Mortgage Calculation: 2011

Wednesday, November 9, 2011

Mortgage Calculation

Home loan interest calculation refinance is one of the most convenient ways to repay a loan because refinancing means to apply for another loan to pay back a previous. Home loan interest calculation : refinance mortgage fast shipping mortgage calculation formula enjoy savings of up to 20 on product cheap mortgage calculation formula save up to 75 off all product. Mortgage calculation use this free mortgage calculator to save money on your home loan today includes amoritization tables, bi-weekly savings, refinance info, and helpful tips. Mortgage calculator formula, cheap mortgage calculator formula mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow on a piece of real estate mortgage. Mortgage calculator - wikipedia, the free encyclopedia mortgage calculator quickly shows what you can expect to spend on your home loan includes charts, amortization tables, graphs, taxes and insurance.

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Subprime Mortgage

Subprime lending is best defined as the act of offering financing to a borrower with blemished credit, low income, or limited documentation, who generally wouldn t. Subprime lending and subprime lenders the truth about mortgage.com subprime mortgage subprime mortgage crisis many economists refer to the current housing crisis in the united states as the worst since the great depression. Subprime mortgages - definition of subprime mortgages and how definition: a subprime mortgage is granted to borrowers whose credit history is not sufficient to get a conventional mortgage often these borrowers have impaired or. Mortgage with large losses like that, i think the subprime mortgage crisis will continue until next year so us property is not a good invest tool right now. Causes of the subprime mortgage crisis - us economy and business subprime mortgage requirements subprime mortgages are a way to help potential homeowners with less-than-perfect credit qualify for a mortgage and purchase a home.

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Mortgage Payment

It s important to make your mortgage payments on time but if you re late on a payment, you need to know what certain terms really mean. Mortgage calculators - mortgage bizcalcs.com if you re in the home buying mode, you might be thinking about a bi-weekly mortgage payment plan, wondering if it can help you pay off your mortgage more quickly. The ultimate mortgage calculator to guide you step-by-step guide to making mortgage payments, laws regarding payments, refinancing, and lending. Government mortgage help for americans gmac mortgage payment q what are my options for making my gmac mortgage payment a you can pay your gmac mortgage bill online, by mail, or by phone. Mortgage payment search results.

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Know Your Mortgage

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Tuesday, November 8, 2011

Mortgage Index

Find interest only mortgage rates and calculate interest-only mortgage loan payments also view the libor rate, prime rate, cofi, mta index and learn about libor loans. Mortgage applications barely up last week: mba - yahoo news mortgage applications rose last week following the biggest decline of the year, showing housing remains depressed the mortgage bankers association s index climbed. Rem ishares ftse nareit mortgage plus capped index fund etf freddie mac media room mclean, va , oct 27, 2011 /prnewswire/ -- freddie mac (otc: fmcc) today released the results of its primary mortgage market survey. Mortgage applications index up 4 9 last week - finance & commerce ishares ftse nareit mortgage reits index fund (rem): reference guide to the ishares ftse nareit mortgage reits index fund exchange-traded fund (rem) and to the. Mortgage lending portal search results.

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Thursday, June 9, 2011

HUD REACHES SETTLEMENT WITH FLORIDA ONLINE ADVERTISER REGARDING DISCRIMINATORY ADS

HUD No. 11-107
Shantae Goodloe
(202) 708-0685FOR RELEASE
Tuesday
May 31, 2011

HUD REACHES SETTLEMENT WITH FLORIDA ONLINE ADVERTISER REGARDING DISCRIMINATORY ADS
USA4SALE Network Inc. agrees to pay $15,000 to settle claim ads
discriminated against families with children

WASHINGTON – The U.S. Department of Housing and Urban Development today announced that USA4SALE Network, Inc., has agreed to pay $15,000 to settle claims that it violated the Fair Housing Act when it posted ads on its Web sites that discriminated against families with children. In addition, the company has also agreed to change the way its Web sites filter discriminatory language.

The settlement is the result of a complaint HUD initiated against the Ocala, Florida-based company after it allegedly printed a rental advertisement on its webpage, ocals4sale.com, that stated “No children, No kids.” The Fair Housing Act prohibits housing discrimination based on family status, including publishing print, broadcast or Internet advertisements that indicate a preference or otherwise discriminate against families with children.

“The Internet has revolutionized the way people search for housing and how housing providers advertise available housing. It cannot be a place to avoid the Fair Housing Act," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "This voluntary agreement will help housing providers easily meet their responsibilities under the Fair Housing Act."

According to the voluntary agreement, USA4SALE Network will develop a screening filter that will flag potentially discriminatory ads for human review and train its employees on how to comply with fair housing advertising guidelines. The agreement also calls for the network to donate $7,500 to a HUD-funded state fair housing organization and contribute another $7,500 to a HUD-approved local fair housing group to cover the cost of the group’s future fair housing advertisements.

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HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

HUD ACTS AGAINST PREGNANCY DISCRIMINATION IN HOME MORTGAGES

HUD No. 11-108
Shantae Goodloe
(202) 708-0685FOR RELEASE
Wednesday
June 01, 2011

HUD ACTS AGAINST PREGNANCY DISCRIMINATION IN HOME MORTGAGES
Actions involve settlement with compensation for victims, and enforcement action

WASHINGTON – The U.S. Department of Housing and Urban Development today announced a settlement agreement with Cornerstone Mortgage Company (Cornerstone), a national mortgage lender based in Houston, which HUD accused of engaging in discriminatory lending practices against expectant mothers. In a separate action, HUD is charging Mortgage Guaranty Insurance Corporation (MGIC) of Milwaukee, Wisconsin and others with engaging in pregnancy discrimination in issuing mortgage insurance in violation of the Fair Housing Act.

During a news conference, John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, announced the settlement with Cornerstone and laid out the Department’s charge against MGIC. The Fair Housing Act prohibits housing discrimination in sales, rental, and lending based on a person’s sex or familial status.

"Pregnancy is not a basis to deny or delay a loan. It’s just that simple,” said Trasviña. “Mortgage professionals may verify income and other resources and have eligibility standards but they may not single out women on maternity leave to deny or delay loans that they are otherwise eligible for.”

Under the terms of the agreement announced today, Cornerstone (doing business as Cornerstone Home Lending) agrees to:

Compensate Dr. Elizabeth Budde $15,000 based on her claims that she was initially denied a mortgage loan even though she was on paid maternity leave and planned to return to work;Create a $750,000 victims’ fund to compensate other Cornerstone borrowers who experienced discrimination because they were on pregnancy or maternity leave at the time they were applying for a loan; Notify all borrowers who applied during a two-year time frame of their right to seek compensation if they experienced treatment that was discriminatory because a borrower or co-borrower was pregnant or on maternity leave; andPay as many as 100 successful claimants a lump sum payment of $7,500 each.

If there are more than 100 successful claimants, each will receive a prorated share of the compensation fund which will be administered by an independent third party administrator agency. Cornerstone has also adopted a new policy clarifying how it will treat applicants for loans who are on parental leave, including maternity leave, when they apply for a loan. (The policy would also apply to men who are on parental leave due to the birth or adoption of a child.) Read HUD’s settlement agreement with Cornerstone.

Meanwhile, HUD is charging MGIC with discriminating against a Pennsylvania family by denying their application for mortgage insurance unless and until the wife returned to work from maternity leave. According to HUD’s complaint, on or about July 26, 2010, MGIC wrote an email summarizing the status of the family’s loan: “rec’d updated bank statements along with email from Borrower that states she is on maternity leave....notifying her that we cannot proceed until borrower is back to work full-time.”

Last July, HUD launched multiple investigations into the lending practices of certain mortgage lenders to determine if they illegally denied families mortgages because the mother is pregnant or on pregnancy-related leave. HUD enforces the Fair Housing Act which prohibits discrimination in lending based on sex or familial status (pregnancy or children in the family). The Act protects consumers from being discriminated against because a borrower is on maternity leave if she can demonstrate that she intends to return to work and can otherwise continue to meet the income requirements to qualify for the loan.

