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  1. Millions of Underwater Borrowers to Benefit from HARP Program Changes?

    By on November 16, 2011

    As promised last month by the regulator of the two government-sponsored mortgage companies, changes to the Homeowner’s Assistance Refinance Program (HARP) are now in place which may enable more than 1 million homeowners who owe more on their mortgages than their homes are worth to refinance at today’s very attractive interest rates.  Many lenders are going to participate as the government has taken much of their potential risk away from refinancing these loans.

    Key points for consumers to be aware of include:

    • Program is extended through December 31, 2013

    • Eligible loans must have been purchased by Fannie Mae or Freddie Mac before May 31, 2009 and have a loan-to-value ratio of greater than 80%

    • There is no loan-to-value cap (It does not matter how much your current value is less than your current mortgage balance)

    • Homeowners must be current on loan for previous six months, 1 late payment in previous year

    • New appraisal may not be needed

    Analysts have indicated that most of the loans that will likely benefit from these changes were originated in the period between 2006-2008. Potentially 1.5 million homeowners will be able to take advantage of this program due to the changes.

    Lenders are expected to be aggressive in marketing this program because when they refinance existing loans for which they are ultimately on the hook, they will reduce their future risks.

    Total Mortgage Services, LLC is prepared to guide you through the HARP refinance process with mortgage professionals who are experienced and determined to improve the financial position of their clients.

    To find out if your loan is owned by Fannie or Freddie, to discuss the program requirements further or lock in current rates:

    • speak with a mortgage professional now by calling 877-868-2509

    Category: Current Mortgage Rates, Fixed Rate Mortgages, Housing Market, Mortgage Interest Rates, Mortgage Regulations, Refinance, Stimulus

  2. Mortgage Rates Roundup for Week Ending February 4, 2011

    By on February 4, 2011

    While recent indications point to overall improvement in the economy, mortgage rates moved however slightly this week. Additionally, inflation remained in check week over week. A report recently released by Freddie Mac revealed the average rate on a 30-year fixed-rate mortgage was 4.81 percent this week, with an average of .8 points. Interestingly, the average rate for the same product one year ago was 5.01 percent. However, the record low, from November, 2010, was 4.17 percent.

    For a 15-year fixed-rate mortgage, the average rate was 4.08 percent with an average of .8 points, while the average rate one year ago for this product was 4.40 percent. Again, the record low of 3.57 percent was documented in November, 2010.

    Although mortgage rates are up significantly from November, they are still considerably lower than February, 2010. If rates are still lower today when compared to this time last year, why is the number of mortgage applications down so appreciably? Mortgage experts believe the drastic reduction in the number of Americans purchasing or refinancing is twofold.

    1. Most homeowners who are eligible to refinance have already done so
    2. Mortgage rates have increased rather sharply in a very short period of time

    Based on Freddie Mac’s report, the average mortgage rate on a 30-year fixed-rate mortgage jumped by .64 percent in a two-month span. And that’s with rates coming back after a much more significant spike during the second week of December when the rate on a 30-year fixed-rate mortgage was closer to 5.25, paying no points.

    As the economy continues to improve, with the standard based on consumer spending, mortgage rates typically rise. With such little movement on the mortgage rate front this week, this event is an exception rather than the rule. Mortgage professionals are anxiously waiting for spring with optimistic anticipation that the floodgates will open on existing foreclosed properties. While most of the nation lingers in the grips of Old Man Winter, only time will tell.

    Robert Hyder

    Category: Fixed Rate Mortgages, Mortgage Rate Trends and Analysis, Mortgage Rates

  3. Mortgage Rates Will Remain Low Into Next Year, Predicts Freddie Mac Economist

    1 By on December 7, 2010

    mortgage rates, 30-year fixed-rate mortgage rates, adjustable-rate mortgage ratesMortgage rates will remain low into next year, predicts Freddie Mac Chief Economist Frank Nothaft. The Federal Reserve will keep the federal funds rate at its current 0 percent to 0.25 percent range for all or most of next year, so relatively low mortgage rates will continue, Nothaft wrote in his blog yesterday.

