There has been quite a buzz on the streets of America since the announcement of the extension and modification of the HARP refinance program from President Obama late October.

Most consumers who may qualify for this program as well as industry professionals such as mortgage lenders and realtors are also anxious to see this program hit the streets to help homeowners.

November 15th 2011 Fannie Mae issued a guide to direct bankers nationwide giving instruction and some basic guidelines to how this refinance program should work, and how they have modified the already existing program. From what we can see this program is very attractive and should help and estimated 5 million home owners nationwide once this program is offered to the public. Although the official release date of this program is set to be on December 1st 2011 which is also the date that lenders are allowed to solicit borrowers who may benefit from this program, there may be a delay due to the fact that most investors are still trying to create product lines based on Fannie Mae’s guidelines.

Here is what we know so far-

The following criteria must be met to qualify for the Home Affordable Refinance Program (HARP):

  • You must live in the home being refinanced.
  • A HARP refinance only applies to Fannie Mae or Freddie Mac mortgages.
  • The homeowner must be able to afford a payment if it exceeds 20% of existing payment.
  • The current mortgage must be up to date with no late payments in the past 6 months.
  • There is NO Loan to Value requirements :-)

To find out if you will qualify for this program – feel free to contact us.

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Last week I met with a client who has been buying investment properties almost monthly over the last 2 years. His excitement for the opportunity was contagious, and his return on investments this year will make anyone a believer that this is a market you don’t want to miss.

This client was one of several I have worked with over the last 6-12 months, who is betting against the media and skeptics, and stepping out into the market. For this guy it is simple. Buy properties no one can finance with cash, fix them up, and sell them for 20%+ above acquisition. It is seems to be working every time.

Well, we know that cash is king, but what about those of us who do not have the cash to purchase income properties? Does the same opportunity exist?

I will tell you with certainty – YES.

One client of mine bought an income property for $155,000 last spring, and put 20% down. His mortgage payment was $881 per month, and this house rented for $1300.

Immediate cash flow = $419 per month.

This story and many like it are becoming the norm for people taking action and investing in income properties here in Shasta County.

Millions of middle to upper class Americans have filed bankruptcy, lost their homes to foreclosure, short sales, etc, leaving their bank accounts drained, and their credit profile shot. This has created an opportunity for what I call First Time Investors to jump into the market and invest in real estate.

Here are the facts…

Prices of homes are at record lows. They may drop lower, but as I indicated in my last blog, if they drop by 10% and rates go up by 1.5% you lose. (unless you are paying cash)

Mortgage Rates are STILL GOOD! Yea, sure they are going up a little. Did you really expect them to stay down that low forever?

Rental Market is Booming – People with GOOD incomes are still losing their homes. They are going to have to rent somewhere.. Why not your house?

YOU too can invest in real estate. (or at least you should take a serious look at it)

Here are a few ways you can do it…

10-20% down with a conventional mortgage. (higher down required for non-owner occupied properties

3.5% Down with an FHA Loan (buy a multi unit property and occupy one of the units)

Cash/Hard Money/Short Term – Refinance into long term

There are some creative ways to get into purchasing and financing income properties, and we would love to assist you.

Call us today for a consultation of the best Redding home mortgage loans to consider.


“We attempt to be fearful when others are greedy, and to be greedy when others are fearful” – Warren Buffet – Multi-Billionaire/CEO of Berkshire Hathaway

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There have been a lot of headlines in the news today talking about the upward movement in the 30 year home mortgage rate over the last several weeks. The average home mortgage lenders rate sheet jumped by almost a half of a percent in just the last four weeks and rates now stand higher than they have been in the last 6 months.

Frank Nothaft, vice president and chief economist of Freddie Mac, explained:

After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November.

We saw mortgage bonds start a massive sell off after Federal Reserve chairman Ben Bernanke’s statement announcing QE2 several weeks back, and the ironic thing about this current trend is that QE2 was intended to bring rates down and keep them down for an extended period of time. Investors on Wall Street began to panic sell due to the fear of inflation and devaluation of the dollar.

A few weeks later Mr. Bernanke was featured on 60 Minutes adding more commentary about our economic condition, and the next day we had another massive sell off. Add this to our current President’s promise to extend tax cuts, and investors are scratching their head with confusion

Redding 30 year Fixed Home Mortgage Rates Are Going Up?

All that to say, mortgage rates have been on the upward move, and it seems there has been no end in sight.

No one has a crystal ball and can predict what will happen from this point forward.

As I contacted my clients last week to advise them to cut their losses and lock in their loans, I reminded them “In the scheme of things, a 4.5% interest rate, is a great rate.”

For prospective home buyers that have been speculating on the price of homes dropping over the next year, here is something to consider. If you are planning on getting a Redding home mortgage loan to buy that house, beware. When betting on the market to get better, you MUST also consider the cost of credit.

Below is a table showing the impact rising rates have on the monthly payment – even if prices continue to soften: (thanks to friends @ KCM)

Impact of Home Mortgage Interest Rates Increasing in Redding and Shasta County

Happy home hunting and Merry Christmas!!

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How to Improve Your Credit Score - Redding Lender - a Mortgage Loan CompanyWith all the changes going on in the financial markets it is getting harder to get financing for a home
mortgage loan in Redding and Shasta County
and now your credit score directly corresponds to the interest rate you qualify for. Having good
credit can save you thousands of dollars a year on a home mortgage loan.

Here are some simple tips to maximize your credit scores!!

1- Pay your bills on time! Setting up automatic payments with your account holders or with your banks can take the work out of paying bills. But make sure the payments are received no later than 30 days past the due date!

2- Balances. Keep balances on credit cards and other revolving accounts below 40% of your credit limits. 25% is optimal and will result in the absolute best credit scoring. Remember owing a high balance on one Continue reading

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“ Thanks to my friends at KCM for this update”

Federal Tax Credits for First Time Home Buying Veterans - VA Loans - Redding Lender, a Mortgage Loan Company<br />
A few weeks ago on Veterans Day I was reminded of a Federal tax credit that is still available for First Time Home Buying Veterans.
Veterans are still able to take advantage of the Federal Tax Credits that expired for the rest of the population a few months back.

Yes, eligible First Time Home Buying Veterans only need to be in contract by April 30, 2011 and close by June 30, 2011 to receive up to $8,000 in tax credits on their income tax return.

And yes, eligible Repeat Home Buying Veterans can receive up to $6,500 in tax credits.

And no, they do not have to take VA mortgages to get the credit (even though we have often discussed the benefits of VA loan financing in this space). Continue reading

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