Archive for the 'Mortgage News' Category
New Rules For Home Loan Modifications
Those seeking to ease their mortgage terms must now document their finances before a trial modification will be approved. Loan servicers must adopt the policy by June 1st 2010.
Taking borrowers at their word for how much they earn was a major cause of the mortgage meltdown. That practice may also be why an Obama administration program has struggled to convert temporary home loan modifications into permanent ones.
The government said last week that it would overhaul the program by requiring homeowners to document their incomes before trial modifications are granted. Read the rest of this entry »
How is your credit?
Most people at one time or another try to improve their credit to be able to secure the best rate for a mortgage, car loan or to just repair their damaged credit.
Here are some helpful tips to improve your credit score;
DO pay your bills before the payment is due preferably as soon as you get the bill. For millionaire credit building, this does have an impact on your credit score. Additionally, it keeps your average daily balance low and saves you money on interest when determining interest and insurance rates.
DO keep your account balances less than 40-60% of the limit. Potential creditors like to see that you use your credit appropriately, but not excessively. The old adage “The best way to get approved for credit is to not need the money” is true.
DO pay your biggest bills first. The larger the missed payment, the more it hurts your credit score. Simiarly, if you are forced to juggle bills, choose to skip the payments for the creditors who don’t report to the credit bureaus like utility companies and pay the ones who will report to the bureaus.
DO pay your mortgage or home loan every month. Lenders frown on late payments on your old home loan when you are applying for new loans.
DO maintain a variety of types of loans. A previous mortgage or auto loan will increase your chances of getting the next mortgage or auto loan.
DON’T cancel your credit cards. Even unused cards help your credit score. It is not until you have a long credit history with a large number of accounts that lenders start to be concerned that you are possibly overextending yourself. If you have trouble not using your cards wisely, freeze them in a block of ice, even cut up the cards. But don’t cancel the account!
DON’T sign up for more cards or get too many rate requests over an extended period of time . Strategically plan and concentrate your efforts when applying for additional credit or loans.
DON’T pay old unpaid bills. This will draw attention to the old accounts. Showing recent activity can keep the information on your report for an extended period of time. Sometimes it is better to leave sleeping dogs lie.
For more information on home buying or selling, give us a call!
Pam Parton & Joanna Woolley
760-580-1615 or 760-580-1630
Brian Olenik of
Corinthian Title
contributed to this
article
CALIFORNIA HOME PRICES SHOW YEAR-TO YEAR GAIN FOR FIRST TIME IN TWO YEARS!!
This is great news!
INCREASE IN CALIFORNIA HOME SALES
The median price of a home in California experienced its first year-to year gain in over two years during the month of November 2009, as the California housing market continued recent trends in terms of prices, supply and sales.
The monthly median home price crossed the $300,000 threshold in November with a median of $304,520, up 2.4 percent from the October median price of $297,500 and up 5.8 percent from $287,880 a year earlier.The situation has improved greatly from a year ago during the worst of the financial crisis, when the median price had registered 41.3 percent year-to-year decline.
After a 59 percent peak-to-trough decline, the California median home price has increased 24.1 percent from a trough of $245,170 that occurred in February 2009. The increase in price has been sustained by a combination of lean supply and high demand, the latter triggered by historically high affordability. By comparison, the National Assoc of Realtors national median price for existing single family homes, which experienced a 29 percent peak-to-trough decline, has increased by 4.7 percent from its trough of $164,00 in January to $171,900 in November 2009.
Nine consecutive month-to month increases in the California median price have been the result of the lean inventory conditions throughout the year. The MLS-based unsold inventory index for California has averaged 4.8 months since the start of the year, well below the 7 month long run average. By comparison, the national unsold inventory index for single family homes has averaged 8.4 months over the year. Inventory levels in both California and the US have trended down for most of the year. As for sales, California returned to pre-peak levels of sales in late 2008 and sustained them through 2009.
With Sales of 536,720 homes in November, the market was 4.6 percent lower than the October sales figures of 562,400, but 4.7 percent above the November 2008 figure of 512,840. Sales throughout the year have averaged 545,600, compared with the pre-peak monthly average over the 2000-2002 period of 537,300 homes. Over the 2000-2002 period, US sales of existing homes averaged 4.8 million homes, compared with the low-to mid-4 million range of sales that the national market experienced from late 2007 until late this year when sales finally exceed the 5 million threshold.
Call Pam and Joanna if you are thinking of buying or selling a home.
Voted “Best in Client Satisfaction Real Estate Agents for 2009 and 2010 – fewer than 7 percent of all licensed real estate agents in San Diego recieve this award.
Pam Parton 760-580-1615 Joanna Woolley 760-580-1630
Content Courtesy of: Robert A. Kleinhenz , Ph.D., Deputy Chief Economist
Understanding your FICO score and how it affects your ability to obtain credit.
FICO scores
REMOVING SOME OF THE MYSTERY ABOUT CREDIT SCORING
Fair, Isaac Co., the major provider of credit scoring systems to lenders, revealed how it determines credit scores, also know as FICO scores. Many lenders use these scores to predict how likely a borrower is to repay a loan.
