Maui Real Estate | Maui Financing Blog| Maui MLS

1/28/09

INTEREST RATES

written by Tricia Morris, Premier Mortgage, Maui

I wanted to give you my opinion regarding the current mortgage market and the urgency with which buyers need to act to take advantage of the current mortgage rate environment.

On January 5^th, the Fed began buying mortgage backed securities. The anticipation of this has been the cause of the rate reductions the past month. This is a temporary situation. The Federal Government is expected to purchase $500 Billion of mortgage backed securities until, at the outside, June 30^th of this year. Mortgages to be purchased by the Fed in June would have to be closed by the borrowers in May. If the current levels of activity in lending are any indication, we may be looking at 90 day or longer escrows by then. As you know, 80% of the lending capacity has been cut over the past year. With reduced staffing at lenders offices, it has become harder to get loans through the system.

If we assume a 90 day escrow with a closing in May, your buyers would need to be in escrow by February 15^th in order to have a reasonable chance to receive the low interest rates.

I am not sure that the Public has been educated that this particular window is open, but will close soon. As The Mortgage Market Guide reported on January 6,2009, “We will see the lowest rates in our lifetime during the first two quarters of 2009, so get this message out to everyone who can benefit and have them lock in during this once in a lifetime opportunity”.

Best Rates, another prominent mortgage publication, reported also on January 6^th that when the Government stops buying mortgage debt at the end of June, there will be a spike in mortgage rates.

(As a side note, the Canadian dollar seems to be strengthening over the last several days and appears to be up about 4% over the end of December’s exchange rates. This might help with Canadian buying.)

I can’t express how strongly I feel that the wisest buyers will act quickly to lock in these mortgage rates. We do not know what the future holds, but we do know that unprecedented rates are available now.

We are already experiencing some delays in moving loans through the system. I want to make sure that your clients receive the interest rates that they want and the service they deserve. Please let us know how we can help your buyers.

Hawaii’s Premiere Mortgage is both a banker & a broker with offices in Kihei, Wailea, Kahana & on Kauai to assist you and your clients. Some realtors have found that providing rate flyers specific to a property, can help with marketing efforts for Open House Events; Please let us know if we can assist you by providing Flyers for your events or if we can assist you in any other way!

Mahalo & Aloha,

Tricia & the Premiere Mortgage Team

Tricia & the Premiere Mortgage Team
Hawaii's Premiere Mortgage Company
800 813-7711 x116
808 874-8800 x116
fax 808 874-1188

email: tricia@mortgagemaui.com

Information is accurate as of date of distribution and is subject to change without notice. January, 2009

Hawaii's Premiere Mortgage Company - 535 Lipoa Parkway, Suite 101, Kihei, HI 96753

JANUARY, 2009
by craig haueisen, windsor capital, Maui

What is the rate?

I want the lowest rate possible!

Interest rates are extremely low right now. They are in the high 4’s to the low 5’s depending on the borrower’s qualifications AND the property type. Will they go lower? They might. There is some talk about the Government buying the Mortgage Backed Securities (MBS) and thus being able to reduce the interest rate as low as 4.5%. However, that is not set in stone as of today, and not everyone will qualify.

Mortgage interest rates vary throughout the day. Shopping for the best rate is almost impossible on your own. Mortgage interest rates are based on the MBS; not the 10-year Treasury note as commonly believed. Often interest rates are advertised with “points” which is a cost to the borrower (sometimes the seller) to buy down the interest rate.

There are several variables that go into determining an interest rate. The following are just a few:

What is the property type? (Single Family Residence, Condo, Condotel, Land, etc.)
How much money down?
What is the occupancy? (Primary Residence, Second Home, Investment)
What is your credit score?
How many mortgages do you currently have?
What is your current income?

The biggest change in the last several months is that most borrowers need to provide income and asset documentation (paystubs, tax returns, bank statements, etc). Mortgage insurance is also becoming a necessity for some people with less than 20% equity.

A good rule of thumb for calculating rates for investment properties is usually 1-2% higher than the national average on a primary residence or a second home.

There is still money to loan for qualified borrowers’. The programs include:

100% financing
Government – FHA and VA
Construction
Vacant Land
Foreign Nationals
Condotel

In summary, find a mortgage broker you trust that has the ability to shop on your behalf. A mortgage broker who has access to numerous lenders both local and national (often over 100 lenders) has the ability to take your individual scenario and locate a lender whose guidelines are applicable as well as assuring you get the best rate.

Written by: Craig Haueisen of Windsor Capital Mortgage Corporation

Feel free to contact Craig directly – 808.298.7549 or email him @ craig@focusmaui.com.

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