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consumer education: A Few Reasons Why Now May Be The Least Expensive And Easiest Time To "Go FHA" - 04/15/09 01:13 AM
Shopping for low mortgage rates is a game of luck.
Some days, mortgage rates are favorable. Other days, they're not. And while you can sometimes make an educated guess about where rates might be headed, you're not always going to guess right.
Even the experts get it wrong more often than they'd like.
But some parts of the rate shopping process can be predicted and one of them is the future of mortgage guidelines.
In general, the more often homeowners default on their respective mortgages, the harder it is for future mortgage applicants to be approved.
This is why "now" may … (1 comments)
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consumer education: What's Ahead For Mortgage Rates This Week : April 13, 2009 - 04/13/09 03:52 PM
For the second week in a row, mortgage markets started the week strong and then ended with a fizzle. In the holiday-shortened week, rates were exactly flat overall.
There wasn't much economic data to move rates last week, incidentally. The market's up-and-down action was largely based on two events:
A reputable analyst said banking-sector optimism may be premature Wells Fargo reported a record $3 billion in first quarter earnings It was the first item that dropped rates Monday and Tuesday; the second item, in part, led them back up.
This week, data returns.
Tuesday, we'll get a look at Retail Sales. Because consumer spending accounts for … (0 comments)
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consumer education: How To Know If Your Adjustable Rate Mortgage Will Adjust Lower - 04/09/09 10:31 AM
When conforming mortgages adjust, they're often tied to an interest rate index called LIBOR.
LIBOR is an acronym for London Interbank Offered Rate. But what LIBOR stands for isn't as important as the role it plays.
LIBOR is an interest rate at which banks borrow money from each other. Therefore, when banks feel the banking system as a whole is unsafe, LIBOR rises to compensate.
It's why LIBOR spiked last October after Lehman Brothers failed. Financial institutions wondered what other institutions would fail and that added risk to the system.
Since October, however, and because of massive government interventions worldwide, … (0 comments)
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consumer education: April 15 Is 1 Week Away And 27 Million Taxpayers Have Yet To File. If You're One Of Them, Here Are Some Tax Tips - 04/08/09 09:43 AM
There are 138 million taxpayers in the United States and, according to the IRS, 20 percent of them file their taxes within 7 days of April 15. In a holiday-shortened week, that means that 27 million people had better get a move on.
And while a portion of this year's last-minute filers will file with storefront operations like Liberty Tax Service or H&R Block, many others will self-prepare with the help of tax software from TurboTax or TaxCut.
If you're a member of the do-it-yourself crowd, consider taking a review of this year's tax law changes before starting your returns. The stimulus package … (0 comments)
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consumer education: How To Know If You're Eligible For A Making Home Affordable Refinance - 04/07/09 07:55 PM
April 4, 2009, marked the official start of the Making Home Affordable refinance program.
Expected to help 5 million homeowners, the Making Home Affordable program "looks the other way" with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.
Not every homeowner is eligible for a Making Home Affordable refinance, however. There are 3 basic criteria that must be met.
First, your existing home loan must be backed by either Fannie Mae or Freddie Mac. Thankfully, both companies provide online lookup services. Start with the Fannie Mae site because Fannie has a … (0 comments)
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consumer education: Can You Guess What Percentage Of Mortgages Are Still Paid On-Time? - 03/03/09 09:28 AM
Mortgage delinquencies are on the rise nationwide, but the news may not be as bad as it appears at first glance.
Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.
Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent.
Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don't seem nearly as menacing.
Consider: In the last quarter of … (1 comments)
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consumer education: What's Ahead For Mortgage Rates This Week : March 2, 2009 - 03/02/09 01:50 PM
Mortgage markets worsened last week, taking interest rates with them.
A steady drip of sour economic news plus concerns about the banking system outmuscled Fed Chairman Ben Bernanke's congressional testimony in which he said the recession would likely end later this year.
Overall, mortgage rates have risen in 9 of the last 12 trading days.
This week, it's unclear in what direction mortgage rates will go. However, it won't be because of a lack of action.
The week starts with the 8:30 A.M. ET release of the Personal Spending report, a closely-monitored report that should make a broad market impact. Economists expect … (0 comments)
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consumer education: The Key Fact Missing From Today's Existing Home Sales Headlines - 02/26/09 10:57 AM
In reading the headlines this morning, you'd think that last month's Existing Home Sales figure signaled more trouble ahead for the housing market.
