Zillow today launched a tool to help borrowers comparison shop for loans. At the Mortgage Marketplace, if you enter your zipcode, the amount you want to borrow and your credit score, the site promises to email you lenders' quotes. The site is free for borrowers; lenders pay $25 to sign up. So far, 1,214 users have requested loan information (including us), and lenders have responded with 640 quotes. We're still waiting for ours.
Showing posts with label mortgage rates. Show all posts
Showing posts with label mortgage rates. Show all posts
Thursday, April 3, 2008
A New Place to Shop For Mortgages
Thursday, March 27, 2008
LoanShark Confesses: I Can't Pull A Credit Score From A Hat
Ever since most major lenders tightened credit standards, my job got harder. Borrowers used to need to have a 680 credit score to qualify them for the best rates. Now it's 700. Anything lower and you can't get a non-conforming loan. Clients ask if one 30-day late payment will be detrimental enough to disqualify them from getting the best rate. Or does it take one 60-day late? Or three 30-day lates along with a high debt-to-credit ratio?
I wish I knew. A FICO score, which can range from the 300s to 900 (although I've never seen one that high) is based on a complicated proprietary formula nobody has cracked. Believe me, I've tried. I've seen people with a lot of lates and they have a score of 720. I've seen somebody who had one late and it brought him down to 600.
I tell clients to get a copy of their credit reports ASAP (get all three because we get all three, every time, and we will use the middle score to qualify you). I tell people if they see anything at all negative on the report, be proactive. Contact the creditor to ask to have the negative information removed (in my experience, it's a lot easier to get a late car payment removed than a late mortgage payment). It's better to write a letter than to phone, and attach copies of your bank statements showing the payment was made.
It's worth the trouble. On a $300,000 loan, here's what you could save:
| FICO® score | APR | Monthly payment |
|---|---|---|
| 760-850 | 5.600% | $1,722 |
| 700-759 | 5.822% | $1,764 |
| 660-699 | 6.106% | $1,819 |
| 620-659 | 6.916% | $1,979 |
| 580-619 | 9.220% | $2,461 |
| 500-579 | 10.242% | $2,686 |
Saturday, March 22, 2008
Rates that sound too good to be true probably are
Some people are hearing about rates on 5/1 and 7/1 ARMS that are much lower than those offered by the main players in the mortgage market.
The main players—Chase, Wells Fargo, Citibank, and BofA—are currently offering rates on these loans in the range of 6% to 7% depending on whether or not you pay any points. Some secondary mortgage players (Union Bank and IngDirect) are offering rates as low as 5.5%. So how can they make money offering rates that are essentially out of the market?
Easy: They make their money by requiring up-front points and having prepayment penalties. They're betting the rates will drop to even lower interest levels than their current offer. The catch? Their borrowers will not be able to refinance to take advantage of lower rates because of stiff prepayment penalties.
Thursday, March 20, 2008
From The Mouths of Realtors
This just in from south Florida, where John Tuccillo, former chief economist for the National Association of Realtors, predicted:
...by summer or fall of 2009, the economy will be better, the housing market will be good and mortgages will be going for about 2 percent more than now.
The hat trick that will pull South Florida from the dumper, he said, is “population growth, falling home prices and a better economy.”
He urged the crowd to watch for three things that will indicate improvements in the real estate market: a drop in the number of home listings, a drop in the amount of time homes remain on the market and an increase in the ratio between the sale price of a house and its listing price.
Until that happens, however, “if you don’t have to sell your house, don’t,” Tuccillo said. Of course, not everybody trusts his advice.
[Photo credit: Nocirc] Read More......
Wednesday, March 19, 2008
Mortgage Rates: Heading Down?
Good news: The federal government took a big step today that should encourage mortgage rates to stabilize—and perhaps start to drop. The move, which gives Fannie Mae and Freddie Mac more leeway to buy loans, could shore up the secondary mortgage market by reassuring lenders that they'll find investors for the mortgage money they lend you and me.
Tuesday, March 18, 2008
What Today's Fed Rate Cut Means
For fixed-rate mortgages: Nothing.
For your HELOC: A nice drop in your minimum payment. See here.
Seventy-five basis points isn't what Wall Street wanted so don't expect your 401K accounts to stop bleeding anytime soon either.
Smart Borrowers Have ARMs
Stop skulking around, feeling sheepish about your adjustable rate mortgage. So what if your next door neighbor keeps reminding you his fixed rate is never going up? He's already paid thousands of dollars in interest that you didn't. And when your rate adjusts, it probably still will be lower than if you had gone for a conventional, fixed-rate loan. Here's how Money magazine explains the situation:
[Photo credit: Ironage] Read More......If the Fed cuts rates by a half point Tuesday, the cumulative effect of the Fed cuts could entirely offset what would have been a significant rate reset for many homeowners.
For instance, a borrower with an adjustable rate of 4.5% could have faced a rate reset up to 7.5% before the Fed started cutting rates in September. Before the rate cuts, that homeowner would have seen an increase of $370 in monthly payments on a $200,000 loan.
But after Tuesday, that rate could reset only a little higher. And for some, the rate might not go up at all - and may actually drop - according to Greg McBride of Bankrate.com.
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