Some local homeowners might be in trouble in the coming months when the interest rates on their Adjustable Rate Mortgages (ARMs) are expected to jump.

Many people are highly leveraged, he said, meaning they bought their homes with little money down and may have low initial rates on their Adjustable Rate Mortgages (ARMs).As Silva puts it, “The homeowners most at risk of foreclosure are those who bought more home than they could afford.”A homeowner with an ARM, Brady said, initially pays much lower interest for a few years than the going rate for a 30-year loan. However, the flip side of the coin is that sooner or later the homeowner must get a new loan or pay interest rates several points higher than his or her initial rate. Someone with an ARM may initially pay $1,700 a month on a mortgage, but when the ARM interest rate balloons, the homeowner could end up paying $3,000 to 3,200 a month. (more…)

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When interest rates went down in the past, many people were refinancing their home mortgages once again. If you refinance, it’s always important to make decisions based on your personal and financial goals in life. In this article, we are going to discuss the topic of paying off your mortgage early and why you might or might not want to.

In the book called “Ordinary People Extraordinary Wealth, A New York Times best seller, by Ric Edelman states in his findings that most of the 5000 people he surveyed with extraordinary wealth still carry a mortgage. While most of us have heard all our lives that it is better to pay off our mortgage as quickly as possible, both sides make some strong arguments for their case. (more…)

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Piles of paperwork, additional lending fees and too many terms to count. Applying for a mortgage can be an overwhelming experience. In this confusing and pressure-filled process, it’s easy to make mistakes. Here are some common ones that lenders and mortgage brokers see, and what you can do to prevent them.

Not checking your credit Before even applying for a mortgage, you need to obtain copies of your credit report and your FICO credit score. Doing this at least six months in advance should give you plenty of time to challenge any errors on your report and ensure that they’re removed by the time you’re ready to apply for a loan. Not getting pre-approved for a loan It’s important to realize that being “pre-qualified” is not the same as being “pre-approved.” Pre-qualification is where a lender tells you how much money you probably can borrow based on your financial situation. Getting pre-approval, by contrast, is a much more detailed process and involves actually applying for a loan. (more…)

search for : lending fees, mortgage, credit report, Pre-qualification

The question many are asking is “should reverse mortgages become an official option for helping to solve a state’s long-term-care challenges?” Some states have already begun the research. For example, Washington state’s Long-Term Care Task Force is hosting a series of community meetings aimed at exploring new funding solutions to the escalating health-care issue created by the rapidly accelerating growth of the state’s senior population.

Reverse mortgage borrowers make no monthly payments on their mortgage during its term. The loan comes due when the borrower permanently moves out of his or her home. Programs vary, yet the more popular plans offer both an initial lump sum for immediate needs and a line of credit that borrowers can access at any time. Seniors can “outlive” the value of their home without being forced to move. The homeowner cannot be displaced and forced to sell the home to pay off the mortgage, even if the principal balance grows to exceed the value of the property. If the value of the house exceeds what is owed at the time of the homeowner’s death, the rest goes to the estate. (more…)

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For a long time the biggest real estate rumble in Washington D.C. has concerned the question of whether or not banks should be allowed to offer real estate services. Having expanded into stocks, bonds and insurance, many national bankers now want to offer real estate brokerage services. In turn, real estate brokers have generally opposed bankers invading their territory in large measure because they fear being crowded out by well-funded rivals.

Under the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 banks are able to create “financial holding companies,” entities with virtually unlimited portfolios. The Senate Banking Committee explains that under Gramm-Leach-Bliley a bank holding company “can engage in a statutorily provided list of financial activities, including insurance and securities underwriting and agency activities, merchant banking and insurance company portfolio investment activities. Activities that are ‘complementary’ to financial activities also are authorized.” (more…)

search for : Washington D.C., real estate services, stocks, bonds and insurance, real estate brokerage services, Gramm-Leach-Bliley Financial Services Modernization Act, financial holding companies

There’s a quiet revolution going on in the mortgage industry: Home buyers soon will be securing mortgages and closing on sales almost as easily and conveniently as they purchase an airline ticket online. Borrowers will go through the entire process, from application to registering with the county courthouse, without the mounds of messy paperwork currently required.

Much of the time spent on loan approval comes from moving bulky paperwork from one desk to another. Not only can electronic forms be transferred almost instantaneously, but more than one person can access and work on them. That can cut loan processing time in half, or less. Instead of a turnaround time of 30 to 45 days or so, it could take two to three weeks. There’s a limit though. “Some of the time is spent on due diligence,” says Albrigo, ” and that can’t be shortened too much.” (more…)

search for : mortgage industry, Home buyers, Borrowers

More than 90 percent of home mortgage transactions involved a two-stage process. The first stage, the development of posted prices that are delivered to loan officers and mortgage brokers, is bias-free. The unequal treatment of minorities occurs in stage 2, where posted prices are converted into the final prices paid by borrowers. A sizeable number of loan officers and brokers charge what the market will bear, and minorities end up paying more because they are more vulnerable.

Minorities (and others) can avoid discrimination by selecting distribution channels where pricing discretion is either absent or controllable by the borrower. Pricing discretion is absent in Internet-based lending because loan officers don’t capture the customer and therefore don’t have the clout to dictate their terms of employment. Internet-based lending offers other borrower protections as well. These include more complete information on lender fees and third-party fees, and the ability of shoppers to monitor their price from day to day until they lock it. On my Web site, I list and rank the best of the Internet-based lenders, including two that qualify as Upfront Mortgage Lenders. (more…)

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The lender wants to charge me a loan origination fee, appraisal fee, credit report fee, processing fee, underwriting fee, flood certification, funding fee, $100 escrow settlement fee, $150 title fee, $15 courier fee, $15 wire fee, $75 recording fee, $80 intangible tax and $235 mortgage tax. What is your evaluation of these charges for a home equity loan?

Virtually every local bank and credit union will eagerly make you a home equity loan or home equity credit line (HELOC) without any junk fees if you have a FICO (Fair Isaac and Co.) score around 700 or higher. I have obtained many home equity credit lines over the years from major lenders, such as Chase and Wells Fargo, without paying any up-front junk or garbage fees such as those you list. The only legitimate home equity loan fees on your list that I wouldn’t resist are the local mortgage tax, the intangible tax (whatever that is), and the recording fee. The other charges you list should be absorbed or paid by the home equity lender if they want your business. (more…)

search for : loan origination fee, appraisal fee, credit report fee, processing fee, underwriting fee, home equity credit line, HELOC