Interest Rates When is the Best Time to Lock?

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!


I always advise my clients to lock in their interest rate at the earliest opportunity. Gambling with a client's interest rate is never advisable. In my business, I have a standardized system in place that we adhere to for all of our clientele.A mortgage loan cannot be closed without locking in a rate, and there are three main elements to take into consideration:

Interest Rate
Points
Length of the lock

Locking in on a rate does not obligate the client to commit to the loan until the loan is actually closed. The lock simply eliminates any risk of the borrower being exposed to market volatility. It provides the security of having time to complete the mortgage and Real Estate transactions with some sense of order. The lender must disburse funds to complete the transaction within the rate-lock period, or else the original commitment to provide a loan at a certain interest rate will expire.

When a lender permits an extended lock-in period, the borrower will usually see either a higher interest rate or more points associated with the loan. The lender does this to minimize their own exposure to market volatility; hence the borrower pays for the lender to take on this risk.For example, a 30-day rate lock commitment may cost the consumer one-half point, while a 60-day rate lock commitment could cost 1 full point.

If the borrower needed an extended lock period, but did not want to pay points, the lender could make up the difference in the interest rate. In this case, typically, a 60-day lock would have a higher interest rate than a 30-day lock.In my business, our standard procedure is to lock in a rate as quickly as possible once we have received the loan application.

My team and I let our clients know that while interest rates fluctuate daily, most lenders do not want to lose any business. We know that in many cases, if there is a significant rally in the market that causes interest rates to drop 0.25% or more, we can ask the lender to renegotiate the rate. Often the lender allows for a renegotiation to avoid potentially losing the loan to another lender.If we allow our clients to sit on the fence and not lock in a rate quickly, we would leave them exposed to market volatility. Then, if rates do increase, the borrower may be unable to qualify for the loan they want, which is a situation we try to avoid at all costs.

By knowing our clients' needs and working intimately with them to make the right decisions, my team and I are proud to say that we have many clients who are raving fans.

The Truth About Appraisals/Knowing the Guidelines Solves the Mystery

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!


The appraisal process often baffles consumers. They may feel that their home is worth a higher dollar amount, and so the appraised value doesn't always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and Real Estate Agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules. In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value. For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace supports the value of a pool at $15,000, then that item will be bracketed as [$15,000] on the appraisal. Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25-40% of the project involves demolition and the fixing of issues that aren't uncovered until the project has already begun, such as plumbing or wiring that may need updating. Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of homes that have actually closed escrow. As a loan professional, I make a point to follow the appropriate guidelines at all times. This promotes a good relationship with the lender, and helps to create easier and much smoother closings for my borrowers.

Call me if you or your clients would like more information on this subject.

Clermont Financial's Expertise Is Critical!

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!


As the real estate and mortgage markets continue to recover, we are seeing more and more restrictions on lending to try and right the ship. One monster that started to surface way back in July of 2007 was the "Declining Markets" guidance sent out by FannieMae (Federal National Mortgage Association).

In short, FNMA began to notice in their massive data base that there are areas of the country that are seeing consistent declines in market value, yet they don't have a standard industry definition of what constitutes a declining market.So what does this all mean?Well, if your lender receives this message when underwriting your conventional mortgage loan and you are not putting any money down, you will be penalized. (An FHA loan is another option.) The lender must immediately lower the highest acceptable loan-to-value ratio by 5%. So, your 100% loan just became a 95% loan, no matter how you slice it. You may be out of luck when looking at conventional financing. One action that you can take to avoid the surprise of this scary, but protective rule is to have your lender run your file through the automated system before even making an offer. This way you will know up front if you will be dealing with this issue on this property regardless of sale price.

In the past, an appraiser had a little lead way in determining value. The appraiser may have been able to go slightly out of area or scope of time, but Not any more. While the following are always considered the best practice, they are now considered the ONLY practice.
These guidelines are not intended to be all inclusive and may differ depending on the lender. They should be viewed as the minimum requirements used to set the market value by using data for comparable properties:

Must be within a 3 to 6 month period, with similar features such as square footage.

Must provide days on market for the subject property and comparable sales used.

Must be within close proximity of the subject property, looking at neighborhood character as well.
Must be within a one mile radius of the subject.

Must provide one current listing or pending sale from the Multiple Listing Service to help support value.

If any of these guidelines cannot be positively addressed or supported in the appraisal, the appraiser needs to provide a detailed written explanation of the circumstances.

