What determines your credit score?
Whether you have had recent credit struggles, or are just trying to build up enough credit to qualify for a mortgage to purchase or refinance a home, here are some helpful tips...
Your credit score is calculated on information obtained from your personal credit file. This information is then analyzed in five different categories to produce your three-digit FICO® score.
Payment History: 35% of your score is based on paying your credit related accounts on time. Late payments or slow pays can drop your score quickly.
Credit Utilization: 30% of your score is based on how much credit you have and how you are using it. If you are close to utilizing the entire amount of your credit limit on a credit card or line of credit, it can reflect negatively on your credit score.
Length of Credit History: 15% of your score is based on good payment history over a period of time.
New Credit and Inquiries: 10% of your score is based on the number of recent inquiries and opened accounts coming from creditors. If you want to minimize the damage from credit inquiries, make sure that when you shop for a mortgage you do so in a fairly short period of time. The FICO® score treats multiple inquiries in a 45-day period as just one inquiry and ignores all inquiries made within 30 days prior to the day the score is computed.
Types of Credit: 10% of your score is based on having a variety of credit accounts such as a home mortgage, auto loans, credit cards, etc.
Overall the best way you can improve your credit score is to: Correct errors. Pay your bills on time. Pay down your debt. And apply for credit sparingly.
Showing posts with label Financial. Show all posts
Showing posts with label Financial. Show all posts
Wednesday, June 16, 2010
Monday, March 15, 2010
Don't Raise Down Payments
FHA Head: Don't Raise Down Payments
Now is not the time to raise the downpayment requirement on a Federal Housing Administration loan, warns FHA Commissioner David Stevens.
Stevens, testifying before a committee of the U.S. House, said his agency would probably insure 300,000 fewer home loans per year if the mandatory down payment was raised from 3.5 percent to 5 percent — a 40 percent increase.
Congress has been considering various ways to put FHA on a sounder financial footing. Besides increasing the downpayment requirement, another suggestion under discussion is raising the upfront mortgage insurance premium to 2.25 percent of the loan amount, up from 1.75 percent currently.
The National Association of REALTORS® also opposes the proposal to raise the mandatory down payment for an FHA loan. The FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices, said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity.
“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said. “It’s important to note that higher balance FHA loans perform better than lower balance ones. While some argue that higher balance loans put taxpayers at risk, such loans actually strengthen the program and reduce risk to the fund.”
Explaining that FHA has played an important role in the recent housing and economic crisis by filing the gap left by private lenders, McMillan said FHA insured almost 30 percent of single-family mortgages in 2009 and more than 50 percent of first-time buyer loans. “Historically, FHA’s market share has hovered between 10 and 15 percent of all loans. And when the private market is strong enough to return, we welcome a reduced FHA market share,” he said.
McMillan said NAR was also concerned that FHA wanted to decrease seller concessions to 3 percent. Reducing seller concessions could put homeownership out of reach for many buyers, he said, because it could require buyers to pay more at closing.
Source: Associated Press, Alan Zibel, and NAR (03/11/2010)
Now is not the time to raise the downpayment requirement on a Federal Housing Administration loan, warns FHA Commissioner David Stevens.
Stevens, testifying before a committee of the U.S. House, said his agency would probably insure 300,000 fewer home loans per year if the mandatory down payment was raised from 3.5 percent to 5 percent — a 40 percent increase.
Congress has been considering various ways to put FHA on a sounder financial footing. Besides increasing the downpayment requirement, another suggestion under discussion is raising the upfront mortgage insurance premium to 2.25 percent of the loan amount, up from 1.75 percent currently.
The National Association of REALTORS® also opposes the proposal to raise the mandatory down payment for an FHA loan. The FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices, said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity.
“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said. “It’s important to note that higher balance FHA loans perform better than lower balance ones. While some argue that higher balance loans put taxpayers at risk, such loans actually strengthen the program and reduce risk to the fund.”
Explaining that FHA has played an important role in the recent housing and economic crisis by filing the gap left by private lenders, McMillan said FHA insured almost 30 percent of single-family mortgages in 2009 and more than 50 percent of first-time buyer loans. “Historically, FHA’s market share has hovered between 10 and 15 percent of all loans. And when the private market is strong enough to return, we welcome a reduced FHA market share,” he said.
McMillan said NAR was also concerned that FHA wanted to decrease seller concessions to 3 percent. Reducing seller concessions could put homeownership out of reach for many buyers, he said, because it could require buyers to pay more at closing.
Source: Associated Press, Alan Zibel, and NAR (03/11/2010)
Wednesday, August 26, 2009
FHA Changes For Condos
Beginning October 1, there will be some changes to the approval process for FHA Condo loans nationwide. The reason for this change is to complete a current due diligence of all Condo projects.
Up until now, Condo projects were either already approved and listed on HUD’s website for FHA financing, or they could be “spot approved” for FHA loans, meaning the lender could get evidence that the Condo project met FHA guidelines and approve a loan on one of the units. This did not approve the whole project through HUD though, so the next time someone wanted to get an FHA loan on a unit in the same project, they also had to go through the “spot approval” process.
Under the new rules, FHA lenders will have the authority to actually approve a whole Condominium project for HUD. This means that “spot approvals” will be eliminated. Once a loan is done on a unit in a development, it will be added to the HUD approved list and future FHA loans in the project will be easier to do.
Up until now, Condo projects were either already approved and listed on HUD’s website for FHA financing, or they could be “spot approved” for FHA loans, meaning the lender could get evidence that the Condo project met FHA guidelines and approve a loan on one of the units. This did not approve the whole project through HUD though, so the next time someone wanted to get an FHA loan on a unit in the same project, they also had to go through the “spot approval” process.
Under the new rules, FHA lenders will have the authority to actually approve a whole Condominium project for HUD. This means that “spot approvals” will be eliminated. Once a loan is done on a unit in a development, it will be added to the HUD approved list and future FHA loans in the project will be easier to do.
All current Condominium project approval will be invalid. After October 1, 2009 all Condo projects will have to go through new approval. Until a Condo project is approved and listed with HUD then FHA financing will not be an option. Over time, this should really streamline the time it takes to do FHA loans on condos here in the Utah County area.
The drawback is that it may take longer and be far more difficult to get an FHA loan done on that first unit in the project, so keep that in mind when buying a Condo that is not on HUD’s approved list. If you would like more information about these changes and what the requirements are for a Condo project to be eligible for FHA financing, just let me know!
The drawback is that it may take longer and be far more difficult to get an FHA loan done on that first unit in the project, so keep that in mind when buying a Condo that is not on HUD’s approved list. If you would like more information about these changes and what the requirements are for a Condo project to be eligible for FHA financing, just let me know!
