Today’s Mortgage Rates: Which home loan is best?

Texas Mortgage Info: How your mortgage person structures your loan is more important than the getting a low rate. To get the lowest 30 year or 15 year fixed rate consider avoiding PMI (mortgage insurance) even though these loans have higher rates; they have lower payments.

New Housing Program Target for Fraud?

Mortgage Banking Solutions CEO David Lykken on why a proposed foreclosure prevention program is a bad idea.

Writing a Loan Modification Hardship Letter

There is relief available for those millions of homeowners who are struggling to make their monthly mortgage payments due to the recent downturn in the economy. Don’t wait until the situation is at the point of no return, contact your mortgage lender now to explore your options in terms of a loan modification. The bank will require 3 key pieces of information from you in order to consider your application for relief.

Before you start writing the letter, make a rough draft outline of the things that you need to cover so that you can use it as a guideline as you write your letter. It’s important that you don’t leave out something critical and that you include all the facts that will be pertinent for the bank’s review.

First, explain to the bank what happened to put you in your current financial situation. Did you lose your job? Did you go through a divorce? Did you suffer an accident or injury? The bank will want to understand what led to your inability to meet your financial obligations.

Second, demonstrate to the bank chronologically that you were making your payments regularly and on time up until this unexpected extenuating circumstance occurred. They will need to understand that but for the unfortunate event(s) described above, you were a good, responsible customer.

Third, show the bank what you plan to do to dig yourself out of this hole that’s been created. Create a budget and share it with your lender. If you are going to cut out luxury services such as satellite television service or cell phones, tell them that. Perhaps you need to sell off a boat of other luxury item. The lender will want to know that you are willing to make sacrifices in order to rectify and improve your financial situation.

Include details in your letter, but keep it succinct and objective, stressing how homeownership is important to you and that you are willing to work with them to modify your loan in order for you to continue to honor your debt obligations.

Deal with your Endowment Mortgages

For security most of the people go for Endowment Mortgage to ensure repayment of their big loans on lifetime investments. Simply said, a loan taker endows his or her life policy to cover risk of any untoward happening before repayment of the loan; and continues to pay regular paybacks as agreed.  This is a beautiful way to keep all involved parties, you, the loaning source and your insurer, at ease. Under this arrangement everybody’s interest is protected without any extra liability. Another big benefit of this system is that you leave no burden on your loved ones or deprive them from enjoying in adverse situations. You have just to be particular about meeting up monthly repayments.

In fact this all leads to your additional savings when your mortgaged savings accumulated in your policy over a period is greater than your loan liability. Perceived potentiality of such mortgaging was so intense during inception in 1980s that both loaning agencies and insurance companies took all efforts to promote it. Result was manifold increase in loan market due to inherent strength of concept.  However, a significant number of endowment policies went bad in repayment in later periods since holders stopped their obligatory premiums mid way. This does indicate toward other alternative the loan seekers have switched to. Also big block has been failure of stock prices to continue increasing. This has hit insurers of getting appropriate returns on investment in shares for generating sufficient capital.

Uncertainty of stock values regarding appreciation due to poorly performing stocks market was getting to be considered as miss-selling or wrong investment made by the insurers. As ethical duty of investors, insurers need to maintain procedure of informing of risk status within certain stipulated period. To protect their interest, loaning agencies also got into system of working out shortfall on each endowment mortgage loans. As a rule, loan providers are required to send ‘re-projection letters’ informing if your policy is sufficiently good to pay loan amount.

Shortfalls are customarily informed through colour coded letters to make the message clear and strong. Red coloured re-projection letters indicate very high risk of short fall. An amber coloured letter projects significant risk. A green coloured letter of course declares likelihood of your policy to cover full loan amount. One thing should be borne in mind that these letters do not mean a situation to be final. Changes are possible under market turn backs with returns well over amount loaned. In case your policy, in all probability, is not expected to perform, you require covering up the shortfall.

In such cases, don’t get unduly agitated. Do not worry since this is a common situation faced by many. There are possible alternatives to overcome the situation. First possibility is your lender asking you to increase monthly repayment amount to cover shortfall. Alternatively you can change over the mortgage loan by repaying interest plus part of principal amount. Always you can go for alternative investment plans to get better returns and payback the loan faster.  Insurers allow changing mortgage policies to loan repayment plans is also workable alternative. And of course, no body has to utter a word if you are able to payback loan amount before stipulated loan period through larger monthly paybacks.

Endowment Mortgages
Mortgage Blog

Should I trust a mortgage calculator?

When you are looking around at the various mortgage lenders you will probably come across a number of websites with mortgage calculators on them.  You might even have tried these out a few times and either really liked or really hated the results and now you are asking yourself if you should actually pay much attention to what the mortgage calculator told you.  After all, it’s a computer program, right?  How much could it have to do with the actual decision making process?  That’s all done by humans, right?

