It is often said that some people change with the direction of the wind. Well it is time to tie down the tent because the wind is blowing all directions when it comes to the economy and the housing market.
Whether you are a home owner that needs money for improvement, or looking to become one or trying to help a loved one become one, the wind is never settled for you. It is because you have to make a decision (get on board with one or another direction) as to whether to refinance, repair, improve or get cash out of the equity to buy a car etc. that you have to make a stand.
So why not come to us at AAA In Service? We do all of the above (except buy a car etc. for you).
So call us we have qualified people that can help you with whatever you want to do.
Visit our website at www.aaa-in-service.com we'll be glad to help!!!
Wednesday, January 30, 2008
Wednesday, January 23, 2008
Whoa Nellie.. or Stop the Falling Market!!!!
It would seem that now is not the time to buy stocks. This may be true but I am not a stock analyst or soothsayer so I can not tell you. But I do know that if you own a home and want to improve it. Now is a good time to do so.
We do home improvements and mortgages and I can tell you that there aren't many mortgages out there. But if you have a good credit score and a high interest rate mortgage, now is the time to act. The Fed has lowered the overnight funds rate and this usually is reflected in the mortgage rate. It shouldn't but it does.
If you don't need to refinance for rate but do wish to get some money to do some improvement, this is also a good time to do that as well.
If you have the money to do the repairs now, the cold weather, is the best time to get them done. I saw on the television and heard on the radio that some of the high profile companies are offering deep discounts for home improvements because of the cold weather. We don't offer discounts because we are already less expensive than those companies even after their "discounts".
The crashing stock markets and the 'subprime mortgage crisis' is not going to affect your home or the value of your home in the long term so rather than try to sell your home with the 'depressed market' fix it up, and in a few months or so (probably after the elections) you can sell it then. Because regardless of who wins the elections we will have a different President, and Congress and when that is 'settled' things will return to some semblance of normalcy.
Also take notice, that since we have been doing mortgages since 1989 we have a fair idea of the value of your home and we will inform you if the home improvement you wish will be an increase of asset or an over kill for the neighborhood. What do I mean by this? I will explain.
If the assessor says your home is worth $100,000 and you want to add a room 14x15 or so how much will the value of your home go up? If you look at other houses in your immediate neighborhood and the houses with the "new" number of rooms and square feet you add are not increased by the cost amount of the "new" addition, then it probably is not a wise move.
Remember though that things that are done as 'maintenance' do not always add value. In other words, a roof repair or replacement just 'maintains' the current value. Adding a bathroom adds value, usually to the home about twice what the cost of installing it, but re-tiling the floor or fixing a leak often will add nothing to it.
You may choose to do the addition or improvement anyway and that will be good too because over five to seven years the value should catch up with the improvement even with the current problems in the real estate market. Nothing lasts forever and this market will change too.
So don't panic, but do act if you need anything for your home because there is no better time than now.
We do home improvements and mortgages and I can tell you that there aren't many mortgages out there. But if you have a good credit score and a high interest rate mortgage, now is the time to act. The Fed has lowered the overnight funds rate and this usually is reflected in the mortgage rate. It shouldn't but it does.
If you don't need to refinance for rate but do wish to get some money to do some improvement, this is also a good time to do that as well.
If you have the money to do the repairs now, the cold weather, is the best time to get them done. I saw on the television and heard on the radio that some of the high profile companies are offering deep discounts for home improvements because of the cold weather. We don't offer discounts because we are already less expensive than those companies even after their "discounts".
The crashing stock markets and the 'subprime mortgage crisis' is not going to affect your home or the value of your home in the long term so rather than try to sell your home with the 'depressed market' fix it up, and in a few months or so (probably after the elections) you can sell it then. Because regardless of who wins the elections we will have a different President, and Congress and when that is 'settled' things will return to some semblance of normalcy.
Also take notice, that since we have been doing mortgages since 1989 we have a fair idea of the value of your home and we will inform you if the home improvement you wish will be an increase of asset or an over kill for the neighborhood. What do I mean by this? I will explain.
If the assessor says your home is worth $100,000 and you want to add a room 14x15 or so how much will the value of your home go up? If you look at other houses in your immediate neighborhood and the houses with the "new" number of rooms and square feet you add are not increased by the cost amount of the "new" addition, then it probably is not a wise move.
