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Mortgage Rates Fall, Extend Record Lows – WSJ.com

Jul 28th 2010

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No Big Surprise, But Mortgage Rates are still at record lows. 30 Year fixed mortgages are at 4.56%, and 15 year fixed rates averaged 4.03%. With the way things are going, I’m beginning to think that mortgage interest rates might stay really low for quite a while. But, I’m usually wrong. I thought interest rates were going to go up after the Fed stopped buying treasury bonds. I was way wrong on that one. It’s nearly august, and Mortgage Interest rates keep dropping.

Mortgage rates fell in the past week, with the average rates on 30- and 15-year fixed-rate mortgages further extending record lows, according to Freddie Mac’s weekly survey.

Rates have been at or near record lows as the Treasury market has rallied amid stock-market volatility, pushing yields lower. Mortgage rates generally track Treasury yields.

The decline over the past few weeks also “echoes the recent signs of weakening confidence in the strength of the economy, particularly the housing and consumer sectors,” said Freddie Chief Economist Frank Nothaft.

The 30-year fixed-rate mortgage averaged 4.56% for the week ended Thursday, down from the prior week’s 4.57% average and 5.2% a year ago. Rates on 15-year fixed-rate mortgages were 4.03%, down from 4.06% and 4.68%, respectively.

Both the 30- and 15-year mortgage rates are at the lowest point since Freddie started tracking them, 1971 and 1991, respectively.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.79%, lower than the prior week’s 3.85% and 4.74% a year earlier. One-year Treasury-indexed ARMs hit a fresh low of 3.7%, down from 3.74% and 4.77%, respectively. That loan type has been followed by Freddie since 1984.

Mortgage Rates Fall, Extend Record Lows – WSJ.com.

Interest Rates

Interest Rates
Lenders Now Have More Wiggle Room to Negotiate Rates?

Jul 20th 2010

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I just read an article on the new your times that claims that even though mortgage interest rates are at all time lows, the margins lenders have to work with are higher than they have been in the past.

A lot of the time lenders will give you one quote when you initially express interest in getting a loan. They hope that you won’t shop around, that you won’t compare their rate with other banks so they can make a bigger commission. But, if you do shop around, and they find out you are going to choose a different lender, then they will cut their fees and give you a better rate.

According to Lending Tree, mortgage lenders have more wiggle room to deal with when it comes to things like being able to sacrifice some potential commissions in order to compete.

According to Cameron Findlay, LendingTree’s chief economist, the difference between the rates lenders are giving consumers and what they are paying investors is much higher than it was back when the recession started, meaning that even while rates seem low, lenders have bigger margins and, therefore, have plenty of wiggle room to offer you an even better rate.

As of Monday, according to Mr. Findlay, the average mortgage rate nationally was 4.63 percent for a 30-year fixed-rate mortgage, 90 basis points higher than the 3.73 percent that investors in the loans are paid — what’s known as the coupon rate. If you account for guarantee fees, this means lenders could theoretically offer rates as low as around 4 percent, Mr. Findlay said. While the exact spread moves around quite a bit from week to week, it’s currently up from a few weeks ago. Before the summer of 2007, it was traditionally zero. Since then, decreased competition among banks has caused it to increase.

via Why Mortgage Rates Vary So Much – Bucks Blog – NYTimes.com.

Interest Rates, Mortgage News

mortgage shopping
How to Keep From Having an Underwater Mortgage « Logan Real Estate Blog

Jul 9th 2010

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I read an article this morning that 70% of the home loans in Nevada are under water, meaning that more than two out of every three homeowners in the state of Nevada owes more on their home than it is worth. These people are unable to sell their homes unless they have a huge savings or can qualify for a short sale.

This stat is pretty staggering really. Nevada’s real estate market was out of control and they are now suffering the consequences. With the way things are headed in both the national and local real estate market, it’s possible that Logan Real Estate values will decrease.

Is there a way to prevent values from declining? Is there something we can do about it? Well… we can’t really control the external factors associated with the real estate market, the federal government has already tried that, but we can control the amount we owe on our mortgages. The way 30 year amortized mortgages are set up, there is very little principle paid and equity gained during the first few years.

One way to drastically reduce the principle owed is to refinance to a 15 year fixed mortgage. Right now, the interest rates on 15 year fixed mortgages are at all time lows, about 4%. I’m currently in the process of refinancing a property, and am amazed at how quickly principle is reduced with these loan products. By refinancing, my monthly payment will go up by about $180, but my principal amount will be reduced by an ADDITIONAL $468 in just the first month, and will increase every single month.

In just one year with a 15 year fixed mortgage my principal will be reduced by nearly 5%. So, if the real estate market were to drop 5% in value over the year, my equity percentage would have kept pace.

