Let's get to it...
Should you refinance? There are some homeowners who are on the fence, perhaps scared, in a jam, or have a ton of equity that isn't doing much for them. Those folks are the ones who really need to look at their options (pro & con) and make a decision. This could be a great time to take advantage of a market where interest rates are still pretty low. If not, it is usually a great time to make a plan for down the road.
Should you buy a home? If you are qualified, I don't see why not. It's a buyers market in a lot (if not most) areas. I'll put it like this; if you have money in the bank after you leave the closing table... it may not be a bad idea. If you don't, it's a risk that may not be in your favor.
Should you take out a second mortgage or line of credit? I don't see them often right now, hardly ever. Their availability is almost nill. If you are looking for one, a local bank may be your best bet. To answer the question, to pay off high interest debt and save you money that you won't in turn spend on something else... YES~! To do home improvements~ it may not be a bad idea. To supplement your income... find another job. No, seriously.
You want to sell your home in the worst way but probably won't get what you want out of it? Yup, this can be an issue. In hindsight, you overpaid and are now undervalued. Consult a trusted Realtor... period.
Is it a good time to invest in Real Estate? I'll get to that answer at the very end of this post.
How do I shop for a mortgage? It sounds somewhat odd, but how do you pick out your favorite vegetable? It's somewhat difficult and owns many variables. Folks want a low interest rate, no surprises, accountability, trust, and something that will benefit them now and down that road. That's just a guess; I have no hardened proof. Getting someone referred to you from family, friends, Realtors, attorneys, etc is a good place to start. But you want to know my other piece of advice which you can do on your own... read the blogosphere about mortgages. Not only will you get some insight on Mortgages, you'll get insight on the person. The latter is as important as the former.
I can't qualify to refinance, what now? - That depends on what you are looking to accomplish. If you wanted cash-out, to pay off your mortgage faster, lower your rate... most likely you can't refinance because you lack the equity or your credit doesn't qualify. If it is the former, you have little control in that area. If it is the latter, working with a Mortgage Professional who understands credit is a must. They should be able to lead you in the right direction. But, if your rate is going to adjust soon and you can't qualify to refinance, it's time to modify your loan. I will be writing a post about that upcoming. If you have immediate questions, contact me at my information below.
Are there any out of pocket fees if I refinance? Yes! A one-time non-negotiable and non-refundable fee to yours truly in the amount of one million dollars. Of course I'm kidding. All applicable closing costs can be rolled into the loan amount, providing you have the equity to do just that. The only out of pocket fee is the appraisal fee, a third party fee. On a single family home in Pennsylvania, I've seen that fee range from $300.00 to $400.00.
I want to buy a home, what's the first step? Find a Buyer's Realtor. They will represent you and you don't pay them a dime out of your pocket. The very next step will be to get pre-approved with a lender. Do some shopping on your own and maybe talk to a few lenders your Realtor suggests and has maybe worked with.
One final note that I'd like to point out. I've heard a lot of yells hype whispers from folks waiting to do anything (buy a home or refinancing) until the market 'comes back'. Ponder the following:
The best time to buy something is when nobody else wants it.
Other articles that may answer some Mortgage-Related questions:
How to help make sure your loan closes as fast as possible.
Simple but important tips regarding your Credit & Credit Score.
Buying a home in Pennsylvania.
Parked and thinking about vegetables ;0
Thanks for the advice, Jason!
Jason,
I sometimes wonder if anyone is out there listening, but take my word, with mortgage companies, INTEGRITY is the key factor...shopping rate is not what it's all about...Trusting a professional loan officer...priceless!!! Thanks, Fran
Jennifer - Personally, I opt for spinach with red wine vinegar.
Erica - Thank you Erica.
Fran - You and me both. Trust is priceless. I will probably be writing about the interest rate thing in the near future.
Sage advice indeed. I think I may adopt the 1MM non-negotiable non-refundable retainer fee idea.
Jesse - It's a splendid idea, is it not?
Jason
Sometimes the consumer likes those cheap rates even if I tell them they are only good for a short time and then you can forget about the service you'll get...kind of like you get what you pay for.
Jason, wise advice as always! And you needn't be a Pennsylvanian to find it very useful!
Jason, great advice! Also credit unions are great places for 2nds in our part of the wood, the great NW. I enjoy reading your blog.
Neal - True, and that mentality will never go away. Hey, who doesn't want the lowest interest rate possible on a Mortgage? By the way, I have something to go over with you the next time we talk.
Patricia - Thank you. I guess this advice is National to an extent:)
Betsy - Good point in regards to the credit unions and second mortgages. Thank you for stopping by and your very kind words!
Jason, I like this as a "current" practical take on all those questions / issues. The funny thing I would add about buying a home years ago and then the value plummeted, maybe don't use that Realtor again, even if they were the trusted Realtor. The problem there is no one has a crystal ball on markets going down or up, so in some cases it may be ok to go back with them again. Just have them be as aggressive as they can as your buyers agent.
Solid and practical advice --with a few smiles thrown in for good measure. The other thing to consider -- you never know it's the bottom until you can look back on it!
PS - Spinach with balsamic isn't too bad either.
Jason, This is good advice. I hope consumers will read it and call you for their mortgage needs.
Jason,
I hope it isn't about all the rumors at the party:)
Well done Mr. Sardi! As a Buyer, or a Realtor, if I'm reading this and I'm in PA, I'm going to you. You certainly are 'The Mortgage Man 4 the Average Man'. Simple, honest and direct. Just the same as you've always been. About that vegetable thing.....
