our rates and costs are very competitive, but we have also invested in the systems and team we need to ensure the top quality experience that you deserve.

Third, MAKE CORRECT COMPARISONS. When looking at estimates, don't simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not "hidden" down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees - they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want - but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all - but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees - this is a moving target on an hourly basis. For example, if you have two lenders that you just can't decide between and want a quote from each - you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

Again, our advice to you is to be smart. Ask questions. Get answers.

I hope you have found this information helpful - I wish you much success - If you have any questions, I would be more than happy to help!

Gwenn Tanvas
Certified Mortgage Planning Specialists

If there was any doubt left that the troubled US financial and credit markets are in full crisis mode, the historic events of the past few months easily erased it. You've seen the headlines. You've heard the stories, but what does it all mean to you and your mortgage? Let us take a closer look at a September to remember and what it means to you - no jargon, no politics, just the facts.

What a Difference a Month Makes
September was a historic month in the financial markets. What started a year earlier as the subprime mortgage collapse had morphed into the perfect financial storm that wiped out some of the biggest financial firms on Wall Street. There was a general and genuine concern that the financial system was coming apart and could virtually shut down.

First, the Feds took over Fannie Mae and Freddie Mac, two government-sponsored mortgage giants that own or guarantee about five trillion dollars in home loans, or nearly half of the total US mortgage market.

Then Lehman Brothers, a prominent securities firm founded in 1850, filed for bankruptcy.

Bank of America, which earlier this year acquired Countrywide, acquired Merrill Lynch, another prominent financial firm.

The Feds were then forced to bail out insurance giant American International Group (AIG), the largest insurance company in America, which needed some $70 billion just to stay afloat.

By the end of the month, JP Morgan Chase, which bought out Bears Sterns in June, would also acquire Washington Mutual and, in a similar move, Citigroup would acquire Wachovia.

In the end, amidst the worst September in the financial markets since 2001, each of these prominent companies had failed to secure investor confidence as liquidity concerns forced their stock prices to levels that ultimately led to their demise, despite a major effort by the government and other central banks around the world to offer unprecedented financial support.

Throughout the month of September, the Federal Reserve not only injected billions into the financial market, the US Treasury was forced to guarantee nearly $2 trillion in money market mutual fund assets. The European Central Bank, Swiss National Bank, and Bank of England also pitched in a combined $90 billion in cash infusions.

Banks and Wall Street firms had essentially stopped loaning money to one another in recent weeks. That choked off the money being made available on Main Street in the form of mortgage loans, business loans, and other consumer borrowing.

To avoid further downward pressure on stock prices, the Securities and Exchange Commission banned naked short-selling and temporarily banned short-selling 799 financial companies for 10 days. Fannie Mae and Freddie Mac increased their purchases of illiquid assets, including mortgage-backed securities, that have been clogging up our financial system and further tightening the availability of credit.

Finally, to avoid an all-out credit freeze, a plan to create legislation for an unprecedented bailout of our financial system was put in place by representatives from the Federal Reserve, the US Treasury, the Bush Administration, Congress, and even the Presidential candidates - a controversial $700 billion plan that, had it passed, would have cost tax-payers for years to come.

The plan, however, came up 13 votes short of the 218 votes necessary for passage. The House vote shocked financial markets, which expected the house to approve the plan - a decision that sent the Dow Jones industrial average down more than 700 points, the largest intra-day drop in history.

At the time of the writing of this article, a new plan has already been announced in the Senate.

Create Your Own Plan
As promised, we will not delve into the politics of any of these decisions by the government to bailout said corporations or the financial and credit markets - or the merits of any new plan that might be put in place. What's done is done. We won't discuss who's to blame or what should or shouldn't be done about it. Whether it's right or wrong, moral or immoral, these actions or their implications are beyond the scope of this article.

Instead, we suggest that you put together your own financial plan to address your future. Just like your fingerprint, your financial situation, needs, and goals are unique and cannot be addressed or even encompassed by a single, one-size-fits-all solution. Whether you're looking to buy, sell, or refinance your home, you need to meet with a mortgage professional you trust right away to create a plan that best fits your individual needs as it relates to the opportunities available in today's turbulent market. What follows are merely suggested discussion topics you might want to consider depending on your individual needs.

Buying or Selling a Home
If you're looking to take advantage of lower home prices and historically low interest rates, credit is still widely available for borrowers who qualify. Qualifying for mortgages today simply means being prepared to provide documentation that supports your application. If you do have credit issues, you might want to consider government loans offered by the FHA, USDA, and VA.

If you're a first-time home buyer (someone who hasn't owned a home in the last 3 years), ask your mortgage professional about the new $7,500 tax credit. This incentive could be a valuable tool in helping you reach your homeownership dreams in today's buyer's market. There is one catch, however. This incentive is temporary, and expires in 2009, so don't wait.

It's important to note that Congress recently passed other legislation banning certain down-payment assistance programs (DAPs), so ask your mortgage professional about VA and USDA loans that, insured by the government, allow for 100% financing to qualified borrowers. There's currently a bill in the House to overturn the ban on DAPs, but congress is pretty busy right now and may not get to it before the end of the year. Some argue, this bill may never pass, so again, don't count on the government's help when you're planning your future.

For sellers it's important to understand these options as well. There are a lot of potential buyers looking to buy a home who may need creative financing options to get the deal closed. Make sure you're working with an experienced real estate agent and a mortgage professional who know how to market your property and make it stand out from the pack. In many instances, you won't have to lower your home price again to create an attractive package for home buyers.

Refinancing
September was one of the most volatile months in the financial markets in years. In one session, the Dow lost 504 points, which was the worst single-day drop since 2001. The Dow then had a two-day session advance of 779 points, the biggest since March 2000. Then, when the government's initial rescue plan was voted down, the Dow lost more than 700 points, the largest single-day decrease in history!

Mortgage interest rates, which are based on the performance of mortgage-back securities (see YOU Magazine April 2008), were so volatile in September that the market experienced price movements within days that used to take weeks or months to occur. In fact, mortgage rates reached six-month lows in September, bounced back in following weeks, only to fall again immediately after the government's rescue plan was voted down.

This volatility is a great advantage for many homeowners looking to refinance, as rates are still near historic lows. If you're connected with a mortgage professional who has access to and understands how changes in MBS pricing can affect mortgage rates on a daily basis, you may be able to secure a lower long-term rate as these short-term movements occur, depending on your situation. (See YOU Magazine July 2008 for an explanation of why bad news for stocks can be good news for mortgage rates).

Loan Modifications
Last month, YOU Magazine discussed loan modifications for homeowners struggling to make payments and/or avoid foreclosure. Print out that article and take it to your mortgage professional to discuss what options are best for your individual needs. If you've fallen behind with your payments or are currently in foreclosure, you may be able to benefit from an increased willingness of banks and lenders to work with you and help you keep your home.

ARMS
If you have an Adjustable Rate Mortgage (ARM) that is due to reset in the next 3 to 12 months, you need to know how any adjustments will affect your monthly mortgage payment. (See YOU Magazine August 2007 to learn how to understand the terms of your ARM.)

Remember, the Federal Reserve has held the line on rates for the last two meetings of the Federal Open Market Committee (FOMC), after 7 straight cuts to the Fed Funds rate in previous months' meetings. And while the Fed has no direct affect on long-term mortgage rates, their actions can directly affect rates for ARMs and certain credit cards and home equity lines of credit (HELOCs) that are tied to the prime rate - especially if the Fed begins a new financial policy of rate increases to address the growing concerns of our struggling economy. (See YOU Magazine April 2008 for more info on how the Fed affects mortgage rates).

In September, the volatility in the financial markets was not limited to the US. We live in a global economic environment, and financial markets throughout the world are more connected than ever.

Last month, we saw evidence of this in the London Interbank Offered Rate (LIBOR). Set by the British banks, this rate is considered one of the most important rates globally - especially in the US, where about 6 million ARMs, including almost all subprime ARMs and 41% of prime ARMS, are linked to the LIBOR. This rate, which experienced the largest one-day increase in 7 years last month, is beyond the reach of the Federal Reserve and its financial policies. If rates stay elevated, gains may follow in the 3- to 12-month Libor indexes, which are used to calculate US mortgage resets. This volatility was seen again as the initial Rescue Bill failed in the House.

In other words, create your own plan of success. Don't wait to be bailed out or rescued by the government or anyone else. If you have an ARM, take 10 minutes to discuss your options with a mortgage professional you trust. Changes in your credit in the last few years could help you secure a fixed-rate mortgage and avoid the volatility that surely awaits us as we face what could be one of the toughest financial meltdowns that most Americans have ever seen.

Gwenn Tanvas is a Appleton, WI-based consumer advocate and Certified Mortgage Planning Specialists with Patriot Mortgage Services, Inc. Email Gwenn - gtanvas@patriotms.com with any questions or if you would like to discuss your personal mortgage plan.

I have just recently returned from the Annual Convention in Wisconsin Dells, held at the Kalahari. Hospitality suites aside, I'm glad I made the step to enter the realm of REALTORS. This year was informational, movitivational and gave many great tips on how to survive real estate in a softer market...and how to survive me, if I am to stay an agent.

Prior to convention I was wary as to a couple of speakers jumping on chairs to bring all sorts of enthusiams into our real estate lives...how would that help me? But then I got to thinking..suppose it was me being burnt out on that one buyer that we are now 40+ plus houses, and still want to see something better, or the sellers that we have to literally put into our therapy sessions to soothe the ups and downs of the market out of them until thier home sells.

All in all it was a great time to re-coup, re-align, and bring back great ideas. I have figured out that in our line of work it takes stamina to get through the busy and the slow times. There was a great quote used that I will try to live and stand by..."If you're going to be there, BE THERE!" Simply truth in thought he was right, we often find outselves being at our appointments, only thinking about what's next on our list. Each experience is unique and we should take it in stride.

Thursday, June 12th, 2008 Kaukauna, WI will host a Town Hall meeting at the Kaukauna High School with Barack Obama right here in the Fox Valley. I pondered about attending this historic event and then this morning I was in Kaukauna previewing a home and decided to swing by the school and see if tickets were still available.

There was a moderate line of people and it seemed to be moving fairly quickly so I parked the car and got in line. Ten minutes later I had two tickets in my hand and I was on my way. I'm curious as to what the event will be like, the inter-party mud slinging should be done so what topics will Obama focus on now? As a Realtor with Coldwell Banker The Real Estate Group my interest will be in what specific steps Obama and his Administration would take to alleiviate the housing crisis including; mortgage interest rates, jobs and the over all economy.

We've been very fotunate in the Fox Cities area to resist the housing slump however the nation wide effects do "trickle down" to us. Between now and tomorrow I'll have lots of thoughts running through my head and most prominently, if given the opportunity, what would I ask Barack Obama?

Assuming nothing major comes up to prevent me from attending the Town Hall meeting, I'll report back tomorrow. In the meantime let me ask you this; if given the opportunity, what would YOU ask Barack Obama?

Hi my name is Chad Robenhorst. I'm a Realtor working in the Appleton (fox cities) Wisconsin area with Coldwell banker The Real Estate Group. If you live in the fox cities and are thinking about making a move... give me call. I am sure to make your buying and/or selling experience unmatched and enjoyable.

Chad Robenhrost REALTOR