mortgage

Looking Back And Looking Ahead : June 9, 2008

June 9, 2008

There was no rest for the mortgage-rate weary last week. As mortgage bonds sold off early in the week, sharp rate hikes followed. A steady stream of better-than-expected economic reports had re-ignited inflation fears, drawing money from the bond market. On Friday, however, the money flow reversed on a triple threat to the U.S. economy: The […]

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Why It’s Good News For Home Buyers When Unemployment Rates Surge

June 6, 2008

On the first Friday of every month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called the “jobs report”, today’s 2-page analysis of May 2008 shows that the economy shed jobs and that unemployment surged. This is terrific news for home affordability. That may sound counter-intuitive, so let’s dig deeper into the […]

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What Happens When Bernanke Says “Inflation” 55 Times In 5 Pages Of Text

June 5, 2008

Mortgage rates are a big deal when you’re buying a home. With even the slighest uptick in rates, 30 years of mortgage payments can get substantially more expensive and one of the most substantial threats to mortgage rates is an economic event called inflation. Inflation’s influence on mortgage rates is so large that markets can get jarred […]

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The Proper Way To Give And Receive Gifts For Downpayments

June 4, 2008

When a home buyer is gifted cash for a downpayment, there is a right way and a wrong way to receive the funds. The right way includes: Completing an acceptable gift letter Documenting the withdrawal of funds with receipts Documenting the deposit of funds with receipts The wrong way is to ignore the rules that mortgage lenders […]

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Did You Know : The Lifespan Of A Mortgage Approval

June 3, 2008

Mortgage approvals don’t last forever. A conforming mortgage approval from Fannie Mae or Freddie Mac has a shelf-life of 120 days. After 120 days, the approval expires and a mortgage applicant must re-submit his application for consideration. In addition, a mortgage approval can “expire” within the 120-day period for other reasons: Change of job status or […]

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Looking Back And Looking Ahead : June 2, 2008

June 2, 2008

Mortgage rates rocketed higher last week, stunning active home buyers and mortgage rate shoppers. Some conforming mortgage rates rose by as much as three-quarters of a percent before Friday’s closing. Even in a year in which mortgage rates have been extremely volatile, last week’s spike was a large one. The main driver of last week’s […]

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The Impact Of Falling Oil Prices On Mortgage Rates

May 30, 2008

Falling oil prices is one reason why mortgage rates are dropping for the first time in 6 days. Oil is off $9 per barrel from last week, a shift that correlates to $0.23 per gallon of unleaded gas, roughly. This drop is good news for both home buyers and “rate shoppers” — high gas prices […]

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Why It Will Be Easier To Get A Mortgage Approval Today Than Monday

May 29, 2008

Mortgage financier Fannie Mae is toughening its mortgage application decision-making process effective Monday, June 2, 2008. The new guidelines will force many Americans to face higher mortgage rates, higher loan fees, or to be shut out from “prime” mortgage rates altogether. The new “mortgage rules” include the following changes: Higher income levels required for basic approvals […]

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Looking Back And Looking Ahead : May 27, 2008

May 27, 2008

The market optimism that had pushed mortgage rates lower since late-March reversed last week on ever-rising oil prices and a bleak outlook from the Federal Reserve. When gas prices reached $3.93 Friday, it re-ignited inflation concerns and inflation, you’ll remember, is the enemy of mortgage rates. As expected, mortgage rates spiked into Friday’s market close. […]

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How Spiking Oil Prices Have Mortgage Rates In Tow

May 23, 2008

High oil prices are derailing the mortgage market this week, taking an almost-vertical path higher. Since mid-February, prices are up by 50 percent. Rising oil prices can be a threat the U.S. economy because with every extra dollar that Americans pay to energy companies, there is less money available for every other company that makes […]

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Simple Real Estate Definitions : Loan-to-Value

May 21, 2008

Loan-to-value is a math formula that represents the relationship between how much a home is “worth” and how much money is borrowed against it. Loan-to-value is often abbreviated as “LTV” and is one of the many factors that lenders consider when underwriting a mortgage application. The math formula is straightforward: In the LTV equation, Loan […]

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Did You Ask: “Has There Been A Mortgage Rate Reprice In The Last Hour?”

May 20, 2008

Yesterday, several mortgage lenders issued three separate “rate sheets” in response to the changing mortgage market. It was the fourth time in the last 6 trading days that mortgage lenders issued multiple rate sheets in a day, and continued the trend that started in mid-January. The yo-yo nature of mortgage rates underscores the importance of making […]

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Looking Back And Looking Ahead : May 19, 2008

May 19, 2008

Optimism ruled the markets last week — optimism about employment, optimism about housing, and optimism about inflation. Mortgage rates edged lower overall. Despite the positive sentiment from Wall Street, consumer confidence in the economy reached a 28-year low. This is a normal divergence because investors live in the “future” of markets while Americans live in the […]

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What Mortgage Fraud Looks Like

May 15, 2008

According to the FBI 2007 Mortgage Fraud Report, more than 46,000 cases of suspected mortgage fraud were reported last year.  This led to bank losses exceeding $813 million. If you’re looking for reasons why mortgage underwriting is measurably more difficult in 2008 — add “mortgage fraud” to the list.  Lenders now perform extra scrutiny on each […]

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The “Inevitable” Recession That Never Was

May 15, 2008

Retail Sales measures total receipts at stores that sell tangible “things” and — aside from weak demand for automobiles and automobile parts — Retail Sales displayed surprising strength in April. So much strength, in fact, that many experts are changing their predictions about the U.S. economy’s fate. Several months ago, most pundits declared that a economic […]

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How The 84,000 Parts Of Inflation Impact Mortgage Rates

May 12, 2008

When the everyday “Cost of Living” increases, our dollars don’t go as far as they used to.  Economists call this inflation. One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a “basket”.  If the overall price is higher, then the economy is experiencing inflation. If a […]

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Looking Back And Looking Ahead : May 12, 2008

May 12, 2008

With little economic news to influence trading and despite a late-Friday afternoon spike, mortgage rates edged lower last week. Two weeks ago, when it lowered the Fed Funds Rate by a quarter-percent, the Federal Reserve noted two things: The economy was stabilizing High energy costs threatened inflation In the days that followed, though, the U.S. dollar […]

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The Counties In Which Home Prices Are Rising

May 8, 2008

When real estate news is reported on television or in the papers, it’s usually told as a national story.  Unfortunately, stories like these aren’t helpful for everyday Americans because real estate is not a national market. Real estate is local. The graph above was used by Fed Chairman Ben Bernanke in a speech to Columbia […]

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You’re Not Immune — No Matter What Your Credit Profile Looks Like

May 7, 2008

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions. One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening. The chart at right is from the April 2008 survey and it illustrates what we already know: It’s getting tougher and tougher to […]

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Why Free Credit Reports Are Worth What They Cost

May 6, 2008

The ubiquity of “free” credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans. Because credit ratings have more importance to everyday life than in years past, this is a welcome development.  For example: Lenders use credit ratings to determine borrowing rates Insurers use credit ratings to determine […]

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