Quite the contrary.
Beyond the attention-grabbing headlines is the real story; the one that shows -- once again -- that housing market fundaments are coming back into balance.
As home values tick lower, it appears, value buyers are stepping in and snapping up supply. It's true that the number of homes sold fell to its lowest levels in 12 years, but we can't ignore the fact that the number of homes available to buy fell, too.
Banks have put the … (1 comments)
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consumer education: The Relative Cost Of Owning Versus Renting Is Back At Historical Norms - 02/25/09 10:53 AM
One popular housing theory is that -- before a bona fide housing recovery can begin -- the cost of owning a home versus renting one must return to historical levels.
If that belief is a truth, a national return to rising home prices may be in store for 2009.
Falling home prices coupled with falling mortgage rates, too, have dropped the relative, after-tax cost of owning a home to 125% of the cost of renting a home.
This is the exact 18-year historical average and not since 2001 has the gap been this small.
As reported by the Wall Street Journal, though, the … (0 comments)
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consumer education: County-By-County: The 2009 "High-Cost" Conforming Loan Limits - 02/24/09 03:07 PM
As part of the stimulus package passed last week, Congress authorized a temporary increase to conforming loan limits in certain high-cost parts of the country.
"High cost" is defined by a regions' median sales price.
With the temporary increase, a greater share of Americans can now qualify for Fannie Mae- and Freddie Mac-backed loans, usually the least expensive source for mortgage money.
Higher loan limits can be good for the housing market and the broader economy for two reasons:
Cheaper money can spur new home demand, supporting home values. Higher loan limits render more homeowners refinance-eligible, freeing up cash for spending, saving, or investing. … (0 comments)
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consumer education: What's Ahead For Mortgage Rates This Week : February 23, 2009 - 02/23/09 01:15 PM
Traders brushed off Tuesday and Wednesday's passage of the American Recovery and Reinvestment Act and the President's mortgage relief plan, respectively.
It showed how unsure markets remain about the stimulus package and its probable impact on the economy.
As a result, mortgage markets worsened last week, albeit slightly. It marked the 4th week out of five in which mortgage rates rose.
However, there were a few notable new items for American homeowners and home buyers last week:
The signed-into-law stimulus package includes a first-time home buyer tax credit Additional banks joined the "no foreclosure" movement Fannie Mae re-opened guidelines so that real estate investors … (0 comments)
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consumer education: What The Homeowner Affordability and Stability Plan Doesn't Mean To Homeowners - 02/20/09 12:40 PM
In Mesa, Arizona, Wednesday, the President presented the Homeowner Affordability and Stability plan, a multi-pronged effort to support the housing market.
The story made the front page of nearly every newspaper in the country.
The president's plan is sweeping:
Incent mortgage servicers to work with at-risk homeowners before delinquency starts Let homeowners with good credit but little equity refinance to today's low rates Fund Fannie Mae and Freddie Mac to support mortgage markets It's a broad plan with many positive angles, but for now, we can't forget that it's just a plan. Although the White House shapes and influences housing policy, Congress, Loan … (0 comments)
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consumer education: Mandatory FHA Loan Fees Increase for Some, Fall for Others - 07/21/08 10:03 AM
The FHA risk-based pricing matrix For the first time in its history, the FHA changed its funding fees and mortgage insurance structure this week. FHA-insured home loans are now subject to a risk-based pricing adjustment, as shown by the table above.
Because of risk-based pricing, FHA home loans are now more expensive for borrowers with less-than-ideal credit profiles, and less expensive borrowers with perfect ones.
Prior to the changes, most FHA borrowers paid an up-front fee of 1.500 percent, plus on-going annual mortgage insurance payments equal to one-half-percent on the amount borrowed.
FHA-insured mortgages have grown in popularity this year … (0 comments)
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consumer education: You've Been Pre-Approved -- Now Get RE-Approved - 12/19/07 10:21 AM
Even if you've been recently pre-qualified (or pre-approved) for a mortgage, it may be prudent to get "re-approved". The mortgage industry is changing quickly; being prepared beats the alternative.
Recently, mortgage lenders have made adjustments in what they will lend, and to whom. This shrinks the pool of eligible mortgage borrowers.
