Tuesday, August 19, 2014

The 2.9 percent mortgage rate: How to get it

A 2.9 percent mortgage rate sound great, but is it too good to be true?

Anyone looking for a home loan knows they want to get the best interest rate possible, but getting a great deal has a lot more to it than comparing rates at face value. The current rate for a 5-year adjustable-rate mortgage is roughly 2.9 percent but an ARM may not be right for you. To ensure you're applying for your most affordable option, there are several things you need to know in advance about mortgage rates.

Short- & Long-Term Low Rates

When you're looking for an affordable home loan, you need to know the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). If the acronym ARM leaves you a bitter taste in your mouth, you're not alone: Subprime ARMs played a significant role in the recent mortgage crisis.

ARMs often start with an interest rate lower than those of fixed-rate loans available at the same time. That low rate is set for a period of 1, 3, 5, 7 or 10 years, after which the rate is adjusted annually, based on an index specified in the mortgage agreement. Once that fixed-rate period ends, the loan's interest rate may rise significantly and leave you with mortgage payments much more expensive than you expected.

The type of loan that suits you best depends on the plans for your future, and you can read more about the differences between fixed- and adjustable-rate mortgages here. When you're thinking of buying a home, do your research well in advance of applying for a mortgage, and shop around for the best rates.

read more: http://www.wptv.com/financial-fitness/the-29-percent-mortgage-rate-how-to-get-it

Monday, August 18, 2014

The 15-year bargain

Before you opt for a 30-year mortgage over a 15-year one in order to secure lower monthly payments, learn how much there is to like about 15-year mortgages.

For starters, average 15-year mortgage rates in the U.S. are often about a full percentage point lower than the average 30-year rate. Recently, the average fixed interest rate for a 15-year mortgage was 3.25 percent, well below the 4.21 percent average for a 30-year loan and below many adjustable-rate mortgages, too.

The real benefit of a 15-year mortgage is the shorter time frame during which your interest is compounded, drastically reducing the amount of interest you pay over the life of the loan.

When calculating mortgage payments, banks use a somewhat complex formula that has a loan that's twice as long as another costing more than twice as much in interest. With a shorter loan term, more of the monthly payment immediately goes toward paying down principal, which has a big effect on the total cost of the loan.

Here's an example: Let's say you want to borrow $250,000, and you want to compare your 15- and 30-year loan options. At current rates, your monthly payment would be $1,224 with a 30-year loan, as opposed to $1,757 per month on a 15-year loan. The 30-year option sounds pretty good, right? Well, over the course of the 30-year mortgage, you'll end up paying $190,641 in interest, while the total interest on the 15-year mortgage will add up to $66,201. So, the cost of borrowing the $250,000 over 15 years is 65 percent cheaper than borrowing over 30 years.

By taking on the larger payment, you can build equity in your home much faster, too.

Consider searching for homes that you can afford with a 15-year mortgage. You'll pay more per month, but you can pay off the home twice as fast. Another option is to get a 30-year loan but make several extra payments per year, thereby reducing your principal faster, reducing your total interest paid and cutting the length of the loan, too.

source: http://www.telegram.com/article/20140817/NEWS/308179981/1002/business

Friday, August 15, 2014

Assumable mortgages hold hidden value

Recently there has been a significant amount of coverage in various media concerning the declining affordability of housing. Prices have begun to rise and so have interest rates. With higher interest rates come larger mortgage payments and smaller qualified loan amounts for those on fixed salaries. But with assumable mortgages, a buyer can keep a seller's existing lower interest rate and payment, and with roughly twice the density of assumable mortgages as national averages many shore area towns have a large stock of homes that grow in desirability even as interest rates climb towards historical norms.

Mortgages insured by the Federal Housing Administration (FHA) and those guaranteed by the Veteran's Administration (VA) are all assumable. Together, these programs cover about 9 million properties across the country, or one out of every six mortgages. Not surprisingly, areas surrounding military institutions typically have a higher percentages of VA loans, and due to FHA's low down payment requirements areas that have a large proportion of homes suitable for first time home buyers usually have more FHA mortgages. Both programs contribute to the large population of assumable mortgages in Monmouth and Ocean Counties. In these two counties alone there are more than 20,000 homes with assumable mortgages. In some towns like Brick one out of every three mortgages is assumable.

An assumable mortgage enables a home buyer to take over a seller's existing loan terms including the unpaid balance, payment amount, remaining number of payments and most import, their interest rate. The buyer takes the seller's existing interest rate even if rates have risen significantly from when the seller purchased the house or last refinanced. Assuming a loan can mean hundreds of dollars in savings per month or tens of thousands over the remaining life of a loan. In addition to saving on interest, closing costs are significantly reduced. There are no mortgage origination fees on an assumption and appraisals are not usually required unless the buyer wants one

read more: http://www.app.com/story/getpublished/2014/08/13/assumable-mortgages-hold-hidden-value-shore-area-residents/14017839/

Thursday, August 14, 2014

Mortgage applications dip 2.7%

 Mortgage applications fell 2.7% from one week earlier, losing any gain it made last week, according to data from the Mortgage Bankers Association’s weekly mortgage applications survey for the week ending Aug. 8, 2014.

The refinance index dipped 4% from last week to the lowest level since May 2014, while the seasonally adjusted purchase index decreased 1% from one week earlier to the lowest level since February 2014.

“While bond pricing was relatively flat and mortgage-backed security prices did little to move interest rates around last week, we did see a slight drop in both refinance and purchase activity. Overall, purchase volume has been unable to reach last year’s levels,” Quicken Loans vice president Bill Banfield said.

As a whole, the refinance share of mortgage activity declined to 54% of total applications from 55% the previous week.

The adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances stayed at 4.35%.

In addition, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances fell to 4.24% from 4.26%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA inched down to 4.04% from 4.06%.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.48% from 3.51%, while the average contract interest rate for 5/1 ARMs decreased to 3.24% from 3.32%.

read more: http://www.housingwire.com/articles/31017-mortgage-apllications-dip-27

Tuesday, August 12, 2014

Student Loan and Mortgage Loan Debt: A Public Health Crisis?

Recent research about student loans and mortgages raises the question of whether having too much debt can make you sick.

A recent Gallup survey of more than 11,000 college graduates finds that graduates with a substantial amount (i.e., more than $50,000) of student loan debt are worse off emotionally and physically than other college graduates. These survey results are particularly troubling because the results suggest that it is the debt itself - not the burden of repaying the debt - that seems to make people sick.

The Gallup survey sample included people who graduated from college over a 25-year period. The results indicate that even graduates who had long ago repaid their debts have lingering negative health effects from those debts.

Good Debt, Bad Debt, Ugly Debt

Of course, not all consumer debt is bad. Because of the potential for high future rewards, student loans - like mortgages - typically are viewed as "good" debts because they help the borrower obtain valuable assets. College graduates have higher overall lifetime earnings than people who don't attend college, and homeowners generally have higher overall household wealth than renters.

Despite the recent focus on massive student loan debt, most student loans - like most mortgage loans - are not delinquent and are being repaid. Though most borrowers are repaying their loans on time, numerous groups including the Consumer Financial Protection Bureau and the Federal Reserve have recently warned that rising student loan debt is harming the U.S. economy.

read more: http://www.huffingtonpost.com/mechele-dickerson/student-loans-and-mortgage-debt_b_5660727.html

Monday, August 11, 2014

Interest Rates for Home Mortgages at Wells, US Bank Aug 10, 2014

Wells Fargo

The benchmark 30 year fixed rate mortgage interest rates are coming out at 4.375% at Wells Fargo (NYSE:WFC) yielding an APR of 4.596%.  The best 30 year FHA loan interest rates stand at 4.125% with an APR of 5.347%.  The short term 15 year FRMs have been offered at 3.500% and APR of 3.838%.

The 5 year Adjustable Rate Mortgages stand at 3.500% at Wells with an APR of 3.252% to start.  As far as FHA ARMs go, 5 year deals  stand at 3.375% and an APR of 3.631%.
What are the refinance interest rates today?

Standard 30 year refinance fixed rate loans are available starting at 4.25% at Wells carrying an APR of 4.335% today.  The best 30 year refinance FHA loans at the bank have been offered at 4.0% carrying an APR of 5.583%.  30 year refinance jumbo FRMs start at 4.125% with an APR of 4.153%.

Large (in eligible areas) 30 year refinance loans have been listed at 4.25%  and an APR of 4.292%.

read more: http://www.fidaily.com/interest-rates-for-home-mortgages-at-wells-us-bank-aug-10-2014/19450/shelly-thomas

Interest Rates for Home Mortgages at Wells, US Bank Aug 10, 2014

Wells Fargo

The benchmark 30 year fixed rate mortgage interest rates are coming out at 4.375% at Wells Fargo (NYSE:WFC) yielding an APR of 4.596%.  The best 30 year FHA loan interest rates stand at 4.125% with an APR of 5.347%.  The short term 15 year FRMs have been offered at 3.500% and APR of 3.838%.

The 5 year Adjustable Rate Mortgages stand at 3.500% at Wells with an APR of 3.252% to start.  As far as FHA ARMs go, 5 year deals  stand at 3.375% and an APR of 3.631%.
What are the refinance interest rates today?

Standard 30 year refinance fixed rate loans are available starting at 4.25% at Wells carrying an APR of 4.335% today.  The best 30 year refinance FHA loans at the bank have been offered at 4.0% carrying an APR of 5.583%.  30 year refinance jumbo FRMs start at 4.125% with an APR of 4.153%.

Large (in eligible areas) 30 year refinance loans have been listed at 4.25%  and an APR of 4.292%.

read more: http://www.fidaily.com/interest-rates-for-home-mortgages-at-wells-us-bank-aug-10-2014/19450/shelly-thomas