There are many types of different home financing packages out there. Before you decide on the best package that suits YOUR needs, you must understand the basic differences as well as its advantages / disadvantages of the various products available in the market.
Yeah, that's what I asked. Seriously, how's your mortgage today?
The clock is ticking and the calendar is turning pages and it soon will be the beginning of the month. You've probably already received your most recent mortgage state (a.k.a bill). Is the payment more than last month? Well, we know it's NOT less. Perhaps it is time for you to have a loan professional take a look at the loan you currently have and determine your options.
Speaking of interest rates - which way are they going? The Federal Reserve stopped (ok, paused) their pursuit of ruining the average home owner with the continued rate increases over the past two years, but that may not last long. Gas prices (which affect every single piece of our economy) are, again, at historical highs in this country. The trickle down affect on prices is really just beginning. You know what that causes? INFLATION. The Federal Reserve wages war on inflation by raising short term interest rates which are passed along to borrowers. The Federal Reserve has no direct impact on the longer term rates (fixed rate loans) as they are tied directly to the long term bond market.
If your last lender got you into (i.e. sold you) a loan that adjusts, yep an ARM and you are now in your adjustment periods, it really is time to rethink your financing and take a look at the options. Your ARM is turning into a credit card every time it adjusts and some of you may have these types of loans that adjust monthly!
Take a look at your statement. Then take out a statment from 6 months ago and a year ago. Compare the stated rates, the payments and your loan balance. Hopefully you were not 'taking advantage' of minimum payments that allow you to maintain a low monthly payment but take the difference between the payment and the monthly accrued interest and then adds that to your loan balance. You could be adding anywhere from $500 to thou$and$ to your loan balance every month. Another concern is that those 'pay options' don't last forever. Once they expire you will have to make the interest payment at least each and every month.
Now, for those of you who have gone ahead and dipped into your equity by getting an equity line of credit. You're in the same position. By default your equity line interest rate adjusts monthly (just like credit cards). You may have got in at 5% or 5.5% but take a look now.....8.5%? Higher? Time to consolidate that...at least into a loan that has a fixed rate for a couple of years. Every move the Federal Reserve took in the last 2 years was immediately felt in your wallet. At the time, your decision made sense. Today it does not. So, let's get a move on and get you out of that cycle too.
Those of you who took advantage of the historically low rates a couple of years and locked your rate for 30 years -- congrats. You've probably seen some good appreciation since then as well (even though the real estate market has stalled nationwide). If you have a need to access some of that equity for any reason (home improvement, tuition, medical needs, a new pool, etc.), make sure you get the right loan. Interest rates are a commodity. If you have a good credit score and can document your income, you can get the best rates offered. What you need is the right loan professional to help you with that. Don't just walk into your bank and ask for a loan, storefront banks (a.k.a retail lenders) do not have access to all of the loan programs offered by their own company much less all of the other lenders. Work with a true loan professional who will work FOR you and get you the right loan for you.
So - take a moment today and check your mortgage. See how its doing. See how it is working for you or against you. Then you'll know the next steps to take.
All over the country - yep, everywhere. That's where the housing marketing is crashing louder than you can hear. In fact it is so loud that the silence of it is deafening. The silence is because sellers are in complete shock and are unable to utter a sound.
A colleague recently make a statement that I found to be pretty profound and yet so simple - "The buyers figured out the market had changed last July....the sellers still haven't figured it out."
So, what's a frustrated seller supposed to do? And if you're a buyer, do you pounce or wait for more blood letting?
Of course there is no clear cut answer to either question. Too many variables. Too many personal needs. So, what you need to do it do what you think is best and right for you in the current market state.
Sellers have it rough. Just look at California where just over a year ago it was the hottest place on earth (and I don't mean another heat wave). Houses were selling like there was a real shortage (as opposed to the low inventory levels that had helped fuel the market for several years); interest rates were rising but had not really scared enough buyers to the sidelines; and buyers were doing anything they could to just get a loan so they could get in and cash in on the frenzy.