Remember though that things that are done as 'maintenance' do not always add value. In other words, a roof repair or replacement just 'maintains' the current value. Adding a bathroom adds value, usually to the home about twice what the cost of installing it, but re-tiling the floor or fixing a leak often will add nothing to it.
You may choose to do the addition or improvement anyway and that will be good too because over five to seven years the value should catch up with the improvement even with the current problems in the real estate market. Nothing lasts forever and this market will change too.
So don't panic, but do act if you need anything for your home because there is no better time than now.
Wednesday, January 9, 2008
Subprime loan woes will ruin everyones good day.
The slogan for all of the candidates for public office from dogcatcher to President of the United States should be the same one used in the past. Maybe you remember it.
IT'S THE ECONOMY, STUPID!!!!
Because it is the economy that will determine the next political trend. The next congress and president will have to stop the bleeding that is going to start a.k.a. recession. Just today a major investment analysis company has stated that the second or third quarters of this year will reflect recessionist numbers.
Soon there will be no advantage for anyone to get a loan through a mortgage broker. The powers that be seem to think that Yield Spread Premiums which are paid to the brokers were the reason for the 'credit crisis' and the 'subprime meltdown'. Nothing could be further from the truth. Unscrupulous practices by some mortgage broker employees and borrowers caused the 'problems'.
But why did those problems occur? There are several reasons.
1) Greed. Loan officers were told by their brokerage managers that they can make as much as they want and they loaded the interest rate up which increases the Yield Spread Premiums by as much as four or five percentage points. They were also charging 'origination fees' and high processing fees. What kind of money would that be? Well, for a loan of $100,000 five percent in Yield Spread Premiums is $5,000 dollars plus a processing fee of $900 and Origination of two percent makes a profit of $7900 for one loan.
2)Fraud. Loan officers not able to make the numbers work for the borrower would make up numbers and even falsify documents to make the numbers work.
3)Untrained personnel. There is no national standard for training loan officers or brokers. NONE. There is no ethical training or guidelines either.
4)Borrowers impatience. Most borrowers don't want to spend the time reading the documents they have to sign at the origination of the loan and at the closing of that loan. If more had taken time to read the documents there would be less of a 'resetting interest rate' crisis.
The best thing we can do is to make sure that all of our legislators on every level know that Yield Spread Premiums are not the problem. Greed and training could solve most of the problems. The Yield Spread premium, used correctly, makes the cost to the borrower lower. There should be a cap on the amount of money charged to the borrower or seller in conjuntion with the Yield Spread Premium.
IT'S THE ECONOMY, STUPID!!!!
Because it is the economy that will determine the next political trend. The next congress and president will have to stop the bleeding that is going to start a.k.a. recession. Just today a major investment analysis company has stated that the second or third quarters of this year will reflect recessionist numbers.
Soon there will be no advantage for anyone to get a loan through a mortgage broker. The powers that be seem to think that Yield Spread Premiums which are paid to the brokers were the reason for the 'credit crisis' and the 'subprime meltdown'. Nothing could be further from the truth. Unscrupulous practices by some mortgage broker employees and borrowers caused the 'problems'.
But why did those problems occur? There are several reasons.
1) Greed. Loan officers were told by their brokerage managers that they can make as much as they want and they loaded the interest rate up which increases the Yield Spread Premiums by as much as four or five percentage points. They were also charging 'origination fees' and high processing fees. What kind of money would that be? Well, for a loan of $100,000 five percent in Yield Spread Premiums is $5,000 dollars plus a processing fee of $900 and Origination of two percent makes a profit of $7900 for one loan.
2)Fraud. Loan officers not able to make the numbers work for the borrower would make up numbers and even falsify documents to make the numbers work.
3)Untrained personnel. There is no national standard for training loan officers or brokers. NONE. There is no ethical training or guidelines either.
4)Borrowers impatience. Most borrowers don't want to spend the time reading the documents they have to sign at the origination of the loan and at the closing of that loan. If more had taken time to read the documents there would be less of a 'resetting interest rate' crisis.
The best thing we can do is to make sure that all of our legislators on every level know that Yield Spread Premiums are not the problem. Greed and training could solve most of the problems. The Yield Spread premium, used correctly, makes the cost to the borrower lower. There should be a cap on the amount of money charged to the borrower or seller in conjuntion with the Yield Spread Premium.
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