HUD’s Federal Housing Administration (FHA) requires its approved lenders to review a borrower’s income to determine whether they can reasonably be expected to continue paying their mortgage. FHA-insured lenders cannot, however, inquire about future maternity leave. If a borrower is on maternity or short-term disability leave at the time of closing, lenders must document the borrower’s intent to return to work, that the borrower has the right to return to work, and that the borrower qualifies for the loan taking into account any reduction of income due to their leave. Meanwhile, HUD is currently reviewing Fannie Mae and Freddie Mac’s underwriting guidelines to determine if they satisfy the Fair Housing Act, including income verification for persons taking maternity or parental leave.

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FHA AND FANNIE MAE ANNOUNCE GREEN REFINANCE PLUS TO PAY FOR ENERGY-EFFICIENT UPGRADES IN AFFORDABLE APARTMENT BUILDINGS

HUD No. 11-106
Brian Sullivan
(202) 708-0685FOR RELEASE
Tuesday
May 31, 2011

FHA AND FANNIE MAE ANNOUNCE GREEN REFINANCE PLUS TO PAY FOR ENERGY-EFFICIENT UPGRADES IN AFFORDABLE APARTMENT BUILDINGS
Energy Improvement Finance Program for Older Affordable Housing Developments

WASHINGTON – U.S. Housing and Urban Development Secretary Shaun Donovan today announced Green Refinance Plus, a program between HUD’s Federal Housing Administration (FHA) and Fannie Mae to allow owners of existing affordable rental housing properties to refinance into new mortgages that include funding for energy- and water-saving upgrades, along with other needed property renovations.

Under the program, FHA and Fannie Mae will share the risk on loans to refinance existing rent-restricted projects while permitting owners to borrow additional funds to make energy-saving improvements to their properties.

Donovan and Fannie Mae’s Executive Vice President for Multifamily Business Ken Bacon unveiled the program at a senior housing development in the San Francisco Bay Area where HUD is investing in energy-saving green retrofits.

“All across the country, owners of affordable housing properties are looking for a way to refinance their mortgages and to make energy improvements and other needed renovations at the same time,” said Donovan. “This program kills two birds with one stone – it preserves our affordable rental stock and it helps finance upgrades that will save energy and money over the long haul. We must make the smart investments in a more energy independent economy. These investments will strengthen our economy, create the new industries and new jobs of the future and reduce our dependence on an ever fluctuating oil market. ”

Bacon added, “Green Refinance Plus supports Fannie Mae’s ongoing commitment to creating a more sustainable rental housing market that is affordable to low- and moderate-income families. This program will provide more renters with renovated apartments in which to live, allow building owners to better manage their energy costs, and help communities by reducing the environmental footprint of our rental properties. Leveraging existing technology and expertise to bring proven energy and cost savings to rental housing is a win for everyone.”

California Congressman Pete Stark said, “Today's event highlights an exciting new refinancing opportunity for owners of affordable housing to make energy- and water-saving upgrades. It’s appropriate that the Green Refinance Plus program is being unveiled by Secretary Donovan at the Eden Issei Terrace in Hayward, in the heart of a community poised to help propel our country’s clean, green energy economy.”

Approximately every 10-to-15 years, owners of existing multifamily affordable properties typically refinance their mortgages. In older apartment buildings, however, owners are hard-pressed to find additional financing to maintain or improve the physical condition of their properties, including making energy-efficient upgrades. Beginning next month, Fannie Mae and its participating lenders will begin accepting applications to refinance owners’ debt as well as improve the energy efficiency of their properties.

Green Refinance Plus is intended to refinance the expiring mortgages of Low Income Housing Tax Credit and other affordable projects and to lower annual operating costs by reducing energy consumption. Fannie Mae and HUD anticipate approximately $100 million in initial refinance volume with an average loan amount of $3.5 to $5 million. FHA will insure up to an additional four-to-five percent of the loan amount, or an average of approximately $150,000 to $250,000 per loan, to provide additional loan funds to pay for i) property improvements that save energy and water costs for owners and tenants, such as energy efficient windows and ENERGY STAR appliances, as well as ii) other needed property renovations.

Property owners will be able to select the energy- efficiency upgrades that make the most economic sense for their properties. Borrowers will obtain a "Green Physical Needs Assessment" completed by a qualified provider. This assessment identifies property improvements that both reduce energy and operating costs and will help borrowers make rehabilitation choices that will give them the greatest energy savings for their investment.

Green Refinance Plusis an enhancement of the Fannie Mae/FHA Risk-Share program, begun in the 1990s. It will provide funding for the refinance, preservation and energy-efficient retrofits of older affordable multifamily housing properties, including those that are currently in Fannie Mae’s or FHA’s portfolios. This program allows for lower debt service coverage and higher loan-to-value ratios, to generate extra loan proceeds for property rehab and energy-efficient retrofits.

Read more about FHA/Fannie Mae’s Green Refinance Plus Program.

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HUD PROVIDES $15 MILLION IN RENTAL ASSISTANCE TO HELP NEARLY 2,000 FAMILIES STAY TOGETHER

HUD No. 11-109
Donna White
(202) 708-0685FOR RELEASE
Thursday
June 02, 2011

HUD PROVIDES $15 MILLION IN RENTAL ASSISTANCE
TO HELP NEARLY 2,000 FAMILIES STAY TOGETHER
Grants will keep children out of foster care, young adults from homelessness

WASHINGTON – In 2009, an estimated 423,773 children lived in foster care in the U.S. as case workers helped to reunite them with their families or primary caregivers. Today, the U.S. Department of Housing and Urban Development (HUD) announced nearly $15 million to help public housing authorities reunite foster children with their parents or prevent them from ever entering the foster care system. Read a detailed account of the local funding announced today.

HUD’s Family Unification Program (FUP) will make 1,931Housing Choice Vouchers available for families whose inadequate housing is the primary factor in the separation or near separation from their children. In addition, FUP vouchers will provide stable housing for young adults (ages 18-21) who left or are aging out of the foster care system, preventing them from becoming homeless.

“It’s heartbreaking to realize that thousands of children live in foster care or forced to live with other families simply because their parents can’t afford a home,” said HUD Secretary Shaun Donovan. “The funding provided today will keep thousands of families together under one roof.”

This funding allows local public housing authorities to work closely with local child welfare agencies to identify families with children in foster care or who are at risk of being placed in foster care and youth at risk of homelessness. These vouchers, like HUD’s Housing Choice Vouchers, allow families and youths to rent housing from private landlords and generally pay 30 percent of their monthly income towards rent and utilities.

According to the National Center for Housing and Child Welfare, it costs the federal government approximately $56,892 annually per family to place children into foster care. Yet the cost to provide housing and supportive services to one family averages less than $14,000 annually. Through this investment in FUP to reunify families who are separated due to housing problems, HUD will reunite nearly 3,500 children with their parents, thus saving $74 million in annual foster care expenditures. Cost savings are also considerable for young people aging out of foster care. The average annual cost of a FUP voucher for young adults is $5,600 – a tenth of the estimated costs associated with undesirable outcomes such as homelessness, incarceration, and residential treatment.

“With this investment of FUP vouchers, Secretary Donovan continues to demonstrate his understanding of the critical role stable housing plays in keeping families together and safe,” said Ruth White, Executive Director of the National Center for Housing and Child Welfare. “We applaud HUD for leading the way to kind of interagency resource sharing that will reunify thousands of children with their families, prevent homelessness among youth aging out of foster care, and ultimately reduce costs.”

FY2010 Family Unification Program funding will be distributed to the following states:

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Wednesday, June 8, 2011

HUD APPROVES $14 MILLION FINANCING PLAN TO REPLACE CRITICAL ACCESS HOSPITAL IN COLUMBUS, MONTANA

HUD No. 11-110
Lemar Wooley
(202) 708-0685FOR RELEASE
Thursday
June 02, 2011

HUD APPROVES $14 MILLION FINANCING PLAN TO REPLACE
CRITICAL ACCESS HOSPITAL IN COLUMBUS, MONTANA

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to the Stillwater Hospital Association in Columbus, Montana. The $14.3 million loan is made possible through the Federal Housing Administration’s (FHA) Section 242 Hospital Mortgage Insurance Program.

