loan

You’re Not Immune — No Matter What Your Credit Profile Looks Like

May 7, 2008

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions. One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening. The chart at right is from the April 2008 survey and it illustrates what we already know: It’s getting tougher and tougher to […]

Read the full article →

Why It Doesn’t Matter What The Federal Reserve Does Today

April 30, 2008

The Federal Open Market Committee adjourns from its two-day meeting at 2:15 P.M. ET today. Markets expect the Fed to lower the Fed Funds Rate by 0.250 percent in its press release but it’s not what the Fed does that matters to economy right now. It’s what the Fed says. If the Fed states that […]

Read the full article →

Before Co-Signing For A Mortgage, Consider The Deeper Implications

April 22, 2008

As mortgage lenders limit how much money they will lend and to whom, co-signing home loans is growing in popularity. “Co-signing” a home loan is when a third-party — usually a parent or relative — promises to make repayments to the bank in the event that the borrower falls behind on his obligations. Money experts usually […]

Read the full article →

Basic Credit Scoring Tips For A Better Mortgage Rate

April 17, 2008

Credit scoring is becoming more important to mortgage pricing so now would be a terrific time to brush up on your credit education. If you understand how the system works, after all, you can make it work to your advantage. One terrific place to start your research is at myFICO.com. Published by credit scoring powerhouse […]

Read the full article →

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 […]

Read the full article →

A Simple Explanation Of “Credit Crunch”

April 8, 2008

News sources like to use the term “credit crunch” in describing the U.S. economy, but they rarely define what a credit crunch is and what it means for Americans. A credit crunch is when the amount of available loans suddenly decreases over a very short period of time. Usually, it follows a period of lending which, […]

Read the full article →

Simple Real Estate Definitions: Discount Points

April 2, 2008

More commonly called “points”, discount points are up-front fees charged by mortgage lenders in exchange for lower mortgage rates. The cost of one point is one percent on the loan size and discount points appear on Line 802 of the HUD-1 Settlement Statement. As a general guideline, each point paid lowers a mortgage lender’s offered interest […]

Read the full article →

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 […]

Read the full article →

In 2008, Home Loans Are One Day Cheap And The Next Day Expensive

March 28, 2008

When mortgage rates change rapidly, it’s a fiscal challenge to shop for a home and/or home loan. Lately, mortgage rates have been especially volatile, mirroring the wild moves of the stock market. Here’s how up-and-down stock markets have been in 2008: Through last week, the S&P 500 Index changed more than 1 percent per day on […]

Read the full article →

Re-Approve Your Pre-Approval

March 20, 2008

Since December 2007, mortgage lending guidelines have changed very quickly and often without notice. Some of the more well-known changes include: Broad restrictions on stated income home loans Broad restrictions on 100 percent financing “Risk-based fees” for credit scores under 740 Some of the lesser-known restrictions relate to property type and occupancy status as well as […]

Read the full article →

Looking Back And Looking Ahead : March 17, 2008

March 17, 2008

Mortgage rates fell last week on growing evidence of a recession, but far fewer Americans were eligible to take advantage. Mortgage lenders continue to reduce product menus and that is leaving homeowners with fewer mortgage financing options than before. As an added hurdle, Fannie Mae and Freddie Mac recently added “risk-based” fees on all conforming […]

Read the full article →

Mortgage Rates Fell But You May Have A Higher Rate To Pay

March 13, 2008

When mortgages began to sour last Fall, Fannie Mae and Freddie Mac instituted “loan-level pricing adjustments”. The concept is basic: For mortgage applicants with less-than-ideal credit profiles, mortgage pricing is adjusted to compensate for the added risks. It’s still a conforming loan, but with adjustments. Effective March 6, though, Fannie and Freddie’s definition of “high-risk” […]

Read the full article →

The Right Question: “How Much Do I Want To Spend On Housing Each Month?”

March 6, 2008

One of the most popular questions that home buyers ask real estate and mortgage professionals is “How much home can I afford?” It’s a normal question to ask, but it’s not the most effective way to plan your finances. Banks will almost always approve you for a home loan in excess of your household budget. […]

Read the full article →

Spreadsheet Formulas: Calculating Home Payments

February 22, 2008

For a lot of homebuyers, calculating a prospective mortgage payment is an online experience.  For example, a search on Google for “mortgage calculator” returns 39 million options. Some people, however, prefer to plan on their local hard drive using spreadsheets.  For these people, the hardest part is often figuring out what formulas to use. Interest Only […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

← Previous Entries

Next Entries →