Monday, August 17, 2009
New Lending Regulations
New lending regulations could delay closings
New lending rules that require mandatory disclosures and waiting periods for mortgage loans have many lenders advising buyers, sellers and real estate agents to plan for at least 30-day closings and to expect possible delays. The regulations, which went into effect July 30, are part of an amendment to the Truth in Lending Act that seeks to ensure consumers receive cost disclosures earlier in the mortgage process, says the Federal Reserve Board.
The new rules apply to all mortgages secured by the borrower’s home, including primary and second homes as well as refinancings, and require lenders to give good faith estimates of mortgage loan costs within three business days after receiving a consumer’s application for a mortgage loan. The rules prevent any fees from being collected before the consumer has received the early disclosures except for a reasonable fee for obtaining a credit report.
The new rules also include various waiting periods, including the requirement that a home loan cannot close until seven days after the borrower has been issued the initial disclosures.
Furthermore, the new regulations require lenders to disclose if the annual percentage rate on the loan changes by more than 0.125 percent from the amount stated in the initial disclosure. If there is a need for a corrected disclosure, the consumer has another three days to review the new document before the loan can close. Because APR is affected by a variety of items, a corrected disclosure may be needed if there are changes in the interest rate, loan product, closing date, settlement fees or other related items. If these changes occur unexpectedly, it could push back the closing.
In similar fashion, the Home Valuation Code of Conduct (HVCC) gives home buyers three days to review a copy of the appraisal before closing on the loan, unless they waive the right.
In addition to the new review periods, mailing dates could affect closings as well. In cases where the disclosures are mailed, they won’t be considered “received” until three business days after the lender places them in the mail. For example, if corrected disclosures are mailed, the earliest the buyer could close would be on the sixth business day after the mailing (i.e., three business days for mailing and three business days for consumer review, with the consumer being allowed to close on the third review day).
Note: In terms of the three- and seven-day waiting periods, a business day is defined as all calendar days except Sundays and legal public holidays.
Taken together, the new waiting periods could unexpectedly delay closings, especially if an appraisal comes in late or the APR changes. While the borrower may be able to waive the truth-in-lending waiting periods in a “bona fide personal financial emergency,” do not rely on this exemption.
Make sure your settlement deadlines provide enough time to accommodate for the new waiting periods.
By using a realtor, if you do end up in a situation where you won’t be able to meet the settlement deadline because of the timeframes in the new regulations, then your realtor will make sure to extend the REPC with an addendum.
New lending rules that require mandatory disclosures and waiting periods for mortgage loans have many lenders advising buyers, sellers and real estate agents to plan for at least 30-day closings and to expect possible delays. The regulations, which went into effect July 30, are part of an amendment to the Truth in Lending Act that seeks to ensure consumers receive cost disclosures earlier in the mortgage process, says the Federal Reserve Board.
The new rules apply to all mortgages secured by the borrower’s home, including primary and second homes as well as refinancings, and require lenders to give good faith estimates of mortgage loan costs within three business days after receiving a consumer’s application for a mortgage loan. The rules prevent any fees from being collected before the consumer has received the early disclosures except for a reasonable fee for obtaining a credit report.
The new rules also include various waiting periods, including the requirement that a home loan cannot close until seven days after the borrower has been issued the initial disclosures.
Furthermore, the new regulations require lenders to disclose if the annual percentage rate on the loan changes by more than 0.125 percent from the amount stated in the initial disclosure. If there is a need for a corrected disclosure, the consumer has another three days to review the new document before the loan can close. Because APR is affected by a variety of items, a corrected disclosure may be needed if there are changes in the interest rate, loan product, closing date, settlement fees or other related items. If these changes occur unexpectedly, it could push back the closing.
In similar fashion, the Home Valuation Code of Conduct (HVCC) gives home buyers three days to review a copy of the appraisal before closing on the loan, unless they waive the right.
In addition to the new review periods, mailing dates could affect closings as well. In cases where the disclosures are mailed, they won’t be considered “received” until three business days after the lender places them in the mail. For example, if corrected disclosures are mailed, the earliest the buyer could close would be on the sixth business day after the mailing (i.e., three business days for mailing and three business days for consumer review, with the consumer being allowed to close on the third review day).
Note: In terms of the three- and seven-day waiting periods, a business day is defined as all calendar days except Sundays and legal public holidays.
Taken together, the new waiting periods could unexpectedly delay closings, especially if an appraisal comes in late or the APR changes. While the borrower may be able to waive the truth-in-lending waiting periods in a “bona fide personal financial emergency,” do not rely on this exemption.
Make sure your settlement deadlines provide enough time to accommodate for the new waiting periods.
By using a realtor, if you do end up in a situation where you won’t be able to meet the settlement deadline because of the timeframes in the new regulations, then your realtor will make sure to extend the REPC with an addendum.
Tuesday, March 31, 2009
New Loans! Good News!
More good news from the mortgage industry -----
Super Jumbo loan programs are back!!
Loan amounts to $2 million and Loan To Valuss to 80%. Available in 30-year fixed, 5-year ARM and 3-year ARM.
680+ FICO score will loan up to $650,000
700+ FICO score will loan up to $1.5 Million
720+ FICO score will loan up to $2 Million
Today's rates for example:
up to $1 Million, 30-year fixed, at 6.125% interest; or a 5-yr ARM at 5.25% interest
up to $1.5 Million, 30-year fixed, 6.0% interest; or a 5-yr ARM 5.125% interest
And don't forget-------conventional, conforming purchase requires 740+ FICO score, 80% Loan To Value, with a 30-yr fixed, is only 4.50% interest!!!!
First-time home buyers still get the federal tax credit up $8,000
and our new State incentive to purchase a new home (never lived in) will get $6,000.
Super Jumbo loan programs are back!!
Loan amounts to $2 million and Loan To Valuss to 80%. Available in 30-year fixed, 5-year ARM and 3-year ARM.
680+ FICO score will loan up to $650,000
700+ FICO score will loan up to $1.5 Million
720+ FICO score will loan up to $2 Million
Today's rates for example:
up to $1 Million, 30-year fixed, at 6.125% interest; or a 5-yr ARM at 5.25% interest
up to $1.5 Million, 30-year fixed, 6.0% interest; or a 5-yr ARM 5.125% interest
And don't forget-------conventional, conforming purchase requires 740+ FICO score, 80% Loan To Value, with a 30-yr fixed, is only 4.50% interest!!!!
First-time home buyers still get the federal tax credit up $8,000
and our new State incentive to purchase a new home (never lived in) will get $6,000.
Friday, March 20, 2009
Grant to purchase NEW homes
Governor signs bill for new homes grant
Gov. Jon Huntsman Jr. signed a bill yesterday that will provide $6,000 grants to buyers of newly constructed, never-occupied homes. Upon his signature, he immediately directed the Utah Housing Corporation to begin dispersing grants under the “Home Run” program to buyers who finance a recently constructed home with a 30-year (or less) fixed-rate mortgage and meet other qualifications.
