mortgages

It’s 2009 : Mortgage Loan Limits Fall As Scheduled In "High-Cost" American Cities

January 2, 2009

As part of the Economic Stimulus Act of 2008 , Congress authorized a conforming loan limit increase in “high-cost” areas around the country. Versus the national conforming loan limit of $417,000, for example, a Manhattan home buyer could secure a 2008 mortgage for $725,000 and still be within “conforming” guidelines. Effective January 1, however, those limits rolled back.

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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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Simple Real Estate Definitions : Amortization

November 18, 2008

In the widest definition possible, amortization (pronounced: am-ohr-tih-ZAY-shun) is the scheduled process by which a loan’s principal balance pays down to $0. The opposite of an amortizing loan is an interest only loan for which there is no scheduled principal repayment schedule. With respect to mortgages, amortization is what determines how much of a monthly […]

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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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Planning To Buy A Home In 2009? Expect A Tougher Mortgage Road Ahead.

November 15, 2008

The Federal Reserve confirmed what most of us already knew — getting qualified for a “prime mortgage” is increasingly more difficult. In a quarterly survey of 84 banks, 75 percent of respondent banks tightened mortgage guidelines over the last 3 months for the most qualified of home loan applicants. “Prime” is a vague term when […]

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Simple Real Estate Definitions : Amortization

October 22, 2008

In the widest definition possible, amortization (pronounced: am-ohr-tih-ZAY-shun) is the scheduled process by which a loan’s principal balance pays down to $0. The opposite of an amortizing loan is an interest only loan for which there is no scheduled principal repayment schedule. With respect to mortgages, amortization is what determines how much of a monthly payment goes […]

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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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If My Mortgage Lender Fails, Are My Payments Still Due?

September 26, 2008

Thursday, federal regulators seized mortgage lender Washington Mutual.   The Seattle-based thrift became the third “big name” lender to close its doors since July, joining IndyMac and Lehman Brothers. In 2007, these 3 lenders represented about 10 percent of the mortgage market and their subsequent failures are confusing American homeowners. The most prevalent question: If my mortgage […]

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FHA Makes Homeownership More Affordable — But Not Until October 1, 2008

September 24, 2008

Earlier this year — and for the first time in its history — the FHA changed its funding fees and mortgage insurance structure. Effective October 1, 2008, it’s repealing those changes. Partly to keep FHA home loans affordable, and partly to comply with new laws, the FHA is rolling back its up-front fees and ongoing mortgage […]

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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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Comparing Payback Periods On 15-Year, 20-Year and 30-Year Mortgages

September 12, 2008

On all principal + interest home loans, the first few years of payments include a lot more money going to interest than to principal. This is because mortgage repayment schedules are front-loaded with interest, meaning large-volume principal reduction won’t occur until late in the mortgage’s lifecycle. Comparing products at a 6% mortgage rate, did you know […]

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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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New Mortgage Rules Put Limits On Residential Real Estate Investors

September 10, 2008

In its last act as a semi-independent company, Fannie Mae altered mortgage guidelines for real estate investors last Friday. It was Fannie’s 22nd update this year. The first part of the guideline change limits the number of properties owned by any one person. Fannie Mae will now decline any mortgage application for a second home or […]

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Looking Back And Looking Ahead : September 8, 2008

September 8, 2008

Mortgage markets improved last week on Hurricane Gustav’s less-than-expected damages and a strengthening U.S. dollar. Even factoring in Friday’s 0.125 percent run-up on most mortgage products, rates improved overall. It’s the second straight week in which mortgage rates improved. But for all the news that we could dissect from last week, it should be the news […]

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The Mortgage Market’s Abnormal Reaction To July’s Producer Price Index Reading

August 20, 2008

The Producer Price Index is a business inflation meter and it’s now up 9.8 percent annually. This is a huge number for PPI and represents the highest year-over-year rate of inflation since 1981. Normally, blowout inflation like this would be terrible for mortgage rates but mortgage markets are actually improved since Tuesday’s data release. Usually, a rocketing PPI would […]

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n Pictures : Mortgage Guidelines Get Tough For All Borrower Types — Quickly

August 13, 2008

It’s not your imagination — getting approved for a home loan is becoming increasingly more difficult. Taken from the Federal Reserve’s quarterly survey of 84 banks, it illustrates the changing dynamic of mortgage guidelines. Most notable is the steep curve for “prime” mortgages, a type of home loan given to applicants exhibiting: A well-documented credit […]

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