But, the amazing thing about amortization is that the amount, and rate, of principle payed off increases every year. During year 5, my mortgage will be reduced 7.5%, year 10, a reduction of 15%, year 14, 50.6% and year 15, it will be reduced 100%. At that point I can say that I actually own the property. With a 30 year fixed mortgage, at the 15 year mark the loan is only 30% paid off. An owner doesn’t achieve 50% equity until year 20.

The attitude towards real estate investments has definitely changed in the five years I’ve been in the business. Five years ago the advice was to borrow with as little as possible to “leverage” your real estate investment, because the value will always increase. Now, the wise decision is to pay your mortgage loan down so one day you can be mortgage free, and actually own an asset. By paying down your mortgage, you are also in position that you can sell if you need too, and if you want to.

via How to Keep From Having an Underwater Mortgage « Logan Real Estate Blog.

Mortgage Products

Amortization, Mortgage Payment, Pay Off
Mortgage Applications Finally Increase

Jul 8th 2010

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Mortgage Interest Rates are about the Lowest they have ever been right now, so it was very disturbing that mortgage applications were down, despite the incredibly low rates. Well, it looks like last week mortgage applications finally rose again. I know that I personally just got my application in to refinance a property. Here are some details provided by the Mortgage Daily News:

The Market Composite Index, a measure of mortgage loan application volume, increased 6.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.5 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 6.4 percent.The Refinance Index increased 9.2 percent from the previous week and is the highest Refinance Index observed in the survey since the week ending May 15, 2009. The four week moving average is up 8.3 percent for the Refinance Index. The refinance share of mortgage activity increased to 78.7 percent of total applications from 76.8 percent the previous week, which is the highest refinance share observed in the survey since April 2009

via Refinance Apps Increase. Originators Work in Highly Competitive Environment.

Mortgage Applications

Mortgage Applications
First Time Home Buyers Tips

Jun 28th 2010

By: John

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Looking and purchasing for a new home can be a tedious thing to do if you are a first time home buyer, most especially if you have no to little experience at all. When you have your own home, you don’t have to worry about paying for the rent every month. Though you still need to pay for the monthly amortization, the good thing about this is that the home will be completely yours in the end. Every improvements you are putting into it is all your own.

Your decision on buying a home depends on how much funds and resources you have. You have to make sure if the funds you have would be enough to cover up all the expenses for the house you plan to purchase. Applying for a loan is another option you can take if you think you don’t have adequate funds. Just be responsible enough to pay your financial obligations on time to avoid having problems later on. Remember that this is going to be a long term debt so you cannot just drop it anytime you want or if you don’t feel like paying for it.

Moreover, you should take into consideration as well the location of where you wanted to buy home, the type of house and the like. It would be easy for you if you have a list of all the neighborhoods in the location you have chosen to purchase. For example if your interested in Utah Houses, then you can jot down the neighborhoods in Utah you like most. You can give consideration to these things to narrow down your choices.

Owning your own home would mean more monthly fixed expenses to you so take a closer look at your finances. Bear in mind that you will be dealing with your mortgage for a long period of time and as a responsible home owner you need to do some regular maintenance on it to be able to maintain your house value.

Getting help from an expert will help you a lot. To guide you during the entire process of purchasing your home, you can hire someone who is credible and with enough experience and knowledge on real estate. Your friends and relatives might have known someone of good reputation whom they can recommend you to. Ask them.

Committing errors is a big no, no here since this is a biggest investment of your life.

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Mortgage Interest Rates at Record Lows, Again

Jun 25th 2010

By: admin

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Okay, so Mortgage Interest Rates are at a NEW record low. This is happening so often, it’s barely even news any more. The fact is that housing interest rates are so unbelievably low it’s almost unreal. Even though Utah home prices will likely drop a little bit more over the next year, from an affordability aspect, the current mortgage rates might be making home affordability the best we will ever see. Here is the mortgage info from CNBC.

U.S. mortgage rates dropped in the past week, with 30-year fixed-rate loans tumbling to their lowest level in 39 years, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.

Interest rates on 15-year fixed-rate and hybrid adjustable-rate mortgages dropped to fresh lows as well. While low rates and high affordability helped the housing market gain ground over the past year, the sector has struggled since popular home buyer tax credits expired on April 30.

Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.69 percent for the week ended June 24, the lowest since Freddie Mac started the survey in April 1971. The latest rate is down from the previous week’s 4.75 percent and the year-ago level of 5.42 percent, according to the survey.

Freddie Mac said the 15-year fixed-rate mortgage averaged 4.13 percent, down from 4.20 percent last week and the lowest since Freddie Mac started tracking the mortgage type in September 1991.

via Homebuyers: Mortgage Rates Drop to Lowest Level on Record – CNBC.

