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6 Things To Avoid While Waiting For A Mortgage Approval

February 21, 2008

When buying a home, there are two stages in the home loan approval process. Stage 1 starts when a homebuyer submits a mortgage application to his loan officer for a pre-approval. A pre-approval is a “walk-through” mortgage approval that says — at a given purchase price and downpayment amount — the home loan application will […]

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Tuesday May Have Marked The Unofficial End Of Low Mortgage Rates

February 20, 2008

For homebuyers and homeowners expecting low mortgage rates this week, Tuesday marked the unofficial end to basement 30-year fixed mortgage rates. According to the market analysts at BestInfo, Inc., the 30-year fixed rate measured its largest one-day movement in more than 10 years Tuesday. Nationally, 30-year fixed mortgage rates increased 0.375%. Here is the “real […]

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Looking Back And Looking Ahead : February 19, 2008

February 19, 2008

Early last week, mortgage rates rose on strong consumer spending and Warren Buffett’s offer to assume $800 billion in debt from three major bond insurers. Both reports were interpreted as signs of long-term strength in the economy, leading mortgage rates higher for long-term products such as the 20- and 30-year fixed rate mortgage. Meanwhile, Fed […]

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The Effect Of Fed Funds Rate Cuts On Mortgage Rates

February 15, 2008

As mortgage rates lurch higher this week, we have additional proof that cuts to the Fed Funds Rate do not lead to cuts in mortgage rates. Since the Federal Reserve’s surprise rate cut January 22, 2008: The Fed Funds Rate is lower by 1.250% The 30-year fixed rate mortgage is higher by approximately 0.750% Mortgage […]

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What The New Conforming Loan Limits May Mean To You

February 14, 2008

The $168 billion economic stimulus plan signed Wednesday includes a temporary increase to conforming loan limits in some parts of the country. Currently, many homeowners whose loans exceed $417,000 are paying higher interest rates because their loans are not securitized the way that smaller loans are. The loan limit increase is intended to make housing more […]

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How Economic Stimulus Impacts Home Financing

February 13, 2008

President Bush is expected to sign the economic stimulus package today. The package includes tax rebates and incentives for business and its purpose is to jumpstart a stalling U.S. economy. If the package is deemed “effective” by Wall Street investors, we should expect the stock market to rally on the prospects of business growth. The […]

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Planning For A “Quick Close”? Now May Not Be A Good Time.

February 12, 2008

On the backs of surging purchase activity across the country and low mortgage rates, home loan applications have risen to a near four-year high. For people with mortgage applications in process, some patience may be required. In 2006 and 2007, mortgage volume slowed nationwide.  Narrowing mortgage guidelines restricted the number of eligible borrowers and rising […]

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Looking Back And Looking Ahead : February 11, 2008

February 11, 2008

Mortgage markets are conflicted about the U.S. economy and the confusion is impacting home buyers. If you’ve recently tried to lock a mortgage rate, you’ve probably experienced it personally. On one hand, reports of plunging sales suggest that the economy is slowing more quickly than expected. This is recessionary and tends to be good for […]

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Are You Inadvertently Merging Your Credit Score With A Stranger?

February 8, 2008

A 2004 study showed that 4 out of 5 credit reports contained at least one error. The errors were of various types with different implications.  A quarter of the errors, for example, were of the “serious” nature; errors that could lead to a credit denial because of a false-reporting delinquency or collection. A much larger […]

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Where Presidential Candidates Stand On Matters Of Money

February 7, 2008

In an election year, voting for a presidential candidate can be a lot like buying a home. Both require a fair amount of analysis but — in the end — the decision is still highly emotional. Using Bankrate.com’s side-by-side candidate comparisons, some of that emotion could be replaced by fact. In a gridded format, candidates are […]

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What’s Your After-Tax Mortgage Rate?

February 6, 2008

Many homeowners are entitled to two major tax deductions — one for annual interest paid on a home loan, and another for real estate tax bills paid to government. Calculating your approximate tax credit is basic: Add mortgage interest paid and real estate taxes paid together Find your marginal tax rate Multiple your tax bracket […]

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Help Your Home Emotionally Connect To Buyers

February 5, 2008

The end of the Super Bowl kicks off the Real Estate Spring Buying Season. As home sellers should prepare for the season’s upcoming homebuyers, they could do worse than to watch this four-minute home staging video from Barbara Corcoran. Barbara offer simple steps that “won’t cost you a lot of money but could make a […]

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Looking Back And Looking Ahead : February 4, 2008

February 4, 2008

We entered the New Year uncertain of the country’s economic future. With January over, it’s a little more clear. Last week’s data and events helped firm expectations. In the near-term, we can expect weakness: The economy is shedding jobs Consumer sentiment is low Home sales continue to slump nationally In the intermediate-term, however, the picture […]

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Making English Out Of Fed-Speak (January 2008 Edition)

January 31, 2008

The Fed lowered the Fed Funds Rate by 0.500% to 3.000% yesterday.  The move was widely anticipated and so Wall Street’s reaction was muted. Because it is tied to the Fed Funds Rate, Prime Rate also fell by 0.500% yesterday.  Holders of home equity lines of credit and credit card debt benefited from the change […]

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History Is A Teacher: Cuts To The Fed Funds Rate Lead To Mortgage Rate Hikes

January 30, 2008

When the Federal Open Market Committee adjourns from its two-day meeting today, it is widely expected to lower the Fed Funds Rate. This does not mean that mortgage rates will fall. In fact, using history as an indicator, we should expect mortgage rates to rise if the Fed Funds Rate falls. Remember: The Fed Funds […]

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Homeowners Rejoice! New Homes Sales Data Is Weak.

January 29, 2008

If you only read headlines this past week, you may have missed two very important points. The first story relates to Housing Starts.  Housing Starts measure the number of new homes entering the construction phase.  The headline blared “Housing starts plunge to 16-year low“. If you are a homeowner, this is terrific news. Because home […]

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The Week In Review (January 28, 2008) : What To Watch For

January 28, 2008

Mortgage rates change from day-to-day, but last week’s volatility was a record-breaker. After drooping through Tuesday and then skyrocketing Wednesday and Thursday, mortgage rates retreated slightly on Friday. By weeks’ end, rates were at their same levels from mid-December. This is in contrast to Tuesday, just after the Fed’s rate cut and before the stock […]

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Real Estate Term : Negative Amortization Home Loan

January 25, 2008

(Pronounced: NEGH-ah-tive am-ohr-tih-ZAY-shun) Negative amortization is the process by which a loan’s principal balance increases on a month-over-month basis. This is in contrast to a “typical” amortization schedule in which the principal balance decreases. Negative amortization is an optional feature on some home loans. These mortgages are usually referred to by the brand names “Option […]

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How The Stock Market Rally Was Terrible For Mortgage Rates

January 24, 2008

The Dow Jones Industrial Average surged 631.86 points in the last three hours of trading yesterday as traders piled into equities. Fueling the rally?  The bond market. For as much as stocks gained today, bonds lost.  Including mortgage bonds.  The dramatic sell-off created a huge swing in mortgage rates and erased nearly all of 2008’s rate improvements. […]

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It’s A Good Day To Have Your Mortgage Adjust

January 23, 2008

When the Federal Reserve lowered the Fed Funds Rate by 0.75% yesterday, it was in response to economic weakness that mounted since its last meeting December 11, 2007. By contrast, the mortgage markets meet every day. Because of this, mortgage rates had already “priced in” the weakness to which the Fed was reacting. This is […]

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