The existing hospital was constructed more than 50 years ago. Space limitations and infrastructure problems in the aging structure necessitate replacement to better serve the community. The FHA-insured mortgage loan will be used to construct an entirely new facility with a new emergency room, inpatient and outpatient surgery areas, laboratory, imaging department, a primary care clinic, and a home health agency. Stillwater Hospital Association is managed by Billings Clinic, Billings, Montana, a tertiary-level hospital that owns and manages six other hospitals and physician clinics in South Central Montana and Wyoming.

“By supporting hospital projects like this one in Montana, FHA is not only helping to expand access to medical care, itis also contributing to the financial well-being of communities by creating jobs to stimulate local economies.” said Acting FHA Commissioner Robert Ryan.

“Critical access hospitals like this one in Columbus are just that – critical – and it’s essential they have the space and facilities to serve the critical needs of Montana patients. This loan to the Stillwater Hospital Association is a smart investment that will support a healthy community and economy for years to come by supporting life-saving care and good-paying Montana jobs during construction and beyond,” said Montana’s senior U.S. Senator Max Baucus.

By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing that will save an estimated$4.2 million in interest expense over the life of the loan. Since 1968, FHA has insured 397 mortgage loans totaling $17.1 billion to hospitals in 43 states and Puerto Rico.

FHA’s Section 242 Mortgage Insurance Program for Hospitals enables hospitals to obtain capital to finance new construction and renovation of acute care hospitals. Eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.

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Refinance Home Mortgage Loan

Refinance home mortgage loan has always been popular among homeowners in periods of low interest rates. Home loan refinancing allows homeowners to replace the existing high interest rate home loan with a low mortgage refinance rate which would reduce monthly mortgage payments and/or shorten mortgage period considerably.

Refinance mortgage could provide low interest rate and flexible repayment options. If previous loan has been paid timely, homeowner's credit score would improve. This will help to get better refinance mortgage terms. Since new loan offers better rate, mortgage could be paid off faster.

A person with good credit score can easily take advantage of mortgage refinance loan. Those who have bad credit can also get a mortgage refinance. However they will have to pay slightly higher interest rate. Probably the best advice for people with bad credit would be to see if they could improve their credit score first.

Recently, more mortgage refinancing applications have been turned in for approval than ever before. This is due to a struggling economy, low home interest rates, and new stimulus programs that make approval of mortgage refinancing easier. In addition, the lenders and banks do not want to deal with more home foreclosures or defaults. Many new refinancing mortgage options now exist for nearly any homeowner. Eased requirements and restrictions allow more people than ever to get refinance approval.

Friday, May 20, 2011

Mortgage Rate Predictions For The Next 7 Days (May 11, 2011)

Welcome to my blog. I'm glad you're here. Get notified by email when I write something new on The Mortgage Reports. Click here for free email alerts or subscribe to the RSS feed in your browser.

Looking for a conforming mortgage rate prediction? I participate in the weekly Bankrate.com Mortgage Rate Trend Index survey. This week's results may give you the answers you need.

The mortgage rate prediction comes with some fine print. First, predictions are for conforming mortgages in places like Nashville, Tennessee; Charleston, South Carolina; and wherever else conforming and super-conforming mortgages are available.

Second, jumbo mortgages are specifically excluded from the survey because jumbos loans are priced differently from conforming ones. The same is true for FHA Streamlines and VA loans. Furthermore, unique loan types, like those for investors with 5 or more properties financed, are excluded.

Mortgage Rate Prediction You can click here to get a real-time rate quote.

Here's the mortgage rate outlook for the upcoming week:

50% think mortgage rates will increase6% think mortgage rates will decrease44% think mortgage rates will won't change

I expect mortgage rates to decrease.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching this compilation of the greatest movie sandwiches.

What I told Bankrate.com : "Momentum is moving mortgage rates lower. For now, ride the wave."

When you look at mortgage rate patterns over a long period of time, you notice that mortgage rates move in batches. For any significant chunk of time -- weeks, months, or longer -- mortgage rates are defined the arcs they follow.

Rates don't move sideways over said chunks of time. The move up or they move down. The pattern is called "trending".

Right now, we're in a downward trend.

Since peaking in mid-April, mortgage rates eased through each of the subsequent 4 weeks. At first, the momentum was slow, but last week, the speed picked up. Mortgage rates shed another few basis points, on average, and fell to their lowest levels of the year.

There's little reason for rates to reverse, either. The forces that put rates on this trajectory are still in play:

Until there's a shock to the system, there's little reason for rates to rise for more than a few days in a row which, in the bigger picture, would be just a blip.

The near-term trend points to falling mortgage rates.

Your Next Step : Get A Rate Quote

Rates are dropping, but you don't want to wait this one out. The mortgage market can change at a moment's notice -- especially when geopolitics are at play. It's not just data that moves markets anymore -- it's governments, too. And that can be frightening.

To get an up-to-date rate quote, call my office or send me an email and I'll be happy to oblige.

Or, to cut to the chase and get a rate quote, do this:

Use my online mortgage rate quote form -- no social security number requiredI'll review your notes and send basic follow-ups via emailOnce you reply, I'll get live rates in your hand. You can lock or wait -- your choice.

Expect to have rates in your hand within about an hour, during business hours.

Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

Be Quick : Mortgage Rates Change In Fewer Than 5 Hours

Welcome to my blog. I'm glad you're here. Get notified by email when I write something new on The Mortgage Reports. Click here for free email alerts or subscribe to the RSS feed in your browser.

Mortgage rates are moving targets. If you've ever shopped for one, you know that.

A rate quote from yesterday has no value to home buyers today; the same way that yesterday's price for AAPL stock has no value today. You can't buy today's securities at yesterday's prices.

It's a truth that carries into mortgage markets. When you want to lock a mortgage rate, you get today's pricing, from this very minute.

In April, mortgage rates changed every 4 hours, 42 minutes on average. That's slower than March, but still really, really fast.

When you shop for mortgage rates, your lender's price is directly tied to the Wall Street-pricing of something called a "mortgage-backed bond".

Broken down, it's a bond that's backed by a group of U.S. mortgages.

On the Difficult To Understand scale, from 1-10, this concept probably rates as a 5. There's a lot of complexity in such a simple statement. The underlying concepts are much more basic, though.

Like everything else in finance, the price of these mortgage bonds is based on supply and demand. Bond sellers make supply. Bond buyers make demand.

At any given moment, the ratio of sellers-to-buyers is in flux. Sometimes, buyers outnumber sellers and bond prices go up. Other times, sellers outnumber buyers and bond prices go fall.

These shifts occur all day long and when the shifts are "big" -- a relative term if there ever was one -- mortgage rates change.

In April 2011, lenders issued 1.70 rate sheets per day. This means that mortgage rates changed every 4 hours, 42 minutes on average.

Ergo, that your rate quote from last month, last week, and, possibly, earlier this morning is irrelevant now; expired and "unlockable"; a mortgage market relic.

Believe it.

When you're taking mortgage quotes in market moving this quickly, unfortunately, "sleeping on it" is not an option and while you wait to compare lenders, rates are moving under your feet.

I am an active loan officer and I watch real-time mortgage rates all day long. I post my notes to Twitter. Follow me there and you'll get my alerts for free. This is critically important because I often post advance notice before mortgage rates change.

Being "aware", though, is just part of being ready.

To move on mortgage rates, you'll need a loan application on file with a lender, and queued to locked before rates start moving. Once they're in motion, it'll be too late.

Give your application now. It's free and fast. Call my office at 513-443-2020 or with some details. We'll get started from there.

Markets move fast. Be alert. Be ready to lock.

Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

How To Beat The April 18, 2011 FHA Mortgage Insurance Increase

Welcome to my blog. I'm glad you're here. Get notified by email when I write something new on The Mortgage Reports. Click here for free email alerts or subscribe to the RSS feed in your browser.

FHA is raising MIP beginning April 18 2011 Going FHA on your next mortgage? Think quick!

For all FHA Case Numbers assigned on, or after, April 18, 2011, annual mortgage insurance premiums will be higher by 25 basis points per year, or 0.25%.

It’s the FHA’s third such increase in the last 12 months -- moves that have cost FHA borrowers a collective pretty penny.

Against a $200,000 loan size, the April 18 increase adds $500 to an FHA-insured borrower’s annual cost of homeownership.

Only new FHA loans are subject to the increase, and both purchases and refinances are affected. Existing FHA-insured homeowners won't face a change.

FHA : 15-Year FHA Mortgages Must Pay MIP, Too

The main reason why the FHA is increasing its annual MIP is because, as a group, the FHA now insures a much larger percentage of the total U.S. housing market.

For example, in 2006, the FHA held a 4 percent market share. By the end of 2010, that share had ballooned to 19 percent. Today, FHA may be backing 30% or more of new housing debt.

Making that many loans can take its toll.

In its official statement, the FHA says that the 0.25% increase to MIP bump will “significantly strengthen” its reserves which, by law, must remain above certain minimum levels. Reserves are low because of the last years' delinquencies and defaults.

The FHA's new mortgage insurance premium schedule is as follows:

15-year loan term, loan-to-value > 90% : 0.50% MIP per year15-year loan term, loan-to-value <= 90% : 0.25% MIP per year30-year loan term, loan-to-value > 95% : 1.15% MIP per year30-year loan term, loan-to-value <= 95% : 1.10% MIP per year

"30-year loan term" includes 30-year fixed rate mortgages and FHA 5-year ARMs.

To calculate what your FHA monthly mortgage insurance premium will look like starting April 18, 2011, multiply your starting loan size by the insurance premium in the chart above. This is your annual mortgage insurance cost.

To find the monthly number, just divide by 12.

The FHA also charges a 1 percent, up-front mortgage insurance premium at closing. That figure remains unchanged.

Remember, you don't have to be closed by April 18, 2011 -- you only need to have an FHA Case Number assigned, and to get an FHA Case Number assigned, you only need to give a mortgage application.

Beat the increase. Call me to start your application today at 513-443-2020, or click here to use my online mortgage rate quote form to see what rates I have for you. I can assure you they'll be low, and you'll get great service, too.

(This post adapted from Bring the Blog, a blogging content service for loan officers and REALTORS®)

Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

How To Keep Your Credit Score High While Shopping For A Mortgage

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The Debt Totem Pole for Mortgages, Auto, Credit Card and Store Credit debt

So, you're shopping for a mortgage and your lender wants to pull your credit. Only, you don't want her to pull your credit because you're worried it will damage your FICO.

30 years ago, that made sense. Today, it doesn't. It's because having a mortgage company pull your credit is much different from having Target do it.

The credit bureaus say it plainly -- your credit scores won't drop when your lender pulls your credit.

A "credit inquiry" is a formal request to review a person's credit report.

Credit inquires are grouped with other traits into a credit-scoring category called "New Credit". New Credit represents a tiny 10 percent a person's complete credit score.

On the scale of 300-850, therefore, credit inquiries represent just a portion of complete category that accounts for a maximum of 85 FICO points. Mathematically, your credit score can't drop more than that.

Credit inquiries come in many flavors, but the bureaus isolate four types as being "a search for new credit".

A credit check for a mortgage loanA credit check for an auto loanA credit check for a credit card applicationA credit check for a store credit card, or consumer loan

These four types are singled out because, in each case, the initial credit inquiry is requested for the specific purpose of taking on more debt. Extra debt increases the probability of credit default and credit scores drop as a result.

Even then, though, the risk of default varies by credit type.

A credit card application can be more damaging to a credit score than a mortgage application. This is because credit card debts tend to revolve higher over time versus a mortgage which eventually pays down to $0.

All things equal, credit card applications harm your credit score much more than an application for a home loan.

As compared to the other credit scoring elements, Credit Inquiries is a relative nothing.

In the official FICO scoring model, Payment History and Credit Utilization account for 65% of a score, combined, and the amount of time during which you've had credit to your name accounts for 15%. These three areas are over-weighted because the bureaus are more concerned with what you've already done with your credit versus what you might do with more of it.

Your credit past is the best clue to your credit future.

It's one of two reasons why it's okay to give your social security number to as many lenders as you want. The impact of a credit inquiry is minuscule as compared to your history as a Model Credit Citizen.

A mortgage credit inquiry is estimated to lower a credit score by just 5 points. Unfortunately, we'll never know for sure because the very act of examining the credit score causes it to move. In Hollywood, this is called The Ray Zalinsky Syndrome.

Put a camera on something, and it behaves differently.

The second reason you should shop around with lenders is that -- unlike applying for multiple credit cards -- applying for multiple mortgages won't ding you for multiple, consumer-initiated inquiries.

Applying common sense: You might apply for 5 credit cards and use them all. You won't be approved for 5 mortgages, though. As such, the credit bureaus have made it formal policy to permit "rate shopping".

Talk to as many lenders as you want in a 14-day time frame; have your credit checked as often as you'd like; compare rates and fees. All of the inquiries will be lumped into a single application.

It's good for you and it's good for the bureaus. Your credit scores stay high and TransUnion, Equifax and Experian collect more fees from the banks.

To promote rate shopping and to lessen The Fear of Credit Inquiry, the people behind the FICO brand spell out for you the best way to get the best mortgage rates possible:

If you want the best rate, you should "shop around" for itLimit rate shopping to 14-day timespan to keep your credit scores highMortgage lenders need your FICO to give accurate rate quotes so give up your social security number

Metaphorically, not letting your lender see your FICO is like not letting your doctor check your blood pressure. You'll get a diagnosis when the appointment is over -- it just might not be the right one.

Your credit scores can mean the difference between a 4.25 percent and a 5.25 percent mortgage rate; a conforming mortgage and an FHA mortgage; an underwriting approval and an underwriting denial.

You can't evaluate your options without a formal credit check. Especially with loan-level pricing adjustments affecting everyone with less than 30% equity, regardless of credit score.

So, start your rate shopping now. and we'll start with your credit pull. Then, I'll show you low mortgage rates you can compare to other banks.

Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

New For Spring 2011 : The Complete HARP / Making Home Affordable Eligibility Requirements

Making Home Affordable explained The Home Affordable Refinance Program (HARP) has been extended. The program's new expiration date is June 30, 2012.

If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance your home without paying down principal or having to pay mortgage insurance.

More people are eligible than you might otherwise think.

Since the Home Affordable Refinance Program's April 2009 inception, I've fielded a lot of questions about how the program works, and exactly whom is eligible.

HARP goes by several names. I use the blanket name HARP because that's what the government calls it. The program is also known as the Making Home Affordable plan, the Obama Refi plan, and Relief Refinance.

What follows is a collection of answers, plus other details of the program, of which you should be aware.

First: Of primary import are these two points:

Only Fannie Mae- and Freddie Mac-backed loans are HARP-eligibleYour current mortgage must have a securitization date prior to June 1, 2009

If you don't meet these two criteria, you are HARP-ineligible. Period.

Both Fannie Mae and Freddie Mac have posted "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac.

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

Yes.

Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan. You'll need this information because the Home Affordable Refinance Program is slightly different which each entity. Next, you'll want contact a loan officer about starting your HARP refi.

If neither Fannie nor Freddie has record of your mortgage, your loan is held somewhere else and is, therefore, HARP-ineligible. You may still be eligible for a "regular" refinance to lower rates, however. Use this form to get a rate quote or use a competing bid service like .

No. You must be current on your mortgage to refinance via HARP.

No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.