FIVE MAIN FACTORS INFLUENCE YOUR FICO SCORE:
1) PAYMENT HISTORY
Payment history accounts for about 35 percent of your score. Paying your bills on time is the best way for you to receive a high FICO score.
2) YOUR CURRENT DEBT
About 30% of your score is determined by how much you currently owe. If you owe a lot of money in relatio lto your available credit limits, you may appear over extended. The key is to keep your balances low on unsecured debt such as credit cards. Even closing unused accounts may not improve your score.
3) HOW LONG YOU’VE HAD CREDIT
The longer you’ve had credit and handled it responsibly, the better your FICO score will be. The length of your credit history accounts for 15% of your score
4) APPLICATIONS FOR NEW CREDIT
Applying for several credit accounts in a short period of time could indicated that you may soon be over extended and may lower your score. This is about 10% of your score.
5) MIX YOUR CREDIT
The final 10% of your score is determined by the kinds of credit accounts you have, such as credit cards, retail accounts, installment loans, finance company loans and mortgage loans, and how many of each.
Ther are other elements, mostly subcategories of the items listed above, that go into your score, including your occupations, time at present job, time at your current address, home ownership and much more. For more information or to obtain a copy of your FICO score, visit www.fairisaac.com
Following these guidelines will help you obtain better financing rates when you are ready to purchase your next home.
Give us a call with any real estate questions you may have, we’re here to help and we answer our phones!
Pam Parton and Joanna Woolley
760-580-1615 or 7605801630
Brian Olenik of
Corinthian Title
contributed to this article
MORTGAGE NEWS
A growing number of homeowners looking to refinance are finding the 15 year mortgage appealing instead of the traditional 30 year term.
Recent data according to the Mortgage Bankers Association reveals one in five applications during October 2009 were for the 15 year term, up 9.1% from a year ago.
The attraction of this mortgage is because interest rates have dropped to near historical lows. Mid December rates for a 15 year fixed conforming mortgage averaged 4.46%, well below the recent high of 5.25% in mid June. Rates on 30 year fixed-rate conforming loans averaged 4.99% or about half a percent point higher.
15 year home mortgages can have their disadvantages, even with low rates monthly payments can be much higher as the loan is being paid off over a shorter term.
Originations of 15 year mortgages at Wells Fargo & Co. are up 55% through November from a year earlier. At J.P. Morgan Chase & Co., 15 year loans now account for 20% of refinances, up from 10% a year ago.
Many homeowners who have paid down a substantial part of their home loan seem to think it makes sense to refinance to a shorter term and pay the difference than put that money in the bank or invest in the stock market and feel lucky if they make 1% interest!
For example – a homeowner in long beach, Calif is in the process of refinancing his investment property to a 15 year loan which carries a rate of 4.375%, this will raise his monthly payment to $294. He states my loan will be paid down quicker – its a win win situation.
Pam Parton 760-580-1615 Joanna Woolley 760-580-1630
content courtesy of the Wall Street Journal by Ruth Simon.
Market Update:
Mortgage bond prices rose last week pushing mortgage interest rates lower. Consumer confidence came in weaker than expected helping rates rally Tuesday morning. The ADP employment release showed more job losses than expected. The employment report Friday morning confirmed the ADP payroll data indicating the US economy shed 263,000 jobs in September.
For the week, interest rates fell by about 7/8 of a discount point.
Another round of Treasury auctions hits the market this week. Solid foreign demand will help rates remain the same or improve. Signs that foreign demand is diminishing will not bode well for mortgage interest rates. Weekly jobless claims set for release Thursday will carry a bit more weight than usual due to the lack of other economic data
Obtaining a home mortgage is often a confusing task that can also lead to frustration. The reason for the confusion is due to the fact that mortgage financing is complex. The good news is that this complexity provides all you San Diego homebuyers out there with options and choices best suited to fit their needs.
Everyone’s financial position is unique. Some people have large cash reserves that can be used for down payments while others want to get into a home with little or no money down. Credit ratings vary from person to person. In addition, future plans vary. Some people plan on staying in their home for the rest of their lives while others only plan on staying for a few years.
These facts alone make comparing your home mortgage to your neighbor’s based on rate alone a flawed endeavor, yet many people attempt to do so. Admittedly, everyone wants a good deal. Keep in mind that comparing rates is just one component of the entire mortgage. Other variables include the term, down payment requirements, income qualifications, credit ratings, reserve requirements, current debt, prepaid points, and many more.
A mortgage professional is able to take all of these variables that are unique to each individual and help a person obtain the mortgage loan that works best for their situation. The service they provide is time consuming and complex. However, the rewards of dealing with a professional carry forward throughout a borrower’s life. Making wise financial decisions today helps to pave the way for a safe and secure future
Market Update from Paul Gonzales @ CountryWide, Mortgage Inc.
MARKET UPDATE:
Mortgage bond prices rose last week pushing mortgage interest lower. The data was mixed with stronger than expected consumer sentiment and a disappointing 5 year Treasury note auction. Fortunately the Fed meeting resulted in some positive mortgage interest rate movements and strong foreign demand for the 7 year Treasury auction helped rates improve. For the week interest rates fell by about 1/4 of a discount point.
