Monday, February 13, 2012
The New York Times
When borrowers choose a fixed-rate loan for a home purchase or refinancing, only one part of the monthly mortgage statement is ever likely to change: The escrow amount.
Read the full story:
http://www.nytimes.com/2012/02/05/realestate/mortgages-shrinking-the-escrow.html?_r=1&ref=realestate
Monday, January 23, 2012
The Mercury News
Mortgage interest rates, near all-time lows, are likely to remain attractive throughout 2012. That means opportunities for new home buyers and for homeowners who want to refinance.
Read the full story:
http://www.mercurynews.com/real-estate/ci_19683720
Tuesday, December 27, 2011
The Wall Street Journal
Mortgage rates are expected to remain very low at least through mid-2012, while housing activity improves slightly, according to Freddie Mac’s economic and housing outlook.
Read the full story
http://blogs.wsj.com/developments/2011/12/14/freddie-low-mortgage-rates-to-hang-around-next-year/?mod=WSJBlog&mod=WSJ_Real Estate_BLOGSDEVELOPMENTSFEED
Monday, November 21, 2011
Congress will decide this week whether to reinstate the limit on government-backed home loans in high-cost areas to $729,750.
Read the full story
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/15/BUIQ1LV1P3.DTL
Monday, November 14, 2011
Consumers currently home shopping or planning to refinance, need to decide on a specific mortgage program and do research to decide which will be the best fit for their situation.
Read the full story
http://www.mercurynews.com/real-estate/ci_19249844
Thursday, August 12, 2010
The Federal Housing Administration (FHA) last week provided details on its “FHA Short Refinance” program that will enable lenders to provide additional refinancing options to underwater homeowners. Beginning Sept. 7, the FHA is offering eligible underwater non-FHA borrowers the opportunity to qualify for a new FHA-insured mortgage.
Participation in FHA’s refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score greater than or equal to 500. The property must be the homeowner’s primary residence and the borrower’s existing first lien holder must agree to write off at least 10 percent of their unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115 percent.
Additionally, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.
Tuesday, August 10, 2010
Published by James Dwiggins under General.
(MCT)—David Kosowski has a full-time job, a sky-high credit score, a solid debt-to-income ratio and enough cash stashed away to put a 20% down payment on the three-bedroom, two-bath home he’s had his eye on since spring.
But when he applied for a mortgage to cover 80% of the $495,000 purchase price of the Coral Gables, Fla., home last month, he was flatly denied.
His story is one that has played out with head-scratching regularity across the troubled housing market, industry analysts say, even as mortgage rates have dropped to historically low levels.
The average interest rate for a 30-year fixed-rate mortgage sank to a record-low 4.56% this week, according to government-sponsored mortgage buyer Freddie Mac. Fixed-rate 15-year mortgages dipped slightly to an average 4.03%, also a record.
But even as rates fall, lenders are raising the bar ever higher for applicants, making it harder for even financially-stable home buyers to qualify, and in some cases making homes affordable only to those able to pay with cash.
Kosowski, who seems to have weathered the recession and the housing market downturn better than many—he’s employed and has considerable equity in the three-bedroom home he purchased 10 years ago—said his application was rejected because the company he works for (and owns a 25% stake in) saw its earnings drop between 2008 and 2009.
That was enough, he said, for the bank to turn down his loan application—despite his 817 credit score, a history of meeting all debt obligations and a 21% debt-to-income ratio.
“They asked me to explain the earnings decline,” he said. “I wrote a letter explaining that the economy had been down in 2009, and the next day they said the loan was denied. I was very surprised.”
Steve Schneider, his mortgage broker, and owner of Greenwich Title Services in South Miami, said he was surprised as well. “His credit is as good as anyone I’ve ever worked with,” he said. “He should’ve flown through.”
Such rejections would have been unheard of a half-decade ago, when credit was flowing freely, often to people who couldn’t afford the homes and condos they were buying, said Doug Dewitt, a Miami-based real estate broker.
“Now the pendulum has swung completely in the other direction, and lenders are making you very accountable in terms of your credit history,” he said. “It’s like they don’t want to write one more bad loan.”
With South Florida’s housing market still struggling to recover from record-high foreclosures, toppled home values and a glut of inventory, the ease with which banks now turn down applicants is nearly unprecedented, he added.
Potential borrowers are being denied access to tantalizingly low interest rates for reasons ranging from insufficient down payments, to a less-than-perfect credit history, to concerns about the property or buildings they hope to buy into.
The current interest rates are so desirable because they translate into significant savings in monthly and total payments for home buyers. For example, someone getting a $250,000 home loan in July 2010 would save an average of about $155 each month, compared to someone getting a similar loan last July, when the average 30-year fixed interest rate was about a percentage point higher.
