July 15, 2018

Minnesotat Shutdown And Your Mortage: Should You Worry?

“As you are likely already aware the government of Minnesota has shut down due to budget issues. Some government services — including basic care for residents in prisons, treatment facilities and nursing homes — continue to operate. Unfortunately many more services have been suspended. Businesses will not be able to get licenses, road work has stopped and there is currently no funding for job training.

If you are someone who is in the process of buying a house with a mortgage during this shutdown you will likely have some concerns. There have been a total of five federal government shutdowns in the past. During these FHA mortgage loans were delayed, so it is natural that home buyers would be concerned about a shutdown on the state level.

Rest assured that Minnesota courts will still be open during this shutdown. Retired Judge Bruce Christopherson said that closing the courts would be a denial of residents’ constitutional rights. Any of your court dealings will proceed normally.

Those who should be most concerned about loan approval are state workers or those people who work in the private sector but could face a layoff due to the difficulties of the shutdown. If this is the case for you, you must call your lender as soon as possible.

Many lenders understand the hardship that the Minnesota shutdown has caused and are still willing to work with Minnesota residents. They understand that the fact that your paycheck isn’t coming is is temporary. This will not be the case for all lenders, which is why you need to keep in touch with the institution that was to issue your mortgage. You can protect yourself by staying abreast of the situation at hand.

Most people will not have to worry about loan approval during this trying time, but it doesn’t hurt to stay informed and contact your lender, anyway.

The most important thing to remember about this Minnesota government shutdown is that it is temporary. As much as residents’ lives are affected now the struggle will not be a permanent one. Governor Mark Dayton is now working diligently with Republicans to put an end to the shutdown, and a resolution should be reached shortly.”

Minnesota’s courts would continue to operate even during government shutdown

Will a Minnesota Government Shutdown Impact Your Loan Approval?

Minnesota Gov. Ready to End Shutdown

Minnesota residents suffer in government shutdown

Mortgage Grace Period For Unemployed Homeowners

“Unemployed homeowners will soon get an extension that will enable them to miss their mortgage payments for up to one full year. The Obama administration will lengthen the grace period from the current time frame of 3 to 4 months, to a full year for those who need additional help to stay in their homes and for those who may be facing foreclosure. This extended grace period only applies to loans obtained from the Federal Housing Administration. This time extension is expected to help tens of thousands of people who are unemployed and are having a difficult time paying their current mortgage and need longer than a few months to get back on their feet.

Officials say that 10,000 unemployed homeowners took advantage of the 3 month grace period within the past year. The reason the FHA is extending the grace period is to try and boost the current foreclosure-prevention program and keep further forclosures from occuring. In 2010, approximately 17,000 troubled homeowners benefitted from the ability to delay their payment that was granted to them by the government. Urban Development Secretary Shaun Donovan hopes this move will compel Fannie Mae and Freddie Mac to follow suit and make the time allowance extension as well. The two government controlled mortgage companies currently back approximately 90 percent of newly obtained mortgages. Freddie Mac and Fannie Mae had no reply as to whether or not they will join the FHA in this endeavor, but come October 1, new rules will apply to the mortgage giants. Rules will be put into effect that will make allowances for long term help for disabled people and people who suffer from long term illness. If a homeowner dies and their property is put into probate, the mortgage payment on the property of the deceased can be delayed for up to one full year.

Trial modifications were allowed for over 1.6 million people who have experienced trouble paying their home mortgage to keep them from facing forclosure and losing their home, but the program has lost approximately 800,000 participants who have permanently dropped out of the governmental run assistance programs permanently. In 2009, the government’s main foreclosure program was created to ensure that at risk people at least had an opportunity to avoid home forclosure. The program’s extension will benefit many who have found themselves unemployed and will give them more time to find work. Hopefully, this will enable them to make their payments, avoid becoming homeless and adding to the already crippling home foreclosure rate.”

