Navigating an Upside down home

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Image courtesy of cooldesign / FreeDigitalPhotos.net

Over the last several years, many have heard about the “Obama” program or the “HARP” program.  For every person that understands the ins and outs of this program, there are 2 more that do not.

An example, once a week I get out with friends for a tennis league.  We spend some time hitting a fuzzy yellow ball, we spend some time running and we spend time complaining about not being young anymore…that may be the majority of the conversation!  In the midst of one of these conversations we ended up turning to home values and with them knowing that I am a Mortgage Broker and it quickly dawned on me that Joe was underwater on his home, or, he owed more than the home could appraise for and wanted.

Now, it had been four years since these programs came into place and I ridiculously assumed that everyone understood what they were and what they could do.  Joe loved the fact that we could lower his interest rate by over 2% being that he and his wife plan to live in the home for years to come.

HARP, or the Home Affordable Refinance Program, is a program that allows homeowners who have a mortgage owned by Freddie Mac or Fannie Mae that has been open since May 31st 2009 or earlier to refinance their home into today’s rates. The link attached will give you more information on where to look to see if you may qualify.  Once we determine that portion the most important part of the equation begins.

Refinances NEED to make sense for YOUR goals.  As with Joe and his wife, I take great care to look at both the short and long term views and financial goals.  We then determine a break even point or the month and year someone would need to own their current home to offset the closing costs. This is when we have a realistic conversation about where life is headed and how the option to refinance would be utilized to help achieve those goals.  As I have mentioned before, every single person is different and because of this, no single situation will be beneficial to all.

I was happy that it made sense to refinance for Joe and his family but I would have also happily told him to keep what he has if it wasn’t in his best interest. My role is to be your advisor, a guide that can help translate the financial jargon into simple and plain english, to give you the tools and education you need to make the best decisions.

Always feel free to reach out to me for any question or further explanation.  My greatest pride is having something of value to offer.

Thanks,

Matt

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