Keep Your Money Where It Is, if you’re planning on buying a home!

Keep Your Money Where It Is, if you’re planning on buying a home!

spend_less_money_save_moreIt’s not wise to make any huge purchases or move your money around three to six months before buying a home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible.

If you open new credit cards, amass too much debt or buy a lot of big ticket items, you’re going to have a hard time getting a loan.

Homeownership at Best!

Homeownership at Best!

Federal Housing Finance Agency has been working towards a plan to open what many we see as underwriting standards that are too restrictive.

Mortgage giants Fannie Mae and Freddie Mac, their regulator and lenders are close to an agreement that could greatly expand mortgage credit while helping lenders protect themselves from charges of making bad loans, according to people familiar with the matter.

Homeownership getting better!

Homeownership Gets Better!

If the agreement is completed, lenders may be more willing to lend to borrowers with lower credit scores and smaller down payments.

Now that lenders are starting to remove some of the credit overlays, it is time to improve the growth of homeownership in the country

We expect FHFA to report the steps to further move and clarify lender liability and support the return of the 97% LTV product at the GSEs, Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac have recouped tens of billions of dollars in penalties from lenders in recent years over claims that the lenders made underwriting mistakes on loans they sold to the mortgage giants.

However, Lenders have blamed those penalties for tight credit conditions and for prompting them to make loans only to borrowers with near-pristine credit.

We hope these initiatives will have a meaningful impact on the mortgage market, and we can see positive changes in the direction of the mortgages industry after years of tightening credit issues.

Next Tuesday will see the existing home sales report for September, on Thursday the FHFA purchase-only house price index for August, and Friday the new home sales report.


Fannie Mae sets new rates effective October 14

Fannie Mae sets new rates effective October 14

Fannie Mae is set to raise the benchmark interest rate for its Standard Modification program. Fannie Mae will raise its required interest rate for standard modifications from 4.375% to 4.5%.  The rate was lowered from 4.5% to 4.375% on Sept. 15, but will now rise again in one week. Fannie Mae announced the change on Tuesday in an email sent to its servicers.

When the program began in Jan. 2012, Fannie’s benchmark interest rate was 4.625%. Fannie lowered the interest rate to 4.25% in Sept. 2012, before dropping it to 4% on Dec. 1, 2012.

“Fannie Mae Standard Modification interest rate is not determined on a preset schedule,” Fannie said in the note to its servicers. “The interest rate is subject to periodic adjustments based on an evaluation of prevailing market conditions.”

Fannie also noted that any loan modification requests that were approved at the previous rate are not eligible to be resubmitted for approval under the new modification rule

Mortgage Loans And Interest Rates

Mortgage Loans And Interest Rates

Mortgage Loans And Interest Rates

By Sandy Flores

Real estate instructor at the College of Santa Ana

 Financial institutions provide considerable information and guidance on mortgage loans and interest rates that apply to these. But it is you who makes the final decision for the best possible loan. It is important that you take responsibility for include comparing interest rates with other sources of information available and affordable. Mortgage interest rates change constantly and daily, depending on various and diverse economic, national and international factors.

 The current national interest rate is generally published in various mass media such as the financial section of newspapers, websites, etc.. This information not only helps you know the current interest but also to analyze how interest presented by a certain time.

Keep in mind that, according to the interest rate that you get on a home loan, this will be reflected in your monthly payment. Remember that these are the loan payments and do not include any other amount as is the property tax, homeowner’s insurance, loan insurance (PMI) if the payment is less engaging 20 percent of the value house, the cost of association if it is a condo, among others.

It is important to not confuse the effective rate of basic interest (Interest Rate) with the annual interest rate (APR), which is calculated according to the cost of your loan and not just the total amount of the amount financed, as in the interest for cash. Ask if the interest rate is fixed or adjustable. Note that variable interest rates may increase and thus also their allowance.

However, the total cost of a mortgage includes more than just the basic rate of interest or effective. These costs include origination fees, discount points, miscellaneous expenses, etc.. and other terms and conditions that could affect the final cost of your mortgage. When comparing different mortgages, strive to make sure and consider all factors that may have influence on the final costs. In most loans, lenders offer mortgages with several combinations of points and interest rates. Generally, the lower the interest rate, more points could pay before closing. Interest rates affect your monthly mortgage payment, while points affect the amount of cash that must be at closing.

Most financial institutions and listed fixed interest rate and fees when you apply for a loan and then agrees to keep fixing the interest for a certain period. While this rate protects determined and offered to pay more for your mortgage, if interest rates rise before you close your loan, it also means you will pay the same rate offered to you with the commitment even if interest rates decrease.

Periods of engagement or attachment generally run from 10 to 60 days. Usually, it is best that the given period is long enough to last you until the closing of your loan and not incur additional expenses if there is a need to request an extension.

Other lenders may give you the option to wait and allow your interest rate “flickering” during the process, so that the rate can change between the time you apply for the loan even before the time of loan closing. By accepting this fluctuation you can benefit from lower interest rates, if interest rates decline even before the loan closing. However, before choosing a fluctuation, make sure you have resources to pay a higher monthly payment if interest rates go up otherwise.

Make sure you understand all terms of the mortgage you choose, so you do not get surprises along the way. It is therefore important to choose a lender with whom you feel comfortable, and you get your questions in a good way. Mortgages are complex financial transactions, and lenders are committed to explain the pros and cons to homebuyers about the various programs and interest rates they offer.

It is important to know that it is your right as a consumer that your lender will express written everything related to the type of mortgage loan you are requesting and disclosure leaves necessary for their knowledge of the process, costs, charges, penalties, type interest, changes that will apply if you choose a variable rate, among others, of your mortgage loan.