Flat Mortgage Rates
October 12, 2009
Freddie Mac reported the results of the Primary Mortgage Market Survey, which showed that the 30-year fixed-rate mortgage averaged 5.03% with an average 0.7 point for the week ending October 29, 2009. This figure is up from last week when it averaged 5.00%. The same time period of 2008 had the figure at 6.46% for a 30-year fixed-rate mortgage.
The 15-year fixed-rate mortgage averaged 4.46% with an average 0.6 point, which is up from last week when it averaged 4.43%. A year ago at this time the 15-year fixed-rate mortgage averaged 6.19%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.42% with an average 0.6 point, which is up from 4.40%. A year ago, the 5-year adjustable-rate mortgage averaged 6.36%.
The one-year Treasury-indexed adjustable-rate mortgage averaged 4.57% with an average 0.6 point, which is up from 4.54%. At this time last year, the 1-year adjustable-rate mortgage averaged 5.38%.
Frank Nothaft, vice president and chief economist for Freddie Mac stated, “Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971,”… “As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year,” according to Freddie Mac’s survey.”
Economic data releases this week offered mixed signals as to the current state of the housing market. For example, total existing home sales jumped 9.4 percent to an annualized rate of 5.57 million homes in September, the strongest pace since July 2007, according to the National Association of Realtors®. However, new home sales unexpectedly fell 3.6 percent to 402,000 houses, the weakest since June of this year, based on figures from the Department of Commerce. Nonetheless, stronger housing demand has lowered the inventory of unsold existing homes in September to the lowest since January of this year and for new homes the lowest since November 1982, which should help stabilize falling house prices.”
All of these signs are good for the housing market. Consumers as well as REALTORS need to be on the lookout for more good news in the coming months.
To learn more contact a Tulsa Homes Expert by calling RE/MAX for more information at 877-738-8572.
Understanding Home Equity Loans
September 20, 2009
Home equity loans are loans that is against the equity you have in your home. Tulsa Home owners can use the money from this loan for any reason you want. It does not have a specified requirement. Interest rates a major consideration when applying for a home equity loan so let’s check out interest rates.
Why do you pay interest rates on home equity loans?
Interest rates are a fee that is charged for using the lending company’s money for a specific time period.
How do you know what the interest rates will be for home equity loans?
Interest rates are figured by dividing the amount of interest by the amount of money borrowed. An example would be: If the lending company charges $60 per year for you to borrow $1,000, the interest rate would be 6%. You will find interest rates posted at most lending companies.
What types of things determine what interest rates will be when you apply for home equity loans?
- Inflation affects interest rates. When inflation rises so does interest rates. This happens because lending companies will lose money that will be paid back to them in the future.
- How much credit people are seeking and how much is available.
- The rate that other institutions charge each other for their short-term loans. (Federal funds rate).
Are interest rates different for different types of home equity loans?
Yes, the higher the credit risks of the loan, the higher the interest rate. Loans that are determined to be high risks are ones that the lending company believes will probably not be repaid.
By checking with different lending companies, you will find that interest rates are not the same for each company. As an example:
The interest rate for a 30 year fixed mortgage in:
- San Diego, California varies from 5.386% to 6.27%
- Bloomington, Indiana varies from 5.391% to 6.071%
The interest rate for a 10 year fixed mortgage in:
- Daytona Beach, Florida varies from 4.557% to 6.105%
- Memphis, Tennessee varies from 4.557% to 5.026%
Therefore, interest rates can be a big factor when you are looking for a home equity loan. This may not be a big difference but when you are talking about several thousand dollars, it does become an important deciding factor. Interest rates vary from state to state and from lending companies to lending companies. They can also very according to the length of the loan and the amount of money borrowed.
Many people are now applying online for all types of home equity loans. This can be very convenient for many of us. There are also many companies online today that can give you the current mortgage rates for home equity loans for the city and state that you live in. Without even leaving home you will be able to check the current rates and find lending companies in your area that have the lowest mortgage rates available.
