July « 2010 « Home Loan Information

23Jul/100

Four sins of mortgage qualification

: Image via Wikipedia

Soon will come the day in the lives of most readers when purchasing a new home will be a desire realized or a necessity placed on them by the demands of life. Even those who already own a home may be faced with the decision or necessity to refinance a current home loan. Sadly most home buyers and owners plan more for their next vacation or even a family picnic than they do an upcoming mortgage.

Mortgage planning really is a science because it is based on numbers instead of emotions. While the buying process itself may be driven by more than numbers the actual financing of that property, or even the decision to purchase with cash, is primarily a series of numeric calculations. As such there are ways for anyone to plan for their next mortgage in order to receive the best possible rate and terms available.

The four sins

Negative impacts on the applicant’s ability to borrow loans are not always of their own doing yet some are. Clearing one’s history of these three sins, if they exist, will greatly improve their likelihood of not only being approved for a home mortgage but getting the best rate and terms.

Tagged as: Business, Credit history, Debt, Foreclosure, Loan, mortgage Continue reading

16Jul/101

What fees are included in the APR (Annual Percentage Rate)?

: Image via Wikipedia

The Annual Percentage Rate (APR) is one of the most misunderstood numbers there is on the mortgage documentation. Additionally it is the most easily abused and even though it is supposed to exist to protect shoppers can be so misconstrued as to actually harm the shopper. Be that as it may here are fees that must be included in the calculations for APR in the state of Georgia.

APR FEES
Processing Fee	Allowed
Underwriting Fee	Allowed
Origination Fee to Lender	Allowed
Discount Points to Lender	Allowed
Broker Fees for Services Rendered	Allowed
Commitment Fee	Allowed
Lock Fee	Allowed
Closing/Escrow Fee to	Allowed
Attorney’s Fee to	Allowed
Disbursement/Funding Fee	Allowed
Wire Transfer Fee	Allowed
Warehouse Fee	Allowed
Assignment Fee	Allowed
Amortization Schedule Fee	Allowed
Copy Fee	Allowed
Fax Fee	Allowed
Document Review Fee to Lender	Allowed
Courier or Express Mail Fee to	Allowed

The APR is the total cost of the loan over the life of the loan averaged with the base interest rate. For example if you have an interest rate or 4.5% and closing costs of $5000 on a $100,000 loan the .5% APR qualified closing costs would result in an APR of 4.923% while $10,000 in APR qualified closing costs on the same loan would result in an APR of 5.333%

The way this can be abused or manipulated is by charging a higher base rate and shifting the rate commission to cover some of the closing costs. Not that this is necessarily a bad thing but it gives a hint as to how this figure can be manipulated.

Friday’s Mortgage Rates…Trending Lower (raincityguide.com)
How loan originators are compensated and why consumers should care. (raincityguide.com)
36% Annual Percentage Rate Is Not Enough Says Check ‘n Go (lockergnome.com)

Tagged as: annual percentage rate, Closing cost, georgia, Loan, mortgage, Points 1 Comment

15Jul/100

What is a buyer's market or seller's market?

: Image via Wikipedia

I can’t say it any better than my friend Jennifer Fivelsdal “Just a few years ago it was not uncommon to see a house assessed at $200,000 selling for $400,000 and this made home sellers happy. That was a market called a Seller’s Market, in other words more buyers and fewer properties. The well known rule of supply and demand dictates that a higher demand with a limited supply will result in higher prices. Today the scenario is so different. Very high inventory and few buyers makes this a Buyer’s Market. In this case buyers want to spend less and get much more for their money.”

We are very much, for almost every market, in a buyer’s market. More now than ever before many sellers are having to short sell their home or bring cash to closing to pay the difference between the sales price and the mortgage pay off. To be sure a home seller may want to have their home appraised independently. While that appraisal cannot be used by the buyer’s lender due to all sorts of rules and regulations it should still be a standard, Uniform Appraisal and the result should be within a few percentage points. If you are in the Atlanta area I can give you the names of a few Atlanta area Georgia licensed appraisers.

Home listings jump 20%, (financialpost.com)
Saratoga Housing Market Inventory Rises Seasonally as Sales Moderate (saratogavoice.com)
Sellers outweighing buyers in housing market (newstatesman.com)
4 Keys to Selling In a Buyer’s Market (entrepreneur.com)
Still a “Buyer’s Market” in Many Neighborhoods (seattlebubble.com)

Tagged as: atlanta, georgia, Market, mortgage, Real Estate, Sales, Supply and demand No Comments

14Jul/101

Bad credit home loans

: Image via Wikipedia

“Anyone can qualify regardless of credit”. “No application refused”. “No minimum credit score required”. The ads are still out there and mostly on Craigslist. Generally those ads are not from mortgage lenders or banks but from mortgage lead generation companies. Unlike mortgage companies lead generators are not required to be licensed, don’t offer home loan services and are not held to the strict standards of mortgage companies in advertising so they make a lot of outrageous claims hoping to get as many people to give them their information as possible.

The truth is there just aren’t any conventional home loans for people with “bad credit”. Not even FHA as is often misconstrued. FHA home loans, just like conventional home loans, actually require a relatively clean credit history although they do allow some negative reporting – even that is limited to scope and history.

Tagged as: Credit history, Credit score, Debt, Loan, mortgage Continue reading

Live Desk

Daily Rates for Qualified Buyers

	Today	Last Week
30 Year Fixed	3.59%	3.65%
15 Year Fixed	2.91%	2.89%
5/1 ARM	2.81%	2.57%
See more mortgage rates at Zillow.com

(Note: These are the lowest rates possible offered through advertisers and lead buyers at the company providing the data. They may require discount points.)