    The rates for fixed-rate mortgages will increase a bit, but rates for the 30-year fixed-rate mortgage will probably remain under 5 percent through the year, Nothaft predicts. Initial rates for 5/1 adjustable-rates mortgages will probably stay below 4 percent.

    In addition, the housing and mortgage markets will gradual recover in 2011, with more home sales next year. Housing markets with a surplus of houses for sale and bank-owned properties will continue to have trouble, but national housing indexes are close to bottom, he asserts. Most experts expect indexes for single-family homes to bottom out in the first half of 2011.

    The good news is that houses are more affordable than they’ve been in years. In fact, the National Association of Realtors’ Affordability Index for the third quarter reported one of the most affordable housing markets since the 1970s. Those low prices will attract more first-time home buyers to the market, Nothaft predicts.

    While purchase-money mortgages will increase, refinance mortgages will decline, he forecasts. Many homeowners have already refinanced or are now refinancing. Plus, the Home Affordable Refinance Program is set to expire June 30, and mortgage rates will begin gradually increasing during the year. Continue Reading…

    Category: Adjustable Rate Mortgages, Fixed Rate Mortgages, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates

  4. First-time Home Buyers Take Over Home Purchases

    By on November 8, 2010

    first-time home buyers, fixed-rate mortgages, home purchases, mortgage ratesHalf of all home purchases involved first-time home buyers this year, the largest portion since the National Association of Realtors started keep records in 1981.

    Last year 47 percent of home purchases were by first-time home buyers, according to NAR’s Profile of Home Buyers and Sellers. The previous largest share of first-time home buyers was 44 percent in 1991. Learn about tips for buying your first home.

    The first-time home buyers’ tax credit, which has now expired, was a major reason for their large share of home purchases. Almost all first-time home buyers, or 93 percent, used the tax credit.

    Almost all of first-time home buyers, or 95 percent, used fixed-rate home loans. Check mortgage rates for fixed-rate terms.

    Most, 74 percent, used savings for their down payment, while 27 percent used a gift from friends or relatives, slightly more than last year. That increases shows that more parents helped their children take advantage of the tax credit and extremely affordable housing, said Paul Bishop, NAR vice president of research.

    Also, 56 percent of first-time home buyers used FHA home loans to finance their home purchase. NAR also reported that 52 percent of the home buyers said obtaining a mortgage was more difficult than they had expected and 9 percent were rejected by a lender. Find tips for getting mortgage approval.

    The median down payment for home buyers was 8 percent, including 4 percent for first-time buyers to 14 percent for repeat buyers. First-time may have used FHA loans, which allow down payments as low as 3.5 percent. How to purchase a house with an FHA mortgage and current FHA mortgage rates.

    NAR’s survey shows that the median age of first-time buyers was 30 and their median income was $59,900. The typical first-time buyer bought a 1,540-square-foot house for $152,000. The typical home sold for 96 percent of the listing price, compared to 95 percent the group’s survey last year.

    Category: First Time Home Buyer, Fixed Rate Mortgages, Purchase

  5. Low Mortgage Rates Will Disappear Next Year, Trade Group Says

    By on October 27, 2010

    Mortgage rates will begin increasing next year, the Mortgage Bankers Association predicts.

    Mortgage rates, recently down to about 4.5 percent for the 30-year fixed-rate mortgage, will rise to 4.8 percent in the second quarter of 2011, then to 5 percent in the third quarter before surpassing the 5 percent mark by the end of next year, according to the MBA’s Mortgage finance forecast released yesterday at a the group’s annual convention in Atlanta. Find current mortgage rates.

    Mortgage rates for the 30-year fixed, probably the most common home loan product, will continue increasing through out 2012, rising to 5.7 percent.

