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Posts Tagged ‘home loans’

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Home Loan Rates? Going Down!

September 2nd, 2009 by Matthew C. Keegan | 2 Comments | Filed in Consumer Financing, Home Financing

If you’re looking for good news these days in the housing market, then you may have heard that home sales are up and prices have stabilized in some markets. But, you may  have also heard that come 2011, there could be a rash of new foreclosures as a fresh batch of variable rate loans come up for an adjustment.

Signs of relief are beginning to appear in the housing market. HARP and HAMP programs from the federal government could help to keep you in your home.

Signs of relief are beginning to appear in the housing market. HARP and HAMP programs from the federal government could help to keep you in your home.

Several markets remain depressed including Detroit, Las Vegas and much of Florida. However, sections of Southern California, Texas and various cities dotting the south and midwest are holding their own. Likely, the performance differences between these markets will continue as unemployment and other issues weigh in.

Additional Help For Home Buyers?

When Congress returns from their break next week, they’ll have a number of issues to take up besides national health care. One issue that should be on the mind of potential homeowners, particularly first time buyers, is the $8000 federal tax credit which must be taken by December 1, 2009. There has been talk about extending and expanding the credit to allow all home buyers to participate while also increasing the rebate to as high as $15,000 per purchase. We’ll let you know more about this information should a bill be presented over the coming weeks.

Meanwhile, the rate for a fixed-rate thirty-year mortgage continues to slide, dropping to 5.17% nationally according to the Zillow Mortgage Rate Monitor. Even better, the rate on a fifteen-year fixed-rate mortgage is 4.57% while 5/1 adjustable rate mortgages can be had for just 4.17%. Keep in mind that these rates apply only to the most creditworthy customers. Shop around for a deal that is most favorable for you.

HARP or HAMP

For homeowners struggling to keep up with payments, the federal government’s “Making Home Affordable” program could help you modify your current loan or seek out an all new loan. The government’s HARP – Home Affordable Refinancing Program – and HAMP – Home Affordable Modification Program has helped thousands of homeowners keep their homes thus far. Visit the related website to learn more including confirming your own eligibility to participate.

Finally, if you’ve been getting the run around when it comes to refinancing your home, then going the traditional rate of refinancing may help you out especially if your personal economic situation has improved over the past several months. Private lenders are still looking for customers, so first verify that your credit is good by obtaining copies of your credit reports to see where you stand. Who knows, the help you’re wanting could be within your reach!

Adv. – Are you considering a loan modification? If so, this mortgage medication website could offer just the prescription you need to improve your financial health.

See Also — Will Nearly Half of Mortgages be Under Water in 2011?


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Home Foreclosures Expected To Ramp Up

April 16th, 2009 by Matthew C. Keegan | 2 Comments | Filed in Home Financing

Despite throwing hundreds of billions if not trillions of dollars at the problem, the Obama administration will not be able to exert its increased influence over the financial marketplace to thwart an anticipated spike in home foreclosures.

Key Lenders Ratchet Up Foreclosures

foreclosureAccording to a report appearing in yesterday’s issue of The Wall Street Journal (WSJ), Fannie Mae, Freddie Mac, J.P. Morgan Chase & Company as well as Wells Fargo & Company have already increased their foreclosure activity over the past few weeks. Those institutions had stopped or slowed down foreclosures in February as they awaited details of the federal government’s housing-rescue plan to emerge which included incentives to help mortgage providers to reduce homeowner payments to manageable levels.

The WSJ says that lenders have determined which borrowers can benefit from their help and which ones are beyond remedy. That latter category of homeowners are the ones now facing foreclosure.

This move by lenders comes even as they are recipients of billions of dollars in taxpayer money, funds which are to be used in part to help keep people in their homes.  Spokesmen for each of the lenders are stressing that foreclosuring a home is an action of the last resort, once all other means of remedy have been exhausted.

Adverse Impact On Home Values

Analysts are worried that any spike in home foreclosures could have an adverse impact on home values. In California, which has experienced some of the worst of the real estate meltdown over the past two years, home prices were beginning to stabilize and sales increase, particularly in the hardest hit areas. With a spate of foreclosed property entering the market, housing values could slip again, slowing down the Golden State’s recovery.

In 2008, 1.7 million homes were lost to foreclosure an amount expected to increase to 2.1 homes for 2009 according to Moody’s Economy.com.  Chase has over 80,000 homes awaiting foreclosure, a number not too unusual for major mortgage providers.

Ineligible According to the Obama Program

Perhaps most shocking for some homeowners, especially those who voted for the Obama-Biden ticket last fall is that they won’t be getting the help they expected when they cast their vote for the team.  Many of these borrowers are unemployed, underemployed or have other credit problems which are exacerbating their troubles.  Even the delays in foreclosure have not helped as these same homeowners have been seeing an increase in fees and interest owed during the moratorium period.

Adv. — Are you looking to refinance your home? Interest rates haven’t been this low in years! If you have very good or excellent credit, you could find a home loan with an interest rate of about 5% for a fixed rate, thirty-year mortgage.  Visit SayLending.com for more information!


