Roger Schlesinger

I was watching the NCAA men's basketball tournament, and I saw the super big guys, the ones that have to duck under door frames, camping out under the basket. After jumping up several times and yelling, "3 seconds in the key!" I realized they weren't going to call the foul.

I guess they might have changed the rule.

It used to be that to avoid taxes (actually, to defer the taxes) on the sale of your house, you had to buy a new house at the same or higher price, and roll the profit into that house. Now, you automatically get a $250,000 exclusion on profits if you have lived in your house over the previous two years continuously, as does your spouse (if you have one). I knew they changed that rule.

Once upon a time, we had a speed limit on the interstate highways. Now, it seems the highway patrol passes you at 76 miles per hour when you are going 75. The other night, I was stopped for driving a tad fast through my town, and I was given a pass because the officer thought it would be nice to let me go, since I told him I was taking my ill wife her dinner. (It probably didn't hurt that the famous female talk show host with the same name lived in the neighborhood. As I was leaving, he asked if Dr. Laura was my wife. I ruined his evening by saying no, and that in fact Dr. Laura had moved.)

The point is, things change and we often don't have any clue. When it comes to mortgages, these changes are generally for the better, and can help you immediately.

Let's start with the ability to refinance as fast as you want after you purchase a house. The old rule was, we had to use the purchase price as the value for a year, even if you could show by appraisal that it was worth more. Now, you can get a new appraisal the day after the purchase closes, and use that for the value. This helps a lot of borrowers who made good purchases, but couldn't take advantage of the additional equity for a year under the old rules.

If your house has been for sale, and it remains on the market, and you want to refinance and stay put for a period of time, it is now allowed for you to do so. You can proceed with a refinance one day after you take it off the market. There is a caveat: if you pulled cash out in the last 12 months, the refinance can't be done until the cashout is a year old.

With automated underwriting as prevalent as it is, borrowers with conforming loans (loans up to $417,000 on single family homes) can generally have a full-documentation loan without supplying any documents at all! High credit scores and a lower loan to value ratio are what help you get approved in that manner. Generally, the only condition is a verbal verification of employment for wage earners.


Roger Schlesinger

Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.