Senate Bill 260 created a fund that will use federal stimulus dollars to provide about 1,600 grants to be distributed through Utah Housing Corporation to home buyers on a first-come, first-served basis.
To apply for the grant, home buyers should work through their lender. Any mortgage lender qualified to make mortgage loans under Utah law can assist home buyers to secure the Home Run grant. Lenders will work directly with Utah Housing Corporation to apply for the grant money. Examples of qualifying mortgages include conventional, FHA, VA, Rural Housing and Utah Housing loans. Cash buyers should work directly with Utah Housing.
Consumers do not have to be first-time buyers to qualify for the program but incomes cannot exceed $75,000 for singles and $150,000 for married couples. Buyers who qualify for both programs can take advantage of the $8,000 federal home-buyer tax credit as well as a Home Run grant.
“It is up to the states to use the federal stimulus money in a way that truly has a beneficial impact on our economy. This is an immediate stimulus targeted at the weakest area of Utah’s economy,” Huntsman said in a press release. “This investment of $10 million will result in 8,800 jobs in the market and $324 million in wages into our economy. This boost is critical for us to reverse our current position.”
To learn more about program details and how buyers can apply, visit www.UtahHousingCorp.org . Also visit www.UtahHousingFacts.com for information about both the Home Run program and the $8,000 federal first-time home buyer tax credit.
Gov. Jon Huntsman Jr. signed a bill yesterday that will provide $6,000 grants to buyers of newly constructed, never-occupied homes. Upon his signature, he immediately directed the Utah Housing Corporation to begin dispersing grants under the “Home Run” program to buyers who finance a recently constructed home with a 30-year (or less) fixed-rate mortgage and meet other qualifications.
Senate Bill 260 created a fund that will use federal stimulus dollars to provide about 1,600 grants to be distributed through Utah Housing Corporation to home buyers on a first-come, first-served basis.
To apply for the grant, home buyers should work through their lender. Any mortgage lender qualified to make mortgage loans under Utah law can assist home buyers to secure the Home Run grant. Lenders will work directly with Utah Housing Corporation to apply for the grant money. Examples of qualifying mortgages include conventional, FHA, VA, Rural Housing and Utah Housing loans. Cash buyers should work directly with Utah Housing.
Consumers do not have to be first-time buyers to qualify for the program but incomes cannot exceed $75,000 for singles and $150,000 for married couples. Buyers who qualify for both programs can take advantage of the $8,000 federal home-buyer tax credit as well as a Home Run grant.
“It is up to the states to use the federal stimulus money in a way that truly has a beneficial impact on our economy. This is an immediate stimulus targeted at the weakest area of Utah’s economy,” Huntsman said in a press release. “This investment of $10 million will result in 8,800 jobs in the market and $324 million in wages into our economy. This boost is critical for us to reverse our current position.”
To learn more about program details and how buyers can apply, visit www.UtahHousingCorp.org . Also visit www.UtahHousingFacts.com for information about both the Home Run program and the $8,000 federal first-time home buyer tax credit.
Monday, March 16, 2009
Unable to Make Your Payment?
If you are unable to make your mortgage payment:
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at: Hud.gov
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.
2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at: Hud.gov
6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287.
7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.
10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
Friday, February 6, 2009
Help For Homeowners
Realtors® Urge Congress to Help 'HOPE For Homeowners'
TUESDAY, 03 FEBRUARY 2009
The National Association of Realtors® today announced its support for new legislation introduced by House Financial Services Committee Chairman Barney Frank, D-Mass., that is designed to ease loan modifications and improve refinancing options for America’s troubled homeowners by revamping the HOPE for Homeowners program.
“HOPE for Homeowners, was designed to help families refinance into safer, more affordable mortgages, in many cases helping those families avoid a devastating foreclosure,” said NAR President Charles McMillan. “Despite being well-intentioned, the HOPE for Homeowners program has had limited success. Lenders have found the program difficult to participate in because of many of the program’s constraints. This legislation, H.R. 703, is expected to make the program more lender-friendly, while preserving the benefits to homeowners. It would also limit risks to the FHA fund and to the American taxpayer. This is important legislation and we hope Congress will move forward with it.”
The legislation would also provide access to Troubled Asset Relief Program funds for small institutions and community banks and encourage additional actions to expand mortgage funding capacity in the primary market. “Stabilizing the housing market will help the nation’s economic future,” said McMillan. “H.R. 703, along with other stimulus bills being considered, will go a long way to help families keep their homes.”
NAR continues its push to enact legislation that will help stabilize and stimulate the housing market. Its four-point plan, introduced in November, is designed to spur home sales and stem the rapid rise in foreclosures by lowering mortgage interest rates and unclogging the credit market, extending the home buyer tax credit, making the increased loan limits permanent, and increasing liquidity in the both the commercial and residential real estate market.
NAR expressed support and vowed to work with Congress and the administration to establish strong housing legislation that will help stabilize home values, prevent foreclosures and put the U.S. economy on the road to recovery. “Providing relief for families facing foreclosure will help stabilize our real estate markets and our economy,” McMillan said.
TUESDAY, 03 FEBRUARY 2009
The National Association of Realtors® today announced its support for new legislation introduced by House Financial Services Committee Chairman Barney Frank, D-Mass., that is designed to ease loan modifications and improve refinancing options for America’s troubled homeowners by revamping the HOPE for Homeowners program.
“HOPE for Homeowners, was designed to help families refinance into safer, more affordable mortgages, in many cases helping those families avoid a devastating foreclosure,” said NAR President Charles McMillan. “Despite being well-intentioned, the HOPE for Homeowners program has had limited success. Lenders have found the program difficult to participate in because of many of the program’s constraints. This legislation, H.R. 703, is expected to make the program more lender-friendly, while preserving the benefits to homeowners. It would also limit risks to the FHA fund and to the American taxpayer. This is important legislation and we hope Congress will move forward with it.”
The legislation would also provide access to Troubled Asset Relief Program funds for small institutions and community banks and encourage additional actions to expand mortgage funding capacity in the primary market. “Stabilizing the housing market will help the nation’s economic future,” said McMillan. “H.R. 703, along with other stimulus bills being considered, will go a long way to help families keep their homes.”
NAR continues its push to enact legislation that will help stabilize and stimulate the housing market. Its four-point plan, introduced in November, is designed to spur home sales and stem the rapid rise in foreclosures by lowering mortgage interest rates and unclogging the credit market, extending the home buyer tax credit, making the increased loan limits permanent, and increasing liquidity in the both the commercial and residential real estate market.
NAR expressed support and vowed to work with Congress and the administration to establish strong housing legislation that will help stabilize home values, prevent foreclosures and put the U.S. economy on the road to recovery. “Providing relief for families facing foreclosure will help stabilize our real estate markets and our economy,” McMillan said.
