Alabama | Home Loan | Mortgage | Refinance

Archive for November, 2009

They’re not getting a penny from the federal government until they move forward,” Mr. Barr said … contend that the Treasury program, addressing mortgages whose low promotional interest rates had soared, is outmoded. At this point, foreclosures …
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WASHINGTON — The Obama administration, battling a foreclosure crisis that shows no signs of relenting, will step up pressure on mortgage companies to do more to help people remain in their homes, officials said Saturday. The administration will …
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Mortgage rates fall to a record low as new home sales climb. MarketWatch’s Amy Hoak joins the News Hub to discuss whether these developments point to strength ahead for the struggling housing market.
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Even home buyers who thought they were getting a bargain are now finding themselves underwater. The News Hub panel discusses a mortgage crisis that has left millions owing more than their homes are worth.
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Homeowners who are re-financing their home for the first time may need a great deal of advice to assist them during the process. While homeowner can certainly research the process of re-financing by themselves, this can be a cumbersome task which is difficult, if not impossible. While it might be possible for a homeowner to educate himself enough to make informed decisions, it is unreasonable to expect a homeowner to be up to date on the most current information in the re-financing industry. It would also not be reasonable for homeowners to learn enough to make a definite decision regarding re-financing. The homeowner may still require some direction regarding which options are best suited for the needs of the homeowner.

Fortunately there are two simple steps homeowners can take to tips the odds of obtaining the most favorable re-financing in their favor. These simple steps include consulting with friends and family members who have recently financed and turning to industry experts for assistance.

Consult Friends and Family when Re-Financing

Believe it or not consulting with family and friends is one of the first steps a homeowner should take in the refinancing process. Those reading this article might be somewhat confused by this suggestion because in the previous section we stressed how it would be virtually impossible for a homeowner to thoroughly educate themselves on the re-financing process. Surely, we are not implying every homeowner has a friend or family member who is capable of given detailed financial advice in regard to re-financing. However, friends and family members can be helpful in a different capacity.

Friends and family members who recently re-financed their own home likely did a great deal of research and legwork before making their decision. They also likely formed useful opinions, either negative or positive, about the lender they used in the process. It is this information which can be very useful to homeowners who are considering their own re-financing. Homeowners can obtain information such as which lenders are currently offering the best rates as well as which lenders are easy to work with and responsive to the needs of the homeowners as well as which lenders do not take a vested interest in helping the homeowner to succeed.

Ask Experts for Advice when Re-Financing

One piece of advice which cannot be overlooked when re-financing a home, is asking an expert in the re-financing industry for advice. These experts may have costly consulting fees associated with their assistance but most homeowners would agree these fees are certainly worthwhile especially if the result in a significant cost savings for the homeowner.

We previously stressed how the issues associated with re-financing can be quite complex and difficult for those outside of the industry to fully understand, however, those in the industry spend their days devoted to learning more about re-financing, keeping up to date with changes in the industry as well as new developments and figuring out how to best serve the customers. All of these characteristics make it clear that homeowners should really consider employing the services of a financial planner with a great deal of experience in re-financing when they are making decisions regarding the best re-financing option for their situation.

Again, friends and family members who previously consulted with an industry professional can supply candid opinions about those they met. This can save the homeowner a great deal of time by eliminating potential candidates who friends and family members thought performed poorly.

Most borrowers have heard of FHA home loans. They are very common. You hear about them mostly as loans for first time borrowers, which is common. However, most people don’t realize that FHA loans can also be does for refinancing. They are not only for purchasing a house.

HUD owns and operates FHA, which is a program designed to help borrowers who might have difficulty buying a house. If the borrower falls within FHA’s requirements FHA insures the loan for the lender, which makes the loan very low risk for the lender, which is very good for the borrower. It could mean a lower interest rate, better terms and just an overall better loan.

FHA’s requirements are; a down payment of 3-5%, the home must be under the FHA’s set loan limit for the county that the borrower lives in and a few other small requirements.

The main advantage to an FHA loan, is if you can fall within their requirements, your credit history or income level, will not hold you back from getting a home loan. If you are getting turned down from other lenders because of a high debt to income ratio or because your credit is bad. You may want to consider applying for an FHA loan, where those requirements are either non-existant or much more flexible.

If the idea of down payment is holding you back, consider also, that FHA loans allow the use of a non-profit organization as a source for the down payment, which opens up the option of using down payment assistance programs like Neighborhood Gold.

To view our list of recommended mortgage lenders online, who offer FHA programs, visit this page: http://www.abcloanguide.com/govloans.shtml

Carrie Reeder is the owner of http://www.abcloanguide.com, an informational website about various types of loans.

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There are several factors that affect your mortgage rate. One major factor of mortgage rate movement is inflation. Inflation means a growing economy and increasing prices of goods and services. A growing economy means a stronger demand for goods and services, allowing producers to increase their prices. This therefore results in higher real-estate prices, higher apartment rents, and higher mortgage rates.

In an effort to reduce inflation and slow down economy, the Federal Reserve lowers down interest rates, and in the process, decrease mortgage rates. Although mortgage rates have the tendency to move in the same direction as interest rates, their actual movements are also based on the supply and demand for mortgages.

Mortgage rates have a slightly different equation in their supply and demand as compared to interest rates. This is the reason why sometimes, mortgage rates move differently from other rates. For instance, a lender has a commitment to make and is forced to close additional mortgages. To achieve this, they would have to lower down the mortgage rates even with interest rates going up.

Other Factors Affecting Mortgage Rates

Mortgage rates are affected by several other factors besides inflation. Mortgage rates rise up when the amount of the loan increases. This increase in mortgage rates is especially true if the loan amount exceeds the established loan limits of Fannie Mae and Freddie Mac. Loan limits typically changes at the beginning with each year to conform with the trend mortgage rates are taking.

The length of the loan may also affect mortgage rates. Shorter loans usually means lower mortgage rates and longer loans can cost you higher mortgage rates. Loans with a 20-year or 15-year note can allow you to save thousands of dollars on mortgage rate payments. However, this also means that your mortgage rate payments every month will also be a lot higher.

To avoid this, an adjustable mortgage rate may help you get started on a lower mortgage rate, but if interest rates grow, your monthly mortgage payments will rise also. Fixed mortgage rates are usually higher than adjustable mortgage rates but they can save you money too, especially if the interest and mortgage rates go up.

Larger down payments can help you save up on your monthly mortgage rate payments. You can get the best possible mortgage rate with a down payment that is greater than 20%. Higher mortgage rates are expected if the down payment is less than 5% since the beginning equity is smaller and provides less collateral.

Discount points are another way to move mortgage rates. Lower mortgage rates usually means higher points paid on your loan. The same goes for closing costs, which are fees that the lender must pay. Higher closing costs paid to them means lower mortgage rates. However, if you do not wish to pay for all the closing costs upfront, the lender will raise your mortgage rate in order to cover it.

The concept is pretty simple. Lenders are usually willing to lower mortgage rates as long as more money is paid upfront. More money down means lower mortgage rates. And lesser money down means higher mortgage rates.