Archive for the ‘Mortgage Loan Applications’ Category

P.M.I Days are back

Thursday, June 10th, 2010

With the housing market sliding down, people losing their jobs as well as credit ratings, it was a bit difficult to get private mortgage insurance last year. This led people to flock at the Federal Housing Administration.

They had no other option. PMI was not an easy task, and lenders were not offering mortgages to borrowers with down payments below 20 percent, except for those who had insurance. At that crucial time, FHA was the only body willing to back borrowers with credit scores below 680 or down payments under 5 percent. However, some mortgage companies today have loosened their standards and are willing to insure borrowers with down payments as low as 5 percent.

P.M.I Days are back

Although the PMI availability improves, premiums haven’t slid down from their ‘year 2008’ level. They remain at a comparative higher level. Today, a loan of $500,000 requires a borrower to pay $258.33 every month, which is 0.62 percent. Before 2008, the rate would have been 0.52 percent that makes $216.66 per month.

Coming to the conclusion – No doubt FHAs are popular among borrowers these days, but PMIs have certain beneficial characteristics as well. Individuals going for PMI directly save $11,250 on a $500,000 loan, which they would have been paying for the one-time FHA fee of 2.25 percent.

Many mortgage companies have already eased their PMI policy, how long will it take other market players to revise their policies too? Is it enough to improve the housing market or to pull down the premium rates to the ‘year 2008’ level?

Reference Link: http://www.nytimes.com/2010/05/30/realestate/30mort.html?scp=4&sq=mortgage&st=cse

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Posted in FHA Loans, Mortgage Industry, Mortgage Loan Applications, housing market, interest rates | 56 Comments »

Bright days for Refinance – Seekers

Monday, May 31st, 2010

Bright days for Refinance - SeekersThe European debt crisis and the turbulent stock markets are turning out to be a ‘helping-hand’ for the American families looking for a refinance. Mortgage rates are edging to a record low. The average 30-year fixed-rate loan sank to 4.78 percent this week, the lowest this year and barely above the record of 4.71 percent set in December, last year.

Individuals looking for a refinance are queuing up in large numbers at mortgage lenders, all seeking a low rate for their refinance. Applications to refinance poured this week, reaching the highest in seven months. However, many of the refinance-seekers are holding back for even lower rates, but the only way to know the bottom is when it’s missed.

Some Analysts predict that this window of opportunity may close soon. Investors, due to uncertain environment and declining stock markets, had pounced on government securities. But, once they grow more confident about the stock market it wouldn’t take long to move out of bonds and back into stocks, which will automatically make the mortgage expensive.

Coming to the conclusion – Even though the mortgage is cheap these days, people are not opting for borrows to buy new homes. The number of loans being drawn to buy homes remained at its lowest in more than 13 years. First reason: the special tax credit for homebuyers expired last month. Another reason: after a large number of borrowers fell into defaults and foreclosures, banks needed borrowers to pay a down payment of around 3.5 percent and also to maintain a good credit rating.

The mortgage rates were to rise when the government ended the security-buying program, instead they fell because of fears that Greece would default on its debt. But, it is clear that the mortgage rates would go up once the investors start investing in stock markets, but how long would it take? Will the housing market get back on the ‘good old’ track?

Reference:

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/27/AR2010052702002.html?hpid=sec-business

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Posted in Mortgage Industry, Mortgage Loan Applications, Mortgage Refinance, housing market | 82 Comments »

Mortgage Loan Applications – ‘Accelerating’ Tips

Monday, May 24th, 2010

Heres  a short story:

Mortgage Loan Applications – ‘Accelerating’ TipsNancy works at the financial district in San Francisco. About a month ago, she was spending most of her time in the ‘Dream-House Hunt’. A perfect house, with lower interest rates and a good mortgage loan was what she was looking for.

However, the mission was ‘partially’ accomplished when she found a perfect house, well-furnished and closer to her workplace. Next, she submitted the mortgage loan application and then waited….waited…& waited. The next week, interest rates marked a spike. Another week – another peak. Now she is maxed out, another point would mean a significant increase in the monthly payment. In the end, she finds out the interest rate has gone up again.

Not only Nancy, there are lot more out there who have the same story. Why does this loan application take so long? How can we speed it up?

First of all, start to shop for a home loan instead of a home first. Getting approved for a mortgage loan before you find a home will accomplish two things: you’ll be locked on to an interest rate, which will save you from this ‘waiting-game’ mentioned above. This is also termed as ‘lock n shop’, only a small number of lenders, such as Choicefinance, Lendingtree and MFG Mortgage Rates, provide this option. Besides this, if the sellers sees that you are pre-approved, they’ll take you as a ‘serious’ buyer.

Next, make things easier for the mortgage company by providing them all the information that you know they’ll need – organized and easy-to-read. This will save them repeated calls, asking you for paperwork again and again.

Lastly, try to bug your mortgage lender to check for ‘order-status’. Mortgage lenders have thousands of applications to process, and it’s really important to make sure that yours doesn’t sit on the bottom of the stack.

Here my question is: what other ways can be used to speed up mortgage loan applications? If you have a case of your own, feel free to share it.

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Posted in Mortgage Industry, Mortgage Loan Applications, housing market | 34 Comments »