Mortgage lending in 2010—down about 50% from early 2009—has shown a complete 180-degree turn from the home lending practices that reigned before the housing market bubble burst, and represents yet another obstacle stalling a recovery in the housing market, those who track the industry say.
Kosowski had very little trouble getting a loan for the home he bought back in 2000, when his income was lower than it is today. As he looked to move into a bigger home this year, the stack of paperwork he had to fill was considerably thicker than it was 10 years ago.
“It’s night and day,” he said, comparing the two loan application experiences. “I had to give about a quarter of the information that they ask for now, my income was significantly less than it is now, and there was no problem getting a loan. It’s almost like they don’t want to lend.”
The low-interest rates have done little to spur activity in the housing market. Last week, the number of mortgage-loan applications for home purchases dropped to its lowest level since the 90s, the Mortgage Bankers Association found. Nearly four out of five applications were from existing homeowners looking to refinance, many of them rejected because of insufficient or nonexistent equity.
Despite prices that have fallen drastically in the past five years, traditional home sales to traditional, middle-income buyers have been pushed to the margins.
With the expiration of the federal home buyer tax credit and many still worried about losing their jobs, the stiff lending requirements of banks offer up yet another reason for the average person to not buy a home.
Kosowski, who works for a lighting manufacturing company, ended up paying cash for the Coral Gables home in June, and is hoping to get a refinance loan soon.
Greg McBride, senior financial analyst for Bankrate.com, predicted that mortgage rates would remain low for the foreseeable future, but it will take more than low-rates to spur a recovery.
“Low mortgage rates alone are not going to revive the housing market,” he said. “People are still nervous about their jobs, and reluctant to take the plunge into home ownership. And the market continues to be plagued by a very high level of distressed properties.”
Thursday, July 8, 2010
Fixating on price in real estate may cost you the deal:
Value Elements in an Offer
The value expressed in a buyer’s offer to purchase, or in a seller’s offer to sell, involves 5 key elements — a financial package:
Tip: Re-read this article when you are ready to make an offer, counter an offer or accept one. This will ensure value is visible to you on all levels before you decide to walk away or sign on the dotted.
Written by PJ Wade
Tuesday, July 6, 2010
Whether you are a first time home buyer or someone who is looking to move up or down, getting into the market can be a fearful time.
Here are some of the most common buyer fears:
Do I have enough money to buy a home?
To first step to finding out how much home you can truly afford is to get pre-qualified for a mortgage.
Also, take a step back and look at your finances. Ideally, you should have around 20 percent of the purchase price to put down. You should also have less than a 36 percent debt to income ratio. Be sure to include all of your monthly obligations in that equation, including student loans, child support payments, alimony, car payments, credit cards, etc.
Once you’ve looked at your savings, make sure that apart from your down payment, you’ll have enough left over to pay closing costs, which include such things as attorney fees and transfer fees. The National Association of Realtors (NAR) reports that this amount averages between 2 and 7 percent of the home price. You also need to have money left as a cushion. What if unexpected repairs, either to your house or car, come up? What if you or a family member needs medical attention? Be sure that you have enough money leftover after the purchase to keep your life running smoothly.
Will I have buyer’s remorse?
There is no such thing as the perfect house, so you should prepare yourself for some mild feelings of “what if”. You may have to give up a few “wants” to get a few “needs” when you buy your next home. Or if this is your first purchase, you may have to buy something a little short of your dream house, and build equity in order to move up at a later date. Try not to lose sight of the big picture. This is a home that you own. You now get the benefits of tax breaks. You are building equity as you pay off the loan. And, hopefully, your home will appreciate in value over the coming years.
How can an unhandy owner handle repairs?
Before you swear off doing some of your own projects or repairs, know that everyone starts somewhere. Take a class at your local home improvement store, invest is a handyman’s guide, or ask a friend that has already tiled their bathroom or fixed a leaky sink to come and give you some pointers.
Be prepared for repairs, maintenance, and updates. Even with a new home, there will be projects. Plan accordingly financially. And if all else fails, hire a professional.
What if I need to move?
Experts recommends that to build equity, you need to have owned your home for at least 3 to 5 years. The NAR recommends, “Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.” If the time is less than five years, then you should be prepared to not make any money on the sale of your home, and even, to “lose” some — in the form of closing costs.
Written by Carla L. Davis
Tuesday, June 15, 2010
The number of delinquent mortgages loans—borrowers behind on their payments by 30 days or more, or who were in the foreclosure process—declined to 6.18 million in April compared with March, according to a report by Lender Processing Services. Meanwhile, REO inventory rose 20.7 percent to 1.13 million units, a new high, compared with a year ago, according to the report.
