The Pros and Cons Of Making A 401(k) Hardship Withdrawal

October 2, 2008

As household budgets get pinched and credit markets tighten, a growing number of Americans are making “hardship withdrawals” from their 401(k) plans. One major fund group cites a 15 percent increase in activity from this time last year for various reasons including staving off foreclosure and medical emergency. However, 401(k) loans should only be made with careful […]

Read the full article →

Mortgage Rates Are Headed Higher AND Lower — Quickly

October 1, 2008

Monday, after the House of Representatives defeated the Emergency Economic Stabilization Bill of 2008, the stock market fell in historic fashion. The Dow Jones Industrial Average closed down 777.68 points, its largest one-day point loss ever. By Tuesday, however, optimism had returned to Wall Street. Assuming that the bill would pass in some form, investors poured back […]

Read the full article →

How Mortgage Rates Responded To The “No” Vote On The Bailout Bill

September 30, 2008

Monday afternoon, the U.S. House of Representatives defeated the $700 billion “Bailout Bill”, surprising Wall Street and the world. The Dow Jones Industrial Average responded by falling 777.68 points — its largest one-day loss in history and, this morning, every newspaper in America is covering the story as front page news. Lost in the coverage, […]

Read the full article →

Looking Back And Looking Ahead : September 29, 2008

September 29, 2008

Mortgage rates bounced around last week, ending up worse overall.  It was the second straight week in which rates deteriorated.  Sentiment was driven largely by the proposed Emergency Economic Stabilization Act of 2008 — a.k.a. The $700 Billion Bailout. The good news is that Congress drafted its bill Sunday evening and within the 110 pages, […]

Read the full article →

If My Mortgage Lender Fails, Are My Payments Still Due?

September 26, 2008

Thursday, federal regulators seized mortgage lender Washington Mutual.   The Seattle-based thrift became the third “big name” lender to close its doors since July, joining IndyMac and Lehman Brothers. In 2007, these 3 lenders represented about 10 percent of the mortgage market and their subsequent failures are confusing American homeowners. The most prevalent question: If my mortgage […]

Read the full article →

Falling Home Supplies Are Bad News For Home Buyers (But Good News For Home Sellers)

September 25, 2008

The August Existing Home Sales report was released Wednesday, showing a decline in the number of homes sold nationwide, and a reduction in the median sales price. Not surprisingly, the media singled these two statistics out, playing them as a big negative. They’re not. The decline in sales wasn’t good, but it wasn’t terrible, either — sales […]

Read the full article →

FHA Makes Homeownership More Affordable — But Not Until October 1, 2008

September 24, 2008

Earlier this year — and for the first time in its history — the FHA changed its funding fees and mortgage insurance structure. Effective October 1, 2008, it’s repealing those changes. Partly to keep FHA home loans affordable, and partly to comply with new laws, the FHA is rolling back its up-front fees and ongoing mortgage […]

Read the full article →

What Happens To Mortgage Rates When Crude Oil Adds $25 In One Day

September 23, 2008

Crude oil prices jumped $25 at one point Monday, ending the day up by 16 percent. This is an unwelcome development for home buyers because the same market forces that pushed up oil prices had a similar impact on mortgage rates. It all comes down to the U.S. dollar. Because both crude oil and mortgage-backed […]

Read the full article →

Looking Back And Looking Ahead : September 22, 2008

September 22, 2008

In a historic week for American Finance, mortgage rates rose considerably, reversing a 3-week trend through which rates had fallen. The U.S. Treasury is the biggest reason why most conforming mortgage rates increased by a half-percent. Hank Paulson’s government group helped to restore investor confidence that had steadily eroded from concern to fear since July 2007, before […]

Read the full article →

How To Lower Your Mortgage Rate Every Time The Market Dips

September 19, 2008

Getting a great, low mortgage rate is often a combination of luck and preparation. Consider what happened in conforming mortgages this week: Monday, mortgage rates plunged to their lowest levels of the year Tuesday, they bounced back in full Wednesday, they clicked higher by a eighth-percent Thursday, they clicked higher by another eighth-percent And so, […]

