I think this is a good decision for the banks. What do you think?
Banks to Review Rejected Loans
Some banks are launching a “second look program” to review loans that have been denied in order to identify circumstances that might persuade underwriters to reverse their decisions.
The Financial Services Roundtable, a trade group of 100 financial companies, including Bank of America Corp., J.P. Morgan Chase & Co., and U.S. Bancorp. Bankers say these programs are starting to loosen the logjams that have made it so hard for both home buyers and small businesses to get loans.
"I don't think of it as being looser. I think of it as making good judgments," says Stephen D. Steinour, chairman, president and CEO of Huntington Bancshares Inc.
Source: The Wall Street Journal, Ruth Simon (09/23/2010)
"Star Treatment for Your Real Estate Needs" It is important for me to understand my client’s needs and wants so I can exceed their expectations. I’m not happy unless they are. It is essential to have a productive positive working relationship and smooth transactions.
Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts
Friday, September 24, 2010
Thursday, September 16, 2010
Are you Still on the Fence about Buying a New Home?
10 Reasons to Buy a Home
Now is a great time to buy. And, what's more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn't changed.
1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home. In some markets, it's simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.
8. It's forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from. There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.
10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
Source: Wall Street Journal, Brett Arends (9/16/10)
Now is a great time to buy. And, what's more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn't changed.
1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
5. You can get a better home. In some markets, it's simply the case that the nicest places are for-sale homes and condos.
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.
8. It's forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from. There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.
10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
Source: Wall Street Journal, Brett Arends (9/16/10)
Monday, December 7, 2009
Getting a Mortgage in 2010: Things you should know
More than three years into a painful housing crash, the real estate market has sent recent--albeit tentative--signs of stabilization. Home sales have increased, inventory levels are down, and price declines have become less precipitous. Along with more affordable home prices and a tax perk from Uncle Sam, attractive mortgage rates--which remained below 5 percent as of late November--have been a driving force behind this development. The availability of low mortgage rates will play a decisive role in the performance of the 2010 housing market as well. To help consumers better understand the requirements and costs they will face as they shop for a home loan next year, U.S. News spoke with a handful of housing market experts and compiled a list of 10 things to know about getting a mortgage in 2010.
1. Still tight: The steep run-up in home prices during the first half of the decade was fueled in large part by breezy lending standards. Some bankers handed out loans without down payments or documentation requirements. But when the housing bubble popped and those loans became massive losses, banks began raising lending standards for borrowers of all stripes. And with the labor market continuing to erode--the unemployment rate hit 10.2 percent in October--and mortgage delinquency rates setting new records, there is no reason to expect credit requirements to loosen in 2010. "Lending standards have tightened dramatically between 2007 and 2009," says Scott Stern, CEO of Lenders One, a cooperative of independent mortgage bankers. "I think there will be a little more belt-tightening in 2010."
2. Down payments: This tight credit environment affects consumers in several ways. First, down payment requirements will be higher than they were just a few years ago. Loans backed by the Federal Housing Administration are at the low end of the spectrum and come with minimum down payments of 3.5 percent. (More on FHA loans below.) Down payments on loans outside of the FHA will vary depending on the market, the borrower, and the property type. "Generally, to get the best rate around, you need at least 20 percent for a down payment," says Guy Cecala, publisher of Inside Mortgage Finance. "That doesn't mean you can't get a mortgage if you have less of a down payment . . . it just means that you are not going to get the best interest rates." Could lenders ease up on down payment requirements in 2010? Possibly. If lenders become convinced that home prices are improving, they may allow borrowers to put slightly less down. But don't expect that to occur until the end of the year--if at all.
3. Credit scores: Cecala says that borrowers will need a FICO score of at least 730 to get the best mortgage rates. They also will need to fully document their income and assets. To ensure that your credit score is as strong as possible, borrowers should access their credit reports. The Fair and Accurate Credit Transactions Act entitles consumers to one free credit report from all three major credit reporting bureaus--TransUnion, Equifax, and Experian--each year. (The free reports can be obtained at annualcreditreport.com.) Consumers should examine each report to make sure it doesn't include any errors. "[Consumers] ought to know what their credit score is; they ought to know what's on their credit report; they ought to make sure that what's on their credit report is in fact theirs," says Rick Allen, director of strategic initiatives for Mortgage Marvel, an online mortgage shopping website. "That's a must do for everybody."
4. FHA: Borrowers who can't meet these tighter lending requirements can turn to the FHA, a federal agency that insures mortgage loans against default. Standards for FHA loans are typically less onerous than those for private lenders. The average credit score for FHA borrowers is about 690, and the minimum down payment is 3.5 percent, Cecala says. "If you can't make the 730 [credit score] or you can't make the 20 percent down [payment], the next best thing is FHA," Cecala says. The downside is that FHA loans come with additional costs. Borrowers must pay an insurance premium as well as a slightly higher interest rate, Cecala says.