Friday, January 23, 2009
Recession to End
Mark Zandi: Recession to end September 2009
In a speech to Utah business leaders, Mark Zandi, chief economist and co-founder of Moody’s Economy.com, said he expects the U.S. recession to end Sept. 15, 2009. Although he said 2009 would be “painful” and 2010 would be “uncomfortable,” he ended his speech with some reasons for optimism. First, the U.S. is paying a lot less for energy, and even though we have probably seen the low in regard to energy prices, he said he doesn’t expect prices to rise significantly in the near term.
Zandi's second reason for optimism is the fact that housing is becoming much more affordable. Nationally, he expects home prices to bottom in the third quarter; however, in the Salt Lake area, he expects prices to continue to fall. The problem in Salt Lake is that both the house price-to-income and house price-to-rent ratios are still above their historical norms. In other areas around the state, however, Zandi’s analysis pointed to more correctly valued prices. “In fact, in markets where you do see affordability, prices are stabilizing,” Zandi said.
Finally, Zandi is optimistic because he expects help from the federal government. The proposed fiscal stimulus and foreclosure mitigation programs along with aggressive efforts from the Federal Reserve should bring the U.S. out of recession. “We’re going to get out of this mess, and we’re going to get out of it by next year,” he said.
In a speech to Utah business leaders, Mark Zandi, chief economist and co-founder of Moody’s Economy.com, said he expects the U.S. recession to end Sept. 15, 2009. Although he said 2009 would be “painful” and 2010 would be “uncomfortable,” he ended his speech with some reasons for optimism. First, the U.S. is paying a lot less for energy, and even though we have probably seen the low in regard to energy prices, he said he doesn’t expect prices to rise significantly in the near term.
Zandi's second reason for optimism is the fact that housing is becoming much more affordable. Nationally, he expects home prices to bottom in the third quarter; however, in the Salt Lake area, he expects prices to continue to fall. The problem in Salt Lake is that both the house price-to-income and house price-to-rent ratios are still above their historical norms. In other areas around the state, however, Zandi’s analysis pointed to more correctly valued prices. “In fact, in markets where you do see affordability, prices are stabilizing,” Zandi said.
Finally, Zandi is optimistic because he expects help from the federal government. The proposed fiscal stimulus and foreclosure mitigation programs along with aggressive efforts from the Federal Reserve should bring the U.S. out of recession. “We’re going to get out of this mess, and we’re going to get out of it by next year,” he said.
Monday, November 3, 2008
Update on credit conditions
Fannie Mae and Freddie Mac economists give update on credit conditions:
Even though subprime lending has dried up, there are still plenty of mortgages available — as long as borrowers meet certain conditions. That was the message of Freddie Mac Chief Economist Frank Nothaft in a presentation to the National Association of Home Builders on Oct. 22.
“I think the good news is that conventional conforming and FHA mortgage rates are still relatively affordable,” Nothaft said. “However, there are some caveats.”
Those stipulations are that borrowers 1) make a down payment, 2) have good credit, 3) apply for a conventional, conforming loan and 4) meet full documentation underwriting standards.
“You can get very good rates and there’s actually plenty of credit available in the marketplace for an applicant who meets those requirements,” Nothaft said.
Borrowers can even get jumbo loans if they meet those criteria — although there will be more underwriting and the products will cost more, he said.
Banks have been tightening their credit standards each quarter for the last year and a half for all loans, including prime ones, according to the Federal Reserve Board’s Senior Loan Officer Survey. The reason? Even though borrowers may be prime from a credit perspective, they may be buying in areas where home prices are falling and that leads to tightened standards, said Doug Duncan, Fannie Mae chief economist.
However, Duncan said there are signs banks may stop tightening their mortgage standards.
“I think we’ll probably see the peaking of [credit tightening this quarter],” Duncan said. “I think if all these efforts to increase liquidity are starting to be successful, you’ll start to see those numbers flatten out and ultimately tail off.”
Even though subprime lending has dried up, there are still plenty of mortgages available — as long as borrowers meet certain conditions. That was the message of Freddie Mac Chief Economist Frank Nothaft in a presentation to the National Association of Home Builders on Oct. 22.
“I think the good news is that conventional conforming and FHA mortgage rates are still relatively affordable,” Nothaft said. “However, there are some caveats.”
Those stipulations are that borrowers 1) make a down payment, 2) have good credit, 3) apply for a conventional, conforming loan and 4) meet full documentation underwriting standards.
“You can get very good rates and there’s actually plenty of credit available in the marketplace for an applicant who meets those requirements,” Nothaft said.
Borrowers can even get jumbo loans if they meet those criteria — although there will be more underwriting and the products will cost more, he said.
Banks have been tightening their credit standards each quarter for the last year and a half for all loans, including prime ones, according to the Federal Reserve Board’s Senior Loan Officer Survey. The reason? Even though borrowers may be prime from a credit perspective, they may be buying in areas where home prices are falling and that leads to tightened standards, said Doug Duncan, Fannie Mae chief economist.
However, Duncan said there are signs banks may stop tightening their mortgage standards.
“I think we’ll probably see the peaking of [credit tightening this quarter],” Duncan said. “I think if all these efforts to increase liquidity are starting to be successful, you’ll start to see those numbers flatten out and ultimately tail off.”
Tuesday, October 7, 2008
$700 Billion Rescue Bill
President Signs $700 Billion Rescue Bill
President George W. Bush signed a historic economic rescue bill on Friday, which sets out to revive the U.S. financial system by allowing the federal government to buy up to $700 billion in failed mortgaged from banks and other financial institutions.
The president signed the bill shortly after the U.S. House of Representatives voted 263-171 today to pass the far-reaching legislation.
"This legislation is critical to stopping the economic turmoil that millions of Americans are facing," NAR President Dick Gaylord said in a statement. "Today's action will go a long way toward ending the current economic crisis crippling the housing and financial markets."
The legislation will help restore liquidity to the mortgage market, which will stabilize the housing market and protect home owners, Gaylord said.
President George Bush, along with congressional members, had lobbied throughout the week for the support of spending billions of dollars to buy bad mortgage-related securities from troubled financial institutions, as a way to ease the credit crisis.
The bill was tossed a setback earlier in the week after the House voted it down, which sent stocks plunging 777 points, the biggest single-day drop in U.S. history.
The Senate revived the bill on Wednesday by making changes to the $700 billion measure, which was aimed at garnering more bipartisan support. The revised bill extended bank deposit insurance and expired tax breaks. The Senate passed its version of the bill in a 74-25 vote on Oct. 1. (see NAR Applauds Senate Stabilization Action).
Earlier in the week, NAR had called on its members to contact Congress to support the bill. NAR also teamed up with eight other business organizations to run an ad in major newspapers across the country that urged Congress to pass the recovery plan.
Source: REALTOR Magazine Online (10/3/08)
President George W. Bush signed a historic economic rescue bill on Friday, which sets out to revive the U.S. financial system by allowing the federal government to buy up to $700 billion in failed mortgaged from banks and other financial institutions.