Read the full article →

What’s Good For Home Sellers Is Bad For Home Buyers : Builders Are Dialing It Back

September 18, 2008

In August, home builders broke ground on the fewest number of homes since January 1991. It was the 16th straight month in which Housing Starts declined. But, although the press labels these statistics indicative of a recession, home sellers nationwide quietly applaud them. With fewer new homes coming on the market, home sellers are finding that there’s […]

Read the full article →

The Strength In New Home Sales Shows That Banks And Builders Have Figured Out The Market

September 17, 2008

Despite turmoil on Wall Street, the housing sector continues to deliver good news. Last month, led by a 22 percent surge from the West Region, New Home Sales rose 2.7 percent over August. A “new home” is a newly-built residence, never before lived in. New homes are usually built and sold by real estate development […]

Read the full article →

The 2 Groups Of People That Benefited From Wall Street’s 6th Largest Point Loss Ever

September 16, 2008

Yesterday, the stock market suffered its largest one-day point loss since September 17, 2001, and its sixth-largest point loss in history. Not everyone got punished, however.  Two groups of people, in particular, welcomed yesterday’s losses: Home buyers out shopping for a mortgage Homeowners that snoozed through last week’s mortgage rate drop See, as the stock […]

Read the full article →

Making English Out Of Fed-Speak (September 2008 Edition)

September 16, 2008

For the third consecutive meeting, the Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent. Of interest to mortgage rate shoppers, the FOMC led its press release with comments about the health of the financial and labor markets, calling them “strained” and “weakened”, respectively.  The relative weakness in both of these […]

Read the full article →

Looking Back And Looking Ahead : September 15, 2008

September 15, 2008

In a week overdone with market-altering news, conforming mortgage rates shed a quarter-percent overall last week.  It was the third straight week in which rates improved. The biggest story, by far, was the government’s takeover of Fannie Mae and Freddie Mac. The two quasi-government agencies were nationalized into bona fide government agencies, converted mortgage-backed debt into risk-free, government […]

Read the full article →

Comparing Payback Periods On 15-Year, 20-Year and 30-Year Mortgages

September 12, 2008

On all principal + interest home loans, the first few years of payments include a lot more money going to interest than to principal. This is because mortgage repayment schedules are front-loaded with interest, meaning large-volume principal reduction won’t occur until late in the mortgage’s lifecycle. Comparing products at a 6% mortgage rate, did you know […]

Read the full article →

Conforming Loan Limits Set To Decrease In Certain High-Cost Areas

September 11, 2008

Conforming mortgages are limited by loan size, based on “typical” housing costs around the country.  Since 1980, as home prices have increased, so have conforming loan limits. The current conforming limit on a single-unit property is $417,000. Earlier this year, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increase in […]

Read the full article →

New Mortgage Rules Put Limits On Residential Real Estate Investors

September 10, 2008

In its last act as a semi-independent company, Fannie Mae altered mortgage guidelines for real estate investors last Friday. It was Fannie’s 22nd update this year. The first part of the guideline change limits the number of properties owned by any one person. Fannie Mae will now decline any mortgage application for a second home or […]

Read the full article →

Why The Government’s Takeover Of Fannie Mae and Freddie Mac Is Lowering Mortgage Rates

September 9, 2008

When comparing two investments with equal risk, a rational person will choose the investment with a higher rate of return. This behavior is called Risk Aversion and is a basic tenet of personal investing. An off-shoot of Risk Aversion is that a rational person will only invest in an instrument of greater risk if the […]

Read the full article →

Looking Back And Looking Ahead : September 8, 2008

September 8, 2008

Mortgage markets improved last week on Hurricane Gustav’s less-than-expected damages and a strengthening U.S. dollar. Even factoring in Friday’s 0.125 percent run-up on most mortgage products, rates improved overall. It’s the second straight week in which mortgage rates improved. But for all the news that we could dissect from last week, it should be the news […]

Read the full article →

← Previous Entries

Next Entries →