Mortgage Monday

Despite the increase in gasoline prices, the stock market has opened higher today based on “earnings momentum”. Oops- just checked- it is down! The bond market was closed Friday for the holiday but the 10-year Treasury yields have opened lower today. This may mean lower interest rates for the week and better asset values.

Regardless of this news, real estate values continue to fall in certain pockets of the country and home sales decline again. Have we missed the Spring Fling and are we doomed for another year with a bad real estate market?

I’m also afraid the second home market might take a real bath. This fear is based on the fact that who can afford to fill up the tank to drive to the weekend home at the beach or the mountains and do we really have the money to fill two refrigerators? Again, the recovery will be quite some time; all we can hope for in 2011 is a flat year.

When buying a home remember:

1.    To verify your closing costs and fees at the time of application- you will review a Good Faith Estimate within three  business days of the lender receiving your loan application. Make sure to review it with your loan officer and understand all the fees involved

2.    Understand that your lender and mortgage loan officer’s compensation plans have changed based on federal regulation and you should not be paying twice and they cannot charge you any fees or points if the lender is also paying them

3.    Make sure you have an out in your purchase contract if the appraisal comes in lower than the sales price. Appraisals are coming in dangerously low, so don’t be surprised if the house is worth a lot less than the seller thought.

4.    Be prepared in advance to submit your mortgage application- the paperwork is arduous- ask the lender what documents you will need (paystubs, tax returns bank statements, etc) and start putting them in a folder. Remember don’t throw out your important papers-shred them.

5.    Know a closing might take more than sixty days now, so plan accordingly. As I say, don’t schedule the movers until the closing date is set in stone!

Happy Monday!