Dear Friends,

I hear from my clients and friends every day, and below are some of the questions and concerns I continue to hear over and over, understandingly so. Everybody is concerned about the economy and their money. We are in unprecedented times and the most serious economic crises of our time.

As a trusted advisor to my clients and friends, I want to address these issues with my views and advice. Since I keep my finger on the pulse of the financial developments that may affect our business and my customers, I want to share with you my insight. I invite your comments, feedback, and your inquiries.

These are the questions I hear every day during this current economic crisis:

• Is this a bad time to buy a house or get a mortgage? Will I be able to qualify?
• I’m nervous about the economy. What should I do about my mortgage?
• Every day, there is a news story about a bank in trouble. Who can I trust?
• My retirement accounts have lost so much value. Should I buy a new house now?
• There is conflicting information in the media every day. I don’t know who to

Is this a bad time to buy a house or get a mortgage? Will I be able to qualify?

Firstly, if you put the emotional aspects of the market to the side for a moment and just look at the logical facts, you will find that this is actually an excellent time to buy or refinance a house for creditworthy borrowers. For the last 100 years, even before the Great Depression, the markets have experienced cycles of highs and lows. We all know that down markets will eventually reward patient investors with a nice upward trend. Be patient and you will reap the rewards of an up market soon.

Right now, there is an abundance of great deals on real estate property out there for the average homebuyer, and the values will surely rise as the market recovers. At the same time, mortgage rates are very low for standard conforming loans. For the typical borrower with verifiable income and reasonable credit, you will have no problem getting a good mortgage at a great rate. Combine that with a super deal on a house, and it makes it a perfect time to buy right now.

Please call me today for your FREE annual mortgage and financial review. Everybody should look at their financial picture once a year, just like you would do with your CPA regarding tax issues. After all, the mortgage is typically your single largest debt obligation. There is NO COST for an annual review, so give me a call today.

I’m nervous about the economy. What should I do about my mortgage?

There’s no question that we are all nervous about the economy, and many people are worried about their jobs or how they will be able to pay their mortgage. People with Adjustable Rate Mortgages (ARM’s) are especially worried. We are currently in a “fixed rate market.” That means the best value on a mortgage for most people is a fixed rate loan, and with rates below 5%, it makes sense to lock into a fixed rate loan. That will hedge you against any future uncertainty and fluctuation of interest rates. There are also some good values on certain 3-year and 5-year ARM’s, particularly for Jumbo customers.

All of us are looking for ways to cut costs during these uncertain economic times. Refinancing your mortgage is one of the best ways to knock a few hundred dollars off of your monthly debt service. And for people with ARM’s who plan on keeping their house beyond 3-5 years, locking into a fixed rate will protect you from the significant fluctuations and uncertainty of our economy.

Every day, there is a news story about a bank in trouble. Who can I trust?

This is one of the most puzzling and worrisome questions of this entire economic crises. For most people today, the notion of a Great Depression or stock market crash is only something you read about in history books. Furthermore, everybody thinks of banks as being the most stable and safest businesses in our society. We have now learned that this is not necessarily the case. While it is true that for most people, your money is totally safe in a bank because it is insured by the FDIC, it also true that banks are having their own financial troubles, as well. Since many of the banks in our country are also mortgage lenders, I hear concern from many people about whether they should do their mortgage with their traditional banking institution. People want to feel safe in choosing the company that will help them with their largest personal financial transaction: their mortgage.

Here is another area that I can be of great value to my clients. Corporate Investors Mortgage Group is a mortgage lender. We are not a bank, and we are not a mortgage broker. That allows us the flexibility of being able to make loans without the limitations of a broker, but also not having to be restrained by the financial concerns facing many banks these days.

My retirement and investments have lost so much value. Should I buy a new house now?

Over the last 25 years that I have been in the mortgage business, I have seen the ups and downs of our economy, and I know that the economic cycles are simply a fact of life. It is important to note that when the market is down, it will eventually go back up. And when it is up, it will eventually go down. Fortunately, over time, the market has gone up, and the value of our retirement accounts will go up, too. The question is when do you need the money from those accounts? If it’s a retirement account, then you will likely not need that money until you retire. However, there is a psychological impact that it has on many people. When their 401(k) and IRA’s are down in value, they feel like they can’t afford to buy a house or many other big- ticket items. This matter is mostly mental, and wise homebuyers should be able to see past this psychological phenomenon and not let it affect a wiser decision to become and maintain being a homeowner.

For those who need to pull money out of their investments to use toward buying a house, this “down market” is a bit more real in terms of affecting their decisions. I would encourage you to put down less money so you would not need to liquidate as much right now. But even if you have to liquidate some of your investments, you should look at the return you would achieve by buying real estate and being a homeowner versus the return you would get in the market. In most cases, you would still come out ahead with real estate, even in this current down market.

There is conflicting information in the media every day. I don’t know who to trust.

This concern is simple for me to address. Everyone needs a “trusted advisor.” You have your CPA to advise you on tax matters, your attorney to advise you on legal matters, and your family physician to advise you on yours and your family’s health needs. Likewise, everyone needs a trusted mortgage and real estate advisor. With over 25 years of experience and in-depth knowledge, and a leader in the industry, I am well-qualified to be your mortgage consultant for life. Please allow me to assist you, your friends and your family with any need that arises in real estate and mortgage financing.

Where are Interest Rates Heading?

• Short-term interest rates (ARM’s) are directly affected by changes in the Fed Funds rate, so you will see ARM rates move in the same pattern as the Libor, Treasury Rates and the Prime Rate. Consumers with adjustable rate mortgages (ARM's) and home equity lines of credit (HELOC's) have already felt the fluctuations and rising rates. This would be a great time to determine if there are ways to save money today by proactively evaluating your current loan. Call Hayes Hyman today for a free analysis.

• Fixed rates have been quite good in the mid-4% to 5% range. That means that the difference between a fixed rate and an adjustable rate has narrowed quite a bit. In many cases, the fixed rates are the same as the ARM rates, such as the 7-year and 10-year ARM’s. Current expectations are for fixed rates (and ARM rates) to go up once the economy re-starts and begins growing again. Keep that in mind. Your stock values and retirement accounts will grow again once the economy rebounds, but mortgage rates will likely go up, too. With fixed rates holding under 5%, this would be an excellent time to review your adjustable rate mortgage (ARM) and considering locking into something fixed, especially if you plan to keep the house for more than 3 years.

• If you have any near-term plans to buy a house or refinance your loan, NOW is the time to act. Recent market changes have softened the market, making it a buyer's market. With rates still in the mid-4% to 5% range for a 30 year fixed mortgage, you can lock into an excellent long-term rate, and probably get a killer deal on a new house. For more information on this, or to locate the best realtor for a buyer's agent, please call me today at (919) 676-1111.

• If you have a 30-year fixed mortgage, or an adjustable rate mortgage (ARM) that is up for adjustments soon to a higher rate, this may be a great time to refinance your loan. For example, many of my customers are refinancing their ARM loans to fixed mortgages, or refinancing their 30-year loans to 15-year terms at rates below 4.5%! Call me for a free analysis and rate quote at (919) 676-1111.

With warm wishes,

Hayes Hyman