Mortgage ABC

Bank of America Promotes No-Fee Mortgage

Tue, 08 May 2007 20:22:03 -0800

Is it no fee, or no cost? Apparently, Bank of America is burying much of the cost to interest rates. Clever move BofA!

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Freddie Mac: Housing Worst Isn't Here Yet

Sat, 28 Apr 2007 16:03:43 -0800

I would be too naive to think the cumulative effect of many years' of reckless lending has already been unwound. How will this affect the economy in the next few years when the Class of 2006 faces graduation?

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Review: Credit Demystified

Mon, 02 Apr 2007 07:53:58 -0800

CreditDemystified.com. This credit education web site, backed by Countrywide Home Loans (Countrywide is one of the largest mortgage product provider in the nation), includes the following sections: 1) How to Improve One's Credit: Information regarding credit repair, credit counseling, and whether one should consider bankruptcy. 2) Credit Learning Center: Introduction to different types of loan products, and especially, how mortgage loan process works. 3) A 10-question Credit Intelligent Quotient test that only takes 5 minutes to complete (and I got a perfect 10!) 4) Introduction to Credit Scores: Explains credit bureaus, credit reports and FICO scores. 5) Introduction to Home Loans: What is fixed rate mortgage, what is adjustable rate mortgage, and what is combination rate mortgage (if you are not familiar with this term, you are not alone. It is actually hybrid loans with a number of years of fixed rate, accompanied by adjustable rate, like 5/1 ARM, 7/1 ARM, etc.) It is not a surprise that CreditDemystified.com does have its commercial purpose, though. For one, Countrywide Home Loan's toll free number is prominent in every single page. The only weakness of this site, perhaps, is in its domain name. I'm not sure how many people can spell demystified correct, and even for those who can, CreditDemystified.com is certainly not an easy domain name to remember. (While the above is a sponsored post, PFBlog is not required to provide a favorable review. Quality time was spent to study the subject website in completing this post to provide an independent opinion.)]]>

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Review: Credit Demystified

Mon, 02 Apr 2007 07:53:58 -0800

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An Imperfect Mortgage Calculator

Sun, 04 Mar 2007 23:38:47 -0800

online mortgage calculator. Unfortunately, it didn't do its job too well. Like other mortgage calculators, this one asks for your loan amount, interest rate and term (number of years). It also goes one step further by asking you to estimate your property tax and PMI (private mortgage insurance) ratio. As a result, the calculator will show you the monthly payment you can expect, the total value of payments, total interest to be paid throughout the life of the mortgage, and the full amortization schedule. As part of the output, there are a few nicely drawn charts showing you the relative percentage of principal, interest, tax and PMI in your payment, and your mortgage balance over time. However, this mortgage calculator is quite detached from reality in several aspects: First, Private mortgage insurance (PMI) usually only applies when one's loan-to-value (LTV) ratio is above 80%, and banks are required to drop PMI once your LTV drops to below 78%. Therefore, it is almost inconceivable that one will carry PMI throughout the 15 years or 30 years of a mortgage. Second, the calculator asks you to estimate your property tax as a percentage of loan amount. Usually, property tax is a percentage of total value of the underlying property, and therefore, an uninformed user may put a wrong percentage here, which will in turn lead to inaccurate results. Third, the calculator labeled the monthly payment in the output as "Monthly Principal & Interest," which, according to my calculation, also includes property tax and PMI payments. It is quite some confusion that can be easily avoided. Conclusion: Nice try on the graphic effects, but there are quite a few better mortgage calculators out there. (While the above is a sponsored post, PFBlog is not required to provide a favorable review. Quality time was spent to study the subject website in completing this post to provide an independent opinion.)]]>