What changed all of this? I am no expert, I just work in this part of the economy but if you asked me a year ago if the market was going to be as flat and heading downhill as it is in 2006, I would've said "heck yeah it is". I don't know why I thought that, it just made sense to me at the time. I didn't sit down and chart the interest rate curves, labor rates, cost of building materials, number of home buyers entering the market vs. those leaving the market. I just wet my thumb, stuck it in the air and said "sell now...not later". Some clients listened and some didn't. Those that did still made great money on their real estate investment. Those that didn't, well, they are either still trying to sell (at a greatly reduced price) or they are planning on waiting out the marketing until it goes up again in a couple of years.
Here's a real life example. A couple purchased property that had 2 houses on it 2 years ago for about $390,000. The homes were rental properties (both 3 bedrooms and 2 bathrooms). They rented for about $1,200 per month which was a fair rental rate for the area. Well, both units are now empty and the property is on the market. A friend of mine is interested in this investment and I toured the property twice (the 2nd time with a licensed contractor). Oh, one other point about this before I get to the punch line. One of the units was wrecked by the last tenants. To be brief the unit needs new flooring, a new kitchen, new baths, new doors, new windows and there is suspicion regarding the state of the raised foundation (evidence of dryrot and termites). Punch line? The owners are asking $450,000. I can only guess that they don't read the newspaper. 2nd punch line -- if the foundation of the suspect unit is not beyond repair, the property might be worth $350,000.
My advice today? Unless you need to sell. Don't. Just too many houses on the market. Buyers are circling like vultures and boy are they getting picky. Try selling a 15 or 20 year old house that has, of course, been lived in for 15 or 20 years to the buyer of today and you'll get run over with "fix it lists" during escrow. Why? Simple actually. Buyers have been spending too much time in model homes and touring all of the new developments that couldn't be built fast enough until now. They are used to hearing about FREE UPGRADES. Well 20 year old homes don't have upgrades. Even if the owner has spent a great deal of time and money modernizing the home, buyers are looking for more and more for the price.
Conversely, if you are in the market to purchase. Go ahead. There are plenty of homes available and you can get a good deal (compared to last year) on all of them. Just make sure you are well represented (that goes for sellers too). Real estate is a resillient investment and, over time, has always appreciated.
That's what.
When mortgage lenders refuse to write loans on central-city rowhouses, does that violate federal fair-housing rules?
What about refusing to write mortgages on houses in a community dominated by an ethnic group? Or not offering mortgage loans for houses that may be used in part to accommodate disabled adults?
Just how much protection do fair-lending and other civil rights laws provide to mortgage applicants who are rejected not because of their credit scores or financial capacities but possibly because of the location, type or potential use of their homes?
A major consumer group is mounting a campaign aimed at nailing down the answers. The National Community Reinvestment Coalition filed lawsuit May 9 against NovaStar Mortgage, a subsidiary of publicly traded NovaStar Financial, based in Kansas City, Mo. The suit, filed in U.S. District Court in the District, charges that NovaStar has repeatedly violated the Fair Housing Act by refusing to offer mortgages on rowhouses in downtown Baltimore, on homes on Indian reservations anywhere in the country, and on houses that may be used in part to shelter and care for disabled adults.
Such bans have "no business justification," according to the suit, and illegally discriminate against African Americans, Latinos, Native Americans and people with disabilities.
We recently sat down for a real estate video interview with Ana Patricia de la Guardia, who works in the Retail and Mortgage Banking Division of Banco General in Panama. She was a wonderful interviewee, speaks English very well, and covered a number of valuable topics related to foreigners being able to qualify for mortgage loans in Panama. As a interesting side note, Banco General has an international credit rating higher than the country of Panama itself.
In this seven minute English language real estate video interview, Ana Patricia discusses a wide range of topics including the paperwork requirements and process for residential and commercial mortgages. She also touches upon the upcoming merger of Banco General with Banco Continental which will make the bank the largest in Panama. We also have a from the same division within Banco General.