The president signed the bill shortly after the U.S. House of Representatives voted 263-171 today to pass the far-reaching legislation.
"This legislation is critical to stopping the economic turmoil that millions of Americans are facing," NAR President Dick Gaylord said in a statement. "Today's action will go a long way toward ending the current economic crisis crippling the housing and financial markets."
The legislation will help restore liquidity to the mortgage market, which will stabilize the housing market and protect home owners, Gaylord said.
President George Bush, along with congressional members, had lobbied throughout the week for the support of spending billions of dollars to buy bad mortgage-related securities from troubled financial institutions, as a way to ease the credit crisis.
The bill was tossed a setback earlier in the week after the House voted it down, which sent stocks plunging 777 points, the biggest single-day drop in U.S. history.
The Senate revived the bill on Wednesday by making changes to the $700 billion measure, which was aimed at garnering more bipartisan support. The revised bill extended bank deposit insurance and expired tax breaks. The Senate passed its version of the bill in a 74-25 vote on Oct. 1. (see NAR Applauds Senate Stabilization Action).
Earlier in the week, NAR had called on its members to contact Congress to support the bill. NAR also teamed up with eight other business organizations to run an ad in major newspapers across the country that urged Congress to pass the recovery plan.
Source: REALTOR Magazine Online (10/3/08)
Monday, August 25, 2008
Paying Off Your Mortgage
Are you thinking about paying off your mortgage early??
One additional payment per year can save you thousands of dollars in interest!
There are two good ways to pay off your mortgage sooner:
1. Make an additional payment by writing one additional check a year to be applied directly to principal.
2. Split each of your normal monthly payments in half and pay every two weeks. (26 half payments equals 13 whole payments)
By making one extra payment per year you will pay less interest and your payments are applied to your principal balance more frequently!
To Pay or Not to Pay off early
To pay your mortgage off early is a secure investment. Many debate whether or not to put extra money towards paying off their mortgage or invest in bonds or stock market. Consider prepaying your mortgage because it reduces total interest expense. You will earn a 'guaranteed return' on your home mortgage.
To not pay your mortgage you will generally get a better market return. If you have a 30 year mortgage at 7% and take advantage of the tax deduction, you will get a better return on any market investment that earns more than 5.1%.
To pay your mortgage early you can cancel your Private Mortgage Insurance (PMI). You probably have PMI if you borrowed more than 80% of your home's appraised value. Making extra payments on your mortgage will help you reach the 20% equity you need to drop the PMI and stop paying those premiums.
To not pay off your mortgage early or you will lose the tax deduction. You will not be able to deduct the interest you would have been paying. If you are in a high tax bracket you should weigh the consequences before paying down the mortgage.
To pay your mortgage early will give you peace of mind. Owning a home and being debt free can be psychologically rewarding. Just be careful that paying your mortgage early doesn't come at the expense of using your retirement savings or lead to high interest credit cards debt.
To not pay your mortgage early because of a possible prepayment penalty. Most fixed mortgages don't carry prepayment penalties, some adjustable rate mortgages do. Discuss the terms of your loan with your lender before you prepay to make sure you won't be penalized.
To pay your mortgage early to have more at retirement. Pay more now to have more later! If you would prefer to not have to use your retirement savings to finish paying your mortgage then consider prepaying now while you are in the workforce.
Planning for tomorrow is important. The more you educate yourself on your financial options, the more confident you will feel with your decisions.
One additional payment per year can save you thousands of dollars in interest!
There are two good ways to pay off your mortgage sooner:
1. Make an additional payment by writing one additional check a year to be applied directly to principal.
2. Split each of your normal monthly payments in half and pay every two weeks. (26 half payments equals 13 whole payments)
By making one extra payment per year you will pay less interest and your payments are applied to your principal balance more frequently!
To Pay or Not to Pay off early
To pay your mortgage off early is a secure investment. Many debate whether or not to put extra money towards paying off their mortgage or invest in bonds or stock market. Consider prepaying your mortgage because it reduces total interest expense. You will earn a 'guaranteed return' on your home mortgage.
To not pay your mortgage you will generally get a better market return. If you have a 30 year mortgage at 7% and take advantage of the tax deduction, you will get a better return on any market investment that earns more than 5.1%.
To pay your mortgage early you can cancel your Private Mortgage Insurance (PMI). You probably have PMI if you borrowed more than 80% of your home's appraised value. Making extra payments on your mortgage will help you reach the 20% equity you need to drop the PMI and stop paying those premiums.
To not pay off your mortgage early or you will lose the tax deduction. You will not be able to deduct the interest you would have been paying. If you are in a high tax bracket you should weigh the consequences before paying down the mortgage.
To pay your mortgage early will give you peace of mind. Owning a home and being debt free can be psychologically rewarding. Just be careful that paying your mortgage early doesn't come at the expense of using your retirement savings or lead to high interest credit cards debt.
To not pay your mortgage early because of a possible prepayment penalty. Most fixed mortgages don't carry prepayment penalties, some adjustable rate mortgages do. Discuss the terms of your loan with your lender before you prepay to make sure you won't be penalized.
To pay your mortgage early to have more at retirement. Pay more now to have more later! If you would prefer to not have to use your retirement savings to finish paying your mortgage then consider prepaying now while you are in the workforce.
Planning for tomorrow is important. The more you educate yourself on your financial options, the more confident you will feel with your decisions.
Wednesday, May 28, 2008
Great Time to Buy or Sell
Utah is among the best states in the nation! We enjoy low unemployment, large influx of new residents, and plenty of available housing! This is a great time to buy or sell in Utah!
* Inventory is excellent, offering many choices in many price ranges. Buyers can truly choose the perfect home!
* The housing market is experiencing price stabilization so buyers are getting better value for their money!
* It is estimated that over 41,000 people will be moving to Utah this year!
* Mortgage programs are plentiful for qualified buyers!
* FHA lending programs are available to more people, even in the Jumbo Loan market!
* Interest rates are historically low!
The market is growing and housing is needed! Buyers and sellers can find the market favorable right now!
This positive information was provided by a great mortgage officer:
Stevan Davis
Axiom Financial
801-836-5678
* Inventory is excellent, offering many choices in many price ranges. Buyers can truly choose the perfect home!
* The housing market is experiencing price stabilization so buyers are getting better value for their money!
* It is estimated that over 41,000 people will be moving to Utah this year!
* Mortgage programs are plentiful for qualified buyers!
* FHA lending programs are available to more people, even in the Jumbo Loan market!
* Interest rates are historically low!
The market is growing and housing is needed! Buyers and sellers can find the market favorable right now!
