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4.5 Percent Interest Rates Provide Hopeful Outlook For Home Buyers

Dec 21

Posted by admin in Real Estate

There is a plan in the works to lower the rate on 30-year home mortgages to 4.5 percent, a number not seen in decades for home loans. The plan by the Treasury Department to help the hurting housing industry would be accomplished through purchasing mortgage-backed securities from Fannie Mae and Freddie Mac. For those with good credit and some money for a down payment, it is a great time to buy a house. The downside to this plan is that it does little to help those who are struggling to pay their existing mortgage. While Federal Reserve chairman Ben Bernanke gave new warnings last week about how the growing number of foreclosures is adversely affecting the economy, there seems to be little agreement on how to help.

The Treasury Department plan could only be available to people buying houses, not to those who want to refinance. Thus someone moving in next door could pay considerably less in mortgage payments each month than the person who has owned his house and struggled to keep up the payments at a higher interest rate. It doesn’t seem fair and it only addresses half of the housing market problems. According to the Associated Press, the man in charge of the $700 billion bailout, Neel Kashkari, told a congressional panel last Thursday that the user was reviewing the 4.5 percent mortgage plan. What remains unclear at this point is if the Treasury Department’s proposal would end up applying only to new mortgages or to refinanced loans, as well.

Some economist seemed to believe that a government lending plan that applies only to new loans would not do enough to help the overall economy. But those in the home building, real estate and other related home industries seemed to welcome the proposal. Lawrence Yun, chief economist at the National Association of Realtors, said by spurring new buyers the housing market and the economy would be stabilized. If the Treasury Department does end up using some of the bailout funds to offer help to current mortgage owners, it may or may not be a good idea to refinance. According to Bankrate, good reasons to refinance include getting a lower interest rate, shortening the term of the mortgage to build equity faster, lowering monthly payments or switching from an adjustable rate to a fixed-rate mortgage.  However, homeowners need to consider the cost of refinancing before rushing to the bank. Since getting a new loan can cost around 2-3 percent of the total loan amount, it is important to weigh the cost against the benefits. For instance, if a homeowner plans to be in the house for years to come, refinancing is probably a good idea. But if the outlook for owning a home is less than 3 years, refinancing may not be worth it.

And then of course, there are those really hurting who owe more than their house is worth. This is where the bailout gets very tricky. It seems the logistics of helping those truly facing foreclosure is difficult at best and a losing proposition for lenders at worst. While there are no easy solutions to the current financial crises, at least there are some silver linings. The hope is that a spree of new home buying could help the housing market and eventually stabilize home prices.

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Mortgage refinance for jobless: Is it still possible

Nov 25

Posted by admin in Mortgage Refinance

TheLoansStore offer best mortgage refinancing rate for refinancing mortgage loan, countrywide loan and home loan for the people with all credit situation.

Do lenders concern a mortgage refinance to people who lost their job?

As USA is passing through economical recession many US citizens have already lost their jobs because of this recession. Some companies are reducing their employees and some are reducing the salary. Is a refinance possible for the unemployed people? I would say ‘No’ because the lenders are not ready to take risks. Most of the major lenders were giving the mortgage refinance earlier but since people have defaulted on the mortgage, they have stopped giving the refinance to people with no job.

Is a refinance achievable for people who have made the mortgage payments even after being laid off?

This is one of the most frequently asked questions about the home loan refinancing. Many people are making the mortgage payments regularly after losing their jobs. So they are wondering if the lenders would be ready to give them a refinance despite the unemployment. I know some people who have lost their jobs and they were paying the mortgage promptly. So they asked the lender about a refinance. They understood that the mortgage rates are very low and this is the best time to get a refinance. But their efforts went in vain.

The lender did not accept even after looking at the perfect credit report. So this clearly explains that employment is a very important factor to get a refinance and there is no way that you are going to get approved without a job. Some strange things have also happened to borrowers. Some of them were laid off during the refinance process. Recession has made several people’s lives hard. Since several plans have been introduced by the federal government to stimulate the housing market, let us hope for the best and wait patiently.

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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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Better refinance than modify mortgage

Nov 23

Posted by admin in Mortgage Refinance

Don’t try to modify mortgage just because you owe more than your home is worth. Reuters reported today that the Obama administration is behind on their goals for mortgage modifications and is still seeking alternative ways to help homeowners hang on to their homes. What many people are not aware of is that government sponsored enterprises such as Fannie Mae and Freddie Mac have relaxed some of the mortgage guidelines when it comes to existing homeowners who have lost value in their homes. Many times when I call upon a customer I begin to qualify them for a refinance and they tell me they are in the middle of a loan modification. When I sit down and do the math I end up asking the question “why don’t you just refinance your mortgage?”. If you have a perfect mortgage history, you should be looking at a refinance first before any talk of a modification.

The Home Affordable modification program is running behind on its goals because the pipeline of modifications that was in process had to be looked at all over again based on the new set of rules that came out on April 1st, 2009. There are people out there who have been trying to modify for eight months now. If they succeed their credit will reflect this and their credit scores will be compromised. When a bank does a modification they look at net income (after taxes) and every single expense in the entire budget of the household. This includes food, gas, electricity, car insurance, phone, cable, entertainment, etc. When a lender analyzes a refinance they look at gross income (before taxes), the mortgage payment and the debts that appear on the credit report. A loan modification is quite often granted to someone with a 100% to 110% debt ratio. A mortgage loan is often granted to someone with a debt ratio of 30-50%. (Mortgage and consumer debt compared to gross income.)

