The Trade-off Between Mortgage Rates and Credit Scores
By: Liz Freeman
July 6th, 2010
If you want the best mortgage rates, you already know that it takes a high credit score. But what if your credit is only kind of sort of good? How much extra will you pay for today’s record-breaking low interest rate?
Assuming that you have 20% home equity or down payment, it takes a 720 credit score to get the best possible rate on a Fannie Mae mortgage. If your score is 699, your fees increase by at least 1.0% of your mortgage amount, and perhaps more if you’re financing a condo (add .75%) or manufactured home (add .5%), taking a cash-out refinance (add 1.375%), or opting for interest-only payments (add .75% and close before August 1, 2010). On a $400,000 loan, that extra 1% adds $4,000 to your other mortgage closing costs!
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StumbleUponConsider the Cash In Refinance
By: Liz Freeman
July 3rd, 2010
If the daily updates touting the Lowest mortgage rates in our lifetime” are driving you crazy, chances are you’d love to refinance but don;t have the equity or credit rating to do so. And you’re probably sick of every mortgage article basically telling you how stupid you are for not refinancing when current 5/1 hybrid rates are as low as 3.5%.
If you’re planning on keeping your home for a while look into a cash-in refinance.
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When a Mortgage Approval Is Not a Mortgage Approval
By: Liz Freeman
June 22nd, 2010
You compared lenders, shopped for the best mortgage rate, applied for your new home loan, and finally got your approval. So now you can go shopping for furniture, maybe get a new car to go in your new garage, and plan your housewarming party, right? Not so fast. Because it’s not over until the fat lady hands you the keys to your new home.
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Fed Chairman Bernanke Expects Mortgage Rates to Rise Before Employment Recovers
By: Liz Freeman
June 8th, 2010
At a dinner hosted by the Woodrow Wilson International Center for Scholars, the Fed Chair reportedly told journalist Sam Donaldson that he believes that the economic recover underway will continue slowly (no “double dip recession) but that rates will rise before the country achieves full employment. Full employment is defined as the state in which those who desire work at the going rate for their skills are able to find it.
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Are Stated Income Mortgages Gone for Good? Probably Not
By: Liz Freeman
May 21st, 2010
Legislation passed by both the House of Representatives and the Senate goes a lot further in some ways than had been anticipated. And one of the changes that Congress wants is the abolition of certain mortgage products. Lenders will be prohibited from making mortgages that don’t require the borrower to prove he or she can repay the loans. But in most cases, mainstream lenders did in fact make Alt-A loans (not to be confused with sub-prime mortgages to borrowers with bad credit) to borrowers who were capable of repaying the mortgages at the time the loans funded. They just had to determine borrowers’ income using alternative methods. These methods could be used to “prove” borrowers’ income once again and still satisfy Congress.
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Getting an ARM? Sooner Is Better than Later
By: Liz Freeman
May 13th, 2010
Fannie Mae changed its guidelines (again) and as usual the changes do not favor borrowers. Its guidelines will be updated over the next twelve weeks to reflect the following:
* Adjustable rate mortgage (ARM) qualifying will be more difficult.
* Interest-only loans will be almost impossible to obtain.
* Perennially-popular 7/23 mortgage products will be discontinued.
Qualifying changes more...
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Fannie and Freddie’s Pricing Pushing Borrowers Into FHA; FHA Pushing Back
By: Liz Freeman
May 11th, 2010
If you’re buying or refinancing a home today, the decision of FHA versus conforming isn’t as straightforward as it used to be. Choosing the high-LTV loan with the best mortgage rate a few years ago usually meant going with Fannie or Freddie. In the not-too-distant past, FHA mortgages came with a 1.75% upfront mortgage insurance premium, which could be financed, plus a .50% to .55% annual premium. You only had to put 3% down. On the other hand, Fannie and Freddie offered 97% financing too,
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More Than 80% Surveyed Say Today Is a Good Time to Buy a Home
By: Liz Freeman
April 22nd, 2010
More than 80% of 708 respondents to a survey by Realogy Corp said that today is a good time to buy a home, even though many of them are not eligible for the first time home buyer credit. And nearly 80% of them feel that current mortgage interest rates are either affordable or very affordable. So while the survey found that people were more worried about the economy than they were a year ago, they also understood that with home prices down 30% nationally from 2006, and mortgage interest rates still low (despite the Fed’s pulling out of the mortgage-backed securities market at the end of March), owning a home in this country is more affordable than it has been in a long time.
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Are the Best Mortgage Rates Behind Us?
By: Liz Freeman
March 29th, 2010
Weak demand for last week’s offerings in treasury auctions sparked sharp increases in mortgage rates, with lenders repricing for worse several times on Wednesday and Thursday. This was a bit dismaying for many who had been fairly confident that the upcoming exit of the Fed from the mortgage-backed securities (MBS) market this month would have little effect on rates
Alt-A Loans May Come Back But Could Be More Expensive
By: Liz Freeman
July 19th, 2010
Remember stated income loans? In their more responsible guises, they required a substantial down payment of between 20% and 30%, stellar credit scores, reasonable liquid assets (at least six months of the stated income in general, so if you claimed to earn $10,000 a month, you should have had at least $60,000 in a bank more...
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