Do not apply for your home equity loans with a company just because their mortgage rates are lower than the last one you checked out. Be sure you check every option in every loan package to insure that you are in fact getting the best type of loan with the options that you need.
If you decide to apply online for a home equity loans; check to be sure that the website is secure. You never want to give out personal information online unless the website has a secure server in which to submit your personal information. You can tell if the page that submits the information is using a secure protocol by checking the URL, if the URL looks like https:// then it is secure and all information submitted will be encrypted and will not be able to be read until it reaches its destination.
Before submitting information for a home equity loans, be sure that the lending company is a real company. If they are, in fact, legitimate they will have their physical address and telephone number posted in clear viewing somewhere on their website. You do not want to give out personal information concerning your bank account if you cannot be sure the company receiving the information is legit.
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Fannie Mae & Freddie Mac’s Appraisal Rules
August 26, 2009
Congress is taking a break until after Labor Day, but things are boiling over the Fannie Mae and Freddie Mac’s appraisal rules. The rules of course are very controversial or we would not be talking about Capital Hill.
If it were up to Bipartisan legislation, the Home Valuation Code of Conduct would be put on a shelf and left for 18 months and this idea is actually getting new sponsors, which is not at 54.
The National Association of Realtors is pushing for the Home Valuation Code of Conduct bill in the key congressional representatives’ home district during the recess. The National Association of Realtors is very critical of the Home Valuation Code of Conduct rules with their side stating the rules “produce deal-killing lowball appraisals, encourage the use of low-paid appraisers unfamiliar with local conditions, and have raised the cost of valuations for consumers.”
Along with the National Association of Realtors, appraisers, mortgage brokers, and home builders are also against the rules. The Home Valuation Code of Conduct took effect on May 1.
David Stevens the FHA commissioner recently presented the first public comment from HUD, which was, the FHA account for close to 1/3 of mortgage market volume and does not have any plans to adopt the Home Valuation Code of Conduct. He went on to explain that FHA has its own guidelines and standards that cover appraisers and appraisals. A few weeks later, Stevens did comment that some of the core principles of the guideline were good.
Stevens stated, “We do like the HVCC’s separation of influence in ordering the appraisal from those who financially benefit from the outcome.” He did say that FHA will not use the Home Valuation Code of Conduct but may incorporate some of the principles.
The goal of FHA as stated by Stevens “is to get changes into the marketplace in the near future.” This is a hint that FHA may soon be presently new guidelines on home valuations, which will of course affect realty agents, appraisers, consumers, and lending companies. No details of any of the changes are available at this time.
Labor Day is fast approaching and Capital Hill will be a buzz before long. The bill only has 54 supporters and with all the discord among the politicians, REALTORS, home owners, and lending companies, I doubt if we will see any changes yet, as they will more than likely more on to more pressing issues such as health care.
Tulsa Mortgage Modifications
June 6, 2009
Tulsa Mortgage Modifications include Second Mortgages
New Tulsa home loan modifications have been changed by the federal government to now include second mortgages instead of only first time mortgages and even new cash incentives are making Tulsa short sale deals better than ever.
The new modifications allows a few homeowners another chance at a loan modification loan that can help them save their home, many that were turned down due to a second mortgage such as home equity loan or line of credit hindered the process.
Due to these new efforts, homeowners are able to take the short sale route instead of ending up another Tulsa foreclosure statistic.
All loan modifications were created to help make Tulsa real estate loans more affordable, in most cases by lowering the interest rate, lengthen the term of the loan, or by reducing the amount of the principal. These loan modifications loans are not refinancing loans that pay off the old loan with a new refinancing loan.
The Making Home Affordable new second-lien program will give first time mortgage borrowers modified loans that will lower their payments on their second mortgage as long as both lenders for the first and second mortgage are participating in the program.
