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Low mortgage rates continue to dominate the current market. Mortgage rates have dropped for the fourth consecutive week, reaching record lows this week.
According to Freddie Mac, the average interest rate on a 30-year fixed loan was 3.79% for the week ending Thursday. This is the lowest interest rate for this loan since the 1950s when long-term mortgages were first introduced.
The average interest rate for the 15-year fixed loan dropped to 3.04% this week, also breaking a new record low.
A year ago the average rate for a 30-year fixed mortgage was 4.61%. The average rate for a 15-year
. . . Read more.
Date:
5/18/2012
Lender Paid Mortgage Insurance (LPMI) may be a good alternative for borrowers who do not want to pay Private Mortgage Insurance (PMI).
Both PMI and LPMI insure the lender against default on conventional loans greater than 80% loan to value (LTV). The biggest difference in the two options is who pays the premium.
The insurance premium on the PMI option is added to the total monthly mortgage payment and paid by the homeowner. The lender then forwards it to a third-party insurance company.
The
. . . Read more.
Date:
5/4/2012
Private Mortgage Insurance (PMI) is required on most conventional loans that exceed 80% loan to value (LTV). It is typically a monthly expense paid by the borrower on top of their mortgage payment. It is collected by the lender and paid to a third party insurance company.
. . . Read more.
Date:
4/27/2012
If your sole source of income is disability, you may still be eligible to qualify for a mortgage. Your ability to qualify for a mortgage depends on the type of disability income you earn.
There are two types of disability income: permanent and temporary. Permanent disability means that you are paid by either Worker’s Compensation, Social Security, or through the Veteran’s Administration. You earn this income for the rest of your life. This income is also non-taxable.
Temporary disability income is what you earn when you are on medical leave from work, but you have the ability to go back
. . . Read more.
Date:
4/20/2012
After a brief upward trend in mortgage rates during the past few weeks, rates are dropping back to near-record lows this week.
According to Freddie Mac, the average rate on the 30-year fixed loan this week fell to 3.88%, down from 3.98% last week. That is just shy of the all-time low rate of 3.87% for this loan, which marked the record low in February.
This week’s average rate for the 15-year fixed loan hit a record low of 3.11%, down from 3.21% last week.
One year ago the 30-year fixed rate averaged 4.87%, and the average 15-year fixed rate was 4.10%. Since December, mortgage rates
. . . Read more.
Date:
4/13/2012
Providing information about your assets can benefit your mortgage application.
Assets can help compensate for the weaker parts of your application. For example, if your application is rejected because of a high debt ratio (DTI), providing assets might help get it approved.
Assets can also help you qualify for certain Conventional HARP refinances which often require no appraisal.
Whether or not assets will help you is typically dependent upon automated underwriting systems (AUS). AUS’s will alert your mortgage originator if your loan is approved or
. . . Read more.
Date:
4/2/2012
HUD recently announced that it will be increasing FHA fees on mortgages originated on or after April 9th, 2012 (with the exception of FHA Streamline Refinances). These are just the latest of several fee increases that HUD has implemented since 2008.
The Purpose of FHA Fees
HUD insures FHA mortgages. HUD needs to collect these fees to cover losses that result from foreclosures and short sales. We only need to look back on the last few years to realize the importance of that.
There are two types of FHA fees:
1. Upfront
. . . Read more.
Date:
3/28/2012
Spring is quickly approaching. And while the seasons are changing, mortgage rates are showing very little signs of change. Rates have remained attractively low and continue to drop.
According to Freddie Mac, the average 30-year fixed rate this week is 3.88%. Three weeks ago the rate for this loan dropped to a near all-time low of 3.87%, the lowest since long-term mortgages began in the ‘50s. This time last year the average rate for the 30-year fixed mortgage was 4.88%.
Mortgage rates for a 15-year fixed loan average 3.13% this week, marking
. . . Read more.
Date:
3/9/2012
HUD just announced that it will be increasing FHA fees on all non-streamline FHA mortgages originated on or after April 9th, 2012. FHA streamline mortgages will not be subject to this increase.
In fact, HUD will dramatically reduce FHA fees on June 11th, 2012, for homeowners who took out their existing FHA mortgages prior to June, 2009.
What is an FHA Streamline Refinance?
An FHA streamline refinance is a specific program reserved for homeowners that currently have an FHA mortgage. They can refinance into another FHA loan with little or
. . . Read more.
Date:
2/17/2012
Along with your income and credit, your appraised value is a major determining factor in the loan approval process. Appraisers base their final report on program specific appraisal guidelines.
