Tips for refinancing a jumbo mortgage loan
September 29, 2010 by admin
Jumbo mortgage loans come in handy when you want to borrow a huge amount for mortgage that is well above what can be termed as ‘traditional mortgage limit’. Freddie Mac and Fannie Mae are two organizations that regulate mortgage lending in the US and keep limits for borrowing traditional mortgage. They purchase a major part of US residential mortgages from lenders and banks, so that they can have free liquidity to lend more mortgage loans.
The extent to which Jumbo loans can be lent is $417,000 for most states in the US with the exception of places like US Virgin Islands, Guam, Hawaii and Alaska, where the limit is set at $625,500. Though jumbo loans are attractive, the flipside is that the average interest rates on them are usually more than conforming mortgages. This is where refinancing jumbo mortgage loans become a viable alternative.
In situations where interest rates fall, it makes sense to go for jumbo mortgage loans. Getting a loan at a lower interest can help manage your finance properly and drive down mortgage payments. Here are steps to refinancing jumbo mortgage loans
1. Find out your credit score: Jumbo lenders are particular about the credit score of the person; if the borrower has a credit score of at least 660, then he or she can take the benefit of jumbo refinancing. Go to a dedicated website that gives credit reports from all the three major credit reporting agencies, and find out your score.
2. Look for loans with competitive rate of interest: Since jumbo mortgages are loans that are over the conforming limits of a regular loan, they carry more risk and hence borrowers have to pay a higher interest rate for jumbos. The interest rate actually rose quite steeply in 2006 (from $359,650 in 2005 to $417,000 in 2006). This sporadic rise led to the creation of jumbo mortgage refinancing opportunity. So when the interest rates are low, you can review all jumbo loan offers and find out if it makes sense to refinance. Refinancing does involve costs. You can go through online comparison tools to find out if the banks are indeed offering loans that can lower the costs comprehensively.
3. Weigh the cost factors: It is usually expensive to refinance a jumbo loan, principally due to the closing costs. Go for the lenders that provide extension and consolidation also, so that you do not have to pay mortgage tax on the existing principal balance.
4. Provide supporting documentation: You may have to submit tax returns of two years compared to the one year tax return document that you provide for a conventional loan. You may also need to submit pay stubs and bank statements as proof.
5. Go through the fine print: Once the loan is approved, take time to go through the loan documents properly. You should go through the closing costs, the interest rates and the money that you’ll actually end up paying during the term of the loan.
Mortgage refinancing options remain relatively unchanged in 2010
September 28, 2010 by admin
Mortgage Refinancing Options – Relatively Unchanged in 2010
If you want to refinance your mortgage, you have 4 possible options to choose from as lender and loan programs have remained quite stagnant this year, despite the push for the government to make borrowing and financing easier. Homeowners who need to refinance their home mortgage have limited options to seek relief, and these will vary greatly based on their equity position in their home.
1. Choose mortgage modification.
When you choose mortgage modification, you can obtain reduced interest rates simply by paying your existing lender a certain amount of money, perhaps only a few hundred dollars, to be able to modify the current loan in a way that will be most advantageous to you.
2. Go with your first mortgage lender (original lender).
The advantage of deciding to avail of mortgage refinance loans from your original lender is that you will most likely no longer be required to submit documents. Moreover, because the lender no longer needs to spend to underwrite the loan, the savings can be passed on to you, thus giving you reduced closing costs.
3. Find a new lender.
Switching to a new mortgage company can only go two ways: good or bad. While it is possible to find better offers from another lender, if you aren’t careful and thorough in your search for good deals, you just might end up with the wrong one and this can be a costly mistake to make. Before deciding on a lender, make sure to check out the fees and rates that they have.
4. Opt for cash-out refinancing.
Cash-out refinancing is recommended if you need extra money aside from what you owe on your mortgage loan. But as a warning, only make use of this type of mortgage refinance loans if (1) you really need the money, (2) if the interest rates are lower than what you have, and (3) if you the cash will be used for a sound financial decision (paying off higher interest debt, financial emergencies, etc).
Applying for a mortgage refinance loan can be a good thing because it can help lower your mortgage payments, help build your equity, and it can also shorten your loan term. However, you do need to be wary of deals that may not really be as good as they seem. Keep in mind that when you avail of refinancing, the cost would range from 3% to 6% of the principal amount, and to be able to recover from that loss would take you 2 years or even longer. Always determine the amount of money you can save with mortgage refinancing before you decide to pursue with this plan. As with any type of refinance loan you pursue, request that your lender provide you with a detailed good faith estimate up front, prior to applying for the mortgage loan.