Interest Rates

15 year fixed, 30 Year Fixed
Mortgage Interest Rates Still at Record Lows but Mortgage Applications are Down

Jun 24th 2010

By: admin

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Mortgage interest rates are still at crazy cheap record lows. The bad news is that even at the incredible lows, mortgage applications around the nation were down. This indicates that future home sales were also be down, and that a large percentage of candidates for mortgage refinances, are have all ready done so, or cannot qualify for home loans. Here is the latest from the Mortgage Bankers Association:

Mortgage applications declined 1.2 percent last week compared to the previous week on an adjusted basis, according the Mortgage Bankers Association weekly survey.

On an unadjusted basis, purchased applications declined 2.3 percent and they were 36.8 percent lower than they were the same week a year ago.

The decline in purchase applications was driven by a 4.4 percent decrease in applications for government-backed mortgages, according to the MBA. Conventional purchase applications actually increased 1 percent.

Most mortgage rates were at their lowest point since mid-May:

* 30-year fixed-rate mortgages decreased to 4.75 percent from 4.82 percent.

* 15-year fixed-rate mortgages decreased to 4.19 percent from 4.23 percent.

* 1-year ARMs decreased to 7.05 percent from 7.07 percent.

Source: Mortgage Bankers Association (06/23/2010)

via REALTOR® Magazine-Daily News-Mortgage Applications Decline.

These are national averages and I’m not sure how Utah Real Estate numbers compare.

Interest Rates, Mortgage Applications

Mortgage Applications
Hard Money Lenders Option for Bad Credit

Jun 24th 2010

By: John

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Credit requirements have become more stringent in regards to getting a mortgage loan. Individuals who are starting out or who have experienced credit difficulties have few options. Traditional lenders practice these credit standards to both purchase and refinance. Once easy, a cash-out refinance is now more difficult. Individuals who have sufficient equity in their homes are now turning to hard money lenders as the only option of tapping into the equity.

Generally, a hard money lender will require that the equity in the property is sufficient to warrant a 50% to 65% loan to value. Under extra circumstances, an individual can get up to 70% if cross-collateralization is also used. These lenders also charge a substantially greater rate of interest and the loans usually run anyplace from 3 month to one year. In rare situations, the loans are for up to 3 years. Funds from this type of a loan are usually used for a commercial enterprise or investing purpose where the return will exceed the costs of the loan and facilitate the pay back to the lender. enable the borrower to repay the loan within the alloted timeframe.

While private hard money lenders usually emphasise on investor hard money, sometimes these loans are made on owner-occupied homes. The reason the lenders prefer non-owner occupied homes is to deflect the consumer laws that protect individuals, relating to foreclosure and other consumer protections. The accessibility of hard money can be a much better alternate than a pay day loan, because the costs of the loan are considerably less and the borrower can borrow much more money.

Even people who have declared or been adjudicated bankrupt can nonetheless qualify for private hard money. In fact, individuals who have foreclosures can qualify for private hard money. However, if the hard asset that is securing the loan is encumbered by tax liens, or judgements, the lenders prefer not to loan on properties where it is harder for the lender to get the property back and disposed of in the event of a default by the borrower. Investors frequently have credit blemishes and this problem has not afflicted lenders from getting funding through a private money loan source. In that case, the hard money lenders evaluate the strength of the hard asset securing the property. The lender also formulates a quick sale value to determine what can be done with the hard asset should a loan go bad.

Lenders require that investors have an exit strategy. The exit strategy deals with how the loan will be paid back and within what timeframe. This is a major consideration to the lender because it indicates the likeliness and likelihood that the amount borrowed will be the amount the borrower repays . Lenders are generally seeking stronger investor exit strategies and prefer situations where the investor already has a pocket purchaser, or a lender approved buyer for a conventional mortgage loan.

For credit challenged buyers and investors , the key is to concentrate on developing a strong exit strategy that can be presented to the lender. Fortunately, loans of this type can still be completed very quickly and funding within 24 to 48 hours is not uncommon. In addition, rehab hard money loans are also made by these lenders to facilitate the acquisition, remake and sale of bank owned and government owned real estate. Transactional lenders and flash funders also fund investors who have buyers in place with conventional mortgage approval is increasing.

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How To Get A Bad Credit Second Mortgage

Jun 24th 2010

By: John

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We all know banks are not loaning money as easily as they use to when a loan is applied for. In reality, they’re carefully examining people’s credit scores in order to determine who might or might not qualify for a loan. Although it’s possible to get loans with bad credit, it can be difficult. Here is a look at how to get a bad credit second mortgage.

If your credit is not so good and you want to take steps to improve it, a second mortgage can help you to consolidate credit card debts and other payments into a single loan with a single monthly payment without having to refinance your original mortgage. The amount that lenders can loan on a second mortgage usually does not exceed the amount of equity the owner has in the home.