There are a few other solutions. For example, FHA and VA do not have an issue with properties located in declining market areas. They leave the determination to those is the field that they trust, the lender and the appraiser.

The bottom line is that while this rule may cause some headaches, but it does not mean that houses can not be sold. It does mean that you need to make sure your lender is up to speed on these changes to assure a smooth transaction.

Getting pre-approved with a mortgage professional before you start looking at properties is more important than ever, because you need to decide which mortgage program will work best for you.

You also need to understand that mortgage guidelines can change even during your loan underwriting process, so don't be surprised if you are asked to provide additional information.

'RE/MAX Real Estate' Ranks Among Top 5 Search Terms

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!

Yes it's true according Jim Hood, Broker for Cincinnati based RE/MAX Elite. RE/MAX Elite gets the most exposure for your home because over 90 % of all of the multiply listing services ( MLS) In the USA feeding directly to RE/MAX.COM !

Combine that with a 40 Million dollar a year marketing campaign and you can see why listing with " simply local" Real Estate
really limits the exposure for your home.




RE/MAX real estate" ranks No. 2 among real estate search terms on the Internet, according to a recent study by Hitwise, an online competitive intelligence service.

Hitwise, a subsidiary of Experian, has been collecting and analyzing data directly from Internet Service Providers (ISPs) since 1997.

The terms were ranked by volume of searches that successfully drove traffic to Web sites in the Hitwise Business and Finance - Real Estate category for the four weeks ending Jan. 26, based on U.S. Internet usage.

Hitwise Real Estate Search Term Rankings

1. realtor.com - 1.7 percent
2. remax - .81 percent
3. homes for sale - .43 percent
4. apartments - .40 percent
5. real estate - .39 percent
6. century 21 - .38 percent
7. apartments for rent - .36 percent
8. zillow - .35 percent
9. zillow.com - .33 percent
10. coldwell banker - .29 percent

New FHA Loan Limits by March 14th

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!

There will be new FHA maximum loan limits within 30 days, thanks to the Economic Stimulus package that will be signed into law by President Bush on Feb. 13.The National Association of Realtors® has developed an “estimated” amount of the new loans for each county in the USA. We repeat, these are estimates. HUD has 30 days after the President signs the legislation into enactment to finalize the new FHA loan limits. Thus, it may not be until March 14 that the new limits are published.Also, these are for loans approved on or before Dec. 31, 2008. If the new limits aren’t extended by then, the existing loan limits may be back in place.Jumbo loans, accepted by Fannie Mae and Freddie Mac, will remain at $417,000.Here are the new “estimated” FHA loan limits for the area:Ohio counties: New limit Hamilton, Clermont, Butler, Warren……………..$337,500

Top 10 Ways Sellers Can Guarantee Their Home Won't Sell

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!

Jim Hood from Cincinnati based RE/MAX ELITE give us tips on selling your home: You can reach jim @ 513-826-1924

1. Be casual, not serious, about selling. A sage once quipped, "Money is only important when you don't want something enough." Real estate expert R.L. Brown said that if half of the 58,000 sellers in Maricopa County removed their for-sale signs we'd be at normal inventory levels. Actions speak louder than words in this market. Discretionary sellers should wait for a less competitive environment.

2. Price it wrong. A home properly priced is half sold. No amount of full-color ads, glossy fliers, multiple photos, virtual tours, agent luncheons, Goodyear blimps, pom-pom girls or Saint Joseph statues will compensate for a wrong, timid retail price.

3. Ignore your agent. Attorneys believe if you represent yourself, you have a fool for a client. Doctors don't self-diagnose. Professionals use professionals. Even though many people believe they're experts on raising kids and real estate, full-time, career pros usually know what's best. Listen to them very carefully.

4. Micromanage the marketing. If you sold cookware in college, carts in California, or carpeting in Cranston, it does not qualify you to second-guess your agent. If you had a real estate license years ago, save your stories about the "good old days" for your children. You can share your concerns and timelines, but leave the details to the listing pro.

5. Reject staging suggestions. Someday shag multi-colored, sculptured carpeting will come back. Whitewashed cabinets, Navajo white walls, linoleum flooring, lots of personal photos, and Elvis paintings on black velvet need to go. Now.

6. Let Fido loose. I recently entered a house and had two frisky, friendly black Labs run up to sniff me. Unfortunately, I had light-gray dress slacks on that day. Both wet stains lasted for hours. Until that day I didn't realize dogs enjoyed chewing the tassels on expensive loafers.
7. Talk to the buyers. Life gets lonely at times. Why not ask the buyers where they grew up? Or how much they qualify for. Tell them about the vacant rental next door. Maybe they could babysit next weekend! Why not share war stories, horror movies or meatloaf recipes?

