homeowners

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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Mortgage Insurance Rates Skyrocket (For Homeowners That Still Qualify)

August 21, 2008

Private Mortgage Insurance (PMI) is an insurance policy paid to a lender in the event that a homeowner defaults on his home loan. With the growing number of mortgage defaults nationwide, mortgage insurers are finding their balance sheets under attack and their revenues in the red. So far this year, mortgage insurers have paid out $6 […]

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Good News For Homeowners : Housing Starts Tumble In July

August 19, 2008

Housing Starts measure the number of new housing “units” on which construction has started and in July, Housing Starts fell to its lowest levels since March 1991. For homeowners, this is a welcome bit of good news because as fewer homes are built, there is less inventory from which home buyers can choose. With fewer homes […]

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Why It May Be Prudent To Lock Your Mortgage Rate Before 2:15 P.M. ET Today

August 5, 2008

The Federal Open Market Committee meets today and is widely expected to hold the Federal Funds Rate at 2.000 percent. This does not mean that mortgage rates will stay flat, too, however. The Fed Funds Rate is a different type of interest rate from the ones charged to American homeowners for their mortgages. The Fed […]

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Looking Back And Looking Ahead : August 4, 2008

August 4, 2008

In a week in which stock markets moved 1 percent or more on four separate days, mortgage markets displayed a relative calmness that helped pull rates lower. It was the second consecutive week that mortgage rates improved. Last week’s biggest story came Monday when the housing bill was passed into law.  The new law provides lifelines […]

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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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Mortgage Rates Spike On Highest Cost Of Living Index Since 1991

July 17, 2008

Another day, another piece of inflationary data. June’s Consumer Price Index showed a 5 percent year-over-year increase in what is now the largest annual Cost of Living increase for Americans in 17 years. This is bad news for both home buyers and homeowners in want of a new mortgage because rising costs are inflationary and […]

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Fannie And Freddie Are Yesterday’s News, Says The Market

July 15, 2008

Mortgage markets have turned their attention back to the U.S. economy this morning, causing yesterday’s rate improvements to unwind a bit. Rates had fallen Monday after the Federal Reserve and U.S. Treasury’s joint announcement in support of Fannie Mae and Freddie Mac.  Today, it’s the data that is taking center stage. Most notably, the U.S. […]

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Are Sub-Prime Mortgage Problems Finally On Their Way Out?

July 2, 2008

In the summer of 2005, sub-prime mortgage lending was at its peak.  Rates were relatively low and lending guidelines were relatively loose. At the time, the “standard” sub-prime mortgage product was the 3/27 ARM. The 3/27 had a few basic traits: A fixed, 3-year “starter rate” Every six months thereafter, the mortgage rate changed The […]

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What To Do If Your HELOC Is Reduced By The Bank

June 27, 2008

A Home Equity Line of Credit is bank product that grants homeowners access to the equity in their home at anytime, usually using checks. Often called a HELOC, these equity-based credit lines function very much like credit cards: The rate is adjustable, tied to Prime Rate There is a minimum monthly payment There is a pre-set […]

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Simple Real Estate Definitions: PITI

June 24, 2008

Most homeowners make four housing-related payments each month: Principal on a mortgage Interest on a mortgage Taxes on the real estate owned Insurance for the real estate owned Collectively, these payments are known by the acronym PITI but don’t let it fool you — a homeowner’s monthly expenses are still called PITI even if one or […]

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Cancel Your PMI Before It’s Too Late To Cancel It

June 12, 2008

When homeowners borrow more than 80 percent of a home’s value, mortgage lenders often require a corresponding insurance policy called Private Mortgage Insurance. PMI provides a cash payment to lenders in the event of a homeowner defaults. But because PMI policies are designed for high LTV loans only, they usually contain cancellation options for when home equity […]

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How We Know That Prime Rate Will Likely Rise Before It Falls

May 22, 2008

Three weeks after adjourning, Federal Reserve officials release detailed minutes of their most recent meeting. The April 30, 2008 minutes were released Wednesday and it affirmed traders’ beliefs that the Federal Reserve will not be in a hurry to lower the Fed Funds Rate again. This is bad news for two groups of people whose […]

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Simple Real Estate Definitions : Loan-to-Value

May 21, 2008

Loan-to-value is a math formula that represents the relationship between how much a home is “worth” and how much money is borrowed against it. Loan-to-value is often abbreviated as “LTV” and is one of the many factors that lenders consider when underwriting a mortgage application. The math formula is straightforward: In the LTV equation, Loan […]

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Smart Money Magazine Says Renters Have Lame Excuses

May 16, 2008

It’s not often that a mainstream media publication taunts renters into buying homes, but that’s exactly what Smart Money does in its latest issue. The Smart Money Web site “lead-in” reads 5 (Lame) Excuses for Not Buying a Home.  That’s a forceful title! It’s unfortunate that renters could feel antagonized by the author’s tone because […]

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How The 84,000 Parts Of Inflation Impact Mortgage Rates

May 12, 2008

When the everyday “Cost of Living” increases, our dollars don’t go as far as they used to.  Economists call this inflation. One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a “basket”.  If the overall price is higher, then the economy is experiencing inflation. If a […]

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Mortgage Lenders Get “Once Bitten, Twice Shy” And Impose New Restrictions

April 11, 2008

Getting approved for a conforming home loan is now tougher than before. Again. As home loan defaults mount, government-sponsored financier Fannie Mae has imposed new guidelines on what it will lend and to whom, highlighting the need for a strong credit profile and a downpayment. In other words, Fannie Mae is outright declining mortgage applicants […]

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FHA Home Loans Emerge As A Cheap Alternative For Low-Credit Score Homeowners

April 1, 2008

FHA stands for Federal Housing Administration, a by-product of the National Housing Act of 1934 and now a sub-group within the U.S. Department of Housing and Urban Development (HUD). The FHA is not a lender nor does it build homes. The FHA exists to insure lenders against loss in the event that a homeowner defaults […]

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Looking Back And Looking Ahead : March 24, 2008

March 24, 2008

Conforming mortgage rates edged slightly lower for the second week in a row. Mortgage rates fell for two main reasons: The Federal Reserve offered fiscal support for troubled mortgage-backed securities A government group gave Fannie Mae and Freddie Mac permission to lend more of money to American homeowners These two actions combined to make mortgage-backed securities safer […]

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