Utah | Home Loan | Mortgage | Refinance

Archive for July, 2010

The average rate for 30-year fixed loans this week was 4.54 percent, down from 4.56 last week, mortgage company Freddie Mac said Thursday. That’s the lowest since Freddie Mac began tracking rates in 1971. The last time …
Go to Source

LOS ANGELES — Households across a majority of large U.S. cities received more foreclosure warnings in the first six months of this year than in the first half of 2009, new data shows. The trend is the latest …
Go to Source

July 29 (Bloomberg) — Rick Sharga, senior vice president for marketing at RealtyTrac Inc., talks with Bloomberg’s Mark Crumpton about U.S. foreclosure filings. Foreclosures climbed in three-quarters of U.S. metropolitan areas in the first half as high unemployment left many homeowners unable to pay their mortgages, according to the Irvine, California-based mortgage-data company. (Source: Bloomberg)
Go to Source

While Frank, Mac, and Dennis try their hand at real estate, Dee arranges to be a surrogate mother to a wealthy couple with a sweet house.
Go to Source

Here’s what we did. We reviewed all of the questions emailed to the Home Buying Institute over the last six months. We made a list of the most common mortgage-related questions sent in by home buyers, and we answered them below. What’s the result? A must-read article for first-time home buyers!

So here they are, starting with the most common mortgage question we receive…

1. What credit score do I need to get a mortgage?

In the past, we did not get this question as much as we do today. Yet, it has quickly risen to #1 in terms of frequency. There are two reasons for this – economic recession and media coverage. The housing crisis of 2008 led to a full-scale economic recession in 2009. Long story short, it’s harder to qualify for a mortgage loan in the current economy. Lenders today are more strict with their lending criteria, including credit scores. There has been plenty of media coverage about all of this, and that’s why so many home buyers are asking this question. So let’s answer it.

First, you need to realize that the numbers I’m about to give you are only averages. Every lender has its own standards and criteria, and they vary a lot. Lenders will also review other criteria, in addition to your credit score (income, debt, affordability, etc.). In the current economy, you’ll probably need a credit score of at least 670 to qualify for a mortgage loan. In order to get the best rates on a mortgage, you’ll need a score of 750 or higher. Again, these numbers are not set in stone. They are merely averages taken from recent surveys.

2. How much of a mortgage loan can I afford?

The most important thing to understand is that you must answer this question for yourself. A mortgage lender cannot tell you how much you can afford to pay each month – they can only tell you what they’re willing to lend you. It’s possible to get approved for a mortgage that’s too big for you. It happens all the time, and it often ends up with a foreclosure situation. So you need to set your home buying budget early on in the process, before you start talking to lenders.

This is a relatively simple process. All you need to do is subtract your monthly expenses from your net monthly income (after taxes), and you’ll have a rough idea of what you afford to pay toward a mortgage each month. When you add up your monthly expenses, include everything but your current rent payments – you won’t have a rent when you buy a home. Be sure to account for entertainment / leisure expenses, retirement and savings contributions, and whatever debts you currently have. Subtract these expenses from your monthly income, and use that figure as a monthly limit for your mortgage. Do not exceed that maximum amount, even if a lender approves you for more. Stay within your budget!

3. How do I apply for an FHA loan?

Let’s start with a quick definition. An FHA loan is any home loan that’s insured by the Federal Housing Administration, which is part of the Department of Housing and Urban Development / HUD. The FHA does not actually make loans to consumers – rather, they insure the loans made by primary lenders.

These loans offer certain benefits to first-time home buyers. Lenders receive guaranteed repayment from the federal government, even if the homeowner ends up defaulting on the loan. This government backing makes it easier for home buyers to qualify for FHA loans. You don’t have to put as much money down (as little as 3.5%), and your credit score doesn’t have to be perfect. That’s the primary appeal of FHA home loans.

To apply for an FHA loan, you would need to start on the FHA website. From there, you can find a list of FHA-approved lenders in your area, and you can apply for the program directly through those lenders. You can actually start this process through either the HUD or the FHA websites. Here are the links:

* http://www.fhaoutreach.gov/lender/lender.do

* http://www.hud.gov/ll/code/llslcrit.cfm

After you submit an application with an FHA-approved lender, they will review your financial situation and tell you (A) if you’re qualified for the program and (B) what kind of rate / terms you might get.

4. How do I get pre-approved for a mortgage loan?

It’s wise to get pre-approved for a mortgage loan before you start house hunting. It helps you limit your search to the types of homes you can actually afford. Sellers will also take your offer more seriously if you have your financing lined up. Fortunately, it’s a straightforward process. Just contact your chosen lender and tell them you want to get pre-approved for a mortgage. They will set up an appointment and tell you what to bring (W-2 statements, bank statements, pay stubs, etc.).

Afterward, the lender will tell you how much they are willing to lend you, based on your financial situation. They’ll also give you a pre-approval letter with the same information.

5. Should I choose a fixed or adjustable-rate mortgage?

A fixed-rate mortgage keeps the same interest rate over the entire life of the loan. On the contrary, an adjustable-rate mortgage (ARM) has an interest rate that will adjust or “reset” every few years. These days, most ARM loans start with a fixed rate for a certain period of time, typically three to five years, and will start adjusting after that. During the initial fixed-rate period, an ARM loan will usually have a lower rate than a regular fixed-rate mortgage. This is why some home buyers choose ARM loans in the first place – to get a lower rate, and thus a smaller mortgage payment each month.

I generally recommend fixed-rate mortgages for people who are going to stay in a house for a long period of time, more than a few years. The only time I would even consider an adjustable / ARM loan would be a short-term residency, where I knew I would be selling the home within a few years. For example, I did my final military tour in Maryland, and I knew I’d be moving out of the state after two years. So I used an ARM loan to get a lower interest rate, and I sold the home long before the three-year point where it would start adjusting. This is the only type of situation where I recommend the ARM loan. For long-term residency, I recommend a fixed-rate mortgage for predictability.

You should learn everything you can about fixed and adjustable mortgages, and choose the one that best suits your needs. Once you learn about the various pros and cons of each option, and obvious choice will begin to emerge.

Brandon Cornett is the owner of Cornett Communications, an Internet publishing company focused on the real estate industry. Visit the author’s blog at http://www.cornettcommunications.com/blog/ for more advice on this topic.

Article Directory: Article Dashboard http://www.articledashboard.com

NEW YORK — Mortgage rates dropped to the lowest level on record for the fifth time in six weeks, making homebuying and refinancing the most attractive in decades for those who can get loans. The average rate for 30-year …
Go to Source

FILE – This undated file photo released by the FBI shows Noshir S. Gowadia. The attorney for a former B-2 bomber engineer from Hawaii accused of selling military secrets to China says his client designed a cruise missile …
Go to Source