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Some Nice Loan Calculators

Sun, 04 Mar 2007 20:51:17 -0800

iloancalculator.com particularly useful. These calculators cover some very typical scenarios when you need to get some hard numbers to back your choices. Here are a glance of some useful calculators: 1) Accelerated Mortgage Payoff Calculator: find out how you can pay off a mortgage early, and how much paying off early will save. 2) Bi-weekly Mortgage Calculator: find out how much faster you could pay off a mortgage by dividing your monthly payments into two, paying every two weeks rather than every month. 3) Auto Loan vs. Home Equity Loan Calculator: figure out whether an auto loan or home equity loan will be cheaper, after accounting for the closing fees of home equity loan. 4) Debt Consolidation Calculator: figure out how much time and money you can save by "consolidating" a credit card balance--or multiple credit card balances. 5) Credit Card Payoff Calculator: see how long it will take you to pay off a credit card balance at the rate you are making monthly payments and charges, and see how much faster (or slower) you could pay off that balance by making larger (or smaller) monthly payments. 6) Lease vs Buy Auto Calculator: find out how much buying a car and leasing a car will actually cost, and which is truly the better value. While online calculators are not scarce resources, what makes the loan calculators at iLoanCalculator.com particularly useful is it provides easy-to-understand explanation of relevant concepts with each calculator, and graphical presentation of the results. Finally, here are some quick (and somehow surprising) facts generated by some calculators at iLoanCalc: 1) For a credit card balance of $5,000 at an interest rate of 18%, it will take more than 30 years to pay it off if you stick to the minimal payment of $100/month. 2) For a 30-year mortgage at 6% interest rate, one can save 5.4 years by using a bi-weekly payoff schedule. For a principle amount of $100,000, that's a saving of over $24,000 over the life of the loan. While the above is a sponsored post, PFBlog is not required to provide a favorable review. Quality time was spent to study the subject website in completing this post.)]]>

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Mortgage Defaults Are Climbing For Alt-A Customers

Sat, 03 Mar 2007 19:01:49 -0800

Woo ... it looks like the housing market slowdown and default nightmare for mortgage underwriters will be worse before getting better. If these Alt-A customers are turning in 2.4% delinquency rate, there is no wonder why my person-to-person lending experience at Prosper.com is abysmal.

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Bad Credit? You Can Still Get A Home Equity Loan

Fri, 24 Nov 2006 23:14:07 -0800

When you choose to apply for a loan with bad credit your options are very limited. If you happen to find a lender willing to approve your loan, you’ll have to pay higher interest rates. Bad Credit Personal Loans are prohibitive due to the fact that lenders don’t have any asset securing the loan so the rate is calculated based on your personal credit. Lower credit scores get higher interest rates among with other costs. When your credit report is pulled, if there are too much stains on it, a lending institution will assume you’re a high risk customer and act accordingly either denying you the loan or charging exorbitant interests to compensate the risk. Offering a co-signer can sometimes solve this problem. The co-signer’s credit score will also be taken into account and might reduce the interest rate charged and get you approved. However, for unsecured loans, it is not always enough. The solution: Home Equity Loans Home equity loans are an excellent option for those dealing with a bad credit situation. Since these loans are secured on the equity of your home, the interest rate will be based mainly on the value of the outstanding equity and thus your credit score will not be such an issue. The rates you’ll get from a Home Equity Loan will be considerably smaller compared with unsecured personal loans, credit cards and payday loans. There are also very flexible repayment programs associated with this kind of loans. You can even get a line of credit so you can get the money when you need it. Moreover if you choose a variable rate the amount paid on interests will be reduced as well as if you select a shorter payment schedule. Consider all your options before opting for one loan. There is no rush and it would be wise to do a thorough research before making a decision. Avoid Overpaying Don’t jump in to the first offer, do your research and pay special attention to fees and costs. Sometimes you may think that certain loan has a very convenient interest rate but the truth is the lending company can be compensating that small rate with huge fees and other costs that will be charged and you may en up paying a lot more than you would have paid with a loan at a higher rate. Thus, you should request loan quotes from as many lenders as possible so you can get an idea of what the average APR and the typical fees and costs are. With this info in hand you can compare rates, fees and costs and see which is the best deal for you. Only then should you apply for a home equity loan.