First, your home loan must be current. You may not be delinquent or behind in your payments. Second, you can't be more than 25% underwater on your home. Officially, this is known as having a 125% loan-to-value. Third, your mortgage must have been originated and sold to Fannie or Freddie prior to June 1, 2009.

Take your the balance of your first mortgage and divide it by the value of your home. This is your loan-to-value.

No. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Apply here online for a rate quote.

No, you won't. If your current home loan doesn't require private mortgage insurance, you won't have to start paying it on your new home loan.

No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require extra steps. Remind your lender that you're paying PMI to help the refinance process move more smoothly.

HARP refinances are limited to the lesser of 125% of the home's value, or the area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $729,750. You can lookup your area's conforming loan limits by clicking here.

No, only rate-and-term refinances are allowable according to the Home Affordable Refinance Program guidelines.

Yes, you can refinance an investment/rental property with HARP, but only if the home was originally financed as an investment property. You can't HARP-refi a home that was originally a primary residence and is now considered a rental.

Yes, you can refinance an second/vacation property with HARP, but only if the home was originally financed as an second/vacation property. You can't HARP-refi a home that was originally a primary residence and is now considered a second home.

No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.

Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed 125% of the home's value, nor may they exceed the local conforming loan limits.

No. Income verification is required in the HARP refinance program.

Yes, with HARP, applicant income is verified in the same manner as with a traditional refinance -- via a combination of W-2s, paystubs, tax returns and other, underwriter-requested documentation.

Base mortgage rates for the HARP program are the same as for a "traditional" refinance. Loan-level pricing adjustments may apply.

No, there is no minimum credit score requirement with the HARP refi program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

In most cases, no.

"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however. As an aside, Freddie Mac is using the branded name "Relief Refinance".

Maybe. HARP guidelines specifically prohibit removing a signer from the note, but there are circumstances in which you can remove a co-signer from the mortgage and from the deed so that the former co-signer has no ownership interest in the home. If that's not possible, to remove a spouse (or co-signed) from the mortgage, a traditional refinance is required.

Lock for 45 days, at minimum. This is because the HARP program, while streamlined for simplicity, still has some grey areas that can lead to delay. It's better to have a rate lock that lasts too long than not long enough.

Use this form to get a rate quote or use a competing bid service like .

If you're ready to apply, click here to generate an online quote. Or, if you have a specific HARP question, send me an email and I'll do my best to give a good reply.

Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI.

If you need foreclosure help, call your current loan servicer immediately.

Don’t Pay Closing Costs When Mortgage Rates Are Falling

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Closing costs by state 2010, from Bankrate.com survey

Mortgage markets have improved through 5 of the last 6 weeks, dropping conforming and FHA mortgage rates to their lowest levels of the year, and re-fanning the flames of last year's Refi Boom.

But refinancing your mortgage is about more than just the rate. It's about the costs, too.

Quickly, high costs can negate the benefits of a refi to lower rate.

Mortgage "closing costs" are fees paid to start a new mortgage; costs that wouldn't be incurred if the mortgage never happened.

Closing costs can be grouped into two categories, labeled as:

Origination/lender chargesThird-party fees

"Origination Charges" are fees paid to the lender at closing; part of the lender's bottom-line. Origination charges are often broken-down by line item and named things like underwriting fee, application fee and processing fee, for example.

Don't get hung up on the semantics or nomenclature, though. Treat Origination Charges as a lump-sum figure. If it's listed in the Origination Charges section on your Good Faith Estimate, it's paid to the lender and that's all that matters.

Different from Origination Charges are "Third-Party Fees". Third-Party Fees are fees paid to parties other than the lender.

Third-party fees include the costs of appraisals, credit reports, settlement fees and government taxes. In general, they should usually be ignored when comparing mortgage offers to each other. This is because third-party fees tend to be fixed-fee line items; they're 100% identical no matter which lender with which you choose to work.

Also, note that your Good Faith Estimate will include line-items such as Escrow Reserves and Per Diem Interest. These are not closing costs because they're costs that would be incurred whether you gave the new mortgage or not. Escrow and per diem are "prepaid items" and don't figure into a closing cost discussion.

Bankrate.com's annual closing cost survey shows that typical mortgage closing costs are higher by 37 percent nationwide.

That's a big (and costly) jump -- especially in high-closing cost state like Texas. The good part, though, is that closing costs can be negotiable, in some respects, and when mortgage rates are falling, it's pretty easy to beat the bank.

Instead of paying closing costs yourself, ask your lender to pay them on your behalf. It's called a "zero-cost mortgage".

Here's how a zero-cost mortgage works:

You're eligible for a certain mortgage rate. Let's say 5.000%.Your closing costs are $3,741, the national average.You willingly accept a rate of 5.250%, higher than for what you're eligibleIn exchange for you paying more mortgage interest each month, the lender agrees to pay your closing costs for you. You pay nothing.

So, a zero-cost mortgage is exactly what it sounds like -- a mortgage for which you pay nothing. Loan sizes don't increase and nothing is "rolled in" to your balance.

The downside to a zero-cost mortgage is that your monthly payment will be higher, but usually it's by a negligible amount relative to the sum of closing costs waived at the time of closing.

Here's a rough guide to how much mortgage rates increase on zero-cost loans (and depending on your state):

Less than $100,000 : Add 0.75% to the market rate for "zero-cost"$100,000-250,000 : Add 0.50% to the market rate for "zero-cost"$250,000-400,000 : Add 0.25% to the market rate for "zero-cost"More than $400,000 : Add 0.125% to the market rate for "zero-cost"

Zero-cost mortgages can be an excellent strategy in a falling interest rate environment. Zero-cost loans eliminate sunk costs and offer an immediate payback on your investment (of zero).

When the future of mortgage rates is uncertain, going zero-cost is a sure thing but not every bank offers zero-cost mortgages.

Waterstone Mortgage does.

If you'd like to see the math on a zero-cost mortgage, click here to get an online rate quote. I'm happy to show you your options.

Dan Green is an active, multi-state loan officer with Waterstone Mortgage. Email Dan at/**/ or call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

Saturday, May 7, 2011

Confusion Seen Over Mortgage Basics

A mortgage may be the biggest financial decision a consumer will make in his or her life, but roughly half of adult Americans lack a basic understanding of mortgage fundamentals, according to a recent Zillow survey.

Adults surveyed incorrectly answered basic questions about how mortgages work 46 percent of the time, including questions about interest rates, points and adjustable rate mortgages (ARMs). A nearly equal number said they were unsure about their own knowledge of home loans and the mortgage process."Most people wouldn't jump out of a plane if they didn't know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages," said Erin Lantz, marketing director for Zillow. "By simply spending a few hours researching how a mortgage works, and by shopping around for the most competitive rates and fees, buyers can save a lot of money."Nearly half of all respondents (45 percent) said they thought it was always a good idea to pay for discount points when taking out a mortgage, when in fact buying points doesn’t make sense if you’re only going to own the home for a few years. Over one-third (37 percent) thought that pre-qualifying for a mortgage meant a guarantee of financing, rather than an initial estimate of what they may be able to borrow.Roughly one-third also thought that lenders are required by law to charge uniform rates for fees and appraisals, and did not realize such fees are negotiable and can vary from lender to lender.About two-fifths (42 percent) thought that FHA mortgages are limited to first-time buyers only, rather than being available to repeat buyers as well.Some of the biggest confusion surrounded ARMs, where a majority of potential borrowers said interest rates always increase when the loan resets, typically after five years for the most common type of ARM. In reality, ARM rates can sometimes go down when they reset, depending on what prevailing interest rates are at that time.A majority also did not understand that mortgage rates vary throughout the day, and the rate you get can depend on what time you lock it in. Fifty-five percent of survey respondents thought rates were set once a day.The survey of over 1,000 randomly selected adults was conducted in mid-April.

Home Prices Hit New Post-Crash Lows

U.S. home prices have fallen to new post-crash lows, confirming a predicted “double dip” in housing prices, according to new figures from housing data firm Clear Capital.