Here are some startling facts for borrowers who are thinking of modifying who really fall into the other side of the Home Affordable legislation. (The mortgages refinance side)

Banks are looking at present values and previous values now. In some cases they will take into account the value three years prior and compare. Florida, California did you hear this? If the only issue is that the customer is upside down, we have a legitimate shot at the loan. In some cases we can get an appraisal waiver to completely avoid an appraisal. In other cases we can do a manual underwrite and get a loan up to 125% of the value of the home. Even more, in many cases, we can do the same loan without verifying income.

A loan modification requires that we show the problem, like a layoff or a cut in income, and then we show the fix or some underlying reason why we should give this person a second chance. A mortgage loan looks for continuity in pay and work history. It has been my experience that customers who are current on their mortgage get turned down for loan modifications where customers who are current on their mortgage have a very good chance of getting approved for a refinance. If the only problem is that you are upside on your home you should be looking at the Home Affordable Refinance program through either Fannie Mae or Freddie Mac. Modifications stretch the term of the loan first, lower the interest rate second, lower the balance third, hardly ever. A refinance will lower the rate from say 6.625% to 5.125% and save approximately $130 to $500 a month and the work is done in 3 weeks to a month with no adverse effects on the customer’s credit bureau. Rates are expected to stay low until about the end of the year when the Federal Reserve is expected to stop purchasing American mortgage backed securities.

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Current Mortgage Rates Still at Historic Lows

Nov 17

Posted by admin in Personal Finance

While the past couple days have seen a slight increase in current mortgage rates, mainly due to stronger than expected wholesale inflation reading in the Producer Price Index and better than expected retail sales reports, interest rates are still at historic lows and refinance applications have increased.

Refinance applications have increased in large for two reasons, historically low interest rates and President Obama’s Home Affordable Refinance Plan (HARP) which allows home owners to refinance their existing mortgage up to 105% of today’s home value. With the decrease in home values over the past several years, this program was developed to allow existing home owners who have seen a decrease in their equity still benefit from the historically low mortgage rates seen today. While the program was intended to help somewhere around 4-5 million home owners, it has unfortunately fell short of that mark to date only helping around 50,000 home owners.

Bankrate.com reports today that the national average mortgage rate for a 30 year fixed mortgage is at 5.36%, up from 5.32% last week. 15 year fixed mortgage rates according to Bankrate.com have actually decreased to 4.85% from 4.94%. The average interest rate is taken from a poll of 10 of the largest financial institutions in the Nation. Consumers must remember that while researching interest rates on the internet, you must use this only as a guide and every individual’s mortgage rate will vary with credit scores and loan to values.

Potential home buyers seeking to purchase their first home may never have another opportunity like we face today. Home values according to Trulia.com indicate average home prices are near 2001/2002 levels. Compound that with historically low mortgage rates and the incentive of the $8,000 tax credit, home affordability is at an all time high.

Industry experts have seen an incredible amount of volatility in mortgage rates over the past couple months due to an uncertain economy. One mistake many home owners and potential home buyers have made in the past is waiting for “what might be”. While mortgage rates were at an all time low of 4.5%, the media blasted 4% possibly on the horizon. While many home owners anticipated lower rates and held off on their refinance or purchase application, they lost out dearly for greed. If a situation can help now, take advantage because the unknown can come back to hurt you.

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You Can Get A Bad Credit Mortgage

Nov 15

Posted by admin in Credit, Mortgage Refinance

Recently, my significant other and I decided to buy our first home. We were unaware of the fact that we had bad credit until we sat down with a mortgage lender who told us our credit scores were terrible. He suggested a bad credit mortgage.

There are lots of causes to bad credit. One of the biggest causes of bad credit is if you are making a habit of late credit card payments. Late credit card payments are like a huge red buzzer to lenders. It alerts them that you have been irresponsible in the past with making payments, and statistically speaking, you will be irresponsible again. That makes you a serious risk to their lending institution. Another popular cause of bad credit is filing for bankruptcy. You can file for many different kinds of bankruptcy. The two most popular forms of personal bankruptcy are a complete wiping of the proverbial slate and a debt reorganization plan. Either way, the filing stays on your credit record for seven years. This, much like the late payments, causes traditional lenders to fall out of their chairs. They look at you and see a lack of responsibility seething from your pores. It is a major signal to lenders that you are not to be trusted with loans. As a result, it can cause a very poor credit score.

Even with the red flags going off in their minds, there are lots of reasons that lenders decide to give their money away to people who have proven themselves untrustworthy according to their credit reports. One of the biggest reasons they loan to people with bad credit scores is that they make more money from the loan. If you are looking for a bad credit mortgage loan, you will almost always pay a much higher interest rate or you will have more points assigned to your loan. Either way, your monthly payments are going to be higher, and the total amount you will pay the bank in the long run will also be much higher. This means more money for the bank, if you manage not to default on your loan.

Even if you have bad credit, though, you will probably still qualify for a bad credit mortgage. This is a great option for people who want to buy their first home, but cannot seem to do so under traditional mortgage programs. Most of these lending institutions believe that everyone deserves a second chance, especially when it comes to attaining the American dream of home ownership.

There are a number of different companies, primarily internet based, that offer bad credit mortgage loans. Most of them offer fast, personal service. You can often get a loan decision in a matter of minutes via your e-mail account. This can be a refreshing change to people who are used to sitting down in a stuffy bank environments.

While obtaining a bad credit mortgage can be more difficult, and they can cost more in the long run, it can help you to reestablish your line of credit after you have experienced credit problems. For us, a bad credit mortgage was the solution to home ownership. Perhaps when our credit report looks a bit sunnier, we can refinance and leave the world of bad credit loans for the world of loans that offer better rates.

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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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