Well, yes and no.  The truth is that if a mortgage calculator wasn’t accurate to a certain degree there would be no point in the mortgage lender having it on their site.  A mortgage calculator is not designed to give you information of pinpoint accuracy about what you can expect from any particular product and if that is what you are expecting then you will find mortgage calculators disappointing.  A mortgage calculator is there to prevent you from wasting both your time and that of the mortgage lender.

There are so many variables to consider when looking for a mortgage that it can be very hard to choose the right product, and what’s more, to feel like you have chosen the right product.  This is a time consuming process, both for you and the mortgage lender, but it stands to reason that there are a lot of mortgages on offer that will absolutely not suit you at all, for any one of the number of reasons.  You may not earn enough, you may earn too much, you may not be able to afford that level of interest or want a shorter or longer term than that particular mortgage requires.  This is where the mortgage calculator comes into play.

When you come to a particular mortgage lender’s website you find a mortgage calculator and it will only take a minute or so for you to enter your information into the mortgage calculator.  It will then take a lot less time than this for the mortgage calculator to give you an answer about the particular product that you were asking about, or to let you know what kind of products you are eligible for under that lender’s policies.  This saves you time because you don’t have to go and talk to someone and go through the entire list of their products, and it saves the lender time because they don’t have to sit with you and go through the entire list of products.  A mortgage calculator allows you to narrow down the possibilities that exist with any particular mortgage lender to a manageable list which you can then take to a human being and talk about in detail.  Of course, talking to the human being will probably narrow the list down again quite swiftly until you are only left with one or two possibilities, but thanks to the existence of the mortgage calculator the list will have started off a lot shorter than it otherwise might have been and the whole process will have been made much shorter and easier.

What is a Loan Modification in Layman’s Terms?

“What is loan modification?” is certainly the question buzzing among homeowners across the country. As loan modification seems to be the option that is most supported by Obama’s Home Affordable Program for those worried about losing their homes, people are wondering just what is loan modification and how does it work.

Before delving into what it is and how it works, it’s important to know what it is not: A catch-all home saver. There are people seeking modifications that think getting one wipes clean all of their responsibilities, and that is simply not true.

The only way to get a mortgage modified is to express that you are willing to work with your lender and then do it. Lenders know when you’re jerking their chain and do not approve people who they do not think will come through on their part of the deal. The lender lowers your interest rate, and you make your payments – that’s the deal.

Lenders don’t want you to go into foreclosure, but giving a modification does make them lose money. The only way they approve is if they are sure you are going to at least pay them the new, lower amount.

So what is loan modification and how does it work? Your interest rate is lowered to an amount that you are able to handle, based on your debt to income ratio, property value, and credit. Some lenders also offer to clear part of the principle in their loan modification packages. Contrary to popular belief, a loan modification is nothing like refinancing, which is taking out a new loan to get some cash back. A modification simply alters your mortgage to a lower, fixed interest rate.

Lenders decide whether to grant a homeowner a modified loan depending on a variety of factors, and none of them have the same criteria. Almost all lenders look at the value of the home, credit, debt to income ratio, date the initial mortgage was taken out, whether it is the place of residence, and mortgage payment history. They all look at the same factors, but they are looking for different things.

It’s no secret that a loan modification can be helpful, but getting one can be difficult due to the rigid requirements lenders have on them. However, a homeowner may choose to either try to get one on their own or hire a professional or attorney to help with the application and negotiations.

Whatever the method to get it, whatever the interest rate you’re hoping for, you no longer need to ask “What is loan modification?”

Home Loan Modification – Save Your Home

If you are one of the struggling homeowners facing possible foreclosure there may be renewed hope! Even if you applied for a modified loan with your lender and were turned down, you now may re-apply under the federal government home loan modification program. This may be your last chance to save your home!

President Obama’s Home Stimulus Plan includes $75 billion dollars that will be used to give lenders monetary incentives to modify your mortgage. Never before, have lenders had this kind of incentive to help American homeowners!

You may qualify for a home loan modification if you are behind on your mortgage, or if you foresee delinquency in your near future. The goal of the federal government is to help homeowners even before they fall behind. A proactive attempt to turn the housing crisis around!

The basic requirements to qualify are as follows:

? Mortgage must be on your primary residence

? Mortgage must have originated prior to January 2009

? Total loan balance must be below $729,000.

? You are currently or will soon be facing a financial hardship

? Total monthly mortgage payment (including taxes, insurance and homeowner dues) must be at least 31% of your total monthly gross income.

If you fit the above requirements you very well may be qualified for a home loan modification. It is important to contact your specific lender as they will have specific criteria in addition to what is listed above.

