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Instant Savings On Your Monthly Mortgage Payment
Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.
It’s a money-saving time to buy a home in the North Georgia Mountains — or to refinance one. Mortgage rates have never been this low in history.
According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed. This represents an incredible value as compared to February of last year. Read the rest of this entry »
Government Releases Additional HARP Guidance For Underwater Homeowners
Tuesday, Fannie Mae and Freddie Mac unveiled lender instructions for the government’s revamped HARP program, kick-starting a potential refinance frenzy across Georgia and nationwide.
HARP stands for Home Affordable Refinance Program. The updated program is meant to give “underwater homeowners” an opportunity to refinance at today’s low mortgage rates.
In the two-plus years since its launch, HARP’s first iteration helped fewer than 900,000 homeowners. HARP II, by contrast, is expected to reach millions.
Lenders begin taking HARP II loan applications December 1, 2011.
To apply for HARP, applicants must first meet 4 basic criteria :
- The existing mortgage must be guaranteed by Fannie Mae or by Freddie Mac
- The existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009
- The mortgage payment history must be perfect going back 6 months
- The mortgage payment history may not include more than one 30-day late payment going back 12 months
If the above criteria are met, HARP applicants will like what they see.
For HARP applicants, loan-level pricing adjustments are waived in full for loans with terms of 20 years or fewer; and maxed at 0.75 for loans with terms in excess of 20 years.
This will result in dramatically lower mortgages rates for HARP applicants — especially those with credit scores below 740. Some applicants will find HARP mortgage rates lower than for a “traditional” conventional mortgage.
In addition, HARP applicants are exempted from the standard waiting period following a bankruptcy or foreclosure, which is 4 years and 7 years, respectively.
These two items are inclusionary and should help HARP reach a broader U.S. audience.
HARP contains exclusionary policies, too.
- The “unlimited LTV” feature only applies to fixed rate loans or 30 years or fewer. ARMs are capped at 105% loan-to-value.
- Applicants must be “requalified” if the proposed mortgage payment exceeds the current payment by 20%.
- Applicants must benefit from either a lower payment, or a “more stable” product to qualify
And, of course, HARP can only be used once.
Fannie Mae and Freddie Mac will adopt slight variations of the same HARP guidelines so make sure to check with your loan officer for the complete list of HARP eligibility requirements.
Just Say No To Saving 15 Percent At The Register
With Halloween behind us, retailers are in the Holiday Spirit. Businesses know that consumers spent a median $556 on holiday gifts last year and they want this year to be just as strong.
That’s why it’s barely November and, already, Black Friday ads clog our mailboxes and the airwaves. Retailers want our dollars and they’re offering great deals to early shoppers.
There’s one discount a smart shopper should think twice, however — the ever-present ”Open A Charge Card Today And Save 15%” promotion. In the short-term, deals like this will save money.
Over the long-term, however, opening a charge card could cost you much, much more — especially if you plan to refinance your home or buy a new one. Applying for a charge card can lower your credit score up to 85 points.
According to the myFICO.com website, as a category, “New Credit” accounts for 10% of your 850 possible credit points, comprising the following credit traits :
- Your number of recently opened accounts
- Your number of recent credit inquiries
- Time elapsed since your recent credit inquiries
- Your proportion of new accounts to all accounts
Each trait is a negative in the FICO-scoring credit algorithm which means that, with each in-store charge card application, your credit score is likely to fall. How far your score will fall depends on the rest of your credit profile. Meanwhile, low FICO scores correlate to higher loan fees.
Using a real-life example, assuming 20% equity in a home, for either purchase or refinance, look how loan fees for a $200,000 conforming mortgage change by FICO score :
- 740 FICO : There will be no added loan costs
- 720 FICO : You’ll have a 0.250% increase in loan costs, or $500
- 700 FICO : You’ll have a 0.750% increase in loan costs, or $1,500
- 680 FICO : You’ll have a 1.500% increase in loan costs, or $3,000
- 660 FICO : You’ll have a 2.500% increase in loan costs, or $5,000
You can see first-hand how expensive low credit score can be — much more costly than the 15% saved at the mall. That’s why people planning to refinance to today’s low rates and soon-to-be Blue Ridge and Blairsville, GA. homeowners, shouldn’t rush to save 15% at the register.
For people in want of a mortgage, high FICO scores are worth protecting.
Have Mortgage Rates Hit The Bottom?
Low mortgage rates are terrific — if you can get them.
