Home Loan & Mortgage Planning News

A recent study by Bank Rate found that while mortgage rates have plummeted from a year prior, the fees associated with processing a mortgage loan have soared by roughly a third.  This is/was to be expected however, as increased borrower scrutiny increase the time and costs associated with the new requirements imposed by Fannie and Freddie.

The Fed has targeted ultra low mortgage rates (and interest rates overall) to help prod a sluggish economic recovery.  The more money in YOUR hands (due to interest cost savings) the more money you’re likely to spend, and the more jobs and growth is created.  While the recovery is anemic at best, the economy does seem to have stabilized to some extent.

Due to the increase in lender fees and mortgage costs, it’s ever more prudent to have multiple lenders quote your loan.  The lowest interest rate may not always be the best deal, as buried and back end fees may substantially reduce your economic gain on a mortgage refinance or home purchase.

Free mortgage rate quotes are here online NOW! While LoanEXA is going through a minor re-design to properly note this fact, at no point in time will be you be asked for any form of payment to use the LoanEXA system.  Give LoanEXA a try – you have NOTHING TO LOSE, and THE LOWEST MORTGAGE RATE AND FEES TO GAIN!

Press Release
August 3rd, 2010
Las Vegas, NV

LoanEXA’s online mortgage rate and home loan quote service will soon be made available FREE to all borrowers, and the $24.95 per quote fee will be waived indefinitely in an effort to increase visitor traffic and mortgage rate quote volume for our registered loan advisor professionals.

The LoanEXA system allows borrowers to quickly and anonymously get live mortgage rates online with far less hassle than conventional methods. While other websites claim to provide anonymous loan quotes, only LoanEXA truly provides this through the borrower friendly system we’ve created. Other sites simply collect your information, only to farm it off to a third party or internal sales person. LoanEXA is the exception to the rule in online home loan and mortgage rate quotes!

While the website is currently 100% free, a minor site re-design is in the works to accurately reflect the loan quote fee being waived.

FEEL FREE to use the LoanEXA system NOW AT NO CHARGE! At NO POINT in the mortgage rate quote process will you be asked for any credit card or payment information.

Stay tuned for more information and a minor website redesign to come!

Most people incorrectly assume their home is still worth more than it really is.  The fact is if you’re looking for a loan or home mortgage – prepare to be shocked by the appraised value.  In fact in many cases the appraisals are coming in lower than buyers are willing to pay for a home!

We’ve put a home loan value “what’s my home worth” resource page here.

Today’s mortgage rate environment is difficult at best, which is why it’s ever increasingly important to hire the RIGHT loan expert to help you find the most appropriate loan or mortgage for you.  Get and compare the best mortgage rates from any number of sources online, and interview your new loan consultant.  There’s an eBook “How to get the best mortgage in the post meltdown era” right on the home page to help walk you through the process.

Mortgage rates are still low, and likely to stay low for a little while longer as the economy still remains in a slump.  If you have equity and need to refinance your mortgage – hire a mortgage expert today by filling out the form above!

Author: Peter Gomes

Buying a home is indeed an exciting experience. It doesn’t matter whether or not you’re buying a home for the first time; you should know certain things before you take out a mortgage.  A mortgage can be defined as pledging a property to the lender, wherein the property serves as the security for the loan.  In other words, your home serves as the security for the loan amount you borrow in order to purchase your new home.

Parties involved in a mortgage deal

Two types of parties are usually involved in a mortgage transaction; namely, the lender or mortgagee, who offers the loan amount and the borrower or mortgagor, who borrows the money.  Your mortgagees can be financial institutions (such as, banks, mortgage companies or credit unions) or portfolio lenders and private mortgage lenders.

Components of a mortgage payment

4 components of a mortgage payment are discussed below:

1. Principal: It refers to the balance amount after you have made your down payment. In other words, principal is the amount that you actually borrow from your lender.
2. Interest: It is the amount that your lender charges for offering you the loan. It is actually a percentage of the total amount you actually borrow.
3. Tax: You need to pay a certain amount of real estate tax, which is often paid as a part of monthly mortgage payments. It varies from one area to another.
4. Insurance: There are various insurances that you need to purchase when you take out a mortgage. The insurance policies provide coverage against financial losses caused by natural disasters, theft, fire, etc.

The above factors are commonly referred to as PITI.  Apart from these, your mortgage payments also consist of closing costs that you need to pay while taking out a mortgage loan.

If you wish, you can contact a mortgage broker, who acts as an intermediary between a borrower and a lender.  However, mortgage brokers do not offer home loans.  They only help you to get the best suitable mortgage.

After a several week surge upwards, mortgage rates finally took a breather this week as the average 30 year fixed mortgage dropped to 5.38% down from 5.59% according to Freddie Mac.  Some 30 year fixed rates were being quoted as high as 6% a couple of weeks ago, whereas a couple of months ago those same home loans were going for near 4.5%.

15 year fixed mortgage rates dropped to 4.89%, and five year adjustable rate mortgages dropped to 4.97%.  All good signs for the housing market and the economy overall!

Mortgage rates have been volatile, and it’s highly important if you’re shopping for a mortgage that you compare home loan quotes online early and often to make sure you get the best rate for your situation!