Nationally, home prices were down 4.9 percent compared to the previous quarter, according to Clear Capital’s report for April. That decline put prices 0.7 percent below the previous post-crash low reported in March 2009, producing the so-called “double dip.”The quarterly decline reversed all the gains recorded over the previous year, with prices down 5.0 percent compared to their April 2010 level. The decline was blamed on a rising tide of foreclosed properties, known in the industry as REOs (real-estate owned), which made up 34.5 percent of all sales in the current report.“The latest data through April shows a continued increase in the proportion of distressed sales that are taking hold in markets nationwide,” said Alex Villacorta, Clear Capital director of research. “With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales.”The new data comes on the heels of last month’s report suggesting that home prices were stabilizing in most of the country. In the current report, however, home prices showed quarterly declines in every single metropolitan area surveyed.The smallest decrease was posted by the Charlotte, N.C. area, where prices were down 1.4 percent compared to the previous quarter, followed by Washington, D.C., which showed a 1.6 percent decline. The biggest quarterly decline was seen in the Detroit, Mich. metro region, where prices were down 13.4 percent in a market where REOs made up nearly 56 percent of all sales.High levels of REO sales tend to pull down home prices in general, because they typically sell at a steep discount compared to conventional home sales. At the same time, a heavy saturation of REO homes on the market suppresses home prices for conventional sales as well, because of the price competition.The Clear Capital survey uses an unusual “rolling quarters” model in which data for the past three months is compared to a previous “quarter” consisting of the four months prior to that period. The model is intended to dampen out the volatility that often appears in month-to-month data while still allowing for current monthly updates on market conditions.

Friday, May 6, 2011

MBA Head Sees Coming Boom

Though the housing market continues to struggle, the new head of the Mortgage Bankers Association sees a coming boom just a few years down the road as the burgeoning Millennial Generation enters its homebuying years.

“With this generation now coming of homeownership age there is a huge potential market for new home purchases,” said David Stevens, recently appointed as MBA president and CEO. “This means that with the right effort and outreach, we will soon be faced with burgeoning demand for new mortgages and new financing.” Speaking before an MBA conference on Monday, Stevens said that demographic trends on housing are pointing upward, despite the industry’s current doldrums. He noted that the upcoming Millennial Generation, also known as Generation Y, is expected to be two to three times larger than Generation X which preceded it. The children of Baby Boomers, the so-called Echo Boom is expected to be even larger than their parent’s generation, with an estimated 80 million members, Stevens said. As such, it offers an opportunity to “make things right” in terms of a sustainable housing market. Although acknowledging that “several years of pain” still lie ahead, Stevens noted a number of encouraging current trends. Early stage delinquencies, those 30-days past due, have returned to pre-recession levels, he said, while foreclosure rates are trending downward. He conceded that the mortgage industry has a lot of work to do to regain the trust of consumers, acknowledging that many of the problems the industry has faced in recent years are of its own making. He said many consumers seem to have been scared off from home ownership, and are sitting on the sidelines wondering if owning a home makes sense for them. “Without dismissing the roles that others played, we must admit that some within the industry gave loans to borrowers that shouldn’t have, and ignored or excused the presence of unethical people and misplaced incentives,” he said. “Acknowledging these mistakes is the first step in rebuilding trust.” Stevens, former Assistant Secretary for Housing and Commissioner of the FHA, recently took over as MBA president/CEO from John Courson, who is leaving the organization. Start here to compare mortgage rates from top lenders in our network

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Rise in Home Equity Loans Reported

Most types of consumer lending have increased significantly over the past year, even as potential mortgage borrowers continue to be frustrated by extremely tight credit.

The credit reporting firm Equifax reports across-the-board increases in most types of consumer credit, with double-digit increases among auto loans and credit cards. Perhaps most surprising of all is a significant rise in home equity loans, despite depressed property values and a decline in mortgage lending in general.The biggest increase was seen among auto loans, which showed a 23 rise in outstanding balances compared to one year ago, measured from March 2010 to March 2011. Newly issued credit cards were up 14 percent over the same period.By contrast, outstanding mortgage balances were down by 3.49 percent compared to last year. Foreclosures accounted for part of the decline, but slow lending combined with consumers gradually paying down debt was also a factor, according to an Equifax spokesperson.In contrast to the overall mortgage lending, home equity lending actually increased by 9 percent over the past year, in terms of outstanding balances. The reasons for the increase, at a time when home values have remained largely stagnant and mortgage credit remains tight, are unclear. No explanation for the seemingly counter-intuitive increase was provided, although the trend is increasingly toward borrowers with high credit scores.Total available credit is currently at about half of its pre-recession levels in 2006 levels, although it appears to be steadily increasing, according to the company. New credit issues in 2011 totals $51 billion so far, compared to $45 billion at this same point in 2010, a 13 percent increase.On credit cards, the company reports that consumers are increasingly paying their bills on time and paying down existing debt, which is resulting in a general increase in credit risk scores nationally.Equifax is one of the three major credit reporting firms lenders turn to for credit scores lenders use to make decisions about consumer loans. Its monthly credit report is based on data from over 585 million consumers and 81 million businesses worldwide.

Freddie Mac, FHA Aid Tornado Victims

Homeowners who were affected by last week’s tornado outbreak across the South may be able to qualify for up to 12 months of suspended or reduced payments on Freddie Mac mortgages, along with other assistance as well.Those with FHA mortgages in affected states may qualify for more limited relief, and all victims may be able to obtain FHA assistance in rebuilding their homes.Freddie Mac announced today that it is offering a series of relief measures for borrowers whose homes were damaged or destroyed by the storms. To qualify, borrowers must have a Freddie Mac mortgage and live in one of the counties declared a major disaster area by President Obama.In addition to suspending or reducing mortgage payments for up to one year, Freddie Mac has authorized a number of other measures to provide relief to borrowers who were affected by the disaster. These include suspending foreclosure or eviction proceedings against delinquent borrowers, waiving late fees or other penalties and not reporting disaster-related delinquencies or forebearances to credit reporting agencies.All relief measures are at the discretion of the mortgage servicer handling the loan. Each case will be evaluated individually to determine what assistance may be offered.Meanwhile, the Department of Housing and Urban Development (HUD) has announced that it is instituting a 90-day moratorium on foreclosures against homes with FHA mortgages in disaster areas in Alabama, Georgia and Mississippi.In addition, disaster victims in those states who have lost their homes can qualify for up to 100 percent FHA financing to rebuild or purchase a new home through a Section 203(h) loan. FHA home equity loans are also available for homeowners to make repairs to damaged homes, through its Section 203(k) Home Rehab loan. Borrowers do not need to currently have an FHA mortgage to qualify.Similar measures were instituted last week for victims of earlier storms Oklahoma as well.Fannie Mae, the sibling agency to Freddie Mac and the nation’s largest insurer of mortgage loans, has not announced any mortgage relief initiatives for victims of the recent storms as of this writing.The lender has authorized mortgage servicers to suspend or reduce payments on mortgages backed by Freddie Mac for up to one year for borrowers

Home Improvement Trends Looking Up

Trends in home remodeling are showing their greatest improvement in over four years, although tight credit and a lack of home equity continue to restrain demand.

The National Association of Home Builders reports that its Remodeling Market Index rose a full five points in the first quarter of the year, to 46.5, suggesting that a recovery is underway in the home improvements. It’s the highest the index has been since the fourth quarter of 2006."Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," said Bob Peterson, remodeling chairman for NAHB. "However, many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans."A score below 50 in the index still represents that more remodelers report declining activity than increases, compared to the previous quarter. However, the rise in the index is considered a promising sign, particularly since some individual indicators are edging into positive territory.The index for major home additions rose to 50.3, up from 48.6 in the previous quarter, while several future indicators rose into positive territory as well. Calls for bids increased to 53.1 in the first quarter of 2011, up from 47.2, while appoints for proposals rose by more than nine points, to 52.4, up from 43.1 previously.Difficulty in obtaining financing was seen as consumer’s main obstacle to remodeling, cited by 90 percent of respondents in the survey, followed by declining home equity, cited by 81 percent. Other reasons were consumer uncertainty about their own economic situations (74 percent) and doubts about investing in a home that may not hold its value (67 percent).