Gary- Unfortunately that crystal ball isn't owned by any of us. If the value plummeted, I dare say it is hardly the Realtors fault. If it was blatantly overpriced or it was found the appraisal was pushed... then that's another thing. Oh the stories we will have for the future years...
Alexsandra - Did I mention I love how you spell your name;) I don't think I've had spinach with balsamic but it sounds quite delicious.
Gita - That certainly would be a plus.
Neal - Make that two things to go over with you:)
Scott - I don't know about that, the 'simple' part. I've been accused of the exact opposite:-)
I agree SAGE ONE! Demand is low and people who are thinking of buying should really think about pulling the trigger my friend. Nobody can ever time the bottom.
Greg - If anyone could time the bottom, they'd probably have more money than they would know what to do with.
Jason my friend I love your last point.....thank you for that reminder....I too say that the lending part is crucial for any Buyer before we hit the road.
My only disagreement with your post Jason is that I think they should get pre-approved and then find a buyer's agent. Neither one costs them anything out of their pocket, but they know what the can afford going into the deal. But your way works too.
Sardi.... in the one paragraph, how to shop for a mortgage? You didn't include a link to my page... in my opinion, that would be the best for everyone.... ;o)
Sardi,
Wow I can't believe none of these other mortgage guys called you on #2. Don't get me wrong, I'm a HUGE fan of reserves, they are needed if you plan to make the jump to homeownership.
That said it's probably the best time to buy now if you are having trouble saving reserves and are a first time buyer. At least until July '09.:-))
Great post though. Signature Sardi- concise and effective.
Gerry Suarez, Jr.
Your FHA Loan Pro!
You know my opinion on pre-approval BEFORE ever seeing a property. I'm miitant about that and you know why. I was going to suggest the balsamic with the spinach but after you nixed the raspberry, I figured I'd just shut up ;-)
Just leaving my comment here, so that if you manage to drum up any business from your post, I want to let consumers know that I am also licensed to do mortgages in PA, but I only charge a $500,000 up front free. It pays to shop around.
Nice post, to the point, without the hype.
Michelle
Dan - Thank you kind Sir, now go travel that road. They need us on the journey.
Fred- Relevant counterpoint. There are definitely mixed schools of thought on this. My guess is that those very schools of thought stem from what entity the first person they turn to will refer them too. In essence, where do folks shop first?
Jeff B - If I wanted your crap, I'd comment on your posts. I'm kidding but you do make me want to link your profile to the following phrase... who not to go to when you need a loan.
Gerry - You know how it goes, reputation can lead folks to think everything you sputter is gold. It can also lead to folks coming after you... the double-edged sword. You came at it from a centric standpoint and nailed a good point. Those products are still out there, where reserves aren't required. My only advice is... make sure they get an inspection and make sure they are well aware that if something breaks down... either they fix it or it doesn't get fixed. Hence, the importance of reserves. And I know what you did on a previous post of mine... innovative, my friend:)
Jennifer- It's a chicken and egg deal with that piece of advice. Yes, if they need financing they need pre-approved with a full application, tri-merged credit and supporting docs (the way it should be done). Yes, if they want to buy a home, they should hire an agent to represent them and their best interests. Which comes first? The debate will go on, but I was just sucking up to Realtors with that one:-)) And let's just eat spinach together, that overtakes whatever dressing is chosen or not;)
Michelle - Damn it, undercut again! If this is a bidding war, I will cut back to $450,000 just out of spite. Thank you for the kind words and I look forward to speaking with you sooner rather than later.
Dropping it to $450,000, eh ? Well since I don't have to split it with anyone and you do... $225,000. Oh, and I like spinach sauteed in olive oil in garlic but prefer string beans.
Michelle - Well, that's fair. Olive Oil and Garlic are a classic mix. As far as splitting it with anyone... I'm more suspect than I ever was. We have created one of the more interesting anomalies... Money!
Oh no...this better be about mortgages:)
Neal - Actually, it just might be.
Dude, you went over my head...
but thanks for the "innovative" props- I'm sure it was by accident, whatever it was!
btw-"centric" would be a good word of the day, if only our politicians could learn it...
Gerry Suarez, Jr.
Your FHA Loan Pro!
Once again great advice for the consumer. Well, I say consumers, but it's great advice for anyone. Keep up the good work Sardi.
Jason- Good tips! Especially like the advice in "How Do I shop for a mortgage." One key for a consumer would be to google their reps name. That might enlighten them a bit as to whether that rep is in cyberspace. Either way, finding someone they trust is key and then perhaps talk to 1 or 2 others just to see if the advice differs.
Gerry - I'm all about "centric". We will talk again soon.
JL - Thank you Sir. Perhaps I will work on a post tonight for your New Group:)
Matt - Thanks. Google is such a wealth of information in this day and age. It's odd, when I spoke with someone today who has shopped elsewhere, the advice is pretty similar from what they are saying. Two and three years ago, it was all over the place. The 'thinning' of our Industry isn't necessarily a bad thing.
Jason of course this is good advice and for some reason I am also thinking about organic carrots...very strange:)
ok then I firmly deny anything I said...as the president always says...no comment!
Jason- I love that...."the best time to buy is when no one else wants it" and it fits perfectly with "the best time to borrow is when you don't need it " :) You have some good advice on here my friend....
Good post, great starter info for clients just getting started.
Love that analogy. I'm gonna use it! Refi fees are a little high don't you think? LOL Good post with nice conversational style.
Bill - I can't even remember if I've ever had organic carrots, I do like vegetables though.
Neal - Since when are you politically correct?
Kathy - Thanks and I agree with that borrowing philosophy as well.
Dee Dee - Why thank you.
Lyn - Hey, I'm worth every penny:)
Thanks for such a nice info on mortgage.
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