I feel like a broken record, and the market is proving me to be a liar. I keep thinking we cannot go any lower in rates, and bam! here we go again. So how did we arrive at this juncture? Well, the markets are a fickle and sensitive place right now. Some buzz words as of late to create a stir:

• Europe: Greece, Turkey,etc...
• Housing Starts
• Mortgage Applications
• Existing Home Sales
• Foreclosures
• Unemployment

This could almost be just today! Regardless of the reasons why, rates are now floating at 4.625% with nominal fees and 4.375% with 1/2 - 1 point origination.These are the lows of the lows folks! Well, maybe. :)

Although the environment is more difficult to maneuver there are a few pointers to follow to ensure a solid refinance or purchase. When refinancing:

1. Before you turn over any money for an appraisal, check Zillow, ask your Realtor, or even a past appraiser of your property what the current value of your home is.  The biggest mistake I see is conjecture and wishes of retention on home value.  In the Chicagoland area alone, we are 11.7% down in the last year according to Zillow.com, so properties improving or maintaining the past value is illogical at this point.
2. The key to a successful refinance is knowing the home valuations that can work for you and what the break-even analysis on the refinance actually is. It is integral to consult an experienced Loan Officer rather than light your money on fire to see if the appraisal works out.
3. Employment: if salaried try to avoid using bonus income if not needed, it only complicates the underwriting.
4. If tax returns must be used (self-employed borrowers or commissioned borrowers) the income is based on adjusted gross income (after write offs) no exceptions. A 2 year history is needed, if there is a serious decline in income in the past two years, most likely underwriters will drop the income to current levels, or even deny a loan, so it is worth analyzing beforehand. 

Purchases:

1. All of the above absolutely pertain,  in addition using a qualified Realtor is so important in this market. The nuances involved to create a successful home purchase process from start to finish are astounding.
2. When viewing prospective homes, keep in mind the condition of the home and how an appraiser will view and take pictures. Underwriters scrutinize appraisals, they quickly become Pandora's Box if allowed. It takes a trained eye in these situations. You can also bounce it off your lender to ensure nothing occurs to sabotage the loan.
3. Borrowers must have a solid understanding of their own financial situation, from credit scores, down payment sources, gifts of equity, etc... Only an experienced lender can explain the proper guidelines associated with current lending practices.
4. Once a borrower is pre-approved, it is essential NOTHING is done on credit period! Reports are now pulled at the beginning and end of every transaction - it could potentially kill any deal on the table the day before closing! It is so essential to know this!

These are just some tips to help take advantage of the record low rates (again), I am still closing loans, both refinances and purchases, we just have to be careful as we navigate through the new regulations.