At this time there are twelve mortgage companies in the program such as Bank of America, Wells Fargo, Countrywide, and Citibank, to name a few.
Eligibility for Tulsa homeowners includes:
- Must be living in the home.
- Unpaid principal balance that is not larger than $729,750.
- A loan originating on or before January 1, 2009.
- A mortgage payment that is more than 31 percent of their gross monthly income; and have
a mortgage payment that is not affordable. - This new program now only lowers the payment, but lending companies can opt to wipe out a second mortgage for a lump-sum payment from the government.
There are also new short sale incentives available that are well worth checking out. A short sale is when the lending company accepts the amount of the sale as full payment on the mortgage. On the other hand, in some cases, the difference between the sale price and the amount left on the mortgage can be taxed, and the homeowner will have to pay the tax amount.
The new short sale incentive provides lenders with a $1,000 payment from the United States Treasury for giving the homeowner the opportunity to sell their home for than the amount owed on the Tulsa mortgage loan and for accepting the amount of the sale as full payment for the loan.
The lending company can also receive $1,000 for accepting a deed-in-lieu transaction. This means the deed will be transferred to the lender instead going through the foreclosure process.
Tulsa homeowners can also receive $1,500 in closing costs by agreeing to a short sales or deed-in-lieu deals. The United States Treasury will also pay up to $1,000 to help stop second mortgages from stopping the deal.
Rural Development Loans
May 30, 2009
Loans for the Tulsa County & Surrounding County
Even though this program for Rural Development Loans has been around since March 27, 2009, many people still do not know that the United States Department of Agriculture (USDA) has Home Purchase Programs available. The Oklahoma USDA rural mortgage program is a government sponsored home buying program, just like Oklahoma FHA and Oklahoma VA, the USDA does not originate the loan, you will need to apply for a mortgage loan through a lender.
The American Recovery and Reinvestment Act of 2009 have made $10 billion available through the Rural Development Single Family Housing Guaranteed Loan Program known as the SFHGLP.
The USDA has explained that the loan is “subject to receipt of congressionally appropriated funds”. Along with this, all loans must meet specific guidelines especially income. These income limits vary according to the section of the state in which you live and the number of members in your family.
In the Tulsa OK metro area the income limits are:
- Very low income – one person at 20,150 to 8 persons at 38,000
- Low income – one person at 32,250 to 8 persons at 60,850
- Moderate income – one person at 37,750 to 8 persons at 66,350
- 38-year term – one person 20,400 to 8 persons at 38,500
- ADJ. Median Inc. – one person 34,000 to 8 persons at 64,200
The various programs available through the USDA include direct loan program with an estimated loan limit in Tulsa County of $144,500, which became effective march 1, 2009. SFH Guaranteed Loan with income limits of RHS low income for 1 to 4 persons 46,100 and 5 to 8 persons at 60,850 and the RHS Moderate income guaranteed loan income limits at 73,600 for 1 to 4 persons and 97,150 for 5 to 8 persons.
The Mutual Self Help Housing Program is also available for Tulsa County residents with qualified recipients completing 65% of the work themselves to build his or her new home.
To learn more about the various rural development programs that you may be entitled to, you should contact a local real estate agent. He/she will be able to help you find a program to provide you with the help you need to buy a home.
Refinancing
April 15, 2009
Bottom Line on Refinancing
We have all heard the stories about refinancing to help lower our monthly mortgage payments and all other kinds of rumors. The problem is that often no one is given us the bottom line on refinancing, so here it is.
Some Tulsa homeowners have interest rates at this time that are well above what is available in the market, but still cannot refinance profitably. The main reason is that property values have declined causing a requirement of mortgage insurance on any new loan. The next reason is many individuals are self employed and cannot meet the requirements of the lenders. The last reason is that the home owner has seen his credit score deteriorate and cannot meet the credit scores needed to refinance.
The bottom line to your questions:
- There is no waiting period requirement for refinancing.