This positive information was provided by a great mortgage officer:
Stevan Davis
Axiom Financial
801-836-5678
Wednesday, April 2, 2008
Tips To Get a Better Interest Rate
Credit Tips That Will Score Lower Interest Rates
Courtesy of Ryan Osborne
A good credit score translates into lower interest rates for home borrowers. In a mortgage lender's eyes, the higher your score is, the less risk you are, and the more likely it is you will pay off your debt. For this reason, borrowers with lower scores usually end up paying higher interest rates on their loans. If this is you, don't panic. There are a number of things you can do to adjust your credit score to receive a favorable review from the underwriter.
Here are a few suggestions:
Should I pay off all my past due balances?
This is usually a good idea, but you only need to worry about the past due balances that have occurred in the last two years. Items more than two years old have little effect on your current credit score. In fact, if you pay off delinquent items over two years old, it can actually bring your credit score down - something you don't want to do. Bringing that score up means you'll get a better interest rate on your loan.
Should I close existing credit card accounts that I don't use?
No. Part of your credit score is based upon credit history. If you have old credit cards that you don't use very much, you still have the benefit of the credit history they represent. Rather than trying to pay off all your credit cards, you can move part of the debt from one card to another to even out the distribution of debt. Try to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home. Also, if your credit provider will increase your line of credit, the ratio of debt to available credit is automatically reduced. When married couples have separate credit card accounts, the debt can be transferred from one spouse to another to clear up credit issues for the other spouse. That spouse with clean credit can be designated as the sole borrower on the loan, but ownership of the home can still go in both names.
What about errors on my credit report?
If you have items that are showing up on your credit report that you know you have already paid, request that these items be removed by the credit bureau. They are obligated to rectify this within 30 days. If there are items on your credit report that are less than two years old, send in your payment if possible and mark the back of the check with the following notation: "Accepting this check is evidence that the transaction is complete and this charge will be deleted from my credit record." If necessary, the cancelled check will be proof that this should be promptly removed from your credit report if it interferes with the closing of your loan.
Any other mortgage questions please contact:
Ryan Osborne
Mortgage Planner
801.748.4877
Courtesy of Ryan Osborne
A good credit score translates into lower interest rates for home borrowers. In a mortgage lender's eyes, the higher your score is, the less risk you are, and the more likely it is you will pay off your debt. For this reason, borrowers with lower scores usually end up paying higher interest rates on their loans. If this is you, don't panic. There are a number of things you can do to adjust your credit score to receive a favorable review from the underwriter.
Here are a few suggestions:
Should I pay off all my past due balances?
This is usually a good idea, but you only need to worry about the past due balances that have occurred in the last two years. Items more than two years old have little effect on your current credit score. In fact, if you pay off delinquent items over two years old, it can actually bring your credit score down - something you don't want to do. Bringing that score up means you'll get a better interest rate on your loan.
Should I close existing credit card accounts that I don't use?
No. Part of your credit score is based upon credit history. If you have old credit cards that you don't use very much, you still have the benefit of the credit history they represent. Rather than trying to pay off all your credit cards, you can move part of the debt from one card to another to even out the distribution of debt. Try to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home. Also, if your credit provider will increase your line of credit, the ratio of debt to available credit is automatically reduced. When married couples have separate credit card accounts, the debt can be transferred from one spouse to another to clear up credit issues for the other spouse. That spouse with clean credit can be designated as the sole borrower on the loan, but ownership of the home can still go in both names.
What about errors on my credit report?
If you have items that are showing up on your credit report that you know you have already paid, request that these items be removed by the credit bureau. They are obligated to rectify this within 30 days. If there are items on your credit report that are less than two years old, send in your payment if possible and mark the back of the check with the following notation: "Accepting this check is evidence that the transaction is complete and this charge will be deleted from my credit record." If necessary, the cancelled check will be proof that this should be promptly removed from your credit report if it interferes with the closing of your loan.
Any other mortgage questions please contact:
Ryan Osborne
Mortgage Planner
801.748.4877
Thursday, March 27, 2008
Common Closing Costs
Common Closing Costs for Buyers
From Realtor.org
As a buyer you will likely be responsible for a variety of fees and expenses that you, and the seller, will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs. The title company or other entity conducting the closing will tell you the required amount for:
* Down payment
* Loan origination
* Points, or loan discount fees, which you pay to receive a lower interest rate
* Home inspection
* Appraisal
* Credit report
* Private mortgage insurance premium
* Insurance escrow for homeowner's insurance, if being paid as part of the mortgage
* Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
* Deed recording
* Title insurance policy premiums
* Land survey
* Notary fees
* Prorations for your share of costs, such as utility bills and property taxes
For your information you can usually plan on paying about 3% of the purchase price in 'closing costs'.
Your lender must provide a good-faith estimate of all settlement costs so you will know up front what to expect!
From Realtor.org
As a buyer you will likely be responsible for a variety of fees and expenses that you, and the seller, will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs. The title company or other entity conducting the closing will tell you the required amount for:
* Down payment
* Loan origination
* Points, or loan discount fees, which you pay to receive a lower interest rate
* Home inspection
* Appraisal
* Credit report
* Private mortgage insurance premium
* Insurance escrow for homeowner's insurance, if being paid as part of the mortgage
* Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
* Deed recording
* Title insurance policy premiums
* Land survey
* Notary fees
* Prorations for your share of costs, such as utility bills and property taxes
For your information you can usually plan on paying about 3% of the purchase price in 'closing costs'.
Your lender must provide a good-faith estimate of all settlement costs so you will know up front what to expect!
Thursday, March 20, 2008
Ways to Raise Your Credit Score
5 Ways to Raise Your Credit Score – And Fast
By Ryan Osbourne
Mortgage Planner
If you are looking to improve your credit score quickly, now is the time to get started. Give us a call. We’ll review your credit and find out exactly where you stand and where you need to get to. In the meantime, here are some great strategies you can utilize right away to give your score a little boost.
1. Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Canceling those cards may inadvertently undo all of your hard work.
2. Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.
3. Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies – this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you’re in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.
4. Protect Your Interests: Your credit is calculated based solely on the information available to your creditors. If you have a HELOC, make sure it’s listed as a mortgage or an installment account on your credit reports and not a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported correctly, that is with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it’s important to monitor your credit every four to six months.
5. Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail. If you’d like more information or a copy of our Sample Dispute Letter, give us a call right away. We’ll be glad to help you in any way we can or, if it becomes necessary, refer you to credit professionals you can trust.
From Ryan Osbourne
Mortgage Planner
Questions or comments for Ryan call: 801.748.4877
By Ryan Osbourne
Mortgage Planner
If you are looking to improve your credit score quickly, now is the time to get started. Give us a call. We’ll review your credit and find out exactly where you stand and where you need to get to. In the meantime, here are some great strategies you can utilize right away to give your score a little boost.
1. Create Some Balance: While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quick jump in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely, do not close your accounts without discussing it with your mortgage professional first. Canceling those cards may inadvertently undo all of your hard work.
2. Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.
3. Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies – this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you’re in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.