The benefits of a home loan modification are many! Here are just a few:

? Lower Monthly Mortgage Payments

? Lower Interest Rate (as low as 2%)

? Longer Terms (up to 40 years)

? Forbearance of Principle

Obviously the greatest benefit is saving your home from foreclosure!

The important thing to remember is that you must complete the application and all forms completely and accurately. It is amazing how many homeowners are denied home loan modifications simply because they did not follow the instructions! You don’t want to be one of those people, you need to read and understand the directions, review your documents and make certain they are completely accurate before submitting them! You cannot make any changes once your application has been submitted; this is your only chance! Do your homework, make sure you understand the forms and review – review – review!

How to Successfully Refinance

When you are looking at how to successfully refinance things may seem very complicated and confusing, but it really is a lot simpler when broken down. To make this work well you just need some planning with a calculator, pencil, and paper.

The first thing to understand is that refinancing means to finance again. You are getting a completely new loan, which you pay off your current one with, and then just start making payments on your new loan.

If your loan is anything other than a mortgage things are really simple for you! Find a lower interest rate, or terms that suit you better, and take them.

For a mortgage things are a little more complicated. So, how to successfully refinance?

When you got your original mortgage you probably remember all of the opening costs, the appraisal fees, the insurance, etc. All of these things will have to be done again. On top of this, you will have fees to close your current loan. Check your loan terms to see if you have a fee for closing out your loan early as this can be a real problem. You want to try your best to add up all of your initial opening costs. For a general estimate many say to expect to pay 3-6% of the new loan amount plus any prepayment penalties on your old one. So, why would you want to do this with all of these upfront costs? Let’s look at what you can save.

As a general rule of thumb it will probably be worth it if you can find a two percent lower interest rate. When you find this lower rate you want to break out your calculator. See how much this rate will save you each month and then figure out how long until you’ve started saving more money each month than you initially spent on opening costs. Will you still be living in the house at that time? Many people estimate this takes three years on average.

Now you know the simple secrets. If you break it down and add all the numbers together you’ll know how to successfully refinance.

Figure Out Your Debt To Income Ratio With A Mortgage Calculator

When it comes to mortgage calculators, a debt to income calculator can show you many things. This may put your financial status in order and show you what you are spending weekly, monthly and even yearly. You will then be able to take a good look at your finances and figure out where you can cut expenses and improve your financial situation. You will want to play with interest rates to see which one you may qualify for also.

This calculator may put everything into perspective, but you want to be sure that you input accurate information. If you are not truly honest about your current spending, you will not get results that truly represent your current financial state. You have to be honest with yourself in order to change your future.

A mortgage calculator gives you the freedom to enter the mortgage terms of your choice. You may want to have a rough idea of what you pre qualify for. You also need to decide whether you are going with an ARM or fixed rates, as both of these will be an option. Your Down Payment will significantly lower your monthly payment, so the more you put down the better. It helps your credibility with the bank and even lowers your debt ratio.

Before you use a calculator to determine mortgage, you may want to figure out what your expenses are. If you do this without putting some thought into it, you are likely to forget some expenses that can make a difference. If you have all of your expenses and income ready before you begin, you will get more accurate results.

You may also want to explore an amortization schedule more closely to see if this is something you need to help lower your payment. You may also want to find out more about loan modification, if you are having problems paying your mortgage, and need a smaller monthly payment.

It is very easy to use a Debt To Income Ratio calculator. You simply put in some numbers and you will be able to view results immediately. You may also have a choice of lenders that will show their rates and compete for your business. This can be a great way to do some comparison shopping all in one place.

A Mortgage Calculator, that also includes debt to income ratio, can provide you with many details about your spending habits. This may be a great time to revise the spending you are doing and you may be shocked by the outcome. If you change your spending, you may qualify for a much better mortgage rate with better interest rates also.

Florida FHA Mortgage

Florida FHA Mortgage – Check Out the F.H.A.’s Rules

The Federal Housing Administration used to be known as a place for Florida borrowers with tarnished credit histories. But now, it has become a destination for Florida borrowers whose credentials are respectable, but not stellar. qualify for the best interest rates on a new or refinanced mortgage, you need to have a top-notch credit score and a substantial down payment or home equity. But if you have less than perfect credit and less than 20 percent in home equity, an important threshold, you’ll have to pay a lot more. And that’s why many of those Florida borrowers are turning to the F.H.A.

The F.H.A. requires down payments of only 3.5 percent and has less stringent credit requirements than conventional mortgages backed by Fannie Mae and Freddie Mac, the two government-controlled mortgage finance companies. F.H.A. mortgages also have become one of the least expensive alternatives for new mortgages and refinancing, given the increase in fees tacked onto traditional loans.