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Your FICO Score Gets A Makeover

January 30th, 2009 by Matthew C. Keegan | 5 Comments | Filed in Consumer Tips, Credit Reports, Home Improvement

In life, there are two things you can be certain about: death and taxes. While you only die once, you’ll be paying taxes over and over and over again. Sometimes death can seem more appealing than the two!

Your Credit Score, Courtesy of Fair Isaac

Mortgage ApplicationAnother certainty in this life, at least to for the American consumer, is their credit score – what is known as a FICO score. The Fair Isaac Corporation score is used by the three major credit reporting bureaus which are: TransUnion, Equifax, and Experian. That score will help lenders determine whether you will receive credit and, if so, at what terms. The higher your score, the better the chance you’ll be approved for a loan and at a favorable rate.

This week, Fair Isaac rolled out a modified version of their credit score, this one dubbed FICO 08. TransUnion is the first of the credit reporting bureaus who will use the new FICO method for calculating credit scores followed by Equifax in the second quarter. Experian is currently in litigation with Fair Isaac over another matter, so we don’t know when they’ll include with the new methodology.

More Accurate Predictor of Problem Borrowers

Supposedly, the new score will be an improvement over the way that the old one was calculated, as it will help creditors do a better job of predicting borrower defaults. In addition, it will be more forgiving of one time slip ups, but it will come down harder on repeat offenders. Scores will still range from 300 to 850 and Fair Isaac is expecting an improvement in lending decisions by as much as 15%.

Consumers may not notice much of a change for awhile, especially as many lenders use the score as only part of their methodology for determining whom they will lend to and for what terms. Some analysts believe that many mortgage lenders will not use the new calculation method until all three credit reporting bureaus are using it. Oftentimes, lenders will obtain credit scores from all three to determine one median score.

Get Your Free Credit Reports

For consumers, now is a good time to pull your credit reports to see if they are accurate and correctly reflect your personal information. Mistakes can impact your credit score, but they generally will only be fixed if you catch them. Thanks to an act of Congress, you can get free copies of all three credit reports at www.annualcreditreport.com. If you want you credit score you’ll pay a nominal fee for that service, something you can do when you order your reports.

Resources

Check Your Credit

Federal Trade Commission

Financing Tips


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Home Mortgage Rates Expected To Drop Below 5% Soon

January 5th, 2009 by Matthew C. Keegan | 11 Comments | Filed in Home Buying, Home Financing

Very good news in the form of lower home loan rates is beginning to unfold across the nation. After peaking just above 6% in Spring 2008, rates are currently just above 5% and expected to continue to fall over the weeks ahead. According to The Wall Street Journal (Home-Mortgage Rates’ Next Stop: Below 5%; January 2, 2009, page C2) house moneyrates may fall even further, perhaps as low as 4.5% for a fixed rate thirty year loan.

This news comes at a time when the country’s housing market is battered and bruised. In some areas of the country, home prices have lost most of the gains realized since 2000 with the Detroit market experiencing price declines in negative territory. The lower interest rates on home loans won’t help all current homeowners especially those whose home values have retreated considerably these past few years.

However, the lower rates will help people who have sat out of the market and are still looking to buy. With home prices depressed and home loan interest rates dropping, demand may begin to pick up. This could translate into the market hitting bottom, the place where many buyers will want to jump in before prices rebound.

So what is driving the lower rates? That would be the Federal Reserve Bank which is planning to purchase $500 billion worth of mortgage backed securities by this coming June, a move which should stabilize the mortgage market. The US Treasury has also jumped in, purchasing $50 billion of mortgage bonds.

For consumers who are planning to buy a home in 2009, there are a few things you can do to take advantage of the coming lower rates including the following tips:

Obtain copies of your credit reports – Free copies of your credit reports are available through AnnualCreditReport.com, a website jointly managed by the three major credit reporting agencies – TransUnion, Experian and Equifax. Get copies of your reports and check them closely for errors; follow each company’s instructions for making corrections. In addition, pay the nominal fee to get your credit score from at least one of the companies; the higher your score the better – the more likely you’ll be approved for a home loan and at a favorable interest rate.

Raise your down payment – Few lenders will offer you a loan if your down payment contribution is only 5%. Many are now requiring as much as 20% down, an amount that could be well beyond the reach of many buyers. Still, you may have that money available in the form of bonds, stocks, retirement savings, etc. Now is the time to assess your portfolio and see which funds can be diverted to purchase a home. In any case, shop around for a mortgage; get prequalified for a loan before you begin to shop for a home. Finally, pay off as much debt as possible.

Begin preliminary shopping – Likely, you’re already familiar with the market where you want to purchase a home. However, even over the past few months prices in some areas have plunged considerably. Learn what the current housing market is like and plan accordingly. You don’t want to overpay in this market, but you do want to offer a competitive price to the seller.

Will the drop in home loan rates signal the end of the recession? That’s hard to say. However, it most certainly will open the door to homeownership to new buyers even as foreclosures continue to mount. If you have the funds to buy, 2009 could turn out to be the best opportunity to buy.

Get prepared now in order to be ready for the Spring home selling season. When Spring arrives you’ll be ready to jump in, perhaps finding the deal of a lifetime.


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