- You will not lose past principal payments if you refinance.
- Past refinance costs, normally does not affect the decision on your refinancing now.
- Refinancing does not have to extend the loan for more years.
- A prepayment plan should not stoop a profitable refinance.
You should speak with your bank or lending company to learn your options. Refinancing can be an option, but may not be the best option in your case. Just remember before throwing in the towel and losing your home you should talk with the lending company to learn the best options for you in your situation. There are ways that you can keep your home instead of losing all that you have worked for over the past few years.
If you have an adjustable rate mortgage and realize that you can receive a better deal in today market with a fixed rate, it would in your best interest to speak with your lending company to learn more. Remember, your lending company may not be willing to make any adjustments to your loan to provide you with a profitable outcome. The main reason is that they are in business to make the company money not to put money in your pocket. You can still shop around for a refinance company instead of sticking with the lending company you have at this time.
Understanding Mortgage Rates
December 7, 2008
So, you are thinking about purchasing a Tulsa home and need some information on a mortgage. Let’s define a mortgage. Usually a mortgage means a long term loan which the borrower (that’s you) acquires by completing an application offered by a bank, online mortgage broker , wholesale mortgage company, independent mortgage broker, lender or sometimes the seller of real estate. Finance mortgage companies hold a claim to property until debt is paid off. These loans are usually typed in the way of a contract.
How do you know what the mortgage rates will be?
Mortgage rates are figured by dividing the amount of interest by the amount of money borrowed. An example would be: If the lending company charges $60 per year for you to borrow $1,000, the mortgage rate would be 6%. You will find mortgage rates posted at most lending companies.
What types of things determine what mortgage rates will be?
- Inflation affects mortgage rates. When inflation rises so does mortgage rates. This happens because lending companies will lose money that will be paid back to them in the future.
- How much credit people are seeking and how much is available.
- The rate that other institutions charge each other for their short-term loans. (Federal funds rate)
Are mortgage rates different for different types of loans?
Yes, the higher the credit risks of the loan, the higher the mortgage rate. Loans that are determined to be high risks are ones that the lending company believes will probably not be repaid.
Therefore, mortgage rates can be a big factor when you are looking for a loan. This may not be a big difference but when you are talking about several thousand dollars, it does become an important deciding factor. Mortgage rates vary from state to state and from lending companies to lending companies. They can also very according to the length of the loan and the amount of money borrowed.
There are many companies online today that can give you the current mortgage rates for the city and state that you live in. Without even leaving home you will be able to check the current rates and find lending companies in your area that have the lowest mortgage rates available. You can even find companies online where you can apply for loans when you find a good mortgage rate.
Do not apply with a company just because their mortgage rates are lower than the last one you checked out. Be sure you check every option in every loan package to insure that you are in fact getting the best type of loan with the options that you need.
Be sure when you talk with different lending companies concerning mortgage rates, be sure you have all of your information together and that you know what you want. You will be able to check out the mortgage rates and other loan options from different loan companies. Be sure you shop around as each loan company may be different in the options or their mortgage rate charges they have available.
Remember that mortgage rates can change from day to day, be prepared to apply for a loan when the mortgage rate is where you want it to be. Check the mortgage rates often by visiting the sites online that keep accurate records or have an updated feed available with the current prices of mortgage rates in your area. Be sure you are up to date on what mortgage rates are when you talk with a lending company. If they seem to be a lot higher than you expected then ask them why they are in fact higher than you found on the internet. If they cannot give you a good explanation, find another lending company.
We will work hard to be YOUR Tulsa Real Estate Agent! We are the Tulsa Homes experts and will work hard to find the home of your dreams. Call Toll Free Direct at 1 (877) 738-8572 today.
Types of Mortgage Lenders
November 2, 2008
Okay you have decided to buy a new Tulsa home and you are wondering where to start. The first place to start is to understand the different types of mortgage lenders available. There are many different types of mortgage lenders.