Rates Hit Lowest Point of the Year

Mortgage rates continued to trend downward last week, reaching their lowest points of the year, according to new figures from the Mortgage Bankers Association.

Average interest rates on 30-year fixed-rate mortgages fell for the third week in a row, dropping to 4.76 percent, down from 4.80 percent previously. Origination fees and points also fell, to an average of 0.76 points, down from 1.00 points the week before.Average rates on 15-year fixed-rate loans also declined, to 3.96 percent, down from 4.03 percent. Origination fees and points also declined, to an average of 0.82 points, down from 0.96 points the week before. It’s the lowest either rate has been since early December.The declining rates stirred some interest in mortgage refinancing, which has been on the wane in recent months as 30-year rates flirted with the 5 percent mark. Refinance applications were up a seasonally adjusted 6.0 percent last from the week before.Applications for mortgages to purchases a home were up slightly, by 0.3 percent. Purchase applications have trended down over the past month by an average of 2.4 percent a week, while refinance applications have held steady on average during the same period.Demand for home purchase mortgages remains quite weak compared to historic norms, down 36.9 percent from the same week one year ago.The survey covers half of all residential U.S. mortgages for the week ending Friday, April 29, with all figures are based on mortgages with an 80 percent loan-to-value ratio.

10 Years Mortgage rates

Before choosing a 10 year mortgage loan, check your assets and see if you have enough income or other assets to save yourself from the threat of foreclosure. This mortgage rate is the lowest of all fixed rate programs. You can save a huge amount of money which you would have paid for interests of other types of loans. Sometimes, the interest rate could be double when your go for the adjustable loan rates.

Ten year Mortgage rates when compared to other rates.

Just like a 10 year Mortgage payment takes ten years to pay up, a 20 year fixed rate would take 20 years and a 30 year mortgage rate would take 30 years to finish off. Why opt for a 10 year fixed rate when you can choose the other types? After all, you have more time to pay the amount and complete the loan. With a ten year mortgage the main advantage is the cost. The interest rate is lower when compared to a 20 year or a 30 year note. But this is not the deciding factor. The highlight is that if you pay off your mortgage in these few years you end up saving a lot of money.

Hidden costs of a 10 year mortgage loan

There are no hidden costs when you go for this type of loan. It also depends upon the organization from which you acquire your loan. Some organizations tend to ask fees for application forms and similar things. They may not mention it earlier because they want to make their costs look cheaper when compared to other organizations offering the same service. The best way to avoid this is by becoming shrewd, by reading all the fine print and checking if there are any loopholes. You will get a detailed idea of this when you go online and check the various companies and how they have maintained their rates. By checking interest rates of different companies through their websites, the possibility of hidden costs has dropped considerably. It is the duty of the customer to make sure that there are no additional costs dampening the benefits of the low interest rates.

5 Years Mortgage Rates

A five year mortgage, sometimes called a 5/1 ARM, is designed to give you much of the stability of payment as you'd get with a 30 year fixed rate mortgage, but also allows you to qualify at and pay at a lower rate of interest for the first five years. There are also 5 year balloon mortgages, which require a full principle payment at the end of 5 years, but generally are not offered by commercial lenders in the current residential housing market.

5 year ARM mortgages, like 1 and 3 year ARMs, are based on various indices, so when the general trend is for upward rates, the teaser rates on adjustable rate mortgages will also rise. Currently rates are low, because the Fed has bought a lot of mortgage backed securities in order to stem inflation. That program is due to end at the end of March 2010. If the Fed extends the program at that time, mortgage rates will remain affordable, otherwise the rates are expected to trend upwards in the second quarter of 2010.

5 year ARM mortgages are most often tied to the 1 year Treasury or the LIBOR (London Inter Bank Rate) but it's possible that any particular ARM could be tied to a different index. These are the most common indices that banks use for mortgage indices:

Treasury Bill (T-Bill)
Constant Maturity Treasury (CMT or TCM)
12-Month Treasury Average (MAT or MTA)
11th District Cost of Funds Index (COFI)
London Inter Bank Offering Rates (LIBOR)
Certificate of Deposit Index (CODI)
Bank Prime Loan (Prime Rate)

The initial rate, called the initial indexed rate, is a fixed percentage amount above the index the loan is based upon at time of origination. This amount added to the index is called the margin. Subsequent payments at time of adjustment will be based on the indexed rate at time of adjustment plus the fixed percentage amount, same as it was calculated for the initial indexed rate, but within whatever payment rate caps are specified by the loan terms. Though you pay that initial indexed rate for the first five years of the life of the loan, the actual indexed rate of the loan can vary. It's important to know how the loan is structured, and how it's amortized during the initial 5 year period.

Payment rate caps on 5/1 ARM mortgages are usually to a maximum of a 2% interest rate increase at time of adjustment, and to a maximum of 5% interest rate increase over the initial indexed rate over the life of the loan, though there are some 5 year mortgages which vary from this standard. Some five year loans have a higher initial adjustment cap, allowing the lender to raise the rate more for the first adjustment than at subsequent adjustments. It's important to know whether the loans you are considering have a higher initial adjustment cap.

In analyzing different 5 year mortgages, you might wonder which index is better. In truth, there are no good or bad indexes, and when compared at macro levels, there aren't huge differences. Each has advantages and disadvantages. One of the things to assess when looking at adjustable rate mortgages is whether we're likely to be in a rising rate market or a declining rate market. A loan tied to a lagging index, such as COFI, is more desirable when rates are rising, since the index rate will lag behind other indicators. During periods of declining rates you're better off with a mortgage tied to a leading index. But due to the long initial period of a 5/1 ARM, this is less important than it would be with a 1 year ARM, since no one can accurately predict where interest rates will be five years from now. With a 5/1 loan, though the index used should be factored in, other factors should hold more weight in the decision of which product to choose. The index does affect the teaser rate offered.

New Foreclosures Jump 21 Percent

Foreclosure activity increased sharply in March, a sign that lenders are coming to grips with the documentation problems that led to the robo-signing scandal last fall.

Foreclosures were initiated on more than 217,000 homes in March, a 21 percent increase over February’s rate, according to information released today by the HOPE NOW alliance. Nearly 85,000 properties were forfeited through foreclosure sales during the month, a 35 percent increase over February.The increase in foreclosures occurred despite a declining trend in mortgage delinquencies. There were 2.63 million residential mortgages at least 60 days past due in March, a 6 percent decline from February’s level of 2.78 million, which in turn represented a similar decline from 2.95 million in January.Meanwhile, the number of at-risk homeowners obtaining private mortgage loan modifications from their lenders also increased significantly in March. Nearly 77,000 propriety loan modifications were completed in March, up from 61,000 the month before. Four out of five reduced borrower’s monthly mortgage payments, with just over half reducing payments by 10 percent or more.There was no updated information provided for loan modifications performed through the government’s Home Affordable Modification Program, for which March data has not yet been released. HAMP guidelines require that all modifications done under the program reduce a borrower’s mortgage payments.Private modifications have recently been outpacing HAMP modifications by about a 3-to-1 ratio. Many major lenders cut back their foreclosure operations after it was revealed last fall that some were taking legal shortcuts in documenting foreclosure claims, a situation that became known as the robosigning scandal. Many pending foreclosure actions were deferred while mortgage servicers developed new approaches to properly handle thousands of foreclosure actions a month.The HOPE NOW alliance is a coalition of industry groups, nonprofit consumer agencies and government entities working together to address the foreclosure crisis.

Wednesday, April 6, 2011

Realtor Fees for the Home Buyer

The Realtors are only paid upon the sale of a home. That means that all the houses you want to see, they will show you. On weekends, evenings, whenever you call them to go out and look. That is why it is very important that only serious Buyers contact Realtors. Look at it this way, would you want to take time away from your family if it isn't warranted?

