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Fixed Mortgage Rates Rise Slightly in Latest Survey

Nov 25

Posted by admin in Mortgage Refinance

Freddie Mac today released the results of its Primary Mortgage Market Survey. This week the current fixed rates rose very slightly, but despite that, Freddie believes that continued low rates are helping boost the housing market. July sales rose for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007.
The 30-year fixed mortgage rates rose slightly from last week, with an average of 5.14 percent and 0.7 points for the week ending Aug. 27th. Last week the same mortgage was at 5.12 percent with 0.7 points. Last year at this time, the 30-year fixed rate mortgage averaged 6.40 percent, with 0.6 points.

The 15-year fixed mortgage rates averaged 4.58 percent with an average 0.7 point. This is down from last week when the same mortgage rate averaged 4.56 percent with 0.7 points. A year ago at this time, the 15-year fixed rate mortgage averaged 5.93 percent, with 0.6 points.

Five-year adjustable-rate mortgages (ARMs) currently average 4.67 percent and 0.6 points. Last week the same mortgage rates were at 4.57 percent and 0.6 points. A year ago, the 5-year ARM averaged 6.03 percent, with 0.6 points.

One-year Treasury-indexed ARMs averaged 4.69 percent this week with 0.6 points. This is unchanged from last week, but last week rates carried only 0.5 points. At this time last year, the 1-year ARM averaged 5.33 percent, with 0.7 points.

For those not aware, points are pre-paid interest which is paid at the time the mortgage is taken out. At that time the home buyer is locked in that mortgage rate if approved and the later fluctuations don’t effect your rate after you are locked in.

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There’s more to a mortgage than a low rate

Nov 23

Posted by admin in Mortgage Refinance, Real Estate

Homeowners and buyers are in a rather enviable position these days. Interest rates are at historic lows and the cost of borrowing for a home is about as low as it can get. That’s great news. But it’s not the only thing homeowners and purchasers need to think about their mortgage.

There are a number of other features to consider before signing up for a mortgage and what is probably the largest debt that most Canadians will ever take on in their lives. “When it comes to choosing a mortgage, getting a good rate is just the tip of the iceberg,” says Mary Gronkowski, regional sales director with Mortgage Intelligence Inc., a national mortgage brokerage company. “You have to be aware of all the other features that may lie below the surface. All features of a mortgage should fit a homebuyer’s personal goals, both now and down the road.” One type of mortgage to consider is an assumable mortgage.

An assumable mortgage means it can be transferred to another borrower. It allows a purchaser to take on your mortgage’s terms and payments as part of the sale of your home. With extremely low interest rates today, that could be a big selling feature to a potential buyer in the future. Given the low rates today, many homeowners are thinking about refinancing their mortgage. Whether you should refinance your mortgage in a period of low interest rates depends on how much it will cost you to break your existing mortgage compared to how much you will save in interest payments. If you break an existing mortgage you will have to pay the greater of three month’s interest or the interest rate differential (IRD). An IRD is a penalty for early prepayment of all or part of a mortgage outside of its normal prepayment terms. Usually this is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principal outstanding and the balance of the term.

For example, if you had a $100,000 mortgage at nine per cent interest rate with 24 months remaining and wanted to renegotiate your mortgage at 6.5 per cent for 24 months, your IRD would be $5,000 ($100,000 x 2.5% $2,500 x 2 years $5,000). It may only make sense to refinance your mortgage if the interest rate savings over the remaining life of your mortgage exceed the value of the IRD. Another strategy is to take a variable rate mortgage. If interest rates go down and you keep your mortgage payments the same, you will be paying off more of your principal with each payment and will pay down your mortgage faster. Many borrowers are taking advantage of low interest rates by accelerating payments on their mortgages. Many lenders will allow you to double up payments periodically or make lump sum payments of up to 20 per cent of the principal once a year.

You should make sure you understand the size and frequency of payments your lender will allow before you sign up. Some mortgage lenders will have an option to skip a payment without penalty, which may come in handy in today’s economy. Another option that many mortgages have is portability. This allows you to transfer your existing mortgage over to a new property, another big advantage if you have a mortgage at current low rates. Not all portability features are the same, however. Some lenders allow up to 120 days to transfer the mortgage while others allow for only a few days or a week. “Choosing the right mortgage involves considering where you are now and where you may be three to five years from now,” says Gronkowski. “Working with a professional can help you make sense of the many options available to you.” Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

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Mortgage Chattanooga

Nov 7

Posted by admin in Loans, Mortgage Refinance

An variable rate mortgage is a loan that is set up with a rate of interest that changes based totally on predetermined factors, basically tied to the Fed interest rate. This is done to lower 1st payments and permit folks to take out bigger mortgages, or give them lower payments for the honeymoon period. At the end of that period your rate of interest will become variable unless you sell your house or refinance. If you believe the chance of your selling or refinancing in the period of the ARM is robust, than the lower rates of the ARM loan will be of great benefit to you. If you suspect it is unlikely that you’re going to sell or refinance inside that period, then you may not benefit from an ARM.