Below are some tips to consider before scheduling the appraisal of your home:
1. Your mortgage company cannot choose the appraiser
The HVCC rule requires appraisals to be ordered through third party Appraisal Management Companies (AMC). Your mortgage company orders the appraisal through an AMC and has no contact with the appraiser (except for VA
. . . Read more.
Date:
2/10/2012
There are many advantages to getting an FHA loan in today’s market. Low interest rates, small down-payments, expanded credit and income standards, and higher allowable loan amounts are just some of the reasons why FHA loans continue to grow in popularity.
FHA loans are insured by the federal government. And the government, understandably, requires mortgage insurance to be paid in order to off-set their lenient approval guidelines.
Typically, there are two types of mortgage insurance associated with FHA loans:
- Upfront
. . . Read more.
Date:
2/4/2012
Mortgage rates rose slightly this week, averaging 3.98% for a 30 year fixed-rate mortgage, up from last week’s record-low average rate of 3.88%.
Despite the increase, it’s worth noting that the average 30 year mortgage rate has remained below 4% for the past eight weeks, according to Freddie Mac.
The average 15-year fixed mortgage rate this week was 3.24%, a modest increase from last week’s average rate of 3.17%.
Low Mortgage Rates, Low Home Sales
It would make sense that low mortgage rates equate to a boost in home sales, but currently that is not the case. According
. . . Read more.
Date:
1/27/2012
When applying for a home loan, underwriters review your credit report with a fine tooth comb. This is because your credit history is a good indicator of your ability to repay your home mortgage.
Most credit reports are also run through a computer program called a Desktop Originator (DO). DO is programmed to ask for documentation to satisfy current underwriting guidelines. One of these conditions that consumers need to be made aware of is directly related to their credit reports.
As a consumer, if you disagree with something a creditor is reporting to
. . . Read more.
Date:
1/20/2012
A VA mortgage could be the best loan option available for qualified veterans looking to purchase a new home or refinance an existing one.VA loans minimize cost and maximize benefit.
Minimal Costs
Low Closing Costs is one of the biggest benefits associated with VA loans.
Veterans are exempt from paying most lender/broker fees such as underwriting, application, and processing. And title fees are dramatically reduced.
In addition, there should be no upfront fees or out-of pocket
. . . Read more.
Date:
1/13/2012
There are some consumer credit guidelines that may affect you towards the end of your mortgage application.
Closing Out Credit Cards
If you are applying for a cash-out refinance, it may be necessary to close out the credit cards that you are paying off at closing.
If the monthly payments make your debt-to-income (DTI) ratio go above the max qualifying ratio, the Underwriter will require that you close the credit cards so that they can no longer be used.
One fast way to provide proof to the Underwriter that your credit cards have been closed is to perform a credit supplement.
. . . Read more.
Date:
1/6/2012
In the final weeks of 2011, mortgage rates continued to hit record-breaking lows. For the week ending December 22, the average 30-year fixed rate fell to 3.91%, the lowest average on 30-year fixed mortgages since the 1950s.
For the week ending December 29, the rate rose slightly to 3.95%. This time last year the rate for this mortgage loan was almost 1% higher than it is now.
The rate for the 15-year fixed mortgage averaged at 3.24%. The rate for this loan marked a record low last week at 3.21%. Last year the interest rate for the 15-year fixed mortgage was 4.15%.
According to Frank
. . . Read more.
Date:
12/30/2011
2011 has been a very active year in the mortgage industry. Here are just some of the headlines and changes that dominated the news:
Dodd-Frank Act
Sweeping changes in the mortgage industry took effect in April of this year thanks to the Dodd–Frank Wall Street Reform and Consumer Protection Act that was enacted in late 2010.
Dodd-Frank mandated a complete change in how mortgage professionals get compensated. The goal was to help prevent predatory lending by making the application process more transparent for the consumer.
The Act also mandated the use of a new Good
. . . Read more.
Date:
12/16/2011
If you are in the process of a mortgage application and are looking to close as soon as you can, there are steps you can take to help ensure there are no delays.
Here are five tips that can help you:
1. Continue to pay all of your bills on time
Your credit history is one of the most vital elements of your mortgage application. Sometimes it’s necessary for lenders to re-pull credit before the loan process is complete.
For example, if you are applying for a conventional loan your credit will likely be pulled again before your loan funds
. . . Read more.
Date:
12/9/2011
Debt Counseling Services (a.k.a. CCCS - Consumer Credit Counseling Service) can negatively affect a mortgage application and hurt credit scores.
