We want to wish everyone a happy holiday weekend. Many of you will be celebrating right in your own backyard. Take a moment to realize what that means to you, your family and your friends. Let us never lose sight of the fact that homeownership is, and always will be, a major part of the American dream. Here are a few great articles and blog posts to help us remember. – The KCM Crew

A Dream House After All – an op-ed piece in the New York Times this week by Karl E. Case, professor emeritus of economics at Wellesley and co-creator of Standard & Poor’s Case-Shiller housing index.

Social Benefits of Housing – an article in Realty Times by Carla Hill, Managing Editor for the online publication.

Even in a Stagnant Market, There Are Benefits to Homeownership – a recent Brookings Institution article by Karen Dynan, vice president, co-director of the Economic Studies program, and the Robert S. Kerr Senior Fellow at the Brookings Institution.

In Defense of Homeownership – an article in the New York Times by Ron Lieber who writes the “Your Money” column for the Times.

5 Reasons Why You Should Buy a Home Today – Steve Harney’s blog post on the subject.

5 Dumbest Reasons Given for Not Buying a Home – a look at whether real estate is actually a good long term investment.

Holy Cow! Have you taken a look at where interest rates are these days??? There are Ten Year Mortgages in the 3.75% range for heaven’s sake! Yes, 3.75%!!!

What are some of the issues to consider as you (and all of America) contemplates a refinance?

1.  Does it make financial sense?

If you are considering a “rate/payment reduction” refinance, I typically recommend that people do one simple calculation. Divide your monthly savings into the costs (out-of-pocket expenses AND any increase in your principal balance). That number will tell you how many months’ payments it will take to “break even”. Depending on how long you anticipate staying in the home, and comparing that to your “break even” month, will give some clarity to what is the right decision.

2.  What about a refinance to shorten the term of a mortgage?

When examining the possibility of cutting years off your mortgage, you should take a good hard look at how such a move can affect your monthly cash flow. If your payment stays the same and you save a few years of payments, many people will choose that option (rather than the monthly savings of a “rate/payment reduction” refinance). However, if your payment is going up (in order to save years), take time to analyze the impact on your monthly activities. Will you be sacrificing too much to save payments 20 year from now?

3.  What will my home appraise for?

This is the biggest challenge facing most people. With so many homes underwater, there are many people who won’t be able to refinance. If you have an FHA loan, there is some hope if you qualify for their “Streamline Refinance Program” because there is an option to close the loan without an appraisal. (For a 15 minute video explaining the program, go to www.Facebook.com/FHAStreamlineRefinances) For others, loan-to-value issues can create the need for Mortgage Insurance when it didn’t before (making “savings” harder to achieve).  Understand that most lenders require you to pay for an appraisal (and maybe an application fee too) when you submit your loan request, so do your best to have a real sense of what your home will appraise for.

4.  Should I lock in?

Even though conventional wisdom is that rates are likely to stay low for a while, history has shown that when they do go up, they go up quickly and dramatically; therefore, my advice is that if you like the rate you are quoted, lock it and sleep well.

5.  How will my income and credit be looked at?

Your refinance creates a new loan that will likely be bundled and sold in a new mortgage-backed security; therefore, this new loan will be underwritten to today’s guidelines (which are tighter than they were a few years back). What I am saying is, you may have gotten a loan in 2006, made every payment on time, and still not get approved today. Maybe because, you have a “no income check” loan and your tax returns won’t support your stated income. Or maybe because you bought a car and your ratios are a bit higher. Or your FICO score is different. Or your appraisal is insufficient.

The most important thing is to speak with a solid mortgage professional and try to address any hurdles BEFORE you spend your money. Compare the proposed savings; honestly assess your home’s value; review your income, assets and credit; all ahead of time to improve the likelihood of a desired outcome.

