“Mortgage rates fell this week to the lowest level on record, giving consumers added incentive to lock in low payments for home purchases and refinanced loans.

The average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week, mortgage company Freddie Mac said Thursday.

That’s the lowest point since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.

Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasury’s has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasury’s.”

by Alan Zibel, Associated Press

Tweet This!

Save $$

A study by the National Association of Insurance Commissioners revealed that many homeowners think the standard insurance policy covers more than it does. Among their mistakes:

• 33 percent of homeowners believe that flood damage is covered.
• 68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.
• 51 percent think damages from a break in the water line on their property supplying water to their home are covered.
• 37 percent think damages due to a break in the sewer line on their property that connects to their municipal sewer system are covered.
• 35 percent think damages from earthquakes are covered.
• 34 percent think damages from mold are covered.
• 31 percent think damages from termites or other infestation are covered.
• 22 percent think pets stolen from or injured on their property are covered.

Tweet This!

]]> http://fortlewisva.wordpress.com/2009/10/21/you-thought-your-homeowners-insurance-covers-it-all/feed/ 0 fortlewisva Save $$ Share By: TwitterButtons.com http://fortlewisva.wordpress.com/2009/10/14/mortgage-terms-words-meaning-ever-wondered/ http://fortlewisva.wordpress.com/2009/10/14/mortgage-terms-words-meaning-ever-wondered/#comments Wed, 14 Oct 2009 16:51:10 +0000 fortlewisva http://fortlewisva.wordpress.com/?p=453 ]]>

ABC's of Money

A site worth visiting is Forbes’ Investopedia. I found valuable explanation of mortgage lingo and the more you know when shopping around for a mortgage or at the closing table the better. I have listed a few here but at fortlewisva.com we find it so important that our customers are informed that we will list more.

It IS all about YOU afterall:

What Does Closing Costs Mean?
The expenses, over and above the price of the property that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.
Also known as “settlement costs”.

Investopedia explains Closing Costs
Closing costs are separated into two categories: nonrecurring closing costs and prepaid costs. Nonrecurring costs are one-time costs associated with buying a property or obtaining a loan. Prepaid costs are those that recur over time, such as property taxes and homeowners’ insurance. These costs are estimated by the lender on what is called a “good-faith estimate”, which the lender must issue to the borrower within three days of a home loan application.

Other terms:

• Appraised Value
  
  What Does Appraised Value Mean?
  An evaluation of a property’s value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower.

  Investopedia explains Appraised Value
  The appraised value of a home is an important factor in the loan underwriting process and plays a role in determining how much money may be borrowed and under what terms. For example, the loan to value (LTV) ratio is based on the appraised value. In general, if the LTV is greater than 80%, the lender will require the borrower to buy private mortgage insurance. However, if the LTV drops to 78% upon a new appraisal, private mortgage insurance payments may be eliminated.

• Down Payment
  
  What Does Down Payment Mean?
  A type of payment made in cash during the onset of the purchase of an expensive good/service. The payment typically represents only a percentage of the full purchase price; in some cases it is not refundable if the deal falls through. Financing arrangements are made by the purchaser to cover the remaining amount owed to the seller.
  Making a down payment and then paying the rest of the price through installments is a method that makes expensive assets more affordable for the typical person.

  Investopedia explains Down Payment
  For example, because houses are extremely expensive assets, home buyers typically pay down payments that equal 5-25% of the total value of a home. The remaining 75-95% of the price will be covered by a bank or other financial institutions through a mortgage loan.

• Dual Apper
  What Does Dual Apper Mean?
  A potential mortgage borrower who submits two mortgage applications (here, “apper” is slang for application) simultaneously with different lenders, who are typically mortgage brokers, without the two lenders’ knowledge.
  A borrower will do this to try to protect themselves from a lender who plays games with loan fees and costs after the application has been taken.
  Investopedia explains Dual Apper
  While clearly some unscrupulous lenders try to play games with borrowers by raising interest rates, increasing fees, adding charges or delaying loan processing after the loan origination process has started, “Dual appers” raise the cost of borrowing for all borrowers, since lenders must charge enough to cover all their costs, including aborted loan applications.
  A better approach for borrowers is to demand to know a lender’s fees for services and shop around before the loan application process begins.
• Good Faith Estimate
  
  What Does Good Faith Estimate Mean?
  An estimate of the fees due at closing for a mortgage loan that must be provided by a lender to a borrower within three days of the lender taking a borrower’s loan application. A good faith estimate is required by the Real Estate Settlement Procedures Act (RESPA). While the form of the estimate is standardized across the industry to allow borrowers to compare costs between lenders, it is key to note that it is only an estimate, and the true figure can sometimes be different.

  Investopedia explains Good Faith Estimate Consumers should beware of unscrupulous lenders who add their own “junk” fees and/or charge excessive fees for items such as wire transfers. However, there are legitimate reasons for discrepancies between the good faith estimate and the actual cost. For example, the lender may not know all the costs of closing services provided by third parties.
  A thorough comparison of mortgages between lenders by a consumer will include a comparison of items such as loan origination fees and loan discounts, which are generally a tradeoff for a higher or lower interest rate.