Reputable Debt Counseling Services help consumers budget and pay off their credit card debt. They negotiate with creditors to lower interest rates and payments. Most are listed as non-profit organizations.
Typically, they do not report to the credit bureaus. However, many of the creditors do report to the bureaus. They report that the account is in a Debt Counseling program. This can negatively affect a mortgage approval.
Also, late payments
. . . Read more.
Date:
12/2/2011
As we quickly approach the holiday season, we’re still experiencing record low mortgage rates. And for homeowners in the market for an FHA jumbo loan, Christmas may have arrived a little early this year.
Mortgage Rates
The 30-year fixed rate this week is 3.98%, making this the fourth consecutive week of rates under 4%, according to Freddie Mac’s weekly mortgage survey. Just last year the 30-year fixed rate was 4.4%.
The 15-year fixed rates continue to be in the low 3% range, this week dropping just .01% to a 3.31%.
FHA County Loan
. . . Read more.
Date:
11/25/2011
Many homeowners are finding it difficult to keep up with their monthly debt obligations. Some see obtaining a loan modification, declaring bankruptcy, short selling their home, or letting it fall into foreclosure as their only recourse.
There is a lot of misinformation floating around about the consequences of taking such dramatic actions. Homeowners should know the truth about how these actions can affect their credit and their ability to obtain mortgage financing in the future.
Below are four false myths:
Myth 1: It’s Impossible to Get a Mortgage after a Foreclosure
It’s
. . . Read more.
Date:
11/18/2011
Employment history plays a very important role in the qualification process of a mortgage application; especially in today’s economic environment.
Many employees are finding themselves with reduced work hours, declining bonuses and commissions, temporary layoffs, or inconsistent self-employment income.
It’s important to understand how your employment history can affect your loan approval.
Unemployment Insurance
Lenders will use unemployment income as a part of your entire income picture if unemployment is reasonable and common in your line of work. For example, if you
. . . Read more.
Date:
11/14/2011
Underwriting Overlays represent one of the biggest hurdles for mortgage applicants. While lenders understandably defend overlays, their very existence disqualies viable borrowers and is slowing the housing recovery.
Conventional (Fannie Mae and Freddie Mac), FHA, and VA mortgages have strict underwriting guidelines that lenders must follow if the loan is to be insured or guaranteed.
Overlays are lenders' self-imposed guidelines that go above and beyond the government requirements.
Lenders with overlays might require higher
. . . Read more.
Date:
11/4/2011
Mortgage rates this week have changed slightly from last week’s rates. Freddie Mac said Thursday that the rate on the 30-year fixed mortgage fell to 4.10% from 4.11% last week. Three weeks ago, it dropped to 3.94 percent.
The average rate on the 15-year fixed mortgage was unchanged at 3.38 %. The rate for this loan it hit a record low of 3.26% three weeks ago.
Although overall rates have increased marginally from the record lows we’ve seen in the previous months, the numbers are still very attractive to potential homebuyers and those looking to refinance.
. . . Read more.
Date:
10/28/2011
If you are refinancing or buying a new home, your spouse may have to be involved even if you are the only person on the mortgage.
Depending on what state you live in, your spouse may have to sign the legal documents at closing, even if they are not on the loan.
Spousal States
If you are a married homeowner in a Spousal State, your spouse has to sign certain documents to attest that he or she knows about the new loan.
Typically, the spouse will need to sign
. . . Read more.
Date:
10/21/2011
Rumor has it that the Obama Administration is close to submitting a mortgage refinance proposal that would expand the Home Affordability Refinance Program (HARP).
HARP currently allows qualified borrowers to refinance up to 125% of the value of their homes if their existing mortgage is currently owned or securitized by either Fannie Mae or Freddie Mac.
Apparently, the 125% loan-to-value caps would be lifted allowing many more homeowners to refinance. This expansion would give more homeowners an opportunity to qualify for the historic low rates currently
. . . Read more.
Date:
10/14/2011
The beginning of the week was a continuation of the week before with mortgage interest rates bottoming out at historic lows. Thirty-year fixed rates pushed below 3.9% while fifteen-year fixed rates dipped below 3.4%.
It’s hard to believe that we’re locking in thirty-year mortgage rates in the 3’s. And while rates steadily worsened as the week progressed, they continue to be better than anyone could have imagined even a few months ago.
A convergence of events transpired this week to whittle away at Mortgage
. . . Read more.
Date:
10/7/2011
Many homeowners wrongly assume that they cannot refinance because they currently owe more than the value of their home. But there are four government sponsored mortgage programs that will allow them to do just that.
