conforming

Conforming Fixed Rate Mortgages Are Now Priced Better Than Comparable ARMs

December 11, 2008

It’s the age-old question for home buyers in need of a mortgage: Which is better: Fixed or ARM? Historically, the answer has hinged on a homebuyer’s desire to meet one of two mutually-exclusive mortgage financing goals: Get low mortgage payments for better cash flow Get long-term payment stability for better budget planning But because of government intervention and lingering questions about the economy, fixed-rate mortgages are now pricing cheaper than their adjustable-rate counterparts.

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The 2009 FHA Loan Limits For Every U.S. County

November 19, 2008

In March 2008, HUD temporarily raised FHA loan limits around the country. Effective January 1, 2009, FHA loan limits revert. FHA home loans are mortgages made by private lenders and insured by the federal government. Historically, FHA home loans have been “easier” for which to qualify than their conforming mortgage counterparts and, therefore, tend to […]

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The 2009 FHA Loan Limits For Every U.S. County

November 18, 2008

In March 2008, HUD temporarily raised FHA loan limits around the country. Effective January 1, 2009, FHA loan limits revert

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How Big Can A Mortgage Be And Not Be Considered "Jumbo"?

November 15, 2008

For the 4th consecutive year, the government has set the conforming mortgage loan size limit at $417,000. A conforming mortgage is one that, quite literally, conforms to the mortgage guidelines set forth by Fannie Mae or Freddie Mac. The 2009 conforming loan limits, as released by the government, are: 1-unit properties : $417,000 2-unit properties […]

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As LIBOR Falls, Homeowners With Adjusting ARMs Get Lower Rates

November 15, 2008

The interest rate against which adjustable-rate mortgages change is falling — evidence that the global banking system is starting to stabilize. On any adjustable-rate mortgage, the initial “starter rate” remains fixed for some period of time, and then adjusts according to some pre-determined rules. For a conforming mortgage, an ARM will typically adjust once per […]

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Effective December 13, 2008, Some Conforming Mortgages Will Require Larger Downpayments To Get Approved

October 21, 2008

In an effort to limit risky borrower behavior, Fannie Mae announced a new round of mortgage guideline changes last week. Unlike previous its previous 20-plus updates that raised income requirements and minimum credit scores (among other changes), Fannie’s latest guideline tweaks focus on the value of its underlying mortgage assets — home equity. Effective December […]

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Why Homeowners With Adjusting Adjustable Rate Mortgages May Be In For A Surprise

October 15, 2008

For homeowners with soon-to-adjust adjustable rate mortgages, the recent banking turmoil worldwide may lead to budgetary pain. This is because most conforming ARMs made since 2003 are based on a borrowing cost called LIBOR and LIBOR is up an uncharacteristic 2 percent since September. LIBOR stands for London Interbank Offered Rate and is the rate at which […]

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Some People Were Thrilled To Watch The Stock Market Fall Below 10,000

October 7, 2008

Monday, the Dow Jones Industrial Average closed below the psychologically-important 10,000 level for the first time since 2004. Despite the milestone-marker breach, however, there was a large group of Americans with reason to cheer.  As stocks sold off, mortgage markets rallied to the benefit of home buyers and mortgage rates shoppers everywhere. Conforming mortgages rates […]

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Fannie Mae Halves One Of Its Mandatory Loan Fees

October 3, 2008

In an effort to provide “the most market support possible”, Fannie Mae is cutting one of its mandatory loan fees by 0.250 percent, effective immediately. Fannie Mae introduced the Adverse Market Delivery Charge in December 2007 to offset foreclosure and delinquency losses.  The initial fee was a quarter-percent of the amount borrowed. Then, as market conditions […]

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How Mortgage Rates Responded To The “No” Vote On The Bailout Bill

September 30, 2008

Monday afternoon, the U.S. House of Representatives defeated the $700 billion “Bailout Bill”, surprising Wall Street and the world. The Dow Jones Industrial Average responded by falling 777.68 points — its largest one-day loss in history and, this morning, every newspaper in America is covering the story as front page news. Lost in the coverage, […]