Mortgage Bankers
A mortgage banker is a mortgage lender that is big enough to sell loans to places like Fannie Mae, Ginny Mae, Freddie Mac, and other loan companies. Some will in fact service the loans that originate while others may not. These mortgage bankers have wholesale lending divisions to mortgage bankers.
Mortgage Brokers
Mortgage brokers are mortgage lenders that originate loans to sell them to wholesale lending companies. The mortgage broker has been doing business with these wholesale companies for a while. Mortgage brokers do not do any underwriting or funding. They also only work with wholesale lending companies that have a wholesale loan department within their company structure.
Wholesale Lenders
Wholesale lenders are a type of mortgage lenders that may not have their own retail branch; they may only work with mortgage brokers. Wholesale lenders offer their loans to mortgage brokers at a lower cost that is available at the retail branch to the general public. The mortgage broker can then add his own fee. To you that would mean that you are paying around the same that you would if you went to the retail branch of the wholesale mortgage lender.
Portfolio Lenders
This mortgage lender is lending money and originating loans on their own behalf. They do not sell them on the secondary market quickly. Because of this, they do not have to go by the guidelines set forth in the Fannie May or Freddie May guidelines. A portfolio lender can determine their own rules for their loans based on your credit. Most of the time portfolio lenders are large banks and savings & loan companies. If you pay your payments on time for a year it becomes known as seasoned, after it becomes seasoned it is then marketable even if your loan does not meet the guidelines set forth by Fannie Mae. When the portfolio lender sells your seasoned loan it then frees up their money so they can make more loans.
Direct Lenders
Direct lenders are mortgage lenders that fund their own money. This can be large or small lending companies. They usually have a credit line where they can draw money to fund all of these loans. Most of the time direct lenders draw up the loan in their own company name.
Correspondents
Correspondents are mortgage lenders that do their own loans and instead of selling them into pools, they sell these loans to a sponsor, which is a larger lending company. The sponsor then sells these loans like they were a mortgage banker to companies like Ginny Mae, Fannie Mae, or Freddie Mac. Sometimes, correspondents fund the loan themselves or the funding may come from a larger lending company.
Banks and Savings & Loans
These mortgage lenders are similar to portfolio lenders
Credit Unions
Credit Unions are similar in operation to correspondents, although a large one could act as a portfolio lender or a mortgage banker.
Now you understand what mortgage lenders are and how they work, you may be able to understand where to find a mortgage loan. Be sure to check with all kinds of lending companies before you make a choice for your mortgage loan.
Enjoy shopping for your new home and finding a mortgage lender that will help your dreams of owning a new home become a reality.
We will work hard to be YOUR Tulsa Real Estate Agent! We are the Tulsa Homes experts and will work hard to find the home of your dreams. Call Toll Free Direct at 1 (877) 738-8572 today.
What is Interest Only Mortgage
October 2, 2008
An interest only mortgage is a wonderful way for buying more home at a cheaper rate.
You can get the lowest monthly payment possible because you are not paying any money toward your principal. Your monthly payments are paying interest only. You can make other payments to your loan for the principal if you desire.
Usually interest only mortgages are for a term of 30 years, the first 5 to 20 years are the interest only years and the last 20 to 25 years is everything combined.
Before you talk with lending companies concerning interest only mortgage you need to understand the basics in mortgage/interest rates.
Why do you pay interest anyway?
Interest rates are a fee that is charged for using the lending company’s money for a specific time period for your interest only mortgage.
How do you know what the interest rates will be?
Interest only mortgage rates are figured by dividing the amount of interest by the amount of money borrowed. An example would be: If the lending company charges $60 per year for you to borrow $1,000, the mortgage rate would be 6%. You will find mortgage rates posted at most lending companies.
Are interest only mortgage rates different for different types of loans?
Yes, the higher the credit risks of the loan, the higher the mortgage rate. Loans that are determined to be high risks are ones that the lending company believes will probably not be repaid.