According to the U.S. Bureau of Labor Statistics the unemployment has now reached a staggering 9.1%.  While there has been SOME slowing in the number of jobs lost, unemployment remains high hampering efforts at an economic recovery.

But just how does that stack up to the Great Depression?  In the early stages of the Great Depression, unemployment hit nearly 16% in 1931.  Towards the middle of the Great Depression in 1934, unemployment peaked at nearly 25%.

Are we on our way to another Great Depression?  The current economic collapse started in late 2007, nearly two years ago.  The Great Depression started in 1929 and lasted roughly the entire decade of the 1930′s.  I wouldn’t dare to guess if we’re in for something similar in nature, as it’s impossible to predict future events.  But if unemployment is a measure you can look at it two ways, 1) this isn’t nearly as bad as the Great Depression (glass half full) or 2) things can get a WHOLE lot worse (glass half empty).

I choose to be a glass half full kind of thinker…

The National Association of Realtors last week said that pending home sales rose 6.7% in the month of April.  This represents the third month in a row that home sales are looking brighter and brighter, and that the recession may be slowing to some extent.  The report also showed that year over year pending home sales have increased by a larger than expected number.

More contracts in process means more home sales a month or two from now!  More home sales means the flood of inventory will start to contract to some extent.

Unfortunately, after plummeting to the mid 4% range, the 30 year mortgage rate has jumped substantially in the last month.  The massive amounts of government debt are piling up, and the United States credit status is now being called into question.

China has been buying our treasuries, effectively loaning the United States money to float our substantial economic recovery programs and budget deficits. However now with the credit status of the United States being called into question it remains to be seen whether or not the Chinese will continue to “float us”.  If they stop buying our bonds, interest rates on those bonds will have to move higher to attract investors.  Unfortunately this will correspond with higher mortgage rates and could squash our hopes of a near term economic recovery.

Last week the Federal Reserve took aggressive action to reduce the cost of borrowing and spur lending activity throughout the economy.  The Fed, still reeling from a broken economy and lackluster credit market announced a massive plan to purchase long term treasury bonds and other mortgage backed securities – thereby dropping the rates associated with those assets.

30 year fixed rate mortgage quotes are hovering in the mid 4% range to 5%.  These are some of the lowest mortgage rates ever seen, and the goal would be to spur more lending, more home buying, more refinancing of home loans to help stabilize the real estate markets and put more cash in current homeowners pockets as they save money in interest expense.

This action has ballooned the mortgage refinancing activity over the last couple of weeks and provided many an opportunity to recognized real dollar benefits from taking advantage of the lower rates.

We’re also seeing signs of life as reports hit the wire yesterday that housing sales were up, housing starts were up, and while the median home price has dropped it’s still encouraging to see real activity in the largest component of the economic mess this country is in.

Loanexa Admin

As a CERTIFIED FINANCIAL PLANNER(TM) one of the most common areas of planning that is consistently overlooked (and I’ve been guilty of this myself at points) is the emergency fund.  Every person, no matter what stage of life should have an emergency fund.

An emergency fund is quite simply just that – a liquid reserves fund (typically money markets, short term CD’s, checking or savings accounts) that is set aside and “earmarked” (we’ve been hearing a lot about earmarks lately!) for unexpected financial needs.  For example job loss, or car problems, or a family member in need.  More often than not however it’s job loss that the emergency fund should help you through until you can find employment again.

The amount to set aside is in question and depends on many things.  Stability of employment is primary.  If you’re a schoolteacher or health care worker – your employment is highly stable typically meaning you can target a 4 to 6 month fund of “bare bones” living expenses.  By this I mean turning off the cable and not going out to eat – basically scrimping but still surviving!  So for example if you’re highly confident in your current budgeting and stability of employment, and it costs you $3,000 per month to live on necessities alone – an $18,000 emergency fund is appropriate.

If your employment is less stable – for example construction or retail – a longer emergency fund is more appropriate – typically 6 months at a minimum and ideally one year.

Don’t overlook this critical planning step.  Many people make the mistake of jumping past the emergency fund into their long term investment portfolio – which puts your nest egg and financial stability at unnecessary risk!

For more information on selecting a financial advisor to help you with your basic planning I highly recommend the National Association of Personal Financial Advisors – www.NAPFA.org – The Fee-Only financial planners in NAPFA are highly educated and an exceptional resource for the general public.

Greg

With mortgage rates at or near recent lows, many people are taking advantage of refinancing their existing loans – many opting for a longer term 30 year fixed rate mortgage.  This is helpful for the economy because it adds stability to the average homeowners largest expense and typically puts extra cash in their pocket to spend.  All in all, this is a positive turn of events.

That being said, new homebuyers are still avoiding real estate like equity investors are avoiding the stock market.  People think they can time the bottom, get the best deal ever.  It’s just not possible with the exception of statistical luck.  Things are on sale America!!!  Wake up!  We probably won’t see home or equity prices in these ranges in 5 or 10 years, and we’ll all wish we would have scooped up the bargains when we had the chance!

Markets, both real estate and equity, are always forward looking.  They don’t care what happened last week, month, or year.  So you too must be forward looking, and assess your financial plan and investments in real estate and equities with a longer term view.  Will we be better off in three years than we are now???  My best guess is “Yes”.  If that’s the case, trying to pick and time the absolute bottom is a futile course of action.

Greg