The employment report will take center stage this week. Consumer confidence, ADP employment, income, outlays, ISM Index, and factory orders data have the potential to move the financial markets. The recent economic data has been mixed. Remember that the bond market typically likes to see weaker figures with very little price pressures.
Good News
The housing sector of the economy has been hard hit during these troubled economic times. In an effort to stablize things the Federal Reserve implemented a system to keep mortgage interest rates low through the purchasing of $1.25 trillion of mortgage-backed securities throughout this year. Few can argue the Fed has not been effective with rates at historically favorable levels. However uncertainty still looms regarding the future of mortgage interest rates after the Fed program stops. The Fed provided some good news last week when they indicated the purchasing of mortgage bonds would be extended into the first quarter of 2010. Prior to the meeting all indications were the program would stop at the end of this year. The bad news is that they have not increased the amount to be spent as of yet. This still leaves much uncertainty and some view it as just a delay. The Fed also indicated that long term inflation expectations were stable. This is great news for fixed income securities and the stability of mortgage interest rates. Remember, the current goal of the Fed is to keep mortgage interest rates relatively low and stable. They appear to be content with rates in the current historically favorable range. So if you’re thinking of buying a home NOW is a great time – don’t miss out on these great interest rates.
Market Update from Paul Gonzales @ CountryWide, Mortgage Inc.
Can I get an FHA Loan?
Being self employed is not a deal breaker if you are trying to get an FHA Loan. Although it can be more difficult to get approved especially if your business is in the initial start up stage - but it can be done.
One important aspect is to begin keeping good business records if you do not already do this, so that you can prove to your lender that your business is lucrative and provides the income you need to pay your bills on time. If you can’t prove on paper that you have a steady income , FHA can’t conclude that you are a good risk.
Your FHA loan application will require information on the nature of your business, and also what your net income is compared to your business expenses. Self-employed people are often asked to provide a profit-loss statement, which helps the FHA and your lender understand how successful your business is. So make sure you keep detailed records of legitimate business expenses and have your taxes professionally prepared. This will help FHA have confidence in who they are lending to.
If you are considering buying a home, begin to prepare as much as a year in advance, especially if there are issues with credit repair or disputes on credit reports to deal with. If you are self employed you should be able to show a stream of reliable income for two years and have a set of accurate records to back up the information you put on the FHA loan application.
You will also need to be able to answer questions related to periods of inactivity and how this might affect your ability to make your FHA mortgage payments.
So if you keep good business records and can prove your business is working and providing the income you need to obtain your loan you should have success in getting an FHA home loan.
New Loan Rules for Home Buyers
Are you one of the many who are in the process of applying for a home loan or planning to refinance your home ? If so you should be aware of a new set of federal consumer protection rules that take effect July 30th 2009.
The new Federal Reserve guidelines require lenders to provide you with initial disclosures of your mortgage costs within 3 days of your application – if you don’t get them you can RUN……
The rule also prohibits lenders from collecting any fees, except of course a reasonable charge for checking your credit – until you have recieved your loan cost disclosures.
What does this mean to to you?- It means no more out-of pocket up front applications charges until you’ve recieved the truth-in-lending disclosures and an annual percentage rate (APR) calculation of these loan costs.
Many mortgage brokers and lenders traditionally have collected fees to cover appraisal fees, credit and various other charges at the time of application – this can amount to hundreds of dollars, so this will be a significant change in procedure for the lending industry.
Another rule also prevents quick closings on loans by requiring a seven day waiting period after applicants are given their early mail disclosures or the disclosures are mailed. You will now have up to a week to think about the transaction. Final truth-in-lending disclosures are due three business days before closing.
Here’s another new change – the new rules require lenders to deliver a copy of the real estate appraisal to you three business days before sceduled closing on the loan. In the past, consumers could request and obtain a copy of the appraisal, buyers often ignored that right – or had no knowledge of this right as no one in the home purchase department had ever told them about this option.
Another important change: if the APR on the early truth- in- lending disclosure increases by more than one-eighth of a percentage point (0.125), the lender will now be required to redisclose to you a corrected version and allow you an additional seven business days to consider the transaction before settlement.
For more information call Pam and Joanna, we are always available and WE ANSWER OUR PHONES!
Pam Parton 760-580-1615
Joanna Woolley 760-580-1630
Information by courtesy of Ken Harney, real estate columnist with Washington Post Writers Group.
As of writing this interest rates are in the low to mid 5% range. These are great rates compared to the national average. However , these rates are not etched in stone.
Mary Whistler
Your credit score has a big impact on what rate you will recieve and how much it will cost you.
Those who have credit scores above 720 have a much better chance in recieving lower rates. While others with lower scores might be charged additional fees or points.
This is why I highly recommend you getting pre-qualified by a mortgage professional. They will be able to review your credit and see what your scores are, helping you to evaluate your situation, perhaps even improving it!
Call me today and let me help you get the best rate possible.
Mary Whistler
760-815-8410
marywhistler@yahoo.com