5. FHA increase? With so many borrowers unable to meet today's stricter lending requirements, FHA-backed loans have become increasingly popular. Today, the FHA guarantees nearly 3 of every 10 new home mortgages. That's a stunning increase from 2006, when the agency backed roughly 3 percent of new home loans. Meanwhile, the agency's finances have deteriorated considerably. The seasonally adjusted delinquency rate for FHA loans increased from about 13 percent in the third quarter of last year to 14.36 percent in this year's third quarter. At the same time, the agency's capital reserve ratio dipped below the level that Congress mandates. In the face of mounting political pressure, the Obama administration has announced new steps that may make it more difficult for some borrowers to obtain mortgages backed by the agency. The steps include raising the minimum FICO score, increasing up-front cash requirements, and possibly charging higher insurance premiums. "We want to ensure that we are able to continue to support the housing market in the short term and provide access to homeownership over the long-term, while minimizing the risk to the American taxpayer," Housing and Urban Development Secretary Shaun Donovan told a congressional committee in written testimony.
Read the full story with additional things to know here: http://news.yahoo.com/s/usnews/20091203/ts_usnews/gettingamortgagein201010thingstoknow
Courtesy of U.S.NEWS
1. Still tight: The steep run-up in home prices during the first half of the decade was fueled in large part by breezy lending standards. Some bankers handed out loans without down payments or documentation requirements. But when the housing bubble popped and those loans became massive losses, banks began raising lending standards for borrowers of all stripes. And with the labor market continuing to erode--the unemployment rate hit 10.2 percent in October--and mortgage delinquency rates setting new records, there is no reason to expect credit requirements to loosen in 2010. "Lending standards have tightened dramatically between 2007 and 2009," says Scott Stern, CEO of Lenders One, a cooperative of independent mortgage bankers. "I think there will be a little more belt-tightening in 2010."
2. Down payments: This tight credit environment affects consumers in several ways. First, down payment requirements will be higher than they were just a few years ago. Loans backed by the Federal Housing Administration are at the low end of the spectrum and come with minimum down payments of 3.5 percent. (More on FHA loans below.) Down payments on loans outside of the FHA will vary depending on the market, the borrower, and the property type. "Generally, to get the best rate around, you need at least 20 percent for a down payment," says Guy Cecala, publisher of Inside Mortgage Finance. "That doesn't mean you can't get a mortgage if you have less of a down payment . . . it just means that you are not going to get the best interest rates." Could lenders ease up on down payment requirements in 2010? Possibly. If lenders become convinced that home prices are improving, they may allow borrowers to put slightly less down. But don't expect that to occur until the end of the year--if at all.
3. Credit scores: Cecala says that borrowers will need a FICO score of at least 730 to get the best mortgage rates. They also will need to fully document their income and assets. To ensure that your credit score is as strong as possible, borrowers should access their credit reports. The Fair and Accurate Credit Transactions Act entitles consumers to one free credit report from all three major credit reporting bureaus--TransUnion, Equifax, and Experian--each year. (The free reports can be obtained at annualcreditreport.com.) Consumers should examine each report to make sure it doesn't include any errors. "[Consumers] ought to know what their credit score is; they ought to know what's on their credit report; they ought to make sure that what's on their credit report is in fact theirs," says Rick Allen, director of strategic initiatives for Mortgage Marvel, an online mortgage shopping website. "That's a must do for everybody."
4. FHA: Borrowers who can't meet these tighter lending requirements can turn to the FHA, a federal agency that insures mortgage loans against default. Standards for FHA loans are typically less onerous than those for private lenders. The average credit score for FHA borrowers is about 690, and the minimum down payment is 3.5 percent, Cecala says. "If you can't make the 730 [credit score] or you can't make the 20 percent down [payment], the next best thing is FHA," Cecala says. The downside is that FHA loans come with additional costs. Borrowers must pay an insurance premium as well as a slightly higher interest rate, Cecala says.
5. FHA increase? With so many borrowers unable to meet today's stricter lending requirements, FHA-backed loans have become increasingly popular. Today, the FHA guarantees nearly 3 of every 10 new home mortgages. That's a stunning increase from 2006, when the agency backed roughly 3 percent of new home loans. Meanwhile, the agency's finances have deteriorated considerably. The seasonally adjusted delinquency rate for FHA loans increased from about 13 percent in the third quarter of last year to 14.36 percent in this year's third quarter. At the same time, the agency's capital reserve ratio dipped below the level that Congress mandates. In the face of mounting political pressure, the Obama administration has announced new steps that may make it more difficult for some borrowers to obtain mortgages backed by the agency. The steps include raising the minimum FICO score, increasing up-front cash requirements, and possibly charging higher insurance premiums. "We want to ensure that we are able to continue to support the housing market in the short term and provide access to homeownership over the long-term, while minimizing the risk to the American taxpayer," Housing and Urban Development Secretary Shaun Donovan told a congressional committee in written testimony.
Read the full story with additional things to know here: http://news.yahoo.com/s/usnews/20091203/ts_usnews/gettingamortgagein201010thingstoknow
Courtesy of U.S.NEWS
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