September 24, 2010
September 24, 2010 by admin
So much for history. The month of September is generally regarded as a bearish month for the stock market. This year, the market has finished on a higher note every week in September. Today, the stock market jumped by nearly 200 points, sending the DOW to its highest levels of 2010. Equity traders grabbed onto a better than expected report from the manufacturing sector and investors piled into equities, rallying stocks across the board. A disappointing report on new home sales did little to derail the market in early trading as investors found the silver lining in almost all of the days news.
Mortgage interest rates edged up with today’s large market rally. Yields on the ten year treasury rose a little over five basis points, sending the ten year back above 2.6%. September mortgage rates have held steady, despite the large rally in the equity markets. Fixed mortgage rates for thirty year loan terms were being offered at or around 4.5% with most national mortgage lenders on Friday. Fifteen year loan terms were being offered just below four percent. Despite great mortgage rates, lenders are reporting a broad-base drop with application volume, a signal that home buying remains slow and refinancing activity quite stagnant. Fannie Mae announced this week a program to incentivize realtors up to $1500 for helping customers close on bank owned homes through the end of the year. Providing a financial incentive to agents seems to be counterproductive as one of the larger issues is borrowers unable to qualify for tighter loan guidelines in place.
Your Guide to Shopping for a Personal Loan Online
September 21, 2010 by admin
There are times when we would need some extra cash. It could just be a few hundreds or even a few thousand dollars, but whatever the case may be, it is quite normal to be in such a situation. Whether it is to pay for school tuition, consolidate your bills, pay off high credit card outstanding balances, cover medical expenses, fund your much-needed vacation, or perhaps to finance your home improvement, applying for a personal loan is something that we all can have a need for every once in a while. If you are shopping for a personal loan online, this article will guide you in choosing the best deals and making sure you don’t end up in a financial mess after getting your loan.
Understanding Personal Loans
If you are shopping for a personal loan online, it is necessary for you to first understand what it really is. A personal loan is an unsecured type of loan, which means that it does not require a collateral in order for you to avail of it. There are two classifications of personal loan, and these are: closed-end loan and the personal line of credit. A closed-end loan is a one-time loan that comes with a fixed rate to be paid over a pre-determined period, usually from one to two years. A personal line of credit, on the other hand, has a revolving balance and a set limit, and basically works just like other kinds of lines of credit.
Advantages of Applying for a Personal Loan Online
Up until a couple of years ago, consumers had to go to the bank personally to apply for a personal loan and fill out an application form. They would have to line up in a long queue and wait for their turn. But now, there is the option to apply from the Internet, through the lender’s website. This makes the whole loan application process not only easy but also convenient. Aside from this obvious advantage, applying for online personal loans also gives you the following features:
1. Quick approvals with some already available in just a matter of hours, although most of them can approve or disapprove a loan in 24 hours.
2. Good customer support, including real-time chat support representatives that can answer questions and be able to walk you through the application process.
3. Some lenders do not run credit checks on applicants, making it ideal for those with no credit history or those with poor credit.
Factors that Affect Lender’s Approval
Some people would wonder why they could never get approved for a personal loan. The main reason for this issue is low FICO score. Although as mentioned, some lenders no longer run credit checks, majority of them still do and they always check your FICO score.
Wondering why you have low FICO score? There are only four possible reasons for this, which are: debt to income (DTI) ratio, high credit card usage, too many credit checks, and inaccuracy in your credit report.
• Your debt-to-income ratio is basically the amount of debt you have compared to your overall income. If you have more debts than you can pay with your income then that will lower your FICO score.
• If you have used more than 30% of your credit card limit then this could also affect your credit score, negatively. Not many people realize this but it is actually one of the main reasons why their credit score is low.
• Running too many credit checks over a short span of time can affect your FICO score because it only means that you applied for several new lines of credit in just a short period of time. The impact isn’t really that high though, but this varies from person to person. On average, each credit check takes off less than 5 points from your FICO score.
• Lastly, your credit report could be wrong. Does the saying, “To err is human…†familiar to you? Well, it can apply to your credit report as well. This is also one of the reasons why you need to see your report to check if there may be inaccuracies. If you do see one, make sure to file a dispute so that it can be corrected.
When shopping for a personal loan online, it pays to always spend some time searching for the best deals out there. Making use of online comparison sites to check for rates and offers has proved to be very helpful for a lot of people.