Contrary to home equity credit lines, the second mortgage is a loan you get only once, and it has a regulated payment amount you need to make monthly. Second mortgages can be taken with the same lender as the original mortgage or with a different lender. The amount of money that could be loaned, or the ease of getting the loan, will be dependent on the amount of equity in the home you have and your credit report.

The majority of bad credit mortgage lenders investigate the most recent few years of someone’s credit report to determine whether or not they will work with them. The two most vital factors that determine who can obtain a bad credit second mortgage are whether they make payments on time, and the income to debt ratio. More reading about this article geld lenen met BKR in Dutch.

The other serious factor taken into consideration will be how you intend to use the money if the loan ends up being approved. If your intention is to pay off high interest debts and consolidate things to make payments easier to handle, rather than invest in other projects or plans, your chances for approval of a bad credit loan go up.

Remember when you are applying for a bad credit second mortgage, it’s important to have the necessary information for a loan officer in your hand when you walk in his office. It’s beneficial to bring hard copies of your credit report with any inconsistencies and notes explaining what you will do to remedy them. If there are no errors, a statement of how you are working to make improvements to your credit score should accompany the loan application.

The best thing to do is be totally upfront with your loan officer about any indebtedness and your current situation. Remember it’s important that you include all of your income in the calculations you make about your debt to income ratio. Banks want to avoid lending money that won’t be paid back, because then they would have to foreclose. So it’s up to you to show exactly why the money is needed and how you plan to use it.

It’s not easy to get a bad credit second mortgage, but they can be the best bet for getting an improved credit score in this difficult economy. You can improve these scores legally and quickly by putting numerous high interest rates together into just one lower interest rate loan without refinancing your original mortgage.

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5 Top Reasons To Decide On An Adjustable Rate Mortgage

Jun 24th 2010

By: John

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ARMs have oftentimes been wrongly interpreted previously and you might be surprised to learn many people still choose adjustable rate mortgages. It can be a great financial opportunity for the right someone. This is a list of the leading five reasons you may want to consider getting an adjustable rate mortgage for your new house either as a loan or to refinance.

Why would you choose an Adjustable Rate Mortgage?

1. Interest rates are currently among the lowest in history and adjustable rate mortgage loans are one way to bring them even lower. One of the main things you want to do if you are in the market to get a mortgage is get many free mortgage quotes online so you can compare rates and offers. An adjustable rate mortgage has a fixed period where the rate won’t change, typically 3, 5 or 7 years. The rate is lower, often much lower, than the popular 30-year fixed rate mortgage. The market rate for an adjustable rate mortgage today is lower by a wide margin than for a conventional 30-year FHA mortgage.

2. If you plan on moving on in a few years, because homeowners know they are only in a fixed-rate period for a short amount of time, an adjustable rate mortgage is best used if you know you are moving before the fixed-rate period is over, if you have plans on using the money protected by the lower interest rate to pay more towards your premium or if you’re planning on refinancing before the adjustable rate mortgage begins to adjust.

3. Even including closing costs on a refinance, you are still saving money over a traditional mortgage. For illustration on a $100,000 home loan, if you were to get a 30-year fixed-rate mortgage at 4.75%, your monthly payments would be $522 a month. If you were to get a 5-year adjustable rate mortgage at 3.5%, your monthly payments would be $498 for a 5-year savings of $4,350. Even adding in closing costs you would have been ahead on your hard earned money.

4. ARMs do not always adjust upwards. Most people assume that later on the fixed period expires, their rate will rise. This is not always the situation. You could start with a 5-year ARM at 4.25% and when it becomes time for the rate to adjust, market prices may be considerably lower. This can prove to be rather a bit of savings for you to pay towards the principle of your house, or use the cash to pay off bills.

5. Adjustable rate mortgages are more common than you think. In the United States, may financially savvy people choose an adjustable rate mortgage, mainly because you can save money. In fact, in other nations, like Canada or the United Kingdom, adjustable rate mortgages are the most common form of home loans. This is often due to the fact that you can pay more towards the principle of the loan, early and without penalty. Early reduction payments decrease the total cost of the loan and allow you to pay off your loan in less time. Get an online mortgage quote to see how you would benefit.

Consider This: Adjustable rate mortgage borrowers are able to save money over the fixed-rate period. However, not everyone is suited for them. Speak to your mortgage lender to determine if an ARM is right for you, make sure you know all of the facts before signing. Question if your lender have prepayment penalties. What is the fixed-rate ratio? Make sure you are aware that while rates can go down – this way they also can rise as well. knowing the risks and having a firm understanding of how an adjustable rate mortgage works, grab a mortgage quote online. It can prove to be a very positive experience.

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