August
2010
Its a buyers time right now and plenty of people are trying to take advantage of the super low mortgage rates to save some money. The only problem are the closing costs! They can add a fortune on to your expenses and all of a sudden you’re hardly saving anything at all. Fees can be added in the blink of an eye by certain lenders and their vendors. Right now the US Department of Housing and Urban Development (HUD) is working on creating regulations that will simplify the mortgage process and save consumers as much as $1,000 off a typical mortgage transaction – theres no promising when this will come into in affect so for now just follow a couple of these rules that CNN.com has provided for all of you borrowers out there.
Get Friendly with your Current Lender
If you’re looking into refinancing, the first call you should make is to your existing lender, who already has critical information about you and your house on file. With an existing relationship with a lender it opens doors to a potential “streamlined” process which will save you a lot of extra paperwork and money on everything from application fees to appraisal fees. For people who have recently refinanced their home or have taken out a loan, you can save as much as 50% on title insurance by asking for a reissue rate, which your lender will request for you.
Get Nitpicky About Fees…
There are about a dozen different kinds of fees that could show up on your final closing statement, including credit report fees, appraisal fees, document preparation fees, title fees, recording fees and underwriting fees. For example, fees on a $200,000 mortgage could add up anywhere from $1,000 – $3,000 and that is WITHOUT any “discount” points that you pay up front to get the best interest rate. Good credit borrowers should challenge any fees that seem excessive, especially when lenders don’t always control many fees that show up on your statement. Your closing costs could jump a lot from the original good faith estimate you’re given, so keep an eye on everything and keep all fees open for discussion if you’re having second thoughts.
…at the same time, do not forget to keep the big picture in view
First priority should be to get the lowest mortgage rate possible and its important not to lose sight of that. The difference between paying a 6% and a 5.5% on a new loan adds up to nearly $23,000 in interest on a $200,000 30-year mortgage. If you have to pay a few hundred dollars in closing costs to get that rate it is definitely worth it! In fact, sometimes if you’re short on cash you might even want to consider rolling the closing costs into your loan, if that is an option. You’ll want to consider how much more you’ll pay each month as well as in interest over the life of a loan. If you roll $2,000 in finance costs into a loan with a 5.5% rate, for example, you’ll pay an extra $11 a month and about $2,000 extra in total interest. In this case you’re still better off than if you had no refinanced at all.
July
2010
After the lowest mortgage rates in decades were recorded, applications ended up falling 4.4% last week reports The Mortgage Bankers Association. Also refinancing home loans dropped 5.9%. Mortgage rates hit a low last week, but the average for a 30-year fixed loan went up to 4.69% from 4.59% from last week and the 15-year fixed loan adjusted up from 4.05% to 4.12% after last week as well. The low rates began in mid-april after European debt terrors have given initiative to buy US Treasury bonds, which has lowered the yield on Treasury’s. We’ll continue to update you all on future rates!
July
2010
Qualified mortgage loaners are in a great position right now as it is a great time to receive one. Last week, rates for 30-year fixed rate loans fell to 4.57%, which reaches the lowest average since 1971. With rates this low, this enables home buyers to get a lot more value in the long term. There are many variables that play into finding a loan, for instance, your credit score must be at least 620 and the amount of cash you’re willing to put down also plays a serious part in getting a good mortgage. Here are some scenarios provided to us by boston.com:
You pay 20% down and expect to retire in the house
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Take out a 30 year fixed rate loan. The interest rate stays the same (historic lows)
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You have 20% down paid, but plan on moving again in a few years
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Take out an adjustable rate loan of five. seven or 10 years. These lows carry a lower initial rate than the 30-year fixed do.
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You have at least 20% down on a house that is worth over $729,500
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You will need a jumbo loan which is not going to be backed by Fannie Mae or Freddie Mac.
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If you put more than 20% down
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Consider a 20 year fixed rate mortgage. Rates are sometimes lower than for a 30-year-fixed-rate by about a quarter point. But because the loan term is shorter, the monthly payment will be higher.
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You don’t have a down payment
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Your options are limited. If you’re a veteran or the surviving spouse of one, consider a mortgage backed by the Department of Veteran Affairs. These loans offer 100% financing without private mortgage insurance at competitive rates. Also if the home you’re buying is in a rural area (as defined by the Agriculture Department), you may qualify for a loan that offer 100% financing.
June
2010
If you’re in the home-buying market, here’s some good news for you! Financing your future home has just gotten easier. Rates on 30-year fixed mortgages have fallen this week to a record low of 4.72 percent this week, only .01 percent more than the all time record low last December. In addition, mortgage rates for fixed 15, 5, and 1 year rates are down to near records as well. Rates on one year adjustable rates are down to 3.91 percent, a record since May 2004!