First Ohio Home Finance

By now, surely you’ve heard of the nationalization of our industry. Fannie Mae and Freddie Mac were “seized” by the Federal government and put into “conversatorship” over the weekend as it became apparent these secondary markets for the mortgage industry had come to the point of bankruptcy.

Short-term, that means mortgage rates are heading lower – MUCH lower. The loans on your home and mine are now backed by the full faith and credit of the United States Treasury now. What seems like zero risk means that more investors will buy mortgage bonds and rates will continue to decline.

An interesting facet of this bailout, though, is that the “solution” is having the opposite effect as the intended purpose of the grand vision for Fannie and Freddie to improve the lives of average Americans. Peter Schiff doesn’t pull any punches in a recent column:

The original idea that gave birth to Freddie and Fannie, which is to make housing more affordable to average Americans, should now be seen as farcical. Their new goal is to keep housing prices high. Absent Freddie and Fannie, housing prices would fall sharply and the mortgage market would stabilize. Americans would once again be able to buy affordable houses with mortgages they could actually repay –just like their grandparents did. Instead they will keep overpaying for houses, burdening themselves with excessive payments in the process, and ultimately sticking taxpayers with the bill when they default.

What’s your opinion?

Regardless of our second guessing of massive policy decisions, this is an excellent time to refinance your home. Call us if your mortgage rate on your first or second loan is more than 6.5%! We’ll give you the straight scoop every time.

Many people like you and me are hearing news of rate cuts but are uncertain about refinancing. If you are like most Ohioans, you bought a home with little down payment in the last few years and home prices don’t seem to have risen much. But mortgage rates are returning to 50-year lows…fixed rates this month touched 5.0%!

1. Now that the Fed has cut rates, you can lower my mortgage payment, right?
Actually, it’s not that easy. We often see mortgage rates rise when the Federal Reserve Bank cuts rates. The Fed adjusts the rate that banks borrow from each other, not consumer rates. Mortgage rates are directly tied to the bond market. But after 5 of the last 8 Fed rate cuts, mortgage rates have risen in the next three months.

2. So how can I take advantage of lower rates?
Most homeowners are angling to get into a fixed rate loan. That’s often a good idea when mortgage rates are low. Now the hot mortgage product is FHA loan. In the past, these programs were little used because of more favorable terms from subprime lenders. Now, the government has loosened its credit and appraisal guidelines to include more normal Americans and average homes. Also conventional loan rates are near 50-year lows!

3. What refinance options are available?
Many homeowners can save hundreds each month if they refinance. Usually it is getting out of an adjustable or second mortgage. With rates falling, this is a great time to do that. We have introduced programs to help no matter your equity position.

4. Can you help if I’m behind on my payments?
Most often we can. FHA has a special program now to help borrowers who have fallen behind on an adjustable rate mortgage (ARM). If you started missing payments after your ARM went up, we want to talk with you!

5. What if I bought from a builder and I owe more than my home is worth?

Many home buyers were sold on payment - without regard to historical price - and few saw the decline in home prices coming – hitting new subdivisions especially hard. We’ve helped a number of people who owe more than their home is worth. Call today!

6. I’d like to move but have heard stories of long times on market. What should I do?
People are still able to sell in this tough market. If you don’t have an exceptional home, it is taking longer and you may get less than you expect. The first step is to get preapproved. Next, you should find a builder or Realtor you trust. We have relationships with GREAT professionals in almost every market. We also know about innovative lease options and land contracts. We’ll steer you right - give us a shout.

7. What is a preapproval and why is it helpful?
Deciding how much you can and want to afford is a critical step to getting and keeping a home. Take a few minutes to discuss your situation with an officer at First Ohio Home Finance. We will explain the process and look over your income, asset and credit documents. You will get a Realtor referral and a preapproval certificate. You’ll also have confidence that offers you make will be able to close in a timely way.

8. Why would I work with First Ohio Home Finance instead of my local bank?
Unlike bank employees, mortgage companies in Ohio now have strict background checks, state testing and licensing, and thorough continuing education requirements. With 12 years in business and more than 6 years HUD-approved, First Ohio Home Finance has thousands of satisfied customers. We are the oldest mortgage company in each of our locations.