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Getting $250 for NOT Banking with Bank of America

Wed, 01 Nov 2006 12:43:11 -0800

This sounds like an easy way to get some petty cash for your downpayment. As far as I know, Bank of America has never been competitve in mortgage rates. I have to admit this is a risky move for BofA.

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Home Prices Keep Sliding

Fri, 27 Oct 2006 04:29:06 -0800

Wall Street Journal summarizes the current status of the housing market. It appears that things can get worse before they get better. Seattle's housing market remains strong, which makes it hard to assess whether my decision in late 2005 to sell my house is wise marketing timing or not.

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How PMI Premiums Are Decided

Fri, 20 Oct 2006 03:41:45 -0800

Perhaps the best advice for PMI is to avoid one, either through savings toward a larger downpayment, or using piggyback loans to bypass PMI.

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Major Private Mortgage Insurance (PMI) Options

Fri, 20 Oct 2006 03:38:45 -0800

Bankrate's Amy Buttell Crane explains that there are three options when you cannot pay 20% of home price as downpayment. Obviously, piggyback loan is usually a better (read: cheaper) option than the other two.

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Red Flags Of Mortgage Fraud

Sun, 15 Oct 2006 02:38:11 -0800

Taking a mortgage is probably the largest financial transaction you have in your life, and you should pay extra attention to these potential red flags:

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Your Can Deduct Costs Of Refinancing!

Sat, 14 Oct 2006 20:04:34 -0800

Do you know on top of a low interest rate, you can also get some tax benefits by properly deducting cost associated with a refinanced mortgage? Here comes IRS Tax Tip 2006-55.

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ARM Holder Beware: The Mortgage Time-Bomb Is Ticking

Tue, 10 Oct 2006 04:57:27 -0800

Although things will turn bad before they turn good, if you just sign up for 3-year or 5-year adjustable rate mortgage, you may want to wait out the storm. After all, the interest rate may have peaked, and in 3 years time it will be a much better time to refinance.

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A Brief Introduction To UK Secured Loans

Mon, 09 Oct 2006 01:07:47 -0800

Secured loans in the UK enable homeowners to borrow money against the value of their property. For homeowners, secured loans are the best loan option to look for their financial needs. There are many benefits of availing secured form of loans, which makes it economical for the borrowers. Secured loans are secured against the property or house of homeowners. This means, borrower has to offer his house or other property to lender as collateral against the loan amount he is taking. This loan keeps lender at no risk, and they, therefore, provide loan at easy terms and conditions. Borrowers property, although, is at risk, if they fail to pay back the loan on time, and according to terms and conditions. But, this one disadvantage is not even a bit comparable to the several benefits, it offers to borrowers. For homeowners and property owners, secured loans are the easiest loan to avail, as it requires mere some kind of collateral, and house serves as collateral in best way. Stiff competition in the UK loan market has made secured loans to be availed much more easily. What borrower needs is to find out a best lender who can offer him the loan at easiest terms to meet his loan requirement in better way. Online lending has come to its age in UK, as they are proving to be a very good source of availing all kind secured loans, as well as offering variety of information and advice on loans. As the secured loans are collateral bound loans, borrower can even get higher amount depending upon value of his property. Moreover, borrower carrying bad credit can also avail the loan easily due to collateral’s presence. Besides, presence of collateral makes this loan available at easy rate of interest. And the repayment period will be long with smaller monthly installment. Sometimes the repayment period extends up to twenty-five years. Secured loans, for homeowners, are becoming a quick way to borrow money in any urgent need of money, as loan sanction process is very fast A bundle of benefits makes secured loans the most favourable loan option for homeowners in the UK. The loan amount borrowed in this loan can be used to meet any purpose of borrower. Borrowers are free to use this amount on expenses, such as, home improvement, debt consolidation, car purchasing, children’s higher educations, and etc. Though, for borrowers, the risk of losing property is attached in secured form of loans, but choosing the suitable lender who makes him loan available at flexible terms, can deter the risk of losing property. Being fair in repayment and meeting lender ‘s terms can keep borrower at ease, and enjoy making all their financial need fulfilling through availing secured loan in UK.