    The Federal Reserve plans another round of quantitative easing, a fancy phrase for pumping more money into to the economy, in at attempt to drive down interest rates and stimulate the economy. The Fed is expected to purchase large amounts of U.S. Treasuries to decrease mortgage rates and other types of interest rates. But the Fed’s actions are already priced into mortgage rates, said Jay Brinkmann, the MBA’s chief economist. The Fed, according to Brinkmann, would have to make an unexpected “blockbuster” announcement to push mortgage rates much lower.

    If the MBA prediction is correct, this year is the best time for homeowners to refinance their mortgages into lower rates.

    Existing-home sales will increase slowly through 2011, rising from 4,026 in the third quarter of 2010 to 5,051 to the fourth quarter of 2011, the MBA predicts.

    The national average for home prices will probably fall slightly next year, but that figure is being weighed down by severely distressed housing markets, such as Florida and some areas of California. Some areas, Brinkmann said, are showing signs of increasing home prices. Learn about mortgage for purchasing a home.

    The median price of existing homes, at $218,900 in the second quarter this year, will increase to $173,500 by the end of next year.

    The MBA predicts that the volume of mortgage refinancings will reach 921 billion this year and 370 billion in 2011. Mortgages for home purchases will amount to 480 billion this year and 626 billion in 2011.

    Yields for the 10-year Treasury, which are typically used to set mortgage rates, will increase to 3.3 percent by the end of 2011.

    Category: Fixed Rate Mortgages, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Refinance

  6. Adjustable-Rate Mortgages Are Not Always Bad, Study Says

    1 By on September 27, 2010
    financial regulations, mortgage regulations, adjustable-rate mortgages, fixed-rate mortgages

    Will government red tape limit options for mortgage borrowers?

    Restricting adjustable-rate mortgages and other more unconventional types of home loans may not be such a good idea, according to a study of mortgage loans in different countries. Fixed-rate mortgages may not always be a great deal, asserts the new study from the Mortgage Bankers Association.

    Adjustable-rate mortgages are common in other developed countries, but default rates have been far lower in other countries, even though some had even greater home price declines, says the report, “International Comparison of Mortgage Product Offerings. That goes to show that mismatching mortgages and borrowers, not adjustable-rate mortgages themselves, prompted the mortgage crises. Outside the US, subprime lending was common only in the UK.

    Yet the comprehensive overhaul of financial regulation, the Dodd-Frank bill, restricts adjustable-rate mortgage terms like interest-only periods and flexible payment designs.

    “The U.S. has traditionally had one of the richest sets of mortgage products available, offering a variety of adjustable rate mortgages, amortization choices and terms, along with long-term fixed-rate mortgages,” said Dr. Michael Lea, director of the Corky McMillin Center for Real Estate at San Diego State University, who did the study.

    After the housing crisis, everybody jumped on the fixed-rate mortgage bandwagon, drawn by historically low mortgage interest rates. With the new financial regulation, fixed-rate mortgages may remain dominant.

    “It is important for those implementing the regulation,” Lea said, “to consider whether such a dramatic and permanent shift in the mortgage market will do more harm than good.”

    “By focusing regulation on loan product design,” he said, “borrower choice will be deeply impacted as products that are commonplace in other countries will be considered unqualified for American borrowers.”

    There are many types of borrowers and all have different needs. “We can’t expect one mortgage product to fit all of their needs,” Michael Fratantoni, MBA’s vice president of research and economics.

    According to the study, which examined 12 developed countries with different mortgage markets, 95 percent of new loans made in the U.S. in 2009 were long-term fixed-rate mortgages. In other countries, the share of fixed-rate mortgages is much lower. Long-term fixed-rate mortgages account for 1 percent of all home mortgages in Spain, 2 percent in Korea, 10 percent in Canada, 19 percent in the Netherlands and 22 percent in Japan.

    In 2009, 5 percent of new home loans in the U.S. were variable rate. That compares to 92 percent in Australia and Korea, 91% in Ireland, 47 percent in the UK and 38 percent in Japan.