One week after posting its lowest mortgage rate in 50 years, Freddie Mac reports that the 30-year fixed rate mortgage rose by an average of 7 basis points nationwide this week to 4.22%. To get the rate, you’ll pay an average of 0.7 “points”.
This week’s rise in the 30-year fixed rate mortgage pulled rates off their all-time lows so either you locked last week’s rock-bottom rates, or you missed it.
Mortgage rates are rising.
As a refinancing homeowner or home buyer in Blairsville or Blue Ridge Georgia, rising mortgage rates are something to watch. This is because, as mortgage rates rise, so do the long-term interest costs of giving a mortgage, increasing your home ownership costs.
For example, if you failed to lock a rate last week when rates were bottomed, and then decided to lock-in only after rates had climbed 0.25 percent, at the new, higher rate, over the life of your loan, you would have responsibility for an extra $5,300 in interest costs for every $100,000 you borrowed.
Rising mortgage rates can be expensive.
For home buyers, rising mortgage rates pose a second problem — they erode your purchasing power. A home that fits your budget at today’s rates may not fit your budget at next week’s rates. And because mortgage rates change quickly, you can sometimes feel like you’re racing the clock.
The hard part about mortgage rates, though, is that we can never know what they’ll do next. On some days they rise, on some days they fall, and on some days they stay the same. Instead of trying to “time the bottom”, therefore, a good strategy can be to lock the first, low rate that fits your budget. Then, if rates are lower in the future, you can look to refinance at that time.
Mortgage rates remain at historical lows. It’s a good time to lock a rate.
Related articles
- Mortgage Rates Make New 2011 Lows (thefrontporchview.com)
Is This The Start Of A Refi Boom? Mortgage Rates Fall For 8 Straight Weeks.
Mortgage rates are falling, falling, falling.
On a wave of uncertainty about Greece and its debt; and weaker-than-expected economic data at home, conforming 30-year fixed rate mortgage rates have fallen to levels not seen since December 2, 2010.
Mortgage rates have dropped 8 weeks in a row. Not even last year’s Refi Boom produced an 8-week winning streak. This season’s streak is historic.
The 30-year fixed rate mortgage now averages 4.49% nationally, down 42 basis points, or 0.42%, since early-April. For every $100,000 borrowed, that equates to a monthly savings of $25.24.
Adjustable-rate mortgages have shed even more, giving back 50 basis points since the streak began.
Because of low rates, it’s an excellent time to buy or refinance a home relative to just a few weeks ago. Note, though, that depending on where you live, you may find your quoted interest rates to be slightly higher or lower than what Freddie Mac reports in its survey. This is because the Freddie Mac figure is a national average.
Mortgage rates and fees vary by region:
- Northeast : 4.49 with 0.6 points
- Southeast : 4.52 with 0.8 points
- North Central : 4.52 with 0.6 points
- Southeast : 4.52 with 0.6 points
- West : 4.45 with 0.8 points
You’ll notice that, in the West Region, rates tend to be low and fees tend to be high; in the North Central Region, the opposite is true. You should expect North Georgia to have its own pricing norm within this region, too.
Is there a particular rate-and-fee setup that suits you best? The good news is that you can ask for it — no matter where you live.
If having the absolute lowest mortgage rate is more important to you than having the absolute lowest fees, ask your loan officer to structure your loan in the “West” style. Or, if low costs are more your style, ask for them.
Mortgage rates appears as if they’re headed lower but don’t forget how quickly markets can change. Once they do, mortgage rates in Blue Ridge and Blairsville should spike. Exploit today’s market while you still can.
Mortgage Rates Still Rising. Is This The End Of The Refi Boom?
Rock-bottom mortgage rates may be gone for good. This week’s Freddie Mac Primary Mortgage Market Survey shows in numbers what Georgia rate shoppers have learned the hard way — mortgage rates are spiking.
During the 7-day period ending November 18, the average 30-year, conforming fixed rate mortgage jumped to 4.39 percent, an increase of 0.22% from the week prior.
And it’s not just rates that are soaring. The average number of points charged to consumers increased to 0.9 percent last week. For most of the year, that cost had been 0.7 percent.
One “point” is equal to 1 percent of your loan size.
With the sudden rise in mortgage rates, we have to question whether the Refi Boom is ending. Between April and early-November, conforming mortgage rates dropped more than a full percentage point and, during that time, a lot of Blue Ridge homeowners capitalized on the market. Refinance activity was strong; rates cut new lows each week.