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40-Year Mortgage!!!

Mon, 09 Oct 2006 01:07:47 -0800

Just as the California housing marketing is tanking, smart guys are inventing the 40-year fixed-rate mortgage. Yes, you can always extend the length of the mortgage to make an expensive house affordable to a few more folks.

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How To Get A Mortgage With Bad Credit

Mon, 09 Oct 2006 01:07:44 -0800

If you are a homebuyer with a poor credit rating you may be concerned how your credit score will impact your loan. Homebuyers with poor credit qualify for higher interest rates and pay higher fees; however, if you spend some time cleaning up your credit and research mortgage lenders you can still qualify for a competitive mortgage loan. Here are several tips to help you clean up your finances and find the best deal for your mortgage. There are many options for homebuyers with poor credit that simply did not exist ten years ago. The Internet is an excellent tool for locating and comparing mortgage offers. Online mortgage lenders, particularly those that specialize in bad credit lending, are often more flexible in their lending than traditional mortgage lenders. Bad credit mortgage lenders are also called “sub-prime” mortgage lenders; these specialty lenders cater to homebuyers with poor credit for a premium finance charge. Find a Government Program If you qualify for assistance from a government homebuyer program you will save yourself a lot of money. The FHA and VA have homebuyer programs that can help you qualify for a mortgage despite your credit. The Federal Housing Administration (FHA) guarantees mortgages for low income individuals and the Veteran’s Administration (VA) guarantees mortgages for veterans. If you qualify for one of these programs your interest rate will be significantly lower than if you take out a bad credit mortgage. Accept Higher Interest Rates and Fees If qualifying for a government program is not an option for you, qualifying for a mortgage from a bad credit lender may be your only option. Depending on the severity of your credit problems, a mortgage broker could be the best way to find a lender willing to work with you. It is important that you compare offers from a variety of mortgage lenders to find the best loan for your financial situation. You can learn more about your bad credit mortgage options by registering for a free mortgage guidebook.

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30-Year Interest Only Fixed Rate Mortgage

Mon, 09 Oct 2006 01:07:43 -0800

Woo ... what an innovation. It is not without merits. After all, who will on earth stay in the same house for 30 years and keep paying the mortgage? Sooner or later, the homeowner will either move or refinance, so if a mortgage company can make this 30-year interest-free balloon offering attractive enough, enough people will try it.

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35-Year Mortgage In California

Mon, 09 Oct 2006 01:07:40 -0800

Yes, well said, "lenders and government agencies will do whatever it takes to spur the housing market." And now the marketing is crashing.

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What Is Bi-Weekly Mortgage Payment?

Mon, 09 Oct 2006 00:13:10 -0800

Truth be told, if you have a bit patience, you can do it yourself without paying anything for the "priviledge" to get your mortgage off your back years earlier. All you need to do is to send in the payments regularly.

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How Bi-Weekly Mortgage Payment Actuall Works

Mon, 09 Oct 2006 00:13:07 -0800

If you want to do it on your own, you need to know that you shouldn't send your mortgage company a check of half of monthly payment once every two weeks. Instead, you should pay a bit more in your monthly check.

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Mortgage ABC: What Is Private Mortgage Insurance (PMI)

Thu, 05 Oct 2006 06:39:40 -0800

Private mortgage insurance (PMI) protects the lender against a loss if a borrower defaults on the loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.

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How To Get The Best Mortgage Deal

Thu, 05 Oct 2006 06:23:25 -0800

FDIC's advice is to shop around and put the offers to writing.

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Mortgage ABC: What Is Conventional Loans?

Thu, 05 Oct 2006 06:23:20 -0800

Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA).

