Perhaps you get a monthly credit score on your credit cards. Maybe you subscribe to a credit monitoring company like CreditKarma. Perhaps you pulled a credit report from one of the three major credit bureaus. Your credit score for a mortgage uses only certain scoring models. You may have more than 40 different scores from many different companies and for […]
Derogatory credit refers generally to items which count against you for your credit score. Minor credit items such as a single late payment may not show up at all on a credit report. Say you paid two days late. You may see a late fee on your next bill, but usually you receive consideration as current as of the next […]
Expect inflation through 2025 to remain elevated. It may persist longer. Based on extraordinary federal government spending, waves of extra cash will flow into the economy for at least 3-4 more years. Massive injections of extra cash lead to high inflation. Every. Single. Time. Few, if any, exceptions can be found anywhere in history. The Federal Reserve did the absolute […]
Interest rates go up and go down. Usually, the movement comes from changes in the policy of the Federal Reserve couple with inflation outlook by consumers and professional. But even obscure items or policies can affect your mortgage rate. That’s well known and home buying and refinancing goes in cycles depending on those rates. Not only is the Fed raising […]
What should you do with your mortgage when a disaster hits? What are the options and obstacles? It’s not common, it’s not uncommon. Damage to your home can occur from various disasters. Hurricane, tornado, flood, wildfire, earthquake, blizzard/ice storm. Even the most recent Covid-19 pandemic resulted in a declared disaster. When these events occur, federal as well as state declarations […]
Forbearance opportunity has ended The HUD foreclosure and forbearance moratoriums for FHA and USDA loans ended. The same for FNMA and FHLMC. Forbearance is just one example of avoiding mortgage default, however, the window to enter forbearance has closed. Those still in forbearance must find out the best way to exit in the shortest time period possible. The costs […]
Fire season. Tornado season. Hurricane season. Ice storms. Floods. Do You Have The Right Homeowner’s Insurance? Do You Know How To Get The Most Reimbursement on Claims? Beware “Amendatory Endorsements” such as the type appearing in Allstate and others’ policies. Read the entire policy. These endorsements don’t get disclosed to you in pricing or buying a policy. They come buried […]
Why improve mortgage knowledge? Isn’t everything available on a google search? A recent google search on mortgage yielded more than 1 billion hits. As anyone knows, google results over time have been modified to reflect those paying the most to advertise dominating the first page and multiple early pages of results. Those results likely tell you little. Multiple recent surveys […]
March Update- Another new 40 year inflation record. February Update– a new 40 year record on consumer price increases and a new all-time record on producer price increases. Ho hum, yawn, another record in inflation from the Fed and Biden. January Update. Once again, inflation set new records or new 40 year highs. Consumer prices jumped 7.5% on an annual […]
Every year, more than 1 million mortgage applications are denied. Avoid a loan denial and being part of this statistic! Borrowers have tools to turn a loan denial into an approval by planning before applying. The 1 million denials do not include the number of applications which were withdrawn. Many borrowers apply to more than one lender. The Consumer Finance […]
Fannie Mae (FNMA) and Freddie Mac (FHLMC) represent the gorillas in the home loan market. Since both are in conservatorship (they went broke in 2008) under the federal government, the Federal Housing Finance Agency (FHFA) exerts total control over them. These two entities are referred to as Government Sponsored Enterprises (GSEs) since they have always had a federal government related […]
Updated. EXERCISE CAUTION in all home and market investments for the next 60 days! Many data points released on November 24 show the Federal Reserve has room to become more aggressive in fighting inflation. With the Federal Reserve pushing rates up now, their previous rate forecast looks incompetent. The Federal Reserve ignored the broad evaluations of top economists of every […]
You probably know someone who would like help understanding how to get approved. Or how to get better mortgage knowledge and a better rate, maybe the best interest rate for a mortgage. Or help understanding the reverse mortgage process. News commentary and helpful discussions can be found in the News/Commentary articles. Browse articles individually or by category of interest. Feel […]
Why Pay Rent? In previous posts, we covered an early bill introduced in Congress to provide grants, not tax credits, to certain individuals to use towards a down payment. Joe Biden had proposed a tax credit, but the plan morphed a bit. Now those wacky politicians plan to top themselves! It’s common for government programs to try to pick winners […]
What is a QM Loan? If you’ve read our prior posts or read in more detail Winning Mortgage, Winning Home, a Qualifying Mortgage is one which has to meet a number of tests concerning underwriting, pricing and Ability to Repay (ATR). Why is this important? Lenders prefer to write QM loans because they are easy to sell and they provide […]
Forbearance jumped into the forefront of housing issues in March 2020 with the beginning of Covid. The federal government immediately enacted a plan to allow homeowners to defer payments on mortgages. While it had the ability to do that on mortgages controlled by the federal government, it did not have the authority to do so on private mortgages. The federal […]
Mortgage Loan Borrowing – Pay $100 Now, Save $10,000? Knowledge about Loan Level Pricing Adjustments ( LLPA ) can show you how paying an extra $100 now may save you $10,000 or more in payments for your mortgage on a $200,000 loan or more than $25,000 on a $500,000 loan. If you are not familiar with an LLPA, you may […]