4. Protect Your Interests: Your credit is calculated based solely on the information available to your creditors. If you have a HELOC, make sure it’s listed as a mortgage or an installment account on your credit reports and not a revolving debt. If you had a bankruptcy, be sure that all items associated with the bankruptcy are being reported correctly, that is with a zero balance. This action could increase your score by 50-100 points. Because simple mistakes like these can wreak havoc on your credit score, it’s important to monitor your credit every four to six months.
5. Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute it free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail. If you’d like more information or a copy of our Sample Dispute Letter, give us a call right away. We’ll be glad to help you in any way we can or, if it becomes necessary, refer you to credit professionals you can trust.
From Ryan Osbourne
Mortgage Planner
Questions or comments for Ryan call: 801.748.4877
Tuesday, January 15, 2008
Building Wealth
From the National Association of Realtors Jan. 2008
Building Wealth
A wealth of housing data clearly demonstrates that housing is a good long-term investment. According to a study by the U.S. Department of Housing and Urban Development, 60 percent of a homeowner’s wealth is from the equity they have built in their home. A Federal Reserve study has shown that the average homeowner’s net worth is 46 times the net worth of the average renter.
This emphasizes the importance of homeownership in creating long-term wealth, and encourages buyers who are on the fence about making a home purchase to contact a REALTOR® who can help them make a smart investment in their future.
Building Wealth
A wealth of housing data clearly demonstrates that housing is a good long-term investment. According to a study by the U.S. Department of Housing and Urban Development, 60 percent of a homeowner’s wealth is from the equity they have built in their home. A Federal Reserve study has shown that the average homeowner’s net worth is 46 times the net worth of the average renter.
This emphasizes the importance of homeownership in creating long-term wealth, and encourages buyers who are on the fence about making a home purchase to contact a REALTOR® who can help them make a smart investment in their future.
Tuesday, January 8, 2008
Mortgage Insurance
Great news for Mortgage Insurance
January 2008
Congress has approved the renewal of the Mortgage Insurance Tax Deductibility, which is an extension that will apply to policies written through the year 2010.
That can be a significant savings for many homeowners. Mortgage insurance premiums can be up to 100% tax deductible, depending on ones tax situation. (Homeowners should consult with their tax advisor for exact figures.)
Mortgage insurance is an important benefit, allowing a home purchase with conventional financing and less than the required 20% down. It offers default protection without adding liens to the property. And the premiums are tax deductible. That’s value for the money!
Talk to your Axiom Financial mortgage consultant for more information about this positive tax news for homeowners!
Orem, Utah Branch (801) 765-0066
Stevan Davis
Garett Petersen
Susan Gifford
January 2008
Congress has approved the renewal of the Mortgage Insurance Tax Deductibility, which is an extension that will apply to policies written through the year 2010.
That can be a significant savings for many homeowners. Mortgage insurance premiums can be up to 100% tax deductible, depending on ones tax situation. (Homeowners should consult with their tax advisor for exact figures.)
Mortgage insurance is an important benefit, allowing a home purchase with conventional financing and less than the required 20% down. It offers default protection without adding liens to the property. And the premiums are tax deductible. That’s value for the money!
Talk to your Axiom Financial mortgage consultant for more information about this positive tax news for homeowners!
Orem, Utah Branch (801) 765-0066
Stevan Davis
Garett Petersen
Susan Gifford
Monday, January 7, 2008
3 Signs of Predatory Lending
3 Signs of Predatory Lending
Always be on the lookout for signs of abusive lending practices. Here’s a rundown of the three most common strategies predatory lenders use.
BY MARIE SPODEK, GRI, AND JEROME MAYNE
By definition, greater upfront costs and continuing higher interest payments are some of the differences between prime lending and subprime lending. While providing opportunities to build equity through homeownership, subprime lending does cost more.
Ideally, responsible, risk-based subprime lenders provide access to credit for prospective home owners with poor credit scores. However, lenders are considered predatory when their practices, although legal, are not in the best interest of the borrowers.
These lenders can include mortgage companies, creditors, mortgage brokers, and even home improvement contractors. Suspect practices include targeting certain groups of people and using pressure tactics to force borrowing decisions while not disclosing valuable decision-making information.
In addition, these loans are often bundled with higher interest, lump-sum credit life insurance, excessive fees, and high prepayment penalties without regard to the borrower’s ability to repay.
Most subprime lenders and the loans they make are not subject to federal legislation, so it has been difficult to document how these practices impact predatory lending.
1. Reverse Redlining: Finding Easy Targets
After decades of redlining (when lenders would not make loans in certain communities because of racial composition), today many predatory lenders specifically seek out groups to which it will market these excessive loans. In other words, these groups become the victims of “reverse redlining.” Predatory lenders also seek borrowers who need cash due to medical issues, unemployment, or other debt-related problems, and they look for borrowers who may not be aware of their choices.
Here’s a closer look at the groups that are most often targeted by predatory lenders:
• The Elderly. Many of the older generation have lived in their homes for a long time and have built up equity. They may be “house rich and cash poor.” When they encounter cash problems due to medical, unemployment, or other debt problems, predatory lenders encourage them to turn to cash-out refinancing to solve their cash flow problems. Because they may not have the experience to comparison-shop, they are vulnerable to contractors and their lenders who suggest the only way to find the money for repairs is to sign papers through the contractor or loan officer, who then charges rates that do not correspond to the risk of the loan. They may be pressured into borrowing money with payments that are so high they are unlikely to make the payments on their fixed incomes.
• Minorities. Although minorities have greater access to credit than ever before, many African Americans and low-income families are paying far more for their credit than corresponding whites. According to the analysis by three reporters from the Charlotte Observer of more than 2.2 million 2004 mortgage applications, in 2005 blacks and Hispanics continued to pay more in interest rates than did whites — no matter high how their incomes.
• Immigrants. Many immigrants are eager to invest in their own homes, and, in fact, owning their own homes may be one of the reasons they immigrated to the United States. However, immigrants can lack the language skills and previous homebuying experience to enable them to effectively analyze loan terms and their implications. They may also lack the bank accounts and credit histories that would qualify them for traditional loans, thus making them easy prey for predators with “alternative” loan programs.
• Individuals with Low Credit Scores. Low credit scores do not always indicate poor credit risks. Sometimes, borrowers fall behind in payments due to circumstances that are not likely to be repeated: unforeseen medical bills, an unexpected job layoff. However, they can end up with unscrupulous subprime lenders who use abusive practices.
2. Charging Unnecessary Costs
As if loan predators have not found enough ways to soak these borrowers, they can always pack in more unnecessary or nonexistent products and services (generally overpriced insurance), sometimes to borrowers who have no beneficiaries. Lenders have especially added to the cost of manufactured homes by folding in overpriced fixtures, appliances, and even free trips. Before borrowers make their first payments, these loans are underwater because the market value of the collateral is less than the loan amount.
3. Giving Misleading or No Information About Loans
Predatory lenders can use bait-and-switch tactics by offering loans that seem almost too good to be true. What they initially offer is often lost in the process, and borrowers may not even realize that the cost or loan terms are not what they originally agreed to. Borrowers have been told that the FHA insures against property defects and loan fraud, neither of which is true.
Borrowers should take time to shop around and compare houses, prices, estimates, and referrals. No reputable lender will ask a borrower to sign a blank contract or loan documents, because blank forms only present the opportunity for dishonest individuals to fill in false information.
Changing the Climate: It’s Up to You
Predatory lending is a big problem in today’s economy. However, this practice is not being perpetrated by ALL loan officers, and not ALL mortgage brokers are crooks. The key to changing the climate is to educate borrowers. There are crooks in every profession, and the consumer needs to know what to watch out for.
*Make sure you have an honest and reliable real estate agent who can guide you in the home financing process.*
Always be on the lookout for signs of abusive lending practices. Here’s a rundown of the three most common strategies predatory lenders use.
BY MARIE SPODEK, GRI, AND JEROME MAYNE
By definition, greater upfront costs and continuing higher interest payments are some of the differences between prime lending and subprime lending. While providing opportunities to build equity through homeownership, subprime lending does cost more.
Ideally, responsible, risk-based subprime lenders provide access to credit for prospective home owners with poor credit scores. However, lenders are considered predatory when their practices, although legal, are not in the best interest of the borrowers.
These lenders can include mortgage companies, creditors, mortgage brokers, and even home improvement contractors. Suspect practices include targeting certain groups of people and using pressure tactics to force borrowing decisions while not disclosing valuable decision-making information.
In addition, these loans are often bundled with higher interest, lump-sum credit life insurance, excessive fees, and high prepayment penalties without regard to the borrower’s ability to repay.
Most subprime lenders and the loans they make are not subject to federal legislation, so it has been difficult to document how these practices impact predatory lending.
1. Reverse Redlining: Finding Easy Targets
After decades of redlining (when lenders would not make loans in certain communities because of racial composition), today many predatory lenders specifically seek out groups to which it will market these excessive loans. In other words, these groups become the victims of “reverse redlining.” Predatory lenders also seek borrowers who need cash due to medical issues, unemployment, or other debt-related problems, and they look for borrowers who may not be aware of their choices.
Here’s a closer look at the groups that are most often targeted by predatory lenders:
• The Elderly. Many of the older generation have lived in their homes for a long time and have built up equity. They may be “house rich and cash poor.” When they encounter cash problems due to medical, unemployment, or other debt problems, predatory lenders encourage them to turn to cash-out refinancing to solve their cash flow problems. Because they may not have the experience to comparison-shop, they are vulnerable to contractors and their lenders who suggest the only way to find the money for repairs is to sign papers through the contractor or loan officer, who then charges rates that do not correspond to the risk of the loan. They may be pressured into borrowing money with payments that are so high they are unlikely to make the payments on their fixed incomes.
• Minorities. Although minorities have greater access to credit than ever before, many African Americans and low-income families are paying far more for their credit than corresponding whites. According to the analysis by three reporters from the Charlotte Observer of more than 2.2 million 2004 mortgage applications, in 2005 blacks and Hispanics continued to pay more in interest rates than did whites — no matter high how their incomes.
• Immigrants. Many immigrants are eager to invest in their own homes, and, in fact, owning their own homes may be one of the reasons they immigrated to the United States. However, immigrants can lack the language skills and previous homebuying experience to enable them to effectively analyze loan terms and their implications. They may also lack the bank accounts and credit histories that would qualify them for traditional loans, thus making them easy prey for predators with “alternative” loan programs.
• Individuals with Low Credit Scores. Low credit scores do not always indicate poor credit risks. Sometimes, borrowers fall behind in payments due to circumstances that are not likely to be repeated: unforeseen medical bills, an unexpected job layoff. However, they can end up with unscrupulous subprime lenders who use abusive practices.
2. Charging Unnecessary Costs
As if loan predators have not found enough ways to soak these borrowers, they can always pack in more unnecessary or nonexistent products and services (generally overpriced insurance), sometimes to borrowers who have no beneficiaries. Lenders have especially added to the cost of manufactured homes by folding in overpriced fixtures, appliances, and even free trips. Before borrowers make their first payments, these loans are underwater because the market value of the collateral is less than the loan amount.
3. Giving Misleading or No Information About Loans
Predatory lenders can use bait-and-switch tactics by offering loans that seem almost too good to be true. What they initially offer is often lost in the process, and borrowers may not even realize that the cost or loan terms are not what they originally agreed to. Borrowers have been told that the FHA insures against property defects and loan fraud, neither of which is true.
Borrowers should take time to shop around and compare houses, prices, estimates, and referrals. No reputable lender will ask a borrower to sign a blank contract or loan documents, because blank forms only present the opportunity for dishonest individuals to fill in false information.
Changing the Climate: It’s Up to You
Predatory lending is a big problem in today’s economy. However, this practice is not being perpetrated by ALL loan officers, and not ALL mortgage brokers are crooks. The key to changing the climate is to educate borrowers. There are crooks in every profession, and the consumer needs to know what to watch out for.
*Make sure you have an honest and reliable real estate agent who can guide you in the home financing process.*
Friday, January 4, 2008
Payment Holiday
Payment Holiday
Wouldn’t you love a vacation from your first mortgage payments as you settle into your new home?
Axiom Financial offers a new program designed to take the financial sting our of the first months of homeownership and help ease you into your new payment schedule!
Here is how it works:
*The seller may contribute toward the purchase of your home.
* The amount contributed may pay a full month or more of principal and interest.
* You will be obligated to pay only the tax and insurance payments for the program term.
* Seller contributions in excess of the allowed payments may be applied to the actual costs of closing, interest buy downs, or property repairs
* This program is available with many types of loans, including some with loan-to-value ratios up to 100%.
Call your Axiom Financial Loan Officer today for details about this new flexible program:
Stevan Davis, Garett Petersen or Susan Gifford located at the Orem, Utah branch. They can be reached by phone at 801-765-0066
Wouldn’t you love a vacation from your first mortgage payments as you settle into your new home?
Axiom Financial offers a new program designed to take the financial sting our of the first months of homeownership and help ease you into your new payment schedule!
Here is how it works:
*The seller may contribute toward the purchase of your home.
* The amount contributed may pay a full month or more of principal and interest.
* You will be obligated to pay only the tax and insurance payments for the program term.
* Seller contributions in excess of the allowed payments may be applied to the actual costs of closing, interest buy downs, or property repairs
* This program is available with many types of loans, including some with loan-to-value ratios up to 100%.
Call your Axiom Financial Loan Officer today for details about this new flexible program:
Stevan Davis, Garett Petersen or Susan Gifford located at the Orem, Utah branch. They can be reached by phone at 801-765-0066
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