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Things To Look When You Shop For Home Equity Line Of Credit (HELOC)

Thu, 05 Oct 2006 06:17:52 -0800

If you decide to apply for a home equity line of credit, look for the plan that best meets your particular needs. Read the credit agreement carefully, and examine the terms and conditions of various plans, including the annual percentage rate (APR) and the costs of establishing the plan. The APR for a home equity line is based on the interest rate alone and will not reflect the closing costs and other fees and charges, so you'll need to compare these costs, as well as the APRs, among lenders.

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What Is A Home Equity Line Of Credit (HELOC)?

Thu, 05 Oct 2006 06:17:48 -0800

A home equity line of credit is a form of revolving credit in which your home serves as collateral. Because the home is likely to be a consumer's largest asset, many homeowners use their credit lines only for major items such as education, home improvements, or medical bills and not for day-to-day expenses. With a home equity line, you will be approved for a specific amount of credit--your credit limit, the maximum amount you may borrow at any one time under the plan. Many lenders set the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home's appraised value and subtracting from that the balance owed on the existing mortgage.

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Home Equity Line Of Credit (HELOC) vs. Traditional Second Mortgage Loan

Thu, 05 Oct 2006 05:59:15 -0800

If you are thinking about a home equity line of credit, you might also want to consider a traditional second mortgage loan. A second mortgage provides you with a fixed amount of money repayable over a fixed period. In most cases the payment schedule calls for equal payments that will pay off the entire loan within the loan period. You might consider a second mortgage instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home. In deciding which type of loan best suits your needs, consider the costs under the two alternatives. Look at both the APR and other charges. Do not, however, simply compare the APRs, because the APRs on the two types of loans are figured differently: - The APR for a traditional second mortgage loan takes into account the interest rate charged plus points and other finance charges. - The APR for a home equity line of credit is based on the periodic interest rate alone. It does not include points or other charges.

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How To Get A Home Loan After Bankruptcy?

Tue, 03 Oct 2006 15:10:51 -0800

There are specific and specialized bankruptcy lenders that will work with you and provide you with bankruptcy home loans. However, there are some requirements. For example, in general, you must have at least a credit score of 500 or more, in order for a bankruptcy home loan company to consider you. These lenders will generally bend over backwards to help you in securing a home loan. Here are some situations that generally apply for those wanting a home loan after bankruptcy: 1. You would likely only qualify for a maximum of eighty-percent financing. What this means for you, is that your down payment will be the twenty-percent that the loan does not cover. 2. It is also a requirement, for those wishing to obtain a bankruptcy home loan, to have a debt-to-income ratio of between forty-five to fifty percentile range. 3. You will likely have a higher interest rate than other people will. This should never stop you from obtaining the home of your dreams. However, as you begin to build your credit back up and improve your rating, you will have the option of refinancing at a later day for a lower rate of interest. It is the goal of most people, to someday become a homeowner. Even if you have filed for bankruptcy, you are not prevented from achieving that goal in any way. Every one makes mistakes; the key is to learn from them.

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A Correction Of Mortgage Rate and Home Price

Mon, 02 Oct 2006 15:54:13 -0800

This is certainly a bad time to be related to real estate in any way. Both mortgage rates and home prices are failing. How long will it last?

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Don't Be Fooled By Multiple Listing Service (MLS)

Sat, 30 Sep 2006 20:55:13 -0800

Do you know some real estate agents are intentionally gaming the MLS by relisting houses after they stay in the market for too long?

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Top Home Buying Tips

Thu, 28 Sep 2006 18:32:07 -0800

Some sound tips from CNN Money on how you should conduct a successful home purchase. These tips are especially useful as we are approaching a time of uncertainty in the real estate market.

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This Time, Falling Rates May Not Help

Thu, 28 Sep 2006 00:06:12 -0800

Don't read too much into the falling rates in the last few weeks. They may not rekindle the cooling market.

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Home Prices Start To Drop

Thu, 28 Sep 2006 00:06:12 -0800

This will be remembered as a reflection point in this round of housing boom.

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Choosing The Right Mortgage

Wed, 27 Sep 2006 17:48:17 -0800

Here is TD Canada Trust's tips on finding the right mortgage product for your household.

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