Is it possible that a foreclosure crisis is brewing? In prior posts we noted that forbearance was extended to June 30, 2021. Reports showed that more than 5% of mortgages remained in forbearance after a year. That number recently fell to about 2.5 million still in forbearance as workouts and exits progressed. New entrants into forbearance declined significantly in late […]
Most buyers will require financing to purchase a home. This will involve either a purchase contract contingent on getting an affordable mortgage or knowing if an affordable mortgage is available prior to making an offer. In a competitive market, not knowing the financing prior to making an offer puts a buyer at a disadvantage. Winning Mortgage, Winning Home is the […]
Thanks to friends at the Consumer Finance Protection Bureau (CFPB), you must be more protected from yourself. Starting July 1, new restrictions affecting mortgage credit have sent the index tracking this to near lows not seen in 7 years. The Mortgage Bankers Association tracks an index (chart below) to estimate how available mortgage credit is to borrowers. With the new […]
Virtually all of the information today that is available on internet searches or typical lender loan sites focuses on typical borrowers. These borrowers land mainly in the buckets of conventional (FNMA/FHLMC), FHA, or VA loans. But what if you aren’t a typical borrower? Perhaps income is highly variable. You may run your own business and have complicated finances. Do you […]
In earlier posts, we outlined our outlook for an opportune time to purchase a home. In this June purchase window update, we see many factors continuing to move in the direction predicted. On June 16, the Federal Reserve Board of Governors announced no rate hike was imminent and minimal increases expected through the end of 2023. Additionally, the short term […]
Rate locks continue to be a source of frustration for many borrowers. They sound like a good idea. Lock your rate for 30 days and any change in interest rates doesn’t affect you. Some lenders may offer a rate lock of 45 days or even 60 days. The loan officer may ask if you want to lock the rate at […]
One of the common complaints voiced by home buyers results from a property tax surprise. These come in a few different flavors. However, the most common surprise results from a change in valuation by the taxing jurisdictions. This may occur in the year of purchase. But more commonly, it arises in the year after purchase. Many real estate agents rely […]
The average price of homes sold reportedly jumped to about $375,000 by the end of April 2021. This represents a 22% gain over the prior 12 months. But this doesn’t mean that the average home increased in price by 22%. In fact, the average price gain comes from the fact that a greater share of homes sold were luxury homes […]
Fannie Mae and Freddie Mac control the residential mortgage market as the two largest buyers of mortgages in the US. Each holds a portfolio of more than $2 trillion and buys around $50 billion more every month. Both effectively went bankrupt in 2008 in the prior housing crisis. Because they operated as GSEs (Government Sponsored Enterprises), Fannie Mae and Freddie […]
Reverse mortgages have become more popular in the last decade. Are you looking at a reverse mortgage? As the statistics and performance of a large number of reverse mortgage come in, they have become more acceptable. A greater number of lenders and loan officers have become familiar with them and now originate them. FHA continues to be the dominant force […]
New Fannie Mae and Freddie Mac restrictions are already affecting lenders. The Mortgage Bankers Association special bulletin noted that FNMA and FHLMC have begun to implement the investor/2nd home caps. The MBA has seen the market for these loans deteriorate significantly. Investors have raised rate penalties by imposing loan level price adjustments. These adjustments seek to avoid getting an excessive volume […]
New Fannie Mae and Freddie Mac rules on lending are here and go into effect soon. These may have a sweeping impact limiting loans or driving up interest rates. Your lender may not be able to honor a pre-approval letter even if you would otherwise qualify for the financing. It may impact the ability to close a loan at the […]
The end of forbearance may be panicking borrowers. In a just released report, the Consumer Finance Protection Bureau (CFPB) noted that March 2021 had the most complaints since April 2018. Those complaints overwhelmingly focus on mentions of forbearance and related terms. The number of mortgage borrowers who reported struggling to make payments also rose. CFPB has been issuing conflicting information […]
Facing Default or in Default? There are many circumstances which cause a borrower to go into default or face the prospect of default. Our prior post on Disaster Declarations covered one such event. But more common reasons for default exist. As one would expect, job loss plays a substantial role in many defaults. Divorce and death also play primary roles […]
A prior post regarding the most significant credit events included foreclosures, pre-foreclosures, deed-in-lieu, and bankruptcies as negative credit flags. These significant credit events keep the primary mortgage buyers (Fannie Mae and Freddie Mac) from purchasing a mortgage loan from an affected borrower. These events also preclude guarantees by federal agencies (FHA, VA, USDA). Private entities likely follow the timelines from […]
Estimates of the number of mortgage borrowers who entered forbearance at some point over the last year range as high as 11 million. Some borrowers used it as a precaution, others had little other choice. Because there were differing reasons for entering forbearance and differing circumstances, many borrowers were able to exit forbearance. The exit would likely be from a […]
Chances are a buyer knows nothing about the potential flood risk on the home the buyer fell in love with and the one on which an offer has been made. Some real estate agents’ websites may provide a note as to the flood zone for listed properties, but is it accurate? What does the letter for the flood zone mean? […]