8. Sell personal items. Wow, maybe the buyers want to buy the patio furniture, rotary lawnmower, or life-size statue of Saint Anthony. You have only four more boxes of Girl Scout cookies to sell. Why not ask for a donation for the March of Dimes, the Humane Society, the local PBS station? Remember the saying, "loose lips sink ships."

9. Discount that smell. My house doesn't smell of pets, baby diapers, curry powder, garlic, fried fish, coconut incense, cigars, manure, mulch, dairy farms or low tide. The buyer must be confusing my castle with a tract home.

10. Dismiss feedback. What do buyers know anyway? They can't possibly mind my barbed wire fence, heavy-duty rebar, backyard bomb shelter, airport runway views, lights from the power plant, hum from the high-voltage lines, railroad tremors, scorpion skeletons, termite mud tubes and pet snakes. What are they thinking?

Cincinnati Mortgage Market update

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!

A big cut in the federal funds rate pushed mortgage interest rates to their lowest levels in four years. The Federal Reserve, in a move to stimulate the economy, has reduced their federal funds rate to 3 percent.

Refinancing activity has been strong and has accounted for a rise in lending activity across the nation, reaching its highest levels since March 2004, despite the fact that home purchase applications actually declined by more than 17 percent.

Thirty year fixed mortgage rates rose during the last week of January and remain in the high five to low six percent level. The average jumbo thirty year fixed is hovering in the low 7 percent range. As economists monitor inflation and its effects on long term US Treasury yields, Fannie Mae and Freddie Mac are both proposing new fees for mortgages they guarantee. According to these companies, these fees are in direct response to the inherent risks associated with guaranteeing loans.

Finance Q and A:
Q: What is the benefit of a bi-weekly payment schedule?
A: Some borrowers choose to pay back their mortgages over 26 bi-weekly payments per year. The bi-weekly payment schedule speeds up amortization and reduces total interest costs. It typically shortens the loan term from 30 years to approximately 22 years. These smaller bi-weekly payments amount to an extra monthly payment per year.
Payments are deducted automatically from your savings or checking accounts. The same objectives can be accomplished by making an extra payment each year, or by applying an additional amount to principal each month when you send in your payment.

Tip of the Month:

Given the recent activity in today's mortgage markets, homeowners everywhere are taking advantage of these historic low interest rates to refinance their homes. This is one of the best times in recent history to finance real estate. Contact your mortgage professional today to take advantage today.

Kim Schieldknecht - LO.002028.000, MB.802245.000Clermont Financial LLC726 Mohawk Trail & 5720 gateway blvd #204Milford & Mason, OH 45150(513)587-3599http://www.clermontfinancial.com

ANOTHER RE/MAX ELITE ADVANTAGE

RE/MAX Elite and the Clermont financial group. If you absolutely, positively want to postion yourself to be successful in today's market!

The more you learn, the more you will earn!

January 2008 Benefit to RE/MAX Sales Associates:

Through streaming videos, downloads, podcasts and other resources, RE/MAX University focuses on helping RE/MAX Sales Associates improve their bottom line.

Click herefor ATOD Overview video.

Click here for ATOD "Listing Presentations" videoClick here for ATOD "Managing Your Time" video.

RE/MAX UNIVERSITY OFFERS AGENT TRAINING ON DEMAND WHERE AND WHEN YOU NEED IT

RE/MAX gives its Sales Associates more through the Agent Training On Demand (ATOD) program. This convenient online tool includes streaming videos, downloads, podcasts, and more, which are available at any time.Every week on ATOD, you'll find new videos with tips and strategies that you can put into practice immediately.Download them to your phone or mp3 player, or watch them online - 24 hours a day, seven days a week.And now ATOD is even more convenient for Sales Associates to view as sample links have been created for you to preview these educational videos.RE/MAX knows that the more educated Sales Associates are, the better they represent home buyers and sellers in today's changing market. That's exactly why RE/MAX created RE/MAX University to provide more modern educational tools that are easy to use and at your fingertips 24/7.RE/MAX University merges the latest technology and state-of-the-art facilities, with a vast body of knowledge contained both within the network and with industry experts, so that RE/MAX Sales Associates can stand out among the competition and provide unmatched quality and customer service.

We invite you to contact Kim Schieldknecht @ RE/MAX Elite, 513-587-3599