Sound Mortgage Planning Blog

Rates are still in the 4.625% to 5.000% range so it's time to get a jump on refinancing out of your high interest rate mortgage and into something more affordable.

The weekend is here and as always, I am available to you if you need to be pre-approved or just need some questions answered regarding financing.

Agents, I am available if you need anything so please call me if I can be of help!

Memorial Service For Four Fallen Police Officers Today - We offer up thoughts and prayers...

From PC Home Loans Management, Staff and Employees we offer up our thoughts and prayers to the families of the four fallen Lakewood Police Officers.

My weekend consisted of freezing cold winds while putting up lights, darn near pealing my finger nail completley off while trying to open the ornaments tote and finally burning my hand while barbecuing vegetables for a salad. As far as weekends go, not my best...yet, I live! I've survived the weekend and I am now ready to take on the world! Well, not quite the world but I will certainly give the South Puget Sound a go.

Last Friday, before the dreaded weekend, I was in Seattle taking the Washington State Housing Finance Commission's House Key class. This is required for any Loan Officer wanting to originate this type of loan and any Loan Officer and/or Real Estate Agent who wants to teach the first-time homebuyer class that all first-time homebuyers using the House Key Bond program must attend.

Let me say, Lisa, Bill and Karen are fantastic trainers and I came away from the class knowing more than I had ever thought I would.

One of the biggest take-aways I got was regarding the Recapture Tax. I had been speking with an agent the day before and they had brought this very thing up. They were concerned about the recapture tax and that it was a deterrent for the homebuyer. Let me say now, this should not be a concern at all.

Let me first quote one of the instructors as saying, "Recapture is a perceived barrier to the program that never really happens." Why?

"The recapture tax is assessed only under the following circumstances:

• The home is sold or otherwise disposed of during the first nine years of ownership;
• The Borrower's income increases each year by 5 percent above the maximum federal income limit at the time of purchase; and
• The Borrower realizes a gain upon the sale of the home.

Because all these events must occur for any tax to be paid, it is unlikely that most Borrowers will pay a recapture tax.

In the event that a recapture tax is due, it will be only a portion of the Borrower's gain on the sale of the home. The law states that the maximum recapture tax is either 50% of the gain on the sale or 6.25% of the original loan amount, whichever is less." Source: House Key Program Manual, RECAPTURE TAX 5.1 (Rev. 06/01/99)

So now I begin the process of putting my class together and finding a local agent that would like to team up and provide first-time homebuyer education classes. I am excited to begin doing this and who knows, I may see you in one of my classes!

As a mortgage professional, it is my responsibility to alert you to market conditions that you can both take advantage of or alert you to when certain conditions exist. Now is one of those times. If you are thinking of restructuring your mortgage, do it now. Rates are poised to rise, a lot!

Just as your financial advisor or CPA subscribes to services to assist them in shaping the advice they offer you, I do the same. One of the tools I use to help me protect you and your financial assets is RateWatch. RateWatch tracks and monitors real time mortgage backed securities (MBS) prices which in turn impact the rates I have the ability to offer you.

I won't overwhelm you with technical information but I would like to show you a chart to explain why I am reaching out to you.

Below is a chart showing prices of one Mortgage Backed Security (MBS). The first thing to keep in mind when viewing this is that the higher the markings on the charts, the lower the rates I have the ability to offer you.