    Most countries in the sample usually subject fixed-rate mortgages to an early repayment penalty except Denmark, Japan and the U.S.  In Australia, Canada, Denmark, Germany, the Netherlands and Switzerland the penalties are designed to compensate the lender for lost interest over the remaining term of the fixed-rate home loan, according to the study, sponsored by MBA’s Research Institute for Housing America (RIHA),

    While some believe that the fixed-rate mortgage is the ideal home loan for all consumers, it does have significant drawbacks. Eliminating early payment penalties means all borrowers pay higher interest rates, which effectively socializes the prepayment option. In the European view only borrowers who prepay home loans should pay the cost.

    Category: Adjustable Rate Mortgages, Fixed Rate Mortgages

  7. Refinancing to Decline 50% in 2011?

    By on September 20, 2010

    Have you ever wondered how constant exposure to negative news shapes your own outlook on things?  I do, because all I seem to read lately is bad news.  Some days I feel like the kid from A Clockwork Orange.  Here’s some news that would be particularly bad for the mortgage industry: the Mortgage Bankers Association (MBA) is forecasting a sharp drop in refinance activity next year.

    A new report from the Mortgage Bankers Association via Housingwire predicts that refinancings could decline by 50 percent in 2011.  Currently refinancing accounts for around 80 percent of all mortgage-related activity and has been keeping many mortgage companies afloat.  Home purchases are down sharply over the past two years, as very low mortgage rates have not convinced potential buyers to make the leap into homeownership.  The lack of demand can be attributed to the expiration of the first time homebuyer tax credit, continued high unemployment, and generally poor economic conditions.

    The MBA predicts that refinance activity will decline due to a rise in mortgage rates and tight credit conditions.  According to the article, rates are predicted to hit 5.1 percent by the end of 2011.  This prediction is more or less in line with that of Fannie Mae and Freddie Mac.

    Further, the MBA predicted mortgage originations to fall to $1.1 trillion in 2011, down from $1.4 trillion in 2010 and $2.1 trillion in 2009.  Do you work in the real estate industry?  How do you intend to deal with this situation?  Let me know in the comments section below.

    Category: First Time Home Buyer, Fixed Rate Mortgages, Jumbo Mortgage, Mortgage Interest Rates

  8. Do You Know If You Have A Fixed-Rate Or Adjustable-Rate Mortgage?

    By on September 2, 2010

    Homeowners are smarter about their mortgages than in the past. Only 8 percent said they don’t know if they had a fixed-rate mortgage, an adjustable-rate mortgage or a more unusual type of loan, reported a poll commissioned by BankRate. If that sounds bad, consider that two years ago 26 percent of borrowers said they didn’t know what type of mortgage they had. In 2007 an incredible 34 percent said they didn’t know if they had a fixed-rate or an adjustable-rate mortgage.  Compare fixed mortgage here.

    Fixed-Rate Or Adjustable-Rate Mortgage?Homeowners also typically have no regrets about buying their home despite the increasing number of foreclosures and drop in housing values. Only 9 percent of homeowners in the poll said they regret buying their current home, compared to 90 percent who had no regrets.

    Of those who had regrets, 31 percent said they felt unhappy because they could not sell their home, and 22 percent said they couldn’t afford their monthly mortgage payments. Others said they were unhappy because their home’s value had dropped, or they didn’t like their home’s location, or because of other reasons, according to the poll done by Princeton Survey Research Associates.

    Blacks were far more likely to feel sorry about buying their home and were more likely to report difficulty meeting monthly mortgage payments. They were also slightly more likely to have an adjustable-rate mortgage or an option ARM.

    Not surprisingly, fixed-rate mortgages have become more popular, the survey indicates. Almost 80 percent of homeowners said they have fixed-rate mortgages, compared to about 65 percent in 2008. Wealthy homeowners were more likely to have fixed-rate mortgages. Roughly 85 percent of households with income of more than $75,000 opted for a fixed-rate, compared to 70 percent of households with income under $30,000.