September 20, 2010
September 20, 2010 by admin
The stock market surged on Monday, gaining over 140 as the DOW is officially at its highest level in the past twenty four months. Investors piled into equity positions following a new report from the National Bureau of Economic Research. The firm made a bold statement today announcing that the economic recession ended in 2009 and the recovery has been in full swing for over one year. The report stoked the fire of Wall Street but will provoke a passionate response from Main Street that is still trying to find the nearly six million jobs that have been lost over the past three years and deal with an unemployment rate over nine percent, huge declines in personal wealth a stagnant job market and a dismal real estate market.
The economic recession report came on the same day that home builder confidence hit an 18 month low. The gap in confidence between Wall Street and Main Street is only likely to get wider prior to the November elections as there will be major PR pushes from both sides of the aisle for the upcoming month and a half as the political parties look to leverage the recovery/recession towards their political benefit.
Despite the jump in stock prices, the ten year treasury saw a pull back with bond yields as the ten year dipped four basis points down to 2.7%. Fixed mortgage rates for thirty year loan terms were being offered by most national mortgage lenders around 4.5% late last week. September mortgage rates have moved up a little over .125% following the seven hundred point increase in the Dow over the past sixty days. Fixed mortgage rates remain well below historical low levels, but there are very few private investors purchasing mortgage bonds and rates remain heavily subsidized by the FOMC and governments lending programs. Fannie Mae, Freddie Mac and HUD (FHA) are presently securing over ninety percent of all home loans in the market.
September 15, 2010
September 15, 2010 by admin
The month of September is looking to break the trend of being a dismal month for the equity markets. The stock market continues moving higher, helping to push the DOW back into positive territory for the 2010 year. The stock market edged up an additional fifty points today as investors are regaining confidence in stocks. Retail sales have edged up for the second straight month and the international move to support bank reform balance sheets providing a capital cushion build up through 2019 has helped investors regain confidence in the stock market.
The move up in the stock market has helped drive the yield on bonds higher. The closely followed ten year treasury bond has pushed back above 2.7%. The upward move in bonds has led to an increase in rates associated with fixed mortgage rates which are now well above 4.5% with major national lenders. Fixed mortgage rates have edged up by twenty basis points over the past two weeks following the upward movement in bond prices. September mortgage rates continue to increase, but remain well below historical averages.
In addition to the upward market move, there is a new factor that is beginning to creep into the market and that is the upcoming November elections. The tea parties impact on the November elections is being felt from coast to coast and their resolve to continue gaining a political voice will be worth following over the next sixty days. Tax reform will remain a popular topic and lawmakers are looking at different options to try and drive a growth into the market, but the chance of anything related to additional spending (stimulus) programs has minimal chances of gaining approval.
Conventional Vs FHA Loans – Reviewing all of your options
September 14, 2010 by admin
Americans are being offered one of the best deals to refinance or buy as mortgage rates have fallen to record lows. If you want to make use of the opportunity then the first step is to weigh the lending options available to you.
It may not be easy to figure out the type of loan most beneficial to you, especially if you are buying a home for the first time or if you haven’t bothered about any of your existing mortgages for years. The loans available can be divided into two broad categories namely – the conventional fixed-rate mortgages and the FHA loan that is backed by the government. Understanding the pros and cons of each category will help you make the right choice:
FHA loans and conventional loans similarities
* The loans are being offered at some of the lowest rates in recent history. Fifteen year conventional mortgages with fixed rates are at recode low rates. The FHA loans may have a slightly higher rate but both types are comparable and competitive.
* Adjustable rate mortgages or ARMs are offered by both FHA and conventional loans.
* Fixed-rates are the most common norm for both conventional and FHA loans. The interest rates will not change through the term of the loan.
Advantages of an FHA Loan over other Conventional Loans
* Eligibility criteria – The required qualifications for an FHA loan are not as strict as conventional loans. If you have a low credit score of 580 you can still qualify for the loan. The debt-to-income ratio allowed on an FHA is higher.
* Low down payment required – The down payment required for the purchase of a home through an FHA loan could be as low as 3.5%. The FHA is government backed and the amount needed to close is low as well, this gives you a chance to save some money.
* Ease of Refinancing – You can refinance around 97.75% of your home’s actual value. An FHA Streamline is available through the FHA which allows refinancing with minimal credit requirements and no appraisal.
Housing market challenges will plague economic recovery for years
September 11, 2010 by admin
There are some many good signs that the US economy might soon return to better times, a recent report from the employment sector showed job growth continues to occur even if the pace of growth is slower that hoped. The. The real thorn in the side of this drive though is the housing market. Despite historical low mortgage rates for the last twenty four months, the housing market continues to show an inability to improve. If there is one thing that is likely to stop the recovery it is this. There have been increasing signs recently that this part of the economy might lead us once again back into troubled waters. In fact many would say that we are there already.