2008 created a significant crisis in housing, bond markets, employment, and interest rates. Unemployment presents a significant problem. Interest rates are rising, but only for longer term loans such as mortgages. In a replay of 2008, short term interest rates (US treasuries with a term of 3 months, 6 months or 1 year) are actually at historic lows! March 22, […]
Are you a first time home buyer? Are you representing a first time home buyer? Do you have friends who are first time home buyers? Many states offer assistance, but the money availability can be limited. The assistance isn’t always free, but it can be very close to it. Let’s look at the Texas program – My First Texas Home. […]
Would you like to know when an advantageous mortgage window opens? Did you miss the historic low rates at the end of 2020 and into early 2021? It benefited well those who were re-financing. But many new buyers paid premium prices or bid up prices to buy a home. Get prepared for the upcoming advantageous window! Now may be the […]
What’s in the title? Title insurance that is. For most buyers, not a clue. Schedule A? Schedule B? Perhaps Schedule C? Schedule D? Any mention of these likely draws blank stares. And yet, a borrower risks losing the house and potentially a lot of money by not knowing what’s in the title. Title insurance plays a different role than casualty […]
Perhaps you have found that it is possible to waive some or all escrows for your loan. Should you? Escrowing money each money for property taxes, property insurance and other items (PMI, flood insurance) is designed to make sure that the taxes and insurance is paid timely and there is sufficient money available to do that when each payment comes […]
Like everything, it depends. You can waive escrows with approval. In follow-up posts, we’ll examine whether you should waive escrows, possible problems and other factors to consider. A number of scenarios cover whether you can waive escrows. Scenario 1. You take out a mortgage and it is less than 80% LTV when you take it out. If it’s a conventional […]
It’s automatic, take out a mortgage loan and the lender sets it up with an escrow account holding your money to pay property taxes, property insurance, private mortgage insurance and perhaps other charges. We’ll examine this from different perspectives in multiple posts. Can you waive escrows? Which ones? What’s the cost? Should you waive escrows? Pros and Cons; Risks and […]
Borrowers routinely question lenders and loan officers about the right mortgage for them. Loan officers and lenders are wary of answering. Many factors affect the right mortgage and lenders lack all the important details about the borrowers needs. As a result, the lenders speak in options available. Fixed Rate or ARM? 5 Year, 10 Year, 15 Year, 30 Year or […]
During the week of July 19, FHA published a revised version of loss mitigation options for borrowers coming to the end of their forbearance period. FHA terminated the old framework. Now, FHA offers two options. First, a COVID-19 recovery standalone partial claim for borrowers who can resume making payments on the mortgage. Second a COVID-19 recovery modification option for borrowers […]
Consumers continue paying higher prices every day as the Biden administration’s spending continues to flood money into the US. First, home prices spiked, then rents spiked. For those facing difficulty paying a mortgage or rent, next comes inflation in the rest of the items. Insurance, utility bills, food, gasoline, and even household items like detergent have increases in prices pushed […]
Whether you’ve bought a house, re-financed or borrowed money, rates reflect historic lows. Credit card rates haven’t seen any help though. The Fed is keeping rates (artificially) low for borrowers. Have deposits also? Don’t count on earning any interest. Soon you may have to pay to keep your money at a bank like many countries in Europe and Asia. As […]
DTI has been a component of mortgage underwriting and loan underwriting for decades. The general rule was 28/36 for a long time. If you are unfamiliar with DTI, pick up a copy of Winning Mortgage, Winning Home; you should not be applying for a mortgage without understanding these numbers and what they mean for you. Politicians pushed to raise these […]
2020 was a big year for mortgage loans. Interest rates fell and millions re-financed or purchased a new home. For the vast majority of borrowers, they looked at the rate and took it. Could they have done better on the rate or did they overpay? Winning Mortgage, Winning Home is designed to prepare borrowers for getting a better rate. Let’s […]
Thank you for the 10s of thousands of page views, all the book purchases and the positive comments/feedback from following the book. Congratulations to everyone who saved thousands on the mortgage and planned well with our book. To close out the year, Winning Mortgage, Winning Home is discounted for Christmas and the holidays! Go to Amazon with your recipient’s email […]
Failure of lenders to close on time frustrates many borrowers. This failure to close on time can be found in our summary of frequent borrower complaints. Many reasons account for delays in closing on time. But home buyers can be hardest hit when closing delays occur. Purchase contracts have deadlines for financing and closing. Missing those deadlines can create significant […]
What’s the latest information on forbearance help?
The Federal Reserve has telegraphed it wants to rein in its continuing massive asset purchases. It may begin in 2022 or perhaps as early as November 2021. Note that doesn’t mean unwinding the $8.5 trillion of money it has pumped into the economy. This $8.5 trillion propped up and inflated asset prices of everything over the past decade. The list […]
Adjustable rate mortgages (ARMs) move up and down in popularity depending on the level of interest rates. Many choose an ARM such as a 7 year or a 5 year because they don’t expect to be in a home for a long period. These two loans have a period where the interest rate is fixed (7 years or 5 years, […]