“Just about any Florida buyer that is putting down less than 20 percent needs to consider F.H.A. financing,” said Thomas Martin , executive vice president of  FHAmortgagePrograms.com. “That doesn’t mean they need to take it, but they should consider it.”

The F.H.A., which was created during the Great Depression, does not make loans, but insures mortgages that meet its guidelines. Because the F.H.A. is the only viable option for a lot of Florida mortgage applicants , its loans now account for a much larger percentage of all mortgages. In 2005 and 2006, at the height of the housing boom, only 1.8 percent of all mortgages were F.H.A.-backed, according to Inside Mortgage Finance. Last year, that number ballooned to 17.1 percent. The F.H.A. now insures 4.8 million single-family mortgages worth about $550 billion.

Historically, F.H.A. loans carried a certain stigma. They were viewed as hard-to-obtain loans for low-income consumers with checkered credit histories and small down payments. They also tended to be more expensive.

But in the current market, the opposite is often true. Qualifying for a regular Florida mortgage has become more expensive, sometimes prohibitively so, given the many fees that are now layered onto conventional loans backed by Fannie Mae and Freddie Mac.

The fees are generally levied on Florida borrowers deemed to be more risky. The charges depend on your credit score and the amount of money you’re borrowing relative to the value of your home. But they tend to hit people with credit scores under 700 and less than 20 percent in home equity. Carrying a home equity loan may result in extra fees, as will taking cash out of your home when you refinance.

The extra charges aren’t the only hurdle consumers may face. Florida mortgage applicants with less than 20 percent in home equity must also purchase private mortgage insurance. The insurance has become much more difficult to qualify for and more expensive, especially in areas where home values have declined the most.

Florida F.H.A. borrowers won’t avoid mortgage insurance, but they will escape the extra fees, lenders and mortgage brokers said. And that’s why, for many families, the F.H.A. program has become the most economical option.

If you’re having trouble securing a Florida mortgage or refinancing an existing loan, here’s what you need to know about the F.H.A’s program:

ELIGIBILITY Florida mortgage applicants  need to prove that they have sufficient income to meet their monthly mortgage payments.

Generally speaking, your payments, including taxes and insurance, should not exceed 31 percent of gross income. When you include car payments, student loans and other obligations, your total debt shouldn’t exceed more than 43 percent of your total gross income. But these thresholds are only guidelines. So if you have a larger than required down payment, or a good amount of money in the bank, you may be able to bend these rules.

The F.H.A. doesn’t impose any income limits or credit score minimums, but people with credit scores below 500 must have at least 10 percent of equity in their home to be eligible. (The average F.H.A. borrower has a score of 640.)

But to keep default rates down, many Florida  F.H.A.-approved lenders have recently started to impose their own credit score minimums — above and beyond the F.H.A’s. guidelines — and are requiring more stringent income documentation. Clearly, they’re trying to protect themselves: if a particular lender’s default rates exceed neighboring lenders, they can be audited and even removed from the program.

All Florida FHA mortgage applicants must pay an upfront mortgage premium of 1.5 to 1.75 percent of the loan, which is usually tacked onto the loan amount. You must also pay an annual mortgage insurance premium of 0.50 of the loan amount (if you are borrowing 95 percent or less of your home’s value) or 0.55 percent (if your loan is more than that).

That premium is broken down into monthly payments. The monthly mortgage premium can be canceled once the mortgage amount falls to less than 78 percent of the home’s value, but it must be paid for at least five years — and it can only be eliminated by paying down your Florida mortgage (not through appreciation in the value of your home).

Excluding the insurance premium, closing costs are about the same amount as you would pay with a traditional FLorida mortgage. All homes must be appraised — which costs about $350, on average — unless you’re refinancing an existing Florida F.H.A. loan,

Florida FHA LOAN LIMITS In many areas, loan amounts appear to hew closely to the conforming loan limits set by Fannie Mae and Freddie Mac. But F.H.A. limits are much lower in less expensive areas: in the lowest-cost areas, the F.H.A. will insure loans up to $271,050, though that number can rise to $729,750 in the costliest parts of, say, New York or California.

TYPES OF LOANS The F.H.A. never trafficked in the exotic subprime loans that started the financial crisis. The vast majority of borrowers get a 30-year fixed-rate mortgage, though it also offers 15-year fixed rates and adjustable-rate mortgages.

ADDED BENEFITS All Florida F.H.A. loans can be assumed by a new Florida FHA mortgage — as long as they qualify — which allows more flexibility if you plan on selling the home later. If mortgage rates were to rise, the new borrower is entitled to the existing interest rate.

Meanwhile, your down payment can be a gift from a family member. And co-borrowers don’t necessarily need to occupy the Florida home. Moreover, the F.H.A. is more reluctant to foreclose on its Florida FHA borrowers. It has said that borrowers in default get to keep their homes about 65 percent of the time.

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