    A survey by Fannie Mae earlier this year agreed that people generally see homeownership as a good choice. The Fannie Mae survey found that about two-thirds of Americans want to own a home, despite the economic slowdown and decline in home prices. Safety and quality schools were top reasons for wanting to buy a home.

    “Despite the recent downturn in the housing sector, Americans continue to value homeownership and think about their homes in ways that go much deeper than the financial investment,” said Mike Williams, president and CEO, Fannie Mae.

    The public is more cautious, however. For instance, almost a quarter of renters said were postponing buying a home despite low mortgage rates.

    Category: Fixed Rate Mortgages

  9. Low Rate 15 Year Mortgages Help Pay Off Debt

    By on September 1, 2010

    More homeowners are taking advantage of low interest rates to refinance into shorter terms, such as 15 year mortgages, to pay off their mortgages sooner, sometimes even if it means higher monthly payments.

    During the first half of the year, 26 percent of homeowners who refinanced opted for a 15 year fixed rate mortgage, compared to 18.5 percent last year, according to data from CoreLogic, a financial data provider.

    With interest rates at all-time lows, many people finding that they can afford higher monthly payments of shorter terms. But even if their monthly payments are significantly higher, some homeowners will bite the bullet, planning to pay as little interest as possible and owning their home free and clear of mortgage debt as soon as possible.

    Paying the mortgage is like putting money into a required savings account for them. In better times, leveraging your home to get a mortgage as large as possible was popular. When the stock market was booming homeowners preferred putting money into stocks for bigger gains. After the stock market crashed, investors became disillusioned with stocks and a more frugal savings ethnic is again popular.

    Moving from a 30 fixed rate mortgage to a low-rate 15 year mortgage term is the most popular refinancing move, but homeowners also use 20 year terms. Although homeowners pay off their mortgage twice as fast with a 15 year term than 30 years, their monthly payment is not twice as much because of the lower interest rate.

    The average 15 year rate was 3.86 percent compared to the 30 year rate of 4.36 percent, according for the week of Aug. 26, according to Freddie Mac.

    A 15 year mortgage of $200,000 at 3.84 percent would have a monthly payment of about $1463, while a 30 year mortgage of the same amount with a 5.5 interest rate would have a monthly payment of $1135.

    “While homeowners are choosing the safety of fixed-rate mortgages in large numbers, at the same time many borrowers are now looking at paying down their mortgage balances faster by choosing a shorter mortgage term of 15 or 20 years instead of 30,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

    “When you can only earn a very low interest rate on your CD or money market accounts, and returns on other investments remain extremely uncertain,” Nothaft said, “it can make sense to pay yourself 4.5 or 5 percent by eliminating some mortgage debt whether by making extra payments or going for a shorter loan term.”

    Category: Fixed Rate Mortgages, Mortgage Interest Rates

  10. Fixed Rate Mortgages Available at Total Mortgage

    By on August 2, 2010

    Fixed Rate Mortgages are safe and secure.Coming into August, Total Mortgage has some of the most affordable fixed rate mortgages in the country. Total Mortgage has a wide variety of fixed rate mortgages currently available. One of the most popular fixed rate mortgages being offered is a 30 year fixed conventional mortgage. Part of the appeal of fixed rate mortgages is that a borrower knows precisely how much he/she will pay each month, because the mortgage rate remains constant throughout the life of the loan.

    Currently, a 30 year fixed conventional mortgage is being offered with a 4.125 percent mortgage rate and a 4.323 percent APR. Other fixed rate mortgages include 15 and 20 year loans. A 20 year fixed conventional mortgage has a 4.000 percent mortgage rate and a 4.273 percent APR. A 15 year fixed conventional mortgage has the lowest mortgage rate of the three mortgage products mentioned but will most likely have the highest monthly payments because of the shorted life of the loan. A 15 year fixed conventional mortgage currently has a 3.625 percent mortgage rate and an APR of 3.972 percent. Continue Reading…

    Category: Fixed Rate Mortgages, Mortgage Rates

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