Buying A Home, Now or Later
May 25, 2009 by admin · Leave a Comment
Some would argue it is a home buyers market. Interest rates are low and certainly there are more homes available that ever before. Many people are wondering if now is the time to buy a home.
Buying a home is a major step in anyone financial goals and that is the first question you need to answer. Why do you want to own a home? Owning a home is more that making a mortgage payment. The expenses of owning a home can make it cost prohibitive for many people.
Deciding how much home you can comfortably afford is another question to consider. Focus on your current budget. Will adding mortgage payment and the inevitable expenses force you to sacrifice other financial goals? The mortgage lender will likely inform you that you can qualify for more of a mortgage than you first considered. Disregard this and listen to your own instincts.
You lender will consider your credit score, your closing costs and your down payment when qualifying you for a loan . As a general rule a credit score of under 620 and you might consider holding off your home purchase until you can improve your score.
A down payment of somewhere between 10 and 20 percent lest prospective lenders you are serious about your financial commitment, and saves on PMI private mortgage insurance.
The biggest advantage to owning a home is the tax advantages. Building equity is normally considered when buying a home versus renting; however don’t expect rapid appreciation of your property in this environment.
Owning a home is still considered the American Dream. Holding off on your dream or buying now should be carefully considered before making any decision. Real estate once had a place of prominence in the investing world, however it can now be said people can and do lose money investing in real estate. That’s seems strange to say but it has become a truth in our society
Relief From The Mortgage Industry
May 24, 2009 by admin · Leave a Comment
If you are like most people these days , you are looking for ways to cut back on expenses. There is not much positive that can be written about the financial institution in this country. However, even in the midst of the worst economic crisis this country has suffered in generations, there is a glimmer of good news and it comes from, of all places, the mortgage industry .
Remember the ultra low mortgage teaser rates to persuade you to secure your mortgage. Yep the same rates that supplied the energy for the housing boom and ultimately the housing bubble bursting. Well it seems that same industry is making refinance mortgage rates even more attractive.
Fixed mortgage rates are now available at below 5%, the lowest they have been in some time. These rates do not include jumbo mortgages, but still many people could be helped. If you plan on staying in your home more than 2 or 3 years, you can save money.
One of the principle reasons for the housing bubble bursting was that many loans were made outside of traditional guidelines of approving a mortgage. Mortgage lenders are stricter and your monthly mortgage, insurance and taxes should not be more than 31% of your monthly income. Imagine that , making loans with some fiduciary responsibility. Closing costs can be costly so make sure that it is worth it to refinance.
These offers are not for everyone. Many are struggling just to maintain current payments on their mortgages. If you have been able to keep current with your payments and your FICO score will allow you to refinance at a good rate, it warrants your due diligence to research your options
Foreclosures Are Up , Surprise, Surprise
May 13, 2009 by admin · Leave a Comment
From the I hope you are not surprised section of the financial news a report surfaced today that “The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates. More than 342,000 households received at least one foreclosure-related notice in April, RealtyTrac Inc. said.”
As Gomer used to say “surprise, surprise, surprise!” No not really, it is going to get worse, lots worse before it gets better, unless of course you listen to our leaders in Washington. President Barack Obama’s administration announced a plan in March to provide $75 billion in incentive payments for the mortgage industry to modify loans to help up to 9 million borrowers avoid foreclosure. Good news right? Boy oh boy the media loves to love Obama.
Mortgage lenders and the mortgage industry are idiot proof. The United States Government is seeing to that. Make bad loans?, no problem here is a few billion to fix it.
When and if our government decides to let it break rather than bailout private industry after private industry, then we have a chance at a changes occurring.
America cannot go on living, borrowing and spending like it never needs to be paid back. Unless of course you are big business, then you get a free pass. I am a Republican , I love business, but everyone needs to be accountable, everyone.
Our economy is in a reset mode and we need to let it reset. This past November I lost a home of 18 years to foreclosure. I did not seek help from the government nor anyone else. The mortgage company did not want to modify my loan , discount the interest rate or anything like that. I lost it and I take responsibility for that I just wish our leaders and corporate bigwigs would be so accountable
Low Mortgage Rates With Big Time Costs
March 23, 2009 by admin · Leave a Comment
Just because a mortgage rate is low does not mean that the story ends there. According to Amy Bohutinsky, vice president of communications for Zillow.com, mortgage rates are low right now but lending standards are such that even those with excellent credit must adhere to very strict guidelines.
New rules have recently been put into place by Fannie Mae and Freddie Mac whereby borrower’s fees are very high for individuals who have less than perfect credit. Lenders are trying to decrease the risks that they have to take on because of the uncertain market. Regardless of whether your credit is excellent, poor or in between, you can expect to pay more points (or prepaid interest), however the lowest refinance mortgage rates will always go to the persons with the best credit score
Pricing is on a risk-based system. Fees are added to mortgages based on credit scores. If you want to avoid paying exorbitant fees then you would be well advised to have a FICO score of 740, or higher if possible. These new rules take effect in April, according to Dan Green, a loan officer with Mobium Mortgage in Cincinnati, Ohio. However these new rules began being incorporated into rate sheets back in January.
Loan level price adjustments are new fees that are not making too many homeowners in search of low interest rates very happy. Prices vary from one consumer to another. For example you could be paying interest rates that are one or two percent higher than what a family member or friend is paying. Extra charges are likely whether you are buying a house or a condo. So how do you find the best mortgage rates ?
Paying Points
As reported by Freddie Mac’s weekly rate survey, in January 2009 the average rate on a 30 year fixed rate conforming mortgage was 5.05 percent. In order to get this rate your payment would need to be approximately 0.7 points. In 2008, 0.4 points would be required in order to get an interest rate of 5.76 percent.
Be aware that an inverse relationship exists between a rate and points. In other words, the more points that you are expected to pay, the lower will your rate drop. Of the amount paid on the mortgage, there is a one percent point that is then charged as prepaid interest.
Before you begin paying points take the time to consider the ramifications for yourself. Is it worth it to refinance ? Would it be a wiser move to pay no points but to have a higher interest rate on your mortgage? Consider how long you are thinking of living in the residence in question. You also need to consider how much time you will need to pay off the points. The concept of paying points makes more sense the longer you plan to reside in a particular house.
Added Fees
Borrowers can expect to pay higher fees in regards to underwriting and processing, which can range from $300 to $400 or higher. An appraisal fee for a refinance can set you back in the area of $300 or more. To save yourself money, use the same title insurance firm that you use when you first got your mortgage. Mortgage fees will likely cost you approximately three percent of the total of the mortgage loan.