Making Home Affordable Program
The first two programs stem from the federal government’s Making Home Affordable Program (known as the Obama Plan). They are reserved for homeowners who currently have conventional loans owned or securitized by either Fannie
. . . Read more.
Date:
9/30/2011
Self-Employed and Can’t Qualify for a Mortgage?
The mortgage crisis has had a disproportionately negative impact on self-employed borrowers. In retrospect, it’s easy to see how this happened. And it’s important to understand who’s to blame, how the blame has shifted, and what can be done to adapt to the new lending standards in today’s market.
What Happened?
Some of the first program casualties of the mortgage meltdown were the stated income, stated asset (SISA), and no income, no asset loan (NINA) programs. These programs were initially created to assist self-employed
. . . Read more.
Date:
9/23/2011
Have you ever applied for a mortgage and wondered why your lender asked for your tax returns for the previous two years?
Debt-To-Income Ratio
One of the main qualifying factors used to approve a mortgage is your debt-to-income ratio (DTI). This number is calculated by dividing all of your debt by your income.
Your DTI helps the lender determine if you can afford the new loan, per their guidelines. And it gives the lender an idea of how much money you have left over after your minimum bills have been paid.
Lenders first determine your monthly debt by pulling your credit
. . . Read more.
Date:
9/16/2011
It’s not too late to take advantage of record‐breaking low mortgage rates as they continue to fall this week. In the week ending yesterday, September 8, Freddie Mac announced the rate for a 30‐year fixed loan dropped to 4.12%, down from 4.22% last week. And that’s the lowest level the rate has been in 60 years.
The average rate for a 15‐year fixed loan fell to 3.33% from last week’s rate of 3.39%. A year ago the average rate for this loan was 3.83%.
This week’s average mortgage rate for the 30‐year fixed and 15‐year fixed loans set new record lows, breaking the previous record low rates
. . . Read more.
Date:
9/9/2011
Power outages, flooding, and downed trees were the most common by-products of Hurricane Irene. Homes have been damaged. Therefore, lenders might require proof that your home was not damaged by the storm before your loan funds.
If your home is located in an Emergency Declaration county or a Disaster Declaration county (as recognized by FEMA, www.fema.gov) and your appraisal inspection date was prior to 8/29/2011; one or more of the following could be needed:
. . . Read more.
Date:
9/2/2011
Mortgage rates continue to hover at all-time lows, fluctuating minimally this week. For the week ending August 25, 2011, the rate for a 30-year fixed mortgage rose to 4.22% after dropping to a record low 4.15% last week. According to Freddie Mac, last year at this time the interest rate for a 30-year fixed was 4.36%.
Last week’s 30-year fixed mortgage rate was the lowest in Freddie Mac records since 1971. But according to the Bureau of Economic Research, FHA loans indicate the rate was the lowest it’s been since the 1950s.
Mortgage rates for a 15-year fixed loan averaged 3.44%, up from
. . . Read more.
Date:
8/26/2011
So you heard your neighbor brag about his new 4% thirty-year rate? Maybe you just read an article describing how rates have dropped to historic lows, or you heard a local mortgage company advertise 4% rates.
To your surprise, when you call to apply you’re offered a rate of 4.125%. You’re shocked. After all, you have excellent credit. You have a solid job history. And you owe less than seventy-percent of your home's value.
So why can’t you get the lowest mortgage rate advertised?
. . . Read more.
Date:
8/19/2011
As the US economy endures the pandemonium of the current financial market, there is good news for those interested in a mortgage refinance or home purchase. Even in the midst of a debt crisis, mortgage rates sunk to record lows this week.
According to Freddie Mac’s Primary Mortgage Market Survey, the average mortgage rate for a 30-year fixed loan dropped to 4.32% for the week ending August 11, 2011, the lowest rates have been since November. At this time last year, the rate for a 30-year
. . . Read more.
Date:
8/12/2011
There are many myths circulating about mortgages today. A lot of them are perpetuated by Loan Officers eager to win business or friends and family members unknowingly offering false advice. But whether these myths are spread out of greed or ignorance is irrelevant because the result is the same; applicants are left misinformed.
People should be given every possible tool when deciding whether or not to take out a new mortgage. Myths and falsehoods create confusion. And they can have dire repercussions. For example, they can steer someone away from a good program, lead them into a bad program,
. . . Read more.