San Francisco Chronicle

Jobless homeowners could get mortgage reprieve

Liar Loan Mortgages

“This is the story of Charlie Engle who is now behind bars serving a 18 month jail sentence for mortgage fraud. More specifically, for taking out what is known as a ‘Liar Loan Mortgage’.

Liar Loan Mortage

The way the authorities tracked down his Liar loan mortgage transaction was through his use of a Stated Income mortgage, in which he is said to have inflated his income.

Mr. Engle is said to have received two loans from Countrywide by falsely stating his income, which was what most of the people were doing in the early part of 2006, at the peak of real estate bubble.

Millions of people took out Stated Income mortgages and inflated their incomes, but Mr. Engle gained the increased attention of Internal Revenue Service special agent Robert W. Nordlander, who went to great lengths to pursue him.

It is interesting to note, and quite sad indeed, that the only prosecutions and convictions that have come from the mortgage crisis have been of very low level people. People who were in the wrong, but caught up in the same fervor as the rest of the nation – while the architects of the whole mortgage crisis have so far escaped unscathed.”

For more information, click here: http://www.calculatedriskblog.com/2011/03/liar-loan-prosecution.html

Fannie Mae and Freddie Mac to be Phased Out

The Wall Street Journal is reporting that the Obama administration has released a white-paper that spells out the federal government’s reform plans to phase out the Fannie Mae and Freddie Mac mortgage programs.

This will have wide implications because Fannie Mae and Freddie Mac are responsible for 9 out of 10 mortgages made currently.

Here is a quick list of possible ways that these proposed reforms could affect home-buyers:

  • Home-buyers will be required to make  a 10% down payment, which is up sharply as you can now secure a mortgage with much less money down if you buy mortgage insurance.
  • Interest rates will likely increase.
  • The amount of money that you will be able to borrow will drop, however by how much is still unclear.

There are further possible effects to banks, lenders and other financial institutions, all of which will dramatically change the face of home-buying and getting a mortgage in America.

WSJ Article:  Click Here

Press Release:  Click Here

Read the text of the proposal:  Click Here (PDF)

Understanding Mortgage Rates

When you’re buying a home or refinancing your home loan, the mortgage rate may possibly win out as the most critical piece of information in the deal. The rate refers to the interest rate over time, what you pay for borrowing the money.

Common types of mortgage rates:

  • Adjustable Rate Mortgage
  • Fixed Rate Mortgage

These products describe certain types of interest rates and how they typically are designed to behave over time.

Adjustable Rate Mortgage

Adjustable Rate Mortgage or ARM, offers you a low introductory interest rate at the beginning of your loan, for a predetermined period of time. After that time your loan adjusts periodically to match the market rate—the adjustment period. Depending on the terms of your loan, your adjustment period varies. It could be one month or it could be one year.

Because there is a risk that uncontrolled interest rates could climb, ballooning your home payment, some ARMS come bundled with a “cap,” or limit on how high your interest rate can actually climb. This is a type of built in safety measure designed to ensure your mortgage rate remains within reasonable bounds. It’s important that if you’re discussing an ARM with your real estate agent and mortgage lender that you know exactly what your terms will be, including your initial mortgage rate, adjustment period, penalties for early pay-off, and other features.

Fixed Rate Mortgage

Fixed Rate mortgages are exactly what they sound like: the interest rate on your home loan stays the same throughout the life of your loan. If you’re looking for consistency and a monthly mortgage payment you can always anticipate, then this is a good rate to consider. A 30-year mortgage is a typical term for a fixed rate mortgage, but given high housing prices, many terms may be longer.

Historical Mortgage Rates

This isn’t the type of “history” you study in school, but the financial record of mortgage rates over the recent or distant past juxtaposed against various indices. Some financial analysts and savvy home buyers may leverage the information available in historical mortgage rate data to make informed decisions about the type of mortgage rate that might benefit them most.

To make the most of this historical data you should make sure you ask your lender what rate index it uses to calculate your mortgage rate. Then you can use the data available to make a more accurate choice.