Some of these guideline changes include:
Low or no downpayment loans may require more income and/or assetsNo income verification (i.e. stated) loans may not be availableHigher credit scores may be necessary to qualify In addition to tighter guidelines, many mortgage lenders are now required to pass higher fees and/or mortgage … (3 comments)
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consumer education: How to Squeeze Extra Tax Deductions from Your Mortgage In 2007 - 12/18/07 04:55 PM
For most Americans (but not all), mortgage interest is tax-deductible in the year in which it was paid.
With some advance planning, therefore, a homeowner can increase his 2007 tax deductions by paying additional mortgage interest while the calendar still reads 2007.
The key is to make the mortgage payment due January 2008 a few days early.
Because mortgage interest is paid in arrears, a mortgage payment due January 1, 2008 accounts for interest that accumulated throughout December 2007.
Rather than make January's mortgage payment on January 1, 2008, a homeowner can send payment this week or next -- … (1 comments)
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consumer education: Mortgage Rates are Going Up -- But Not for the Reason You'd Expect - 12/13/07 12:16 PM
Conforming mortgages are getting more expensive -- but not because of mortgage rates.
To protect against further weakness in the housing sector, Fannie Mae and Freddie Mac are instituting "delivery fees" on all conforming mortgages, effective March 2008.
Fannie Mae's Adverse Market Delivery Charge and Freddie Mac's Market Condition Delivery Fee will add a one-time, quarter-percent fee to every home loan purchased from mortgage originators.
This means that on a $100,000 conforming mortgage, the borrower could:
Pay a $250 fee out-of-pocketAccept a slightly higher interest rate that "finances in" the higher fee Because the fee is in percentage terms, as the loan size increases, … (7 comments)
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consumer education: Why Credit Card Holders May Benefit from The Fed's Actions Today - 12/11/07 12:28 PM
The Federal Open Market Committee meets today and will release a public statement at 2:15 P.M. ET.
It is widely expected that the FOMC will lower the Fed Funds Rate by at least 0.250%.
When the FOMC lowers the Fed Funds Rate, it is trying to "loosen" credit for American businesses and consumers. When credit is "looser", it is cheaper, and easier to procure.
Looser credit promotes spending and propels the U.S. economy forward.
By contrast, when the FOMC raises the Fed Funds Rate, it is trying to "tighten" credit which, in turn, slows down the U.S. economy.
The … (2 comments)
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consumer education: The Week in Review (December 10, 2007): What to Watch For - 12/10/07 02:13 PM
Among lingering doubts about housing and credit markets, and a general uncertainty about the U.S. economy, the mortgage bond market tanked towards the latter part of last week.
As investors moved away from mortgage bonds, mortgage rates forcefully bounced off their two-year lows.
A major factor behind last week's run-up in rates is the market expectation for Tuesday's Federal Open Market Committee meeting.
Those expectations sharply shifted after Friday's strong employment report from the Census Bureau and dragged rates along with them.
Prior to the jobs report, markets were expecting that the FOMC would lower the Fed Funds Rate … (1 comments)
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consumer education: Appraisals are As Much Art as Science - 10/25/07 06:26 AM
The number of home valuation websites continues to grow. A simple Google search for "How much is my home worth?" shows 118,000 results and seems to get larger month after month.
For home sellers, these programs can give a false sense of security (or insecurity!) about at what price a home should be listed for sale.
Computer programs can never replace the role of licensed home appraisers and that's because valuing a home is not as simple as providing some inputs (traits) in order to get some output (value). There is a "fuzzy logic" that computer programs just can't produce in the … (7 comments)
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consumer education: How the Stock Market is Directing Traffic for Mortgage Rates - 10/24/07 02:22 AM
As we talked about Monday, the stock market appears to be directing traffic for the bond market.
Monday was a flat day for stocks, and it was a flat day for bonds, too. Mortgage rates idled.
Tuesday, with no economic data hitting the wires, market participants looked for direction elsewhere.
Some likely candidates include:
The price of oil. If oil prices continue to rise, it will place inflationary pressure on businesses and consumers. That is bad for mortgage rates.The value of the dollar. A recent rally in the dollar should attract foreign investors to the U.S. markets. That is … (1 comments)
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Ilyce N. Powell, CMPS™ - Certified Mortgage Planning Specialist
Baltimore,
MD
More about me…
AmeriSave Mortgage Corp./ United First Financial
Address: Lending in All 50 States + DC, Eliminating Debt and Building Wealth in United States and Canada
Office Phone: (866) 814-2153 x 7103
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