Interest only mortgages are you still interested?
With their usually less than fixed rates, along with interest only payments, an a short-term ARM a interest only mortgage could represent a way to have the lowest possible monthly payment and still be able to own your own home. However, all that flexibility comes with risks.
Some mortgage products, allow you to have your choice of payment plan, including interest only, fully amortizing or accelerating amortizing. These pick a price and pick a payment arms are gaining in usage, because they allow you to determine how best to apply your income to your mortgage.
If you are already qualified for an interest only mortgage, and if you have college, retirement or investment needs to take care of, you might consider adding interest only payments to your arm in order to more fully fund the other financial needs in your life. You can invest the money better elsewhere than paying down your mortgage balance. As far as maximizing your tax deduction, remember that not only is that vast majority of your payment already comprised of interest, but that only a fraction of every dollar in interest you spend is tax deductible, anyway.
Please consider that interest only mortgage will rise just like a river, complicating things for borrowers who do not have fixed loans. Whatever happens, it is crazy to assume that house prices and appreciation will continue indefinitely.
Most Tulsa home prices can keep rising only as long as there are Tulsa home buyers willing to pay more than the last one did. Buyers who want to use an interest only mortgage to best advantage must be ready to welcome one more problems in their life. People who choose a conventional fixed mortgage over an interest only mortgage select it just for the security and the knowing what their payments will be now and 20 years from now.
Deciding on the interest only mortgage with all the many investment to choose from, really depends on what your priority in life is to live better now in a hope that later your income will rise or buy less home for your money and feel more secure.
We will work hard to be YOUR Tulsa Real Estate Agent! We are the Tulsa Homes experts and will work hard to find the home of your dreams. Call Toll Free Direct at 1 (877) 738-8572 today.
Bush announces Fannie Mae and Freddie Mac Takeover
September 8, 2008
The Bush administration announced on Sunday, September 07, 2008 that the federal government was taking control of Fannie Mae and Freddie Mac in a hard line move to aid the distraught United States housing market and thus the economy.
Both executives at Freddie Mac and Fannie Mae were replaced in this aggressive move. Herb Allison is now the head of Fannie Mae whereas David Moffett will head Freddie Mac. Allison was the former chairman of Merrill Lynch and Moffett was the former vice chairman of US Bancorp.
Fannie Mae and Freddie Mac have a combined total of $1.6 trillion in outstanding debt. The decision for the takeover and placing both companies into a conservatorship under government regulator might possibly be the largest financial bailout in the history of the United States. The Treasury Department is taking the equity of both firms, explaining that the taxpayers of the US should not have to bear the burden.
Between Fannie Mae and Freddie Mac, they have lost close to $14 billion over the last four quarters. The investors, including overseas banks are now starting to show signs of worries over their finances.
Treasury Secretary Henry Paulson stated, “Our economy and our markets will not recover until the bulk of this housing correction is behind us,”… “Fannie Mae and Freddie Mac are critical to turning the corner on housing.” During the interview, Paulson stated, “Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe.”
The main reason the takeover occurred as explained by Paulson is that if these two companies failed it would ultimately be more serious and could end up costing taxpayers tens of billions of dollars. “A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance.”
The Federal Reserve along with other federal banking regulators stated today that a few smaller institutions have holdings of common or preferred stock share in both Fannie Mae and Freddie Mac and that regulators were “prepared to work with these institutions to develop capital-restoration plans.”
The plan will entail FHFA operating the companies until they are stable. During this time, the Treasury will finance loans until December 31, 2009.
Along with the takeover, the Treasury will start a program to buy mortgage-backed securities that are held by Fannie Mae and Freddie Mac to add much-needed funds in the mortgage market.
The failure of either Fannie Mae or Freddie Mac would be so large that it would not only be felt in the United States but around the world. The government takeover was necessary to save the housing market and boost the economy.
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