Ronda Curtis
Mortgage Loan Officer
Air Academy Federal Credit Union
ph (719) 488-4954
mobile (719) 360-7003
fax (719) 488-2932
Just like shopping for a car, there are many features and components to compare when searching for the best mortgage product.The best way to begin is to determine what your goals are for your financial future. If you are buying a home, ask yourself if you are planning to stay in that home for a long time, or will this residence be a short term purchase. Once you decide how long you will be staying in the property, you can determine the type of mortgage you should apply for. For instance, if you believe you will be in the home for 3-5 years, then you may want to consider a 3/1 ARM or a 5/1 ARM. Both of these products are what is termed as an Adjustable Rate Mortgage. However, the rate is fixed for a certain period; either three years in the 3/1 ARM or five years in the 5/1 ARM. This product may be a better choice then a traditional 30 year fixed rate loan as the interest rates are often times lower than the 30 year fixed rate product. Keep in mind, that if there is a slightest chance you will remain in the property, or want to keep the loan longer than the three or five year period, you will want to consider the risks with the Adjustable Rate Mortgages. After the initial fixed term of the loan, the interest rate can change dramatically, most often times up to 5% higher than the initial fixed rate. This can substantially affect your monthly mortgage payment.
Another feature of mortgage loans to consider is the pre-payment penalty. Most of us don't want to even consider having a pre-payment penalty on our mortgage loans. However, this is a useful tool is reducing the rate on the mortgage. If you know for certain that you will be in the property and will not want to refinance the mortgage loan for a certain period of time, you can opt for a 12 month, 24 month, or even 36 month pre-payment penalty. This can save you between .125% and .375% on your interest rate. Again, realize the risks involved. If you do sell the home or refinance before the pre-payment penalty is expired, then there can be significant fees to pay.
Interest only loans have received a bad review lately, due to the large number of foreclosures. This is because the interest only loan product is a tool for a specific audience. If you have equity in your property, and realize that you will be basically paying rent that is tax deductible, then the interest only mortgage product may work for you. It will allow you a lower required monthly payment for a specific period. One of my favorite products is the 30 year fixed rate interest only mortgage. This mortgage will allow you to pay interest only payments for the first 10 years of the loan. The interest rate remains fixed for the entire 30 year period. After 10 years, the mortgage payment will adjust to principal and interest at the same fixed rate, and amortize the payments on the remaining balance for 20 years. Make sure that your mortgage provider will allow for additional payments to be made to the principal balance without penalty. You can then control what you pay each month toward the principal balance based on your finances.
The main thing to consider when shopping for a mortgage, is to choose a mortgage lender you can trust. You will need to choose a lender that is readily accessible to answer any questions you have. Make sure that your lender understands exactly what you want to accomplish with the mortgage loan. A good lender will also offer you other information and choices you may want to consider. The mortgage loan process is very detailed with a lot of working components all coming together in the end to allow you to purchase a new home or refinance an existing property with exactly the terms you first agreed upon. Ask your friends for referrals of a lender that did a good job for them. This process can be very smooth and well handled by the right lenders...but can also be very bad and sometimes costly if you simply look for the best rate!!!
Happy Mortgage Shopping!!!
To pre-qualify for your mortgage loan now, FREE of charge, apply on-line at
From the AP Wire comes the below article.
I am happy the doltish pennsyltucky banking regulators finally stepped up to the plate and put a halt to the legalized thievery the company has been engaged in in this state. The regulators woke up to the nefarious business practices of this company and its subsidiaries only after the company reported it would be restating its financial reports. No one apparently noticed the hundreds of prospective home owners who had to file for bankruptcy after the company and its subsidiaries failed to fund mortgage loans after closings. D-oh! Wake up! This is what happens when bureaucrats hide behind the deregulation fad sweeping through our political entities. Meanwhile, company executives have fat bank accounts not accessible to the folks stuck in bankruptcy. New Century Financial's sub-prime business practices are a main cause of the stock market dropping precipitously just last week.
"Troubles increase for mortgage lender
New Century Financial, the beleaguered lender that caters to people with poor credit scores, said yesterday it has received cease-and-desist orders from four more states to stop it from accepting new mortgage applications.
The company said in a filing with the Securities and Exchange Commission that Connecticut, Maryland, Rhode Island and Tennessee issued the orders Wednesday and Thursday, alleging that New Century Corp. units had violated state laws, including failure to fund mortgage loans after closing.
Massachusetts, New Hampshire, New Jersey and New York have already issued similar orders, according to the company. In addition, its Home123 Corp. unit entered into a consent agreement with the Pennsylvania Department of Banking to keep it from taking new mortgage applications in that state, New Century said.