Today, however, Wall Street sentiment is different. There’s a growing concern for the future of the U.S. dollar, and that’s making mortgage bonds less attractive to investors. As demand drops, so does the underlying bond’s price which, in turn, causes mortgage rates to rise.
Buy-sell patterns like this are common. The speed at which they’re changing is not. Mortgage lenders can barely keep up with the volatility, issuing up to 4 separate rate sheets in a day.
Therefore, if you’re shopping for mortgage rates, or wondering whether it’s finally time to join the Refi Boom, the time to lock is now. Mortgage rates should remain volatile through the New Year, at least. At what level they’ll be then, though, is anyone’s guess.
30-Year Mortgage Rates Make New Lows, But Look Ready To Spike
No doubt you’ve heard that mortgage rates are low. They’re lower than they’ve ever been in history. The news is everywhere.
Just check out some of these headlines from the last 24 hours:
- Mortgage rates set new lows for the 6th straight week (Reuters)
- Mortgage rates fall again; 30-year fixed at 4.54% (Wall Street Journal)
- Mortgage rates hit another low : 4.54% (NPR)
Fixed mortgage rates are now down more than 1/2 percent from the start of the year, and 3/4 percent from just 1 year ago. The drop has dramatically improved home affordability for home buyers in Blue Ridge and Blairsville while creating refinance opportunities for existing homeowners.
From a payment perspective, a conforming, 30-year fixed rate mortgage is now cheaper by $41.94 per month per $100,000 borrowed versus July 2009.
A homeowner with a $300,000 mortgage, therefore, is saving $45,295.20 over 30 years.
Low mortgage rates rarely last long and rates appear to have troughed. After a big downhill between April and July, they’re now flat. This could mean rates have finished falling, or that they’re gearing up for another drop lower. Either way, if you haven’t talked to your real estate agent about home affordability, or your loan officer about refinancing, it may be time to make that call.
If today’s market marks the end of low rates, rates are expected to rise quickly.
Conforming Loan Costs Are On The Rise!
Mortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A “discount point” is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it. In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn’t do the same for required points.
The press fails to mention discount points entirely.
An increase of 1/10 percent in discount points costs home buyers and refinancing households in Blue Ridge and Blairsville an extra $100 per $100,000 borrowed.
The hike reminds us that there’s more to a mortgage than just its rate — costs matter, too. And if you’ve only been watching the headlines, you would have missed how costs are rising.
Should You Refinance Your Mortgage?
Because of strife in Greece, Spain and North Korea, conforming mortgage rates are back to all-time lows. They’re at levels not seen in 50 years. For homeowners that missed the Refi Boom of November 2009, it’s a second chance.
In this well-presented, 3-minute video from NBC’s The Today Show, you’ll get tips getting low rates and choosing the best time to lock in.
Some of the topics covered include:
- Why were the experts wrong about rates moving higher this summer?
- How much money can you save with a 1 point drop in your interest rate?
- Should you buy a bigger home now that rates have fallen?
The advice in the piece is matter-of-fact and centered. There is no cheerleading and the message is honest. Mortgage rates are low and they likely won’t stay that way. If you’ve been thinking about a refinance, talk to your loan officer as soon as possible.
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1 In 8 Banks Tightened Prime Mortgage Standards
The Federal Reserve says that financial markets “remain supportive of economic growth“. Residential mortgage guidelines, however, continue to tighten.
If you’ve applied for a home loan recently, you probably felt it; extra scrutiny on income, assets and credit scores, among other things. The hard proof of the changes, however, can be found in the Federal Reserve’s quarterly survey of its member banks.
Every 3 months, the Federal Reserve asks senior bank loan officers around the country whether their respective banks’ “prime” residential mortgage guidelines tightened since the last survey.
For the period January-March 2010, 1 in 8 banks surveyed toughened their qualification standards.
Only 4% loosened them.
When we account for the Fed’s survey in conjunction with new underwriting standards from Fannie Mae and FHA, it’s clear that getting approved for a mortgage in 2010 is more difficult than at any time in recent memory.
Today’s homeowners and home buyers in Blairsville have taller hurdles to leap:
- Minimum FICO scores are higher
- Down payment/equity requirements are larger
- Debt-to-Income thresholds are smaller
In other words, mortgage rates may stay low throughout 2010, but that won’t matter to homeowners failing to meet the new, minimum eligibility standards as set forth by the lenders.
If you’re among the many people wondering if now is the right time to buy or refinance a home, remember that — along with a probable increase in mortgage rates — mortgage approvals are getting more scarce.
The best home price or mortgage rate in the world won’t matter if you’re ineligible for financing.
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