Mortgage Rate Calculators

You’ve likely seen the ubiquitous mortgage rate calculators that dot many websites. What are they and how do they work?

Many websites that offer mortgage information or access to mortgage loan resources, might also offer you a convenient mortgage rate calculator. These simple tools take basic data regarding your mortgage loan or proposed mortgage loan, and spin it into estimated values that only approximate the actual loan rate and payments. Use these tools only to get ball-park estimates and don’t hinge your hopes to the results they give you.

For more information, visit http://www.mortgagesinspain.org/

How To Get a Home Mortgage

A lot has changed in the home mortgage business in the last few years, changing the products available and the ease with which you might be approved for a home loan or home refinance loan.

Now that the mortgage landscape is forever altered, how do you get an affordable mortgage?

What is a mortgage?

Simply, a mortgage is a credit-based loan used specifically to buy or refinance a home. Mortgages are originated from lenders, specialized at handling these types of complex credit products. You pay for a home mortgage with monthly payments, similar to other types of credit payments you may make, such as student loans and credit cards. Most home loans don’t come due for many years, depending on how much of the cost you finance, the mortgage rate, and how much cash you can put down, if any.

Getting a Mortgage

If you’re a homebuyer, a reputable real estate agent will have mortgage professionals he or she works with regularly. They can review your financial situation before you begin making offers on homes, and might even get you pre-approved for a home loan so you know up front in what price range you should be shopping. Once you make an offer on a home, they will be ready to show you an estimate of the loan you might expect, including payments, and interest rate.

Refinancing Your Home

If you already own a home and want to refinance to lower your payments or get some cash for your home’s equity, you can contact your lender for refi options. They will give you a whole new home loan.

Remember, a mortgage is a credit-based loan, so mortgage lenders will need to do a credit check on you to finalize any loan documents, all of which are traditionally signed at the closing.

Managing Your Mortgage

Many lenders offer convenient online access to your account so you can manage various aspects of your home or refinance loan: current balance, payments made, interest rate, guidance if you have trouble paying your mortgage, and strategies for paying off your mortgage faster.

Subprime Meltdown Drives Mortgage Changes

In the months leading up to the recent subprime mortgage meltdown, even borrowers with little savings, high debt to income ratios, and poor credit were quickly approved for new home mortgages. Everyone was riding a wave of good fortune. But in hindsight, lending practices were sloppy. When the bottom fell out of the home mortgage market and prices adjusted to reflect reality, millions of new homeowners couldn’t make good on their home loans. Many of them should never have been approved for mortgages in the first place.

Do your homework. You will be better off in the homebuying or refinance market if you do a little research on the current options available for getting a home loan. Tip: typical options depending on your financial situation could include home loans for individuals with credit problems, no money down home loans, FHA loans, and Veterans loans. Find out how each could impact you short- and long-term and be prepared to ask your lender informed questions.

For more information, visit http://www.princeton.edu/economics/

How To Find The Lowest Mortgage Rates

Getting a home for the very first time is something that a lot of people dream about. When the time actually comes, they leap at the opportunity to do so and often times it is at the cost of not really understanding the gravity of the agreement that they have made. You see, most people cannot purchase a home outright and therefore need a lending group or bank to loan them the money to purchase the home. Without looking for the lowest mortgage rates, you are setting yourself up for an uphill battle.

You see, there are all kinds of different things that you need to know and appreciate when it comes to finding the lowest rates for your mortgage agreement. If you are to apply some of the knowledge that you are able to read in this article, than you can be a little more prepared to not only get a great structured plan for your mortgage through a lender, but to also get the lowest rates around.

The first thing that you are going to need to learn will be that the mortgage rate is relative to the mortgage payment. These are like Siamese twins, and you cannot talk about one without noticing the other being adversely connected. The lower the rate is, the lower the payment. The higher the rate is, the higher the payment.