New Century, the second largest U.S. subprime home mortgage lender last year based on loan volume, has already stopped making new loans due to a lack of funds.
The lender, now on the brink of bankruptcy, is the subject of SEC and Justice Department investigations or accounting and the trading of its stock.
The SEC is conducting preliminary inquiry into the circumstances that led to the company's disclosure last month that it would restate its financial results for the first three quarters of last year. The company said it is cooperating with investigators."
Financing is a key element of the buying process - no matter the country of choice. Mortgages are also a reality in today's markets. We recently sat down with Mr. Antonio Echeverria Gutierrez, a former Intel employee and now a financing specialist with Birdleaf Financial in Jaco Beach, Costa Rica.
Antonio works just a few steps from Jaco Beach in Costa Rica and is completely bilingual. He talks about the various financing options available to US and non-US buyers for mortgage loans and commercial properties in Costa Rica. He also covers the financing process in general, the criteria used for making financing decisions about mortgages, and how his company makes purchasing investment or retirement property in Costa Rica as easy and painless as possible.
If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over. New loan programs and opportunities to leverage your home equity can bring you lower mortgage payments and new investment opportunities. Ask us about the fastest & safest way to pay off your loan, while helping you to build long-term wealth.
Is a fixed rate mortgage the best choice for you?
Many of us opt for the certainty of a 20 year or 30 year fixed rate mortgage when we get our first mortgage. If you anticipate selling your home within the next 10 years, one of our adjustable rate mortgages or new hybrid loans may be a better financial fit for you. Hybrid loans typically have a lower fixed rate than a traditional 20 or 30 year mortgage. The savings you receive can well be worth switching to a hybrid loan.
Are you paying for Private Mortgage Insurance (PMI)?
There are a lot of new loan programs available that can help you eliminate PMI, even if you have less than 20% equity in your home. The monthly savings adds up quickly. This money can be put to better use to help you achieve other short-term and long-term financial goals.
Are your taxes and insurance up to date?
Even though your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it just makes sense to periodically check to see that these payments are being made properly. While you’re at it, you’ll want to review your homeowner’s insurance policy. It’s a good idea to review your policy every two to three years to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation.
Do you have a Home Equity Line of Credit (HELOC) for emergencies?
Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies. A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit. As you repay the balance of the draw, the credit becomes available again. Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency.
How’s your credit report?
The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan. That’s why it’s important to periodically check your credit report.
Now it’s even easy to do so. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each credit reporting company provide you with a free copy of your credit report, at your request, once a year. To request your free credit report, visit .
Are you making the most of your home’s equity?
With rising home prices, you may have more equity in your home than you realize. Taking out a home equity loan to payoff credit card debt, car loans and other higher interest debts may make good financial sense. Let us show you how to become Debt-free faster, with less risk, and without cash-flow compromise.
Are you on track to meet your Retirement Goals?
The greatest investment advantages of real estate are the tax advantages and favorable leverage it offers. If you are a good money manager, your home could be the key to haing your own Private Bank. Ask us how to control your equity for a more successful retirement.
Is it time to refinance?
The timing might be right to refinance your mortgage loan. New rates may help you significantly lower your monthly payment. Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation - whatever! Perhaps by refinancing you can even pay off your mortgage sooner!
We'll work with you to determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your future plans.
Michael Noel, CMPS, CMC, MBA
American Home Financial Services Corporation
Mortgage Rates Are Important!
When shopping for mortgage rates however, the most important consideration should be the lowest mortgage rate on the right mortgage loan. This will create the Best Mortgage Loan!
Today more than ever, the mortgage loan is a critical component of your overall financial plan. Optimizing your cash flow and savings require smart decisions in terms of Debt Strategy and Equity Management.
Making these decisions require analyzing your current situation and your future financial goals.
The appropriate program matches your profile and may mean an adjustable rate mortgage is better thean a fixed; or vice versa- even though the latest news says one thing or another.
Financial Priorities
Your plans need to be organized into these four major goals:
The typical loan officer or mortgage broker will not ask about these factors, so it is important to consult a qualified Mortgage Planner. Contact us today!
Michael Noel, CMPS, CMC, MBA
American Home Financial Services Corporation