Are you a resident of Chattanooga hunting for a mortgage? Finding the ideal house loan used to be a daunting task. You need to first find possible brokers and contact them one at a time. Occasionally it could be an agony to get a hold of them and then chase up with a quote. Have tons more information about pattern day trading. Meeting with your bank is a more sensible choice as you can sit down for a meeting and they will tailor a mortgage specific to your requirements. That is right, turn the tables on them and make them compete for you mortgage loan.

They provide a quick and simple application and you’ll be approached by the countries top mortgage banks with competitive quotes. Bob knows that even if he will afford the additional $70. 00 every month for the fixed rate mortgage, that $70 every month could be used more wisely knocking down principle in the ARM period. After their last kid moved out of the home they made a decision to downsize and get a smaller home. John and Catrina are presented with the same loan options as Bob and Robyn were. After you know the different payment amounts you’ll be ready to identify which loan makes the most sense for you and your unique circumstances.

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The good points and bad points of Refinancing

Nov 7

Posted by admin in Mortgage Refinance

Customarily , you may expect increases every six months to a year. Always available Another massive advantage of a variable rate mortgage is they are always available. If IRs are incredibly high, you can get an ARM quoted at a lower rate, as the bank will still make a large amount of money over the period of your loan. Refinancing has turned into a valid option for many people with high IRs on their mortgage.

Refinancing is basically a replacement loan, with a different bank and ( hopefully ) a lower IR. – you could be able to switch from a non-fixed rate to a set rate mortgage, giving you bigger security in the future from potential rate rises. – you will also be in a position to increase the quantity of your mortgage, to repay other, higher IR liabilities like Visa card debt, cell telephone debt and private loan debt. Credit. This will permit you to save cash on IR charges Why would you duck refinance? If you make a decision to borrow more than your present mortgage, you want to be scared of your position. If you don’t work out the expenses concerned with refinancing properly, you might finish up paying more in interest fees. What will it cost me? Refinancing does carry some costs you need to be made aware. Valuation Fee This is the charge for a pro appraisal of the value of your house. Credit history An evaluation of your credit health Escrow Fee for cash transferred by a 3rd party.

Bank Costs Any other costs that are suffered by employing a particular bank Am I eligible? Trying for mortgage refinance is just like trying for another loan. The best one that I have found is here calcbuilder.

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Mortgage Lending-A Few Facts To Start Down The Path To Home Ownership

Nov 6

Posted by admin in Loans, Real Estate

From a loan standpoint there are, in general, three types of loans, a fixed rate mortgage, an adjustable rate mortgage (ARM) or an interest-only loan. With an interest only loan, you are just paying the interest piece of your loan. In an adjustable rate mortgage, the interest rate is usually fixed for a specific length of time, after which it will periodically (for example, annually or monthly) adjust up or down to some market index. In a fixed rate mortgage, the interest rate, and subsequent periodic payment, stay unchanged for the life (or term) of the loan. For a fixed rate mortgage, payments for principal and interest should not change over the life of the loan, while ancillary costs (such as property taxes and insurance) can and do change. Your monthly cash flow, length of time you hope to living in the house and your general credit history will all factor in to the type and length of loan you should select.

In coming up with a home buyer?s loan amount, interest rate and cash required, lenders will consider many factors. These factors, in turn, help lenders to calculate their apparent risk of the mortgage loan, that is, the likelihood that the financing will be repaid. None of us will totally comprehend the inner workings of a mortgage lender but plain and simple is the fact that mortgage loans are accessible for all types of homebuyers with all types of credit.

The term mortgage loan is the generic word for a loan secured by a mortgage on real property; the ?mortgage? refers to the legal security, but the terms are often used interchangeably to refer to the mortgage loan. When making a mortgage loan for purchase of a property, lenders ordinarily require the borrower make a down payment, that is, contribute a percentage of the price of the house. In the past, the necessary amount, or percentage, of a down payment has been directly related to a person?s credit history. However, 100% or more lending choices can be found in the mortgage lending space, even for those with a bad credit history.

Statistically, just about 25% of the people in the United States are part of the subprime category and while there is no formal credit profile that describes a subprime borrower, most in the United States have a credit score that is not more than 620. Subprime lending, also called near-prime, or second chance lending, is a broad term that refers to the practice of creating loans to borrowers who do not meet the requirements for the top market interest rates because of their poor credit history. The term ?subprime? is in reference to the credit status of the borrower, not the interest rate on the loan itself. This lending is risky for both lenders and borrowers due to the blend of above average rates, inadequate credit history, and potentially suspect financial conditions often related with subprime applicants.