When it comes to the US economy there are few people who would deny the importance of housing market. This is why the government has created incentive packages to encourage people to continuing buying property. The tax credit scheme provided first time buyers with up to $8,000 if they purchased a new home; other buyers also could apply for huge tax breaks. This tax incentive has run its course though and people are very worried about how the housing market will react now that this stimulus has been removed. Some are predicting that the worst of housing crisis might yet be to come and this is going to prevent any chance of US economic recovery.
The pessimists may actually turn out to be right and things may be about to get worse for the economy. Figures for May show that the US housing market is at its lowest point since we started keeping records. The sale of new homes fell to a third of what is normally expected; down from an average of 800,000 to 300,000. Now that the government incentive is gone the effects are already noticeable. The Federal government had hoped that the last few mounts of the scheme would say a big increase in purchases as people rushed to take advantage of the credit before it expired. Unfortunately the increase was nowhere near as high as what analysts had predicted.
Unless the government implements some new stimulus package we are very likely going to see further deterioration in the housing market. Demand for new properties will continue to fall, and people will struggle to sell their homes. The only good thing about any of this is that it will force the price of houses down. This then might encourage people to once again buy, and then we can expect a recovery in the housing market – the biggest fear is that this day might be a long way off.
September 8, 2010
September 8, 2010 by admin
The stock market rebounded following Tuesday’s major sell off as investors moved back into equities on Wednesday. The markets move up is a bit puzzling as there was limited economic data on Wednesday aside from a report that European debt was begging to become less problematic for the market. A new report from the Federal Reserve was much more pessimistic on the growth of the U.S. economy and confirmed yet again that the likelyhood for a double dip recession is increasing.
Treasury yields moved up past 2.65% on Wednesday, pressuring fixed rate mortgage loans for thirty year loan terms to cross back over 4.5% with major lenders. A few online lenders were offering thirty year mortgage loans below four percent (3.99%). This loan program would give a borrower a fixed mortgage rate for thirty years under four percent, but also carries significant upfront closing costs (discount points) in order to secure the below market interest rate. This type of loan is more beneficial to borrowers who plan to make a long term commitment, likely over 5-7 years in there present home and could potentially lead to savings in the tens of thousands of dollars over a thirty year loan period. A good loan advisor should be able to break down the cost, potential savings over 30 years, break even point and even the potential tax savings for paying the discount points. September mortgage rates continue moving higher, but remain at very attractive levels for both refinance and purchase customers.
Tips for saving when shopping for new auto insurance policies
September 6, 2010 by admin
Since we want to ensure protection for our vehicles and ourselves, we take advantage of insurance policies. Getting auto insurance is definitely an added cost to our expenses but it is an important kind of expenditure. Auto insurance nowadays is expensive and not every vehicle owner can afford to get one. This is because there are several factors for the insurance rates such as your insurance agent, age requirement, the type of car, the insurance company, and your residential area. However, every car owner is required to get an auto insurance for guaranteed protection and security of every person.
If you are on a tight budget and can barely get a better deal with your car insurance, there are ways to actually reduce the cost of your insurance policy while being guaranteed of insuring your car.
1. Contact several insurance carriers to compare rates and quotes.
Even without an insurance agent, you can scout for an insurer yourself through the help of your friends, information from the Yellow Pages, through the newspaper or magazines, and even a thorough research on the Internet. Every company offers different insurance packages so narrow down your search for a better deal by getting a quotation either from the insurance company itself or from the State Insurance Department for the price comparison.
2. Consider the benefits of the car insurance package apart from the price.
Of course, the price is a huge factor in getting insurance. But aside from the insurance rates, also consider the quality and the benefits you will get from your insurance company. There may be optional coverage you don’t really need such as collision, uninsured motorist, or the comprehensive coverage. Gather all the possible information from your insurance agent and make wise comparisons from one company to another.
3. Consider using the same insurance company for all your other types of insurance.
There are insurance companies that offer discounts if you use their service for your other insurances aside from your car insurance. You will also get reduced rates for insuring more than one vehicle with just one company and if you become a long-time client to them.
4. Keep a clean driving record.
It is important to note that there are certain exclusions to your car insurance coverage. Your insurer will definitely not cover any claim for reckless driving such DUI and accidentally hitting a road disaster. With a good driving record, your insurance company may even give you reduced insurance rates. Moreover, signing up for discount insurance programs will help you save on insurance cost as well.
5. Check your ability to pay for car insurance before buying a car.
Whether it is replacing an old car or buying your first car, always consider the insurance cost in your expenses. A more expensive vehicle will require higher insurance rates. So, make sure you have the ability to pay for larger car insurance deals to ensure protection for your car.