• Home-Equity Loan
  What Does Home-Equity Loan Mean?
  A consumer loan secured by a second mortgage, allowing home owners to borrow against their equity in the home. The loan is based on the difference between the homeowner’s equity and the home’s current market value. The mortgage also provides collateral for an asset-backed security issued by the lender and sometimes tax deductible interest payments for the borrower.
  Also known as “equity loan” or “second mortgage”.
  Investopedia explains Home-Equity Loan
  A home-equity loan is basically a line of credit secured by your home. When the line of credit is drawn down, the financial institution providing it places a second mortgage loan on your home until the loan is paid off, after which the you can use the loan to finance other purchases. However, if the loan is not paid off, your home could be sold to pay off the remaining debt. Interest rates on such loans are usually adjustable rather than fixed and lower than standard second mortgages or credit cards.
• No-Cost Mortgage
  
  What Does No-Cost Mortgage Mean?
  A mortgage refinancing situation in which the lender pays the borrower’s loan settlement costs and then extends a new mortgage loan. A lender does this in exchange for charging the borrower a higher interest rate. When the lender then sells this mortgage into the secondary mortgage market, the price it will receive for the mortgage is based on the interest rate on the mortgage.
  A mortgage broker would do the same based on the size of the rebate they might receive from a lender.
  Investopedia explains No-Cost Mortgage Do not confuse a no-cost mortgage with a no-cash mortgage. This is a mistake borrowers frequently make. With a no-cash mortgage, the settlement costs are rolled into the loan’s principal balance, and will therefore be paid for over time, with compounded interest.
  With a no-cost mortgage, the borrower pays financially in the form of higher interest charges on a lower principal balance. A borrower should perform a thorough analysis to determine the most suitable mortgage option.
• No-Fee Mortgage
  What Does No-Fee Mortgage Mean?
  A mortgage in which a mortgagee does not charge the mortgagor any fees for the applications, appraisals, underwriting, processing, private mortgage insurance and other third-party closing costs typically associated with mortgages. The total cost savings associated with the lack of fees is typically 3-5%
  Investopedia explains No-Fee Mortgage
  People seeking no-fee mortgages should be diligent when coming upon an offer for a no-fee mortgage, as many mortgagees tack origination and/or closing fees onto the mortgage’s interest rate.
  Home buyers definitely gain from the prospect of free private mortgage insurance and other cost savings. The financial institutions that offer no-fee mortgages also reap benefits, because the amount of revenue lost in mortgage fees can be recovered when mortgage holders also sign up for bank accounts, credit cards and other higher margin services.
• Origination Points
  
  What Does Origination Points Mean?
  A type of fee borrowers pay to lenders or loan officers in order to compensate them for the role they play in evaluating, processing and approving mortgage loans. Credit history is one factor that plays a role in the amount of origination points a borrower needs to pay. Unlike the other types of points (for example, discount points), origination points are not tax deductible.
  Investopedia explains Origination Points
  Typically, each single origination point represents 1% of the mortgage loan. For example, if you are borrowing $150,000 and the bank is charging you 1.5 origination points, you will end up paying $2,250 (or 1.5% of $150,000).
  Since the amount of origination points required to be paid is not set in stone, borrowers may be able to negotiate the amount of origination points that they pay.
• Relocation Mortgage – Relo
  What Does Relocation Mortgage – Relo Mean?
  A type of mortgage that is designed for relocating/transferring employees. Corporations sometime make special mortgages available for relocating employees in an effort to make the moving process easier and more economical. Oftentimes, there are bonuses for the employee, such as the company paying the closing costs. Some mortgage companies specialize in offering relo mortgages.
  Investopedia explains Relocation Mortgage – Relo Historical data shows that employees who relocate for their jobs are likely to relocate repeatedly at predictable time intervals; therefore, relo mortgages have more predictable prepayment characteristics than non-relo mortgages. Because the prepayment characteristics of any mortgage-backed security (MBS) are very important to its valuation by traders, the more predictable prepayment characteristics of MBSs backed by relo mortgages allow relo MBSs to trade at a premium relative to other MBSs.
• Tax Service Fee
  
  What Does Tax Service Fee Mean?
  A legitimate closing cost used to ensure that mortgagors pay their property taxes. A tax service fee is typically paid by the buyer at the time the home is purchased, the lender then passes this sum on to a tax service agency. The role of a tax service agency is to look for delinquent property taxes and alert the mortgage company to prevent tax liens from existng against their mortgagors’ homes. Since tax liens have priority over lender liens, banks wants to ensure that they, not the state, become the owner of  these properties.
  Investopedia explains Tax Service Fee
  For borrowers with impound accounts, property taxes are collected monthly with mortgage payments; in this case, the tax service agency’s job is to provide the lender with your property tax bills so that they will be paid on time. For borrowers without impound accounts, the mortgage company will often remit any unpaid property taxes on behalf of the homeowner and then bill him or her for the sum, plus penalties and fees.

Get more details and talk to a specialist which opportunities are waiting for you! For help with your VA loan contact us or apply directly online for a quick pre approval.

Tweet This!

