Sub Prime Mortgages: Not So Easy Anymore

 

If your credit isn't the best, you might be familiar with sub-prime loans: they're the kind with a high rate for people with low credit…

 

With the mortgage industry suffering it's worst setback in decades in the past 12 months, the landscape is changing.  Money editor Stacy Johnson explains in this 1:33 video.

 

Leave us your comments or thoughts on the mortgage industry and the current real estate market.  We'd love to get your feedback.  Just click the comment link below and give us your feedback.

 

 

 

Mortgage Questions: There Are NO Dumb Ones

 

The old saying, "the only dumb question is the one you don't ask" couldn't be truer when it relates to your mortgage. The more you ask, the more you know. And the more you know, the better decisions you'll make when getting a mortgage.

 

when you are ready to talk with a mortgage professional to figure out the best loan for your situation, have some information ready. This will help your banker or broker find you the absolute best mortgage.

 

Some common questions you should ask yourself are:

• How long do you plan on staying in your home?
• Do you think your income will grow substantially in the next 3-7 years?
• Do you plan on starting (or growing) your family in the next 3-7 years?
• Do you put money in a 401k or other long-term investment?
• Are property values rising or declining in your area?
• In order to pay a lot less interest down the road, can you afford a slightly higher payment with a 15-year or 20-year mortgage vs. a typical 30-year mortgage?

 

To ensure you get the best mortgage for your situation, always ask questions, get answers, ask more questions, and then make your decision. If you think you'll be moving or refinancing in the next few years, consider an ARM. If you know you won't be moving or refinancing, consider a 30-year or a 15-year fixed.

 

Isn't saving a lot of money worth asking a few questions?  If you have one now.. use the comment link below and ask away! If we don't know the answer, we'll get it for you!

 

 

 

Home Mortgages with Bad Credit

 

2 points to keep in mind with a mortgage loan for people with bad credit:

 

Finding a bad credit mortgage could take a while.  The reason it can take a while is, most of the high street banks and financial institutions have shareholders.  They usually want to make safe bets on people who will pay on time, and complete on time, so they can protect their investors.

 

Most bad credit home mortgage lenders will charge you a higher rate of interest.  This is due to the risk factor.  Someone who is more likely to pay back is a safer person to lend to than someone who has a bad credit rating and seeks a bad credit mortgage.

 

You may not be able to go to the big financial organizations, however, there are many places offering mortgage loans for people with bad credit.  The process begins with research.  Even with the best credit file and credit score, you want to research the best mortgage rates available for your circumstances.

 

Make sure you keep an eye on what the bad credit home mortgage offers.  Many mortgage lenders will offer you a bad credit home mortgage at the best home mortgage loan rate initially, only to increase it later on.

 

Do not apply for every bad credit home mortgage you see.  Every time you apply for a mortgage, you ultimately get the search appearing on your credit file.  This is used by mortgage lenders, and if they find too many searches, they may decline you simply on that basis.  This is why researching bad credit home mortgages before choosing one is so important.

 

You can still find bad credit mortgages.  All that is required is spending the time to narrow your search to 2 or 3 mortgage lenders.  Try speaking to a home mortgage broker, you may find you can get the best home mortgage loan rate for your needs after all.  Always make sure you learn about the details of the fine print.  This is why it is important to use the help of real estate professionals who can handle the paperwork, and know what to look out for.

 

Please don't hesitate to contact us if you need assistance!

 

 

 

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Lenders Cutting Off the Home-Equity Spigot

 

For more than a decade, banks encouraged homeowners to tap their equity for everything from paying off credit cards to covering college tuition.

 

Now lenders are abruptly shutting off the spigot.  More than 100,000 homeowners at one lender already have been told that their home-equity lines of credit have been frozen and they can't use them to borrow more money.  Others have seen their credit limits abruptly lowered.

 

Meanwhile, lenders are tightening standards so that getting a home-equity loan in many markets is more difficult, even when the value of your home is still well above what you owe on it.

 

Loan experts predict many more homeowners will find themselves cut off from home-equity loans and lines of credit as lenders flee the so-called second-mortgage market.

 

Has your lender frozen or cut off your home equity line?  We'd love to hear about it.  Use the "comment" link below to (vent) tell us about your experience.

 

 

 

High-Cost Mortgages: Now a Bit Cheaper

 

Mortgage costs just got a little cheaper for buyers in high-cost areas.

 

The size of loans that can be guaranteed by Freddie Mac and Fannie Mae was raised recently by the Office of Federal Housing Enterprise Oversight.  The new, higher loan limits will stay in effect through the end of the year, allowing the government sponsored enterprises to buy much higher-priced mortgages in some areas of the country.

 

Also, the size of the loans the Federal Housing Authority (FHA) can insure was raised by Housing and Urban Development (HUD).

 

Both moves will lower borrowing costs for buyers of higher priced homes, and aim to boost flagging real estate markets.

 

Previously, Fannie and Freddie could only insure mortgages of up to $417,000, called conforming loans. That meant, assuming a 20% down payment, that only buyers of homes costing $521,500 or less were eligible for mortgages with GSE backing.

 

The new loan limits for Fannie and Freddie vary by area based on local median home prices and go as high as $793,750 in some markets.  By making it easier for buyers to get loans, regulators hope to get these markets moving again.

 

 

 

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