Date:
8/5/2011
Despite the devastating housing crisis, 73 percent of Americans still consider home ownership a vital part of the American Dream, according to a June, 2011 National Association of Homebuilders (NAHB) poll taken by Public Opinion Strategies and Lake Research Partners.
This surprising survey effectively captures the long-term optimism and dream-big mentality of the American consumer. Owning a home has become more than just a “commodity,” according to Celinda Lake, president of Lake Research Partners. “It is a core value.”
But does this poll reflect the economic realities that potential homeowners
. . . Read more.
Date:
7/29/2011
There may finally be light at the end of the tunnel for jobless homeowners struggling to make their mortgage payments. The Obama administration recently modified some of the Federal Housing Administration (FHA) requirements which will affect the unemployed population who own homes. According to the Bureau of Labor and Statistics, the national unemployment rate as of early this month lingers at a devastating 9.2%. Beginning August 1, the FHA will require mortgage servicers to extend the forbearance period for unemployed homeowners from 4 months to 12 months.
The purpose of the new policy
. . . Read more.
Date:
7/22/2011
Over a million Americans have benefited from loan modifications over the years. But only a fraction of the qualified homeowners that begin a modification process actually end up with a permanently modified mortgage. The vast majority waste thousands in upfront fees, are slapped with penalties and higher rates, or fall into foreclosure.
Many seemingly legitimate law firms, loan modification companies and big banks have been complicit in the exploitation of desperate homeowners
. . . Read more.
Date:
7/15/2011
It is estimated that mortgage payments account for up to 35% of the average homeowners' income. In a struggling economy people are pinching pennies, but most are unaware of the simple ways to save money on their largest monthly expense: their mortgage. There are many ways in which homeowners can save both monthly and over the life of their mortgages. With just a little effort and research, you might be able to lower your housing expense and save.
. . . Read more.
Date:
7/8/2011
The fluctuation of mortgage rates can be as unpredictable as the weather. Rates can change significantly, even within just one day. However, mortgage loan rates have fallen for an eighth consecutive week and it is likely that we are close to hitting a year-to-date mortgage rate low.
According to Freddie Mac, the current year-to-date low for mortgage rates is 4.49%. The average rate on the 30-year fixed loan in the past two weeks was 4.5%. This rate is the lowest it’s been in 5 months for the 30-year fixed loan. The average rate on the 15-year fixed loan was 3.69%, a common refinance loan.
. . . Read more.
Date:
6/30/2011
A new federal government mortgage assistance program is being offered through the Department of Housing and Urban Development (HUD) to assist homeowners who are at risk of foreclosure. The Emergency Homeowners Loan Program (EHLP) is funded by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provided $1 billion towards the program.
Eligible homeowners include those who are involuntarily unemployed or underemployed due to adverse economic conditions and/or medical conditions. Homeowners must have experienced at least a 15% drop in income, causing them to become behind on
. . . Read more.
Date:
6/24/2011
I recently heard a radio ad in which the owner of a mortgage company congratulates listeners who did not buy a home within the last few years. He tells them that they made “a great business decision.” (This is the same company that ran ads encouraging people to buy homes over the same period of time). He then proclaims that this is “the best time to buy” and warns listeners that they will make the “worst business decision of their lives” if they fail to buy a home in today’s market.
I admit that this example may not be representative of most company’s tactics. But the hard truth is that news
. . . Read more.
Date:
6/16/2011
Are you having trouble figuring out how you will finance the down payment for your home? Have you been looking for down payment assistance? Some people are reaching into their 401k retirement accounts as means for down payment assistance. It is important to understand the different options and what they entail. Rules and regulations may vary depending on your company’s plan.
. . . Read more.
Date:
6/9/2011
The economic meltdown has had a disproportionately negative impact on the jumbo mortgage market. Most of the wide-ranging portfolio programs that used to dominate the jumbo market evaporated almost overnight. The government stepped in three years ago to help fill the void by temporarily increasing the maximum loan limits on FHA and Conventional High-Balance loans.
These temporary loan limits are set to expire on September 30th, 2011; making it even harder for many borrowers to refinance their
. . . Read more.
Date:
6/2/2011
The ever-important number known as your credit score can affect everything, from prospective jobs to the amount of interest you pay on a loan. Overall, the better your credit score, the less you will be considered a risk to lenders.
Unfortunately there is no quick-fix for credit that’s in need of repair. Credit can be ruined overnight but it can take years to rebuild. However, you can effectively restore damaged credit if you manage it responsibly over time. Following these few tips will put you on the right track to improving your credit score and building positive credit history.
. . . Read more.
Date:
5/27/2011