]]> http://fortlewisva.wordpress.com/2009/10/14/mortgage-terms-words-meaning-ever-wondered/feed/ 0 fortlewisva Fortlewisva.com finds mortgate terminology explained Share By: TwitterButtons.com http://fortlewisva.wordpress.com/2009/10/11/introduction-to-ft-lewis-wa-actually-done-pretty-well/ http://fortlewisva.wordpress.com/2009/10/11/introduction-to-ft-lewis-wa-actually-done-pretty-well/#comments Sun, 11 Oct 2009 15:47:26 +0000 fortlewisva http://fortlewisva.wordpress.com/?p=444 ]]> If you Fort Lewis is your new duty station and you are PCS’ing to this area this is video is a great to start your research. You can also visit relocationreview.com and read a few reviews of this post and even more important write a review about your current installation. Relocationreview.com is at the beginning of it’s website so there are a few things that are not working right, but the folks at relocationreview are really nice so go and drop them a line and check out their website.

This video was created by U.S. Army Housing Services Office and Assistant Chief of Staff for Installation management. It’s actually very informative and well done. Take a look at it!

Get more details and talk to a specialist which opportunities are waiting for you! For help with your VA loan contact us or apply directly online for a quick pre approval.

Tweet This!

Mortgage Tips via Federal Reserve

The Federal Reserve -casually called “The Feds” -  advices consumers with 5 tips on how to shop for a mortgage.  What is it they suggest

1. Know what you can afford -  Run your numbers: How much money do you have coming in? What are your monthly expenses (insurance, utilities, car, credit card debt)? Do  you have enough in emergency savings put aside? It is easier if you use this monthly spending form to help you get all the data sorted and analyzed. The CNN “What can I afford?” calculator can help you as well. Then find out your credit score. You should order a credit report once a year anyway to keep in your records. To get your credit report visit annualcreditreport.com,or call 1-877-322-8228. Make sure you don’t pay anything. These reports are free – unless you want to also find out your credit score.
2. Shop around–compare loans from lenders and brokers. – You can turn to a lender i.e. a bank to see what the bank offers you or you can turn to a broker. Neither one is required to find you the best deal, in the end YOU will have to know what it your best deal. Here is another link on how to find the best deal by the Federal Reserve
3. Understand Loan Prices and Fees. – Many consumers accept the first loan offered and don’t realize that they may be able to get a better loan. On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate. Shopping around is your best way to avoid more expensive loans.
4. Know the risks and benefits of loan options - Mortgages have many features–some have fixed interest rates and some have adjustable rates; some have payment adjustments; on some you pay only the interest on the loan for a while and then you pay down the principal (the loan amount); some charge you a penalty for paying the loan off early; and some have a large payment due at the end of the loan (a balloon payment). Consider all mortgage features, the APR (annual percentage rate), and the settlement costs. Ask your lender to calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet (33 KB PDF) can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.
5. Get advice from trusted sources – A mortgage loan is one of the most complex, most expensive financial commitments you will ever assume–it’s okay to ask for help. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development’s (HUD) website or by calling (800) 569-4287.

I am very pleased with the advice and tools the Federal Reserve displays. Nevertheless, I do need to add just a little bit: A reputable broker will find you the best deal he can and will be happy to explain ALL the fees to you. It is crucial that you ask as many questions as possible. There are no stupid questions – just stupid answers. And YES, in the end you are the one making the decision and you will have to live with it for possibly the next 30 years.

Get more details and talk to a specialist which opportunities are waiting for you! For help with your VA loan contact us or apply directly online for a quick pre approval.

Tweet This!

WP.com Share Button

Tax Credit Extension Draws Increasing Attention

Increasing media coverage has drawn attention to the reality that the $8000 first-time homebuyer tax credit will expire November 30, but that prospective purchasers need to act quickly to assure that they will qualify for the credit. To receive the credit, purchasers must actually close the transaction before December 1.

Ways and Means Chairman Rangel (D-NY) has introduced legislation that would extend the benefit of the credit through 2010, but has limited eligibility for that extension to a limited group of potential purchasers. His bill (H.R. 3590) would make the credit available to individuals who have served in the military, Foreign Service or in the US intelligence community outside the US for 90 days or more during 2009. They must also be first-time purchasers.

NAR has sent a letter of support to the Chairman and has also urged him to include an extension of the first-time homebuyer credit when the full House considers that legislation. The House will likely require that any extension of the credit be “paid for.” Paying for an extension of the current credit is said to “cost” just less than $1 Billion per month of extension. NAR is working aggressively through its grassroots and also at the staff level to convince Congress to extend current law.

In the Senate, Senator Ben Cardin (D-MD) has sponsored S. 1678. It offers a straight extension of the credit for 6 months. Majority Leader Harry Reid (D-NV) is a cosponsor, as is Senator Johnny Isakson (R-GA), an early advocate for a tax credit. The Senate does not yet have a strategy for moving that bill, as all revenue measures must originate in the House.

Get more details and talk to a specialist which opportunities are waiting for you! For help with your VA loan contact us or apply directly online for a quick pre approval.

Tweet This!