Here are a few reports and surveys you may find interesting.-The KCM Crew

Trulia’s American Dream Survey 

Zillow’s Homeowner Confidence Survey

RealtyTrac’s August Foreclosure Report

NAR’s Study: Social Benefits of Homeownership and Stable Housing

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We know how busy everyone is. For that reason, here are our 5 most popular blog posts from the last 30 days (just in case you missed any of them). Have a great weekend!

- The KCM Crew

5 Reasons Why You Should Buy a Home Today

What Will My House Be Worth Next Month?

5 Things Sellers Must Require of a Real Estate Agent

Sell Now or Wait? What the Experts Are Saying

The 5 Components of a Good Credit Score

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We are at a very interesting crossroads in our industry. Being good is no longer good enough. The consumer doesn’t want to deal with ‘just anyone’ in real estate. They want someone who can explain what is happening in the market and help them understand their options. They want an expert, an industry leader. Below are some resources which will empower you to become that leader.

If you are part of the KCM community, you have already received our free strategy guide, the KCM Quick Report, in your inbox this past week. Read, enjoy and implement.

If you have not yet joined our community, please feel free to sign-up for the KCM Quick Report and fan/like us on our KCM Crew facebook business page.

If you are looking to become a full fledge member of the KCM Family, subscribe to our monthly educational resource, Keeping Current Matters.

Have a great weekend!        – The KCM Crew

People often ask us where they can see Steve deliver his message in a live forum. Though most of Steve’s speaking engagements are private events, here are five events which have open registration. Click on banners below for more information. - KCM Crew

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Everyone has an opinion on why Lebron James picked Miami over New York and Chicago. We have no inside information. The only connection we have to Lebron is that my son played on the same AAU team as one of Lebron’s teammates in Cleveland. I did not talk to Lebron, the teammate or even my son about this.

We thought we would still offer our thoughts on the matter. We think it had to do with real estate. From the beginning, Lebron said there were two things that would enter into the decision making process:

1. The opportunity to win multiple rings (NBA championships)
2. The opportunity to become a billionaire through earnings and investments

I’ll leave the basketball stuff to the sports analysts aside from the fact Lebron obviously did not believe he could win a championship in Cleveland.

The part about becoming a billionaire interested me. Apparently, the New York Knicks also saw it as an important issue to Lebron. According to a report by Forbes.com, the Knicks tailored their presentation to the superstar around potential future earnings:

To make the case, they commissioned a study from marketing consultant Interbrand that says LeBron could earn close to $1 billion over his lifetime in salary and endorsements if he makes Madison Square Garden his permanent home–their high-end estimate sees him earning as much as $2 billion. That outshines the estimated $700 million he’d likely earn in Cleveland, the $690 million in Chicago, and $600 million in Miami.

The Knicks broke down the different sources of income available in each city. Below is one of the actual slides from the presentation (the entire presentation is available here).

There was one big part missing in the presentation. How does he then invest the millions he earns? Lebron plays golf with Warren Buffett!! He realizes that to become the billionaire he wants to be, he must intelligently invest his earnings. Why not real estate?

Look at real estate values in the finalists for Lebron: Chicago, New York and Miami.

Real estate values increased more in Miami than either of the other two cities during the boom of the last decade. Today, you can purchase luxury properties for over a 50% discount off boom prices. Lebron believes he will bring back the excitement to Miami. The excitement will bring back the city which will bring back prices. Any property he bought now could apprciate dramatically upon the Heat’s success. (I’m not saying I believe that. I’m saying Lebron perhaps does.)

Maybe, the real reason Lebron picked Miami was real estate.

Have to go…checking out prices in South Beach…just in case.

Every weekday we post the best real estate articles we can find on the KCM Crew Fan Page on facebook.

Join the over 4,000 real estate and mortgage professionals who ‘like’ this page. See what other industry pros think of the articles and say about the important issues.

Jump on over right now.

We would love to know you like us. Really, really like us!!

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See you Tuesday!!

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BREAKING NEWS:  Done!! President signed bill!