For borrowers who have exceptional credit and adequate debt positions, there may be next to no documentation of income or assets required at all. In approving mortgage loans, lenders in many markets rely on credit reports and credit scores derived from them. The bigger the number, the less of a financial risk the borrower is assumed to be. Life will tell you that everything in life has its price and mortgage lending is no different. Pretty much anyone can approve for a mortgage with the price tradeoff usually being a higher interest rate. Lenders are looking to lend as much money as possible, but are always looking to accept as little risk as possible.

Finding the money for your home is a necessary evil but taking that step to buying a new home should get you excited, not scare you. Mortgage loan rates are still at a level that offers you some very good options, making it a good time to buy a home. There is a web presence of highly regarded lenders who are looking to help you obtain a mortgage loan. Do a little research, get a few ideas from these lenders as to what you can qualify for, and then go out and buy your dream house.

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Adjustable Rate Mortgages

Apr 21

Posted by admin in Personal Finance

An adjustable rate mortgage (ARM) is a mortgage with an interest rate that is variable. Unlike a fixed rate mortgage where the payments are steady throughout the term of the mortgage, interest rates for adjustable rate mortgages are linked to an economic index and tend to vary over a period of time.

Adjustable rate mortgages usually have an initial fixed rate that is lower than the interest rate of a comparable fixed rate mortgage. This is because these kinds of mortgages transfer a part of the interest rate risk from the lender to the borrower.

A lower initial rate means lower payments, which can allow you to take a larger loan. However, if the interest rates start rising, your monthly payments will increase or the term of the mortgage will increase depending upon the policies of your lending institution.

An ARM begins with a rate that is fixed for the initial period. Once this initial period is over, interest rates vary at adjustment intervals. For example, a “3/1 ARM” has a initial low rate that is fixed for the first 3 years, and then gets adjusted every year, based on the variations in the economic index to which it is linked. Common adjustable rate mortgages include: 1/1, 3/1, 5/1, 7/1, and 10/1.

Some adjustable rate mortgages may be allowed to get converted into fixed rate mortgages. However, a conversion fee is levied, which could be high and could take away any savings that you might have gained from the initial lower rate.

Lenders do not allow you to choose the economic index to which the adjustable rate mortgage is linked; however, you can choose the lender based on the index that will apply to your loan.

It is advisable to ask the lender how each index used has performed in the past and choose the index that has remained fairly stable.

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Understanding Real Estate Lingo As It Relates To Financing

Feb 16

Posted by admin in Finance, Real Estate

When you purchase a home, your head may begin to spin when you hear all of the lingo being thrown around by your Realtor. Generally Realtors try to talk in laymen’s terms, but there might be occasions when he or she might use a word that you do not understand. Hence you should know as much as possible about real estate terms well in advance. Here is a look at some of the most common terms you might hear as they relate to obtaining financing for your new home.

Adjustable Rate Mortgage (ARM)
An Adjustable Rate Mortgage is that type of loan whose interest rate changes on a periodic basis. Over here, the rate changes as the mortgage loan stay in sync with the current index, which is similar to the method used with one-year treasury bills. Adjustable Rate Mortgages can increase more than two percentage points each year and may raise as much as six points above the original rate.

Amortization
Amortization is a special type of payment plan that allows you to reduce the amount of your debt in a gradual way by making payments each month on the principal amount of the loan. A special type of payment plan that allows you to reduce the amount of your debt in a gradual way by making payments each month on the principal amount of the loan is referred to as Amortization.|A unique type of payment plan that permits you to reduce the amount of your debt in a gradual way by making payments every month on the main amount of the loan is referred to as Amortization.

Appraisal
An appraisal is an estimate of the value of or the quality of your home on specific date. An appraisal is required by lenders prior to approval of a loan and must be completed by an expert. The lender will determine if the home you wish to purchase is worthy of the investment required when loaning you the money based upon the results of the appraisal.

Conventional Mortgage
A conventional mortgage is a type of home loan that is not backed by HUD or by the VA (Veterans’ Administration). Therefore, a conventional loan sticks to the conditions that have been established by the state of Texas as well as by the lending institution. This means the mortgage rate may change according to the lending institution and may even change if you acquire the loan in a state outside of Texas.

Earnest Money
Earnest money is a term given to the deposit that you make to the seller or to his or her agent. This deposit goes to show your seriousness of your interest in purchasing the home and you need to make this deposit when you sign an agreement of sale. The earnest money you paid will be adjusted with your down payment on the home when you purchase the home. If the sale does not take place, you will lose this earnest money unless the purchase offer dictates the money is to be refunded.

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