On the other hand, the Seller usually picks up the bill for all realtor fee's. The Seller typically pays 3% for their realtor to list and show their home, then another 3% for the Buyer's realtor.

The exchanging of money only happens at the closing table. So if it takes you 1 or 2 months to find the house of your dreams, the Realtor is using their money for gas to drive you around and eating out. A normal purchase takes approximately 30 days to complete. So for 30 days your Realtor is working their booties off for you!

Earnest Money When Seller Refuses to Make Repairs

The answer depends on the terms of the sales contract. Typically, the buyer places an earnest money deposit and in some instances, the contract contains a home inspection contingency. The buyer then has a specific period of time to get the home inspepcted and notify the seller if there are any repairs needed. The seller can do one of three things, under the standard form of sales contract:

1. He can fix the items requested by the buyer.

2. He can fix some of the items, and not others.

3. He can refuse to do any of the repairs.

At this point, the buyer must decide if he wants to go through with the purchase. If the seller fixes everything, the buyer must proceed or his earnest money is at risk. If the seller chooses #2 or #3, it's up to the buyer to decide whether to proceed with the contract, re-negotiate it, or cancel it. If the buyer cancels the purchase because of necessary repairs that the seller won't fix, the buyer would get his earnest money back IF THERE IS A HOME INSPECTION CONTINGENCY in the contract. If there is no home inspection contingency, the seller is under no obligation to do anything.

Skipton re-enters buy-to-let mortgage market

Building society Skipton has announced that is to once again offer buy-to-let mortgage products following a temporary withdrawal from the market.

Skipton ceased buy-to-let mortgage lending in 2009 due to uncertainties in the market, but says increased demand means it will now begin offering such products once again.

Its buy-to-let portfolio will include a two-year fixed rate mortgage at a rate of 4.49 per cent and a three-year fixed rate deal at 5.49 per cent, both with a loan-to-value ratio of up to 60 per cent.

Kris Brewster, Skipton's head of products, said: "With evidence that the housing market is beginning to stabilise, albeit with the potential for further limited house price falls later this year, we believe it's now appropriate to make a controlled, low risk return to this space.

"Therefore, we have decided to offer a set of straightforward and competitive products."

The news follows a recent survey by The Mortgage Works, which found that the majority of brokers predict activity in the buy-to-let mortgage market is set to increase, with 51 per cent expecting the number of new landlords to rise in 2011.

659,000 households struggling with mortgage payments

Thousands of homeowners are struggling to pay their mortgages as pay falls in real terms, a new study reveals.

According to a report by the Centre for Economics and Business Research and the Institute of Social and Economic Research for the BBC?s Panorama programme, rising inflation coupled with stagnating salaries means that the average worker now takes home ?1,088 less a year than they did just two years ago.

This represents a five per cent pay cut, in real terms, on what they were earning at the beginning of 2009 - in the middle of the recession .

The study found that 659,000 households are already struggling to meet mortgage payments, with 117,000 in arrears .

Furthermore, if the Bank of England decides to increase the base rate of interest by one percentage point, a further 36,000 households will find it difficult to make mortgage payments .

It comes the same week as a study by MGM Advantage, which calculates that rising inflation means UK households need to find an extra ?1,496 a year on average more than they did 12 months ago to maintain their standard of living.

Tuesday, April 5, 2011

Northern Rock cuts mortgage interest rates

A number of rate reductions have been made by Northern Rock to its Everyday range of mortgages .

The cuts affect a number of two and three-year fixed rate deals and will help those with deposits ranging from ten to 30 per cent.

Northern Rock's two-year deal at a 90 per cent loan-to-value (LTV) ratio now comes at a rate of 5.88 per cent, with no product fee to pay.

Those with a bigger deposit can now benefit from a 3.39 per cent rate on a 70 per cent LTV mortgage, with a ?995 product fee, also on a two-year deal, while a remortgage on the same terms is now at 3.48 per cent.

Finally, Northern Rock has reduced its three-year 70 per cent LTV mortgage to 3.94 per cent, with a ?995 fee.

It follows recent comments by David Hollingworth of mortgage brokers London and Country, who told the Telegraph that many mortgage lenders are increasing their fees for their most competitive mortgage deals, as customers look to switch to a fixed-rate loan over fears of future interest rate rises.

Monday, April 4, 2011

Mortgage costs expected to rise with market in a “swirl”

int rate QMark Last year, many mortgage market analysts didn’t think mortgage rates could go any lower. After reaching 50-plus-year lows, the expectation was for mortgage rates to consistently trend upwards (where else could they go?). Yet with moderate economic improvement over the last few months, and most recently, several tumultuous global events (Japan disasters, unrest in the Middle East and Africa), mortgage rates have found little upward momentum.

However, outside of current mortgage rates, the mortgage market is in the midst of a regulatory whirlwind that has the market in a “swirl.” HSH.com’s VP Keith Gumbinger shares nine issues “which all contribute to the uncertainty in the market and are a deterrent to improving lending conditions, reducing costs or to making the mortgage market a less-messy landscape.”

Let’s take a look at a few of the issues, and keep in mind how they’re going to impact your bottom line (emphasis added):

1. Risk-based pricing adjustments

As far as cost increases go, both Fannie Mae and Freddie Mac increased their “Loan Level Pricing Adjustments” (LLPA; Fannie) and their “Post-Settlement Closing Fees” (Freddie). Applied at the intersection of your credit score and the amount of equity or down payment you have, these increase the cost to the consumer to help Fannie and Freddie offset the risks of making loans to lower credit or equity borrowers. However, for the first time this spring, these apply not just to risky borrowers, but even to those with stellar credit and fairly deep equity stakes. Basically, costs have risen for all borrowers.

2. FHA insurance cost increases

Not the same as the LLPAs above, the FHA — which recently changed its insurance premium structures to lower initial costs in favor of higher recurring (annual) costs — has decided to add another 0.25 percent increase to its annual mortgage insurance premium. This adds an additional $250 to the annual cost for a $100,000 loan in the first year. It’s not a huge increase, but no additional cost increases are welcome in this housing market.

5. Dodd-Frank and QRM

As far as we know, QRM isn’t a radio station anywhere, but rather a vague concept which may come to dominate the mortgage securities industry. The Qualified Residential Mortgage (QRM) will eventually be the “standard” mortgage structure, as it will be the mortgage(s) which won’t require loan sellers to retain as much as 5 percent of the value of the loans sold into securitization. At present, and while the definition isn’t set just yet, this is likely to be a conforming 30-year fixed-rate mortgage with a high credit score and down payment requirement (possibly at least 20 percent down). All other loans being sold or packaged into securities will require the firm(s) who securitizes the loan to hold back a pile of cash against possible loss, called “skin in the game.” Five percent of hundreds of billions of dollars adds up to a lot of money that needs to be held back, which reduces funds available to lend… and the institution of such a standard will make loans outside any narrow definition more scarce and expensive.

8. CFPB

Coming soon to a mortgage market near you will be a bureaucracy with sweeping regulatory authority. How the new agency will change the mortgage and consumer-lending markets will remain unclear for some time, but borrowers should start to familiarize themselves with a concept that lenders have been aware of for some time: regulatory risk. Regulatory risk is a part of any regulated business model and has impacts (in this case) on the availability and the price of credit. A climate of stable regulations can become well-modeled with known costs and implications, but an unclear or stormy one is hard to plan for or quantify. In such a situation, “erring on the side of caution” becomes the order of the day, with potential effects on the price of credit tending toward the high side until the true costs of conducting business are known. In a worst case scenario, a lender may simply decide to pull away from lending at all until at least some clarity returns. If nothing else, the initial expected focus of the new bureau on mortgage disclosure reform will likely drive up the cost of making new loans to some additional degree.

“This spring (and beyond), everything from front-end originator compensation to back-end loan failure management (and everything in between, it seems) is in this regulatory swirl at the moment,” said Gumbinger. “Homebuyers and homeowners are left to navigate this mess as they search for credit to buy and refinance homes this year. Here’s wishing them ‘Good luck!’”