Over the past two weeks, rates have slowly increased to their current state. Whereas last month you could get into an FHA insured mortgage for a low 4.5% interest rate, the current rate is about 5.25%. That 0.75% increase can mean a lot for someone looking to purchase a home and even more for someone who wants to refinance their current mortgage.
With a home loan of $200,000, a borrower would be paying $1,065 per month at 5.25% instead of the low $975 per month at the old rate. That’s almost $100 per month, for 30 years! This rate increase has thrown some homeowners and homebuyers for a loop, but it doesn’t have to. There is a simple solution in what is commonly called a ‘hybrid loan.’
In a hybrid loan, the borrower takes out a mortgage at a low fixed rate for three to five years. After that period, the loan becomes an adjustable rate loan. However, unlike other adjustable rate loans, this loan can never adjust more than one percent each year.
Now this loan doesn’t sound that great at first glance, but there are a couple of perks that will end up saving you, the homeowner, a lot of money. First, when you get the hybrid loan insured by the FHA, because it will eventually adjust, rates are significantly lower than flat fixed rates. That means you could enter into a fixed rate mortgage for three to five years at up to a two percent lower interest rate!
In addition to a lower fixed rate which can save you hundreds of dollars each month, there is another benefit of this loan. You have a low fixed rate with an FHA insured home loan for at least three years. That means, once the interest rate is eligible to adjust, you are eligible to streamline your FHA loan. Streamlining your FHA loan is fast, easy, and affordable. It will lock your interest rate in at the low fixed rate of the time, preventing your loan from adjusting afterwards.
If you’ve been thinking about refinancing or purchasing a home and are worried about interest rates rising, this hybrid loan is the answer to your problems. You can get a fixed low rate for the next three to five years, saving you hundreds of dollars each month, and then streamline your loan into a fixed rate when it starts to adjust, locking it in and ensuring that you will always be saving money.
We here at CREFCO strive to make sure our customers understand their options and make the best choice available to them when getting a mortgage. If you want to save money, whether you want to refinance your home or are looking to purchase a new home, Contact us today.
Consumer Real Estate Finance Company
CREFCO
1-866-854-4242
http://www.crefco.com
Tuesday, June 30, 2009
Wednesday, June 3, 2009
Low Mortgage Rates... Fleeting?
Last week’s events in the financial markets carry a simple message to people looking for a 30-year mortgage, whether they’re purchasing or refinancing: Get your low rate while you can.
Over the course of last week, rates on 30-year loans jumped drastically, ending around 5.25%. That rate is still low compared to historic standards, but it is a significant jump when compared to the 4.75% and below of previous weeks.
Many are wondering what caused this surge in interest rates. Well rising government debt and growing hopes of economic recovery are driving up long-term interest rates on government debts. The 10-Year Treasury bond yield surged from 2% earlier this year to over 3.5% last week, which caused other long-term rates to increase.
What does all that mean? Well for those of you looking to refinance your home, buy a new home, or even sell your home, it may mean bad news if the mortgage rates continue to rise.
For those of you looking to refinance, you may be out of luck already if you have not locked in your rate. Last year, new mortgage rules were introduced to avoid another subprime mortgage scandal. The days of being able to lock in a rate while you refinanced or looked for a home are over. Now borrowers’ rates are not locked in until after the home’s appraisal comes back.
And for those of you looking to buy a new home, these increased rates can translate to a significant increase in cost. On a typical $200,000 home with an 80% loan, the increase from 4.75% to 5.25% can mean $50 per month.
Rates are still reasonable now, but who knows where they could be in the coming future. The message is clear: Get your low rate while you can.
Let CREFCO help you move through the process while the rates are still low.
Apply Online Today
Over the course of last week, rates on 30-year loans jumped drastically, ending around 5.25%. That rate is still low compared to historic standards, but it is a significant jump when compared to the 4.75% and below of previous weeks.
Many are wondering what caused this surge in interest rates. Well rising government debt and growing hopes of economic recovery are driving up long-term interest rates on government debts. The 10-Year Treasury bond yield surged from 2% earlier this year to over 3.5% last week, which caused other long-term rates to increase.
What does all that mean? Well for those of you looking to refinance your home, buy a new home, or even sell your home, it may mean bad news if the mortgage rates continue to rise.
For those of you looking to refinance, you may be out of luck already if you have not locked in your rate. Last year, new mortgage rules were introduced to avoid another subprime mortgage scandal. The days of being able to lock in a rate while you refinanced or looked for a home are over. Now borrowers’ rates are not locked in until after the home’s appraisal comes back.
And for those of you looking to buy a new home, these increased rates can translate to a significant increase in cost. On a typical $200,000 home with an 80% loan, the increase from 4.75% to 5.25% can mean $50 per month.
Rates are still reasonable now, but who knows where they could be in the coming future. The message is clear: Get your low rate while you can.
Let CREFCO help you move through the process while the rates are still low.
Apply Online Today
Thursday, May 28, 2009
Jumbo Mortgages!
Jumbo mortgage rates may be on the decline, which is a good thing for homeowners in luxury home areas. These mortgages are referred to as jumbo because the loan amount is higher than the limit for loans of government-backed Freddie Mac and Fannie Mae.
For a while, jumbo mortgage rates were becoming costlier and more difficult to acquire due to the lack of available credit from lenders. However, Bank of America, which took over Countrywide Mortgage, has begun promoting its jumbo mortgage loan program with lower rates than other large banks. Many experts believe the other banks will soon follow this example.
Nowadays, banks no longer have institutional lenders for these loans, so they must keep the loans themselves. With so many people being more conservative these days, money is flowing into the banks, and they are beginning to have more funds available to borrowers.
If you’re looking for a jumbo loan, don’t expect an easy application, though. There are many lenders out there, and these loans will differ from lender to lender. Make sure you do plenty of research about your loans and what you qualify for.
Generally speaking, your best option is a conventional, or conforming, loan. These loans usually require a 720 credit score, full documentation, and at least 20% down. If you are looking into a jumbo mortgage and need some help, contact CREFCO. We’re always glad to help you with your loan situations.
http://www.crefco.com
(866) 854-4242
For a while, jumbo mortgage rates were becoming costlier and more difficult to acquire due to the lack of available credit from lenders. However, Bank of America, which took over Countrywide Mortgage, has begun promoting its jumbo mortgage loan program with lower rates than other large banks. Many experts believe the other banks will soon follow this example.
Nowadays, banks no longer have institutional lenders for these loans, so they must keep the loans themselves. With