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What Happens To Mortgage Rates When Crude Oil Adds $25 In One Day

September 23, 2008

Crude oil prices jumped $25 at one point Monday, ending the day up by 16 percent. This is an unwelcome development for home buyers because the same market forces that pushed up oil prices had a similar impact on mortgage rates. It all comes down to the U.S. dollar. Because both crude oil and mortgage-backed […]

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Looking Back And Looking Ahead : September 22, 2008

September 22, 2008

In a historic week for American Finance, mortgage rates rose considerably, reversing a 3-week trend through which rates had fallen. The U.S. Treasury is the biggest reason why most conforming mortgage rates increased by a half-percent. Hank Paulson’s government group helped to restore investor confidence that had steadily eroded from concern to fear since July 2007, before […]

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How To Lower Your Mortgage Rate Every Time The Market Dips

September 19, 2008

Getting a great, low mortgage rate is often a combination of luck and preparation. Consider what happened in conforming mortgages this week: Monday, mortgage rates plunged to their lowest levels of the year Tuesday, they bounced back in full Wednesday, they clicked higher by a eighth-percent Thursday, they clicked higher by another eighth-percent And so, […]

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Looking Back And Looking Ahead : September 15, 2008

September 15, 2008

In a week overdone with market-altering news, conforming mortgage rates shed a quarter-percent overall last week.  It was the third straight week in which rates improved. The biggest story, by far, was the government’s takeover of Fannie Mae and Freddie Mac. The two quasi-government agencies were nationalized into bona fide government agencies, converted mortgage-backed debt into risk-free, government […]

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Conforming Loan Limits Set To Decrease In Certain High-Cost Areas

September 11, 2008

Conforming mortgages are limited by loan size, based on “typical” housing costs around the country.  Since 1980, as home prices have increased, so have conforming loan limits. The current conforming limit on a single-unit property is $417,000. Earlier this year, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increase in […]

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Why The Government’s Takeover Of Fannie Mae and Freddie Mac Is Lowering Mortgage Rates

September 9, 2008

When comparing two investments with equal risk, a rational person will choose the investment with a higher rate of return. This behavior is called Risk Aversion and is a basic tenet of personal investing. An off-shoot of Risk Aversion is that a rational person will only invest in an instrument of greater risk if the […]

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Converting Your Primary Residence To An Investment Property? You May Not Qualify For Your Next Mortgage.

August 26, 2008

When a homeowner buys a new home, he has 3 options of what to do with his current residence: Sell the home, paying off the mortgage in full Keep the home as a second/vacation home Convert the home to an investment property The most common action plan is the first one — sell the home and pay […]

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Fannie Mae Increases Its Mandatory Loan Fees For All Borrowers

August 7, 2008

Fannie Mae announced a new risk-based pricing model and additional mortgage delivery fees this week, adding to the cost of buying or refinancing a home. Risk-based pricing was first introduced by Fannie Mae this past April. It added new, mandatory loan fees for high-risk borrowers while rewarding a small group of low-risk borrowers with fee […]

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Changing Mortgage Guidelines Impact Buyers Of Second Homes And Investment Properties

August 1, 2008

Conforming mortgage guidelines are the Home Loan Rule Book, delineating between applicants that approved for a mortgage and those that do not. Effective today, the rule book just got a little bit tougher. According to Fannie Mae, homeowners converting their primary residence into a second home or investment property will be subject to additional underwriting […]

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The New Housing Bill’s Hidden Tax Trap

July 31, 2008

Monday, President Bush signed the Housing and Economic Recovery Act of 2008 into law and the press jumped on the obvious storylines: First-time home buyers get a $7,500 purchase “credit” Conforming loan limits move to $625,000 Delinquent homeowners get a lifeline from the FHA Local governments get federal money for buying and restoring foreclosed homes […]

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