There are several different things that majorly play into the rate that you are dealing with at the end of the day. The first, and possibly the most influential of all of these, would be your current credit score when you are applying for the home loan. If you have a credit score that is less than optimal, or even just a little bit compromised, you might find yourself with a higher mortgage rate as a result.

The best thing for you to do would be to repair detrimental aspects of your credit score as best as you are able to. Talk to the representatives regarding anything negative on these reports and work out ways to repair this score before you get into home loan deliberations. The time that you take here to repair your credit will all but ensure lower rates and therefore lower monthly payments in the future.

You need to be able to negotiate what it is that you want. You have to be willing to go to more than just your bank or lending group to try and get a loan. Playing the field can prove to be one of the most beneficial approaches to getting the lowest rates for your mortgage. You need to be able to talk about what kind of time you want to pay back the loan and just what kind of money you need to purchase the house.

These will affect the rate/payment as well. You see, the longer you have to pay off a loan that you have borrowed will give you lower rates and payments. Likewise, the less amount of money that you actually need to borrow will affect the rates and payments for the better too.

If you are willing to consider all of these things and apply the knowledge to your own situation, you might find some of the lowest mortgage rates around. While there might be other things to consider, you should have a pretty good introduction through the paragraphs above.

Find more information,visit http://www.nyshcr.org/Press/News100908.htm

How To Get A Home Mortgage

If you are curious about the process of purchasing your own home, than likely you are really asking about how to get a home mortgage. You see, while there might be millions and millions that are working towards or are currently homeowners, they often did not get that way from purchasing a home outright. The home loan and consequent mortgage is what made this a possibility for many different families.

How To Get A Home Mortgage

There are plenty of different things that you will need to know and consider when it comes to getting a home mortgage. Through the paragraphs of this particular piece, you should be able to get a pretty good introduction into what makes this process complicated, and what you can do to ensure that you do not do anything on your end to make it take longer than it needs to.

This really begins with understanding the few steps that are involved in such an undertaking. Obviously the first thing that you need to do, is to find the property or home that you are going to want to purchase. Often times, unless you are planning to build your own home, you are going to have a hard time just getting a home loan without the specifics of the home itself and the sale price of this property.

So, once you have determined what it is that you actually want to purchase, you are going to go into deliberations. Get yourself a reliable real estate agent that is good with the negotiations. Getting the lowest possible price for the house based on the bids that you make on the property is obviously a good thing for you in a number of different ways.

Once you have a figure and the specifics of the house determined, you should then find the lending company that you are going to use. More often than not, this falls on the bank that you have been a loyal customer to. They are usually very willing to provide loans to long time customers, but should this not apply to you, there are plenty of lending groups.

You have to be educated on the various loan types and stipulations for the mortgage that are out there. This way you can negotiate the very best scenario for you and the bank or lending group that you are working with. Some people might be able to negotiate a fixed rate when they were initially offered a variable rate for instance. Things like this vastly affect your monthly payments and payback requirements.

To avoid unfortunate circumstances like foreclosure, you need to fully understand all of the terms of the agreement that you have with the lending group or bank. This might require you to take the proposed contract to an unbiased third party to explain all of the stipulations and finer points so that there is no confusion.

While there might be all kinds of different things to know and understand about how to get a home mortgage, the truth is that the process is not as intricate as you might have imagined. Follow these steps and you should attain a pretty decent mortgage agreement should you meet the criteria for approval.

Find more information,visit http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm

Home Mortgage Rate – Understanding The Cost of Borrowing To Buy A Home

There is a lot that will go into eventually owning your own home outright. Since the majority of folks that are buying a home do not have the financial stability to pay the full cost of the home outright, many have to look to borrowing the remainder or the majority of the amount to be able to find the home of their dreams. Your home mortgage rate is a big part of this process.

Home Mortgage Rate

Now, there are all kinds of things that you are going to have to learn to appreciate about the process of buying your own home through the assistance of a lending group. Through the course of the paragraphs in this article, you should get a pretty good idea about mortgage rates and the process of getting a lending group to help you purchase a home.

The first thing that you will have to know and appreciate will be the relationship that your credit has with several different aspects of this process. The first thing will be the approval of such a loan to begin with. If you have not begun deliberations with a lending group to determine if they will financially assist you in purchasing a home, than you need to stay on top of your credit. Any detrimental marks on your report might keep you from approval. Taking care of these is highly advisable.

Not only this, but your credit score is also going to have a big influence on the mortgage rate that you are later asked to pay should you get approved. Most of the lending groups or banks have a tiered system that sets your credit after approval into different groups. These groups are based on your credit. While it was good enough to be approved, it might not be good enough to get the lending groups ideal mortgage rates.

There are all kinds of different things that will affect the mortgage payment that you are asked to pay every single month. The obvious factor being the cost of the home relative to the amount of money that you needed to borrow to afford that property. The higher the amount that you are asking for, the higher the monthly payment is likely going to be.

Another factor that will affect the mortgage payment that you are going to be asked to pay will be the length of time that you both have agreed upon to pay back the loan. The shorter the time, the larger the monthly installments are going to be. Likewise, the longer that you are able to agree upon, the less amount of money you will have to pay on a month to month basis.

The importance of fully reading your agreement is crucial. You need to completely understand every single aspect of the contract that you will sign, otherwise you run the risk of hurting yourself financially in the future. The best thing for you to do is to ask an unbiased third party with experience in these matters to look over the proposed agreement.

While there might be a lot of things that play into the home mortgage rate that you will be dealing with, these are the most common of these factors. To get the best rates you need ideal credit and an ability to negotiate the best stipulations of your lending agreement.

For more information, visit http://www.forecasts.org/fha.htm

Learning About Current Mortgage Rates

Getting some assistance to purchase your own home is nothing new. It could easily be assumed that most of those that are homeowners have gotten that way through the use of a lending company or a bank, rather than just purchasing a home outright. Knowing the average current mortgage rates will ensure that you are not going to find yourself in a bad agreement financially with a lender.

The truth is, there are lots of different things that you are going to want to understand and appreciate about mortgage rates right now. Through the paragraphs that you will read in this article alone, you are going to get a good look at some of the factors that influence the monthly mortgage payment and how you can help yourself get competitive rates through lending companies that might be around.

One of the first things that you have to do will be to look online and find out what the average rate for a mortgage is right now. This way, you are going to ensure that whatever you might do with a lending company, could at the very least be in the same area as what the average rate is. You do not want to go into an agreement blind or uneducated, and it can be very much to your benefit to put in the research.

Having said this, you are going to need to understand that whatever lending group or bank you might be considering is not the only one offering loans. So if you are talking with a representative from this group and you are not liking what you are hearing, there are other places that you can likely go. Shop around to put a generic term on it. Make sure that you are getting the best rates and the best agreement possible.

This is highly reflective of a few different things. The first of these would be your credit. This will affect the loan in two different ways. The obvious one being whether or not you are approved for a loan from a bank or a lending group. The second of these being the stipulations and rates of the mortgage payment once you have been approved. Both of these are highly important, so get your credit in order if you need to.

The payment that you are going to be asked to surrender once a month will be relative to two major points. The first of these being the amount of the loan that you have taken out to afford the property. If this loan is not too considerable, than the payments that you will be asked to pay will be on a smaller scale as well. Likewise, a large loan will likely yield larger monthly installments.

Another factor that will play into the payment structure from month to month will be the specified amount of time to repay the loan that was agreed upon initially. This will break up the payments over the span of time, so the longer the time the smaller the payments will be.

If you were curious about all of the various things you needed to know about current mortgage rates, this should give you a good introduction. While there might be other things to consider, this is a good place to begin. If you have questions about your loan you are best to consult with a unbiased and experienced third party.