No longer listed for sale by Joe Hayden, Realtor.

(This picture does not represent current exterior updates)

This home was updated with new siding and replacement windows, plus a new water heater and HVAC two years ago. The home is in fair condition requiring paint, carpeting, flooring, and minor carpentry updates. Currently rented for approximately $850/month, this home could make a nice investment property.

This home is a short sale, so we encourage you to make an offer. The seller’s lender will negotiate the final sales price.

Offered for sale by Joe Hayden, Realtor.  Please contact him for additional information or to schedule a showing of this nice home.

Times have changed.

With rising foreclosures, mortgage companies are sustaining record losses and are tightening their lending qualification criteria, plus altering or eliminating numerous conventional loan products. The first to go was the 100% loan-to-value or zero-down conventional mortgage. In January of this past year, Fannie Mae (a company that buys and sells mortgages on the secondary market as investments, and has a huge influence over the types of loans available to the consumer) announced risk-based pricing adjustments (mortgage-speak for “costing you more money”) for high loan-to-value ratios, low credit scores, and features such as taking “cash-out” of the property on a refinance.

For example, prior to the change a conventional borrower with a 640 credit score borrowing at 95% loan-to-value could get the exact same interest rate as a 740 credit score borrower putting 20% down. During those times you were either in the club or you were out. You were either an “A Paper” or “Conforming” borrower or you were a “Sub-Prime” borrower. The main difference now is that there are many different levels of qualification for conventional borrowing. Today, a 740 credit score will get a better rate than a 640 credit score, and 20% down will get a better deal than 10% down. The greater the risk, the greater the rate when it comes to conventional loans.

FHA Government Loans have become the better alternative in many cases for those who are not eligible for the absolute best rates on conventional mortgages. This group mainly consists of those with credit scores under 720, those exceeding 80% of their homes value, or especially those taking “cash-out” greater than 80% of their home’s value. There is small rate adjustment for credit scores between 580-600 with FHA, and a bigger one for those under 580, but 600 plus borrowers are on the same playing field as everyone else. Because FHA interest rates are in line with the best conventional rates, it will usually result in a better deal for those subject to Fannie Mae pricing adjustments. Additionally, FHA has become almost a no-brainer for those who are still stuck with a sub-prime mortgage. They allow for manual underwriting which looks at the person more than the credit score.

Now more than ever, borrowers need a competent mortgage professional who is up to date on the current market conditions. Gone are the days where you can call around asking what interest rates are and hope to get a fair deal. All the numbers for your specific situation have to be plugged in to see what adjustments you may be subject to, and what type of mortgage is best. I offer a 100% free mortgage analysis to all Louisville area residents. To learn more visit www.billsexpert.com.

Mike Roberts is a senior loan officer at The Mortgage Warehouse. You can reach him at 502-244-4700, ext. 117 with any of your questions.

Lately, FHA loans in particular have become very popular for refinancing. The loan size allowed in Louisville has risen to $302,500 allowing more homeowners to qualify. Guidelines have become more favorable allowing many that currently have credit problems and sub-prime mortgages to obtain the best fixed rates available. These changes also make home ownership that once seemed out of reach a real possibility for some who are looking to buy a home for the first time.

If you are considering refinancing your current mortgage you have to look at several factors. What is your total financial situation now and what will it be after the refinance? The following factors should all be an equal part of your decision to refinance:

• The interest rate, both the current rate and your present mortgage rate
• The total balance owed before and after refinancing
• Time (How long you intend to stay in the property and the new loan.)
• Risk (Is it fixed or adjustable? Is it interest only? Is there a penalty to pay it off early?)
• What are the tax implications associated with your refinance?
• The new monthly payment
• All closing costs
• Is the loan officer an expert, reputable, and trustworthy?
• Do you completely understand every aspect of the refinance?

If all of these variables are favorable to you, then the time to refinance is now. The best way to get into trouble, however, is only focusing in on just one or two of the variables. For example, it sounds great to get a zero closing cost loan, but that is negated if the interest rate is 1% higher as a result. It may sound wise to pay $4000 in costs to lower your rate from 8% to 6% if you owe $400,000. That is $8000 in savings in just year one. What if you only owe $50,000? Does that still make sense? It would take at least 4 years to break even. Will you still have this loan in 4 years?

What if someone says ‘no thanks’ to refinancing just because the payment is only $10 a month lower, but what they didn’t think about is they can get also get a $5000 tax deduction? What about someone that has a $300,000 interest-only loan at 7% versus someone who has a typical $300,000 fully amortized loan also at 7%? Three years later the interest-only person is still paying 7% on $300,000 which is actually more overall interest even though the rate remained the same.

As you can tell, there is a lot to know and understand. I am a Louisville based mortgage expert that has helped thousands of local residents with their mortgage and personal finances. I offer a 100% free mortgage consultation for all local residents. Contact me anytime and we can discuss your particular circumstances, then match that up with the current market guidelines to see if refinancing will help you.

Mike Roberts

502-244-4700 x 117
mike_roberts@tmwrates.com
www.billsexpert.com