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Right now, we are witnessing first-hand the worst real estate crash in U.S. history. Someday many of us will look back at years 2007-20?? and say, "Yeah, those were the days when we owed more than our houses were worth." But in the present day, in the midst of our housing crisis, we must decide what to do about it. Bottom-line is, nobody wants to lose their home, but most would rather lose that than lose money- and keep on losing it. So do I sell short or walk away? These are two things that come to mind when homeowners think about their equity lost and cutting their losses short. Unfortunately, both of these choices involve moving out of one's home and all of the trauma that goes along with it. There's hardly a bright side to either one, but what if there were another way? Today, I want to give you an alternative option to consider, which may also be for the greater benefit of our national economy: SHORT REFINANCING.
Learn more about a Short Refinance
 In today's troubled housing market, homeowners must be especially cautious about which loan program and terms they choose. With stricter lending standards, the so-called "bad loans" have almost diminished, but there still exist loans that you must be careful with. Any such loans that are set to "adjust" after a short period of time (a.k.a ARMs or Adjustable Rate Mortgages) will typically buy you a lower interest rate and payment. These options might make life easier for several years, but if you intend to occupy your home for the long-term, it may be too risky to gamble on having these same low rates when the time comes for you to refinance again in the future. You may secure a 5.XX% rate now, only to be in a crisis situation if rates rise in the double digits 5 years from now.
Some red flags that you may want to watch for are marketing pitches with the phrases such as "Freedom Choice Advantage" or "Many Options Program." These loans give borrowers a choice of a flexible payment, instead of making a principal and interest or an interest only payment, which can result in them owing MORE than they initially borrowed. This is called negative amortization, commonly referred to as "negam." There once was a time when real estate appreciation was far surpassing any accrued negative amortization one's loan, but those times are now long gone.
In a flat or depreciating market, the only wise choice in financing is that which remains permanently fixed. Remember that no one can predict the future, so go with what is certain for the long-term. Presently, long-term fixed rates are very competitive compared to short-term adjustables. For this reason, I ALWAYS advise a 30 year fixed mortgage if a borrower can truly afford a principal and interest payment. If you wouldn't mind making a quick call to me, I can break down your options to you in very simplified terms that you can understand. I look forward to helping you make the wisest decision for your family.
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Our struggling economy has led to a surge in federal lending programs. Government sponsored entities (GSEs) like Fannie Mae and Freddie Mac are expanding their offerings to assist homeowners refinance out of their high adjustables or negative amortization loans. Federal stimulus packages for real estate may only be available until the end of 2008, so contact me soon to find out if you and your family can benefit.
One major modification in regulations is the increase to the standard conforming limit of $417k to potentially higher limits as determined by HUD (Housing and Urban Development). Click here to see the new conforming limit in your county. What this could mean to you is a lower interest rate at a reduced cost.
Interest rates and loan underwriting guidelines literally change by the minute. What you think you may understand about the refinancing may no longer apply in this ever changing economy. I am available for questions anytime between 8am and 6pm Mon-Fri and Sat-Sun by phone appointment at +1 408 216 7274. I take email questions as well at randymiguel@gmail.com.
Add your email to my confidential rate watch list, and I'll worry about interest rates for you. You can expect to be alerted quickly if rates fall to your desired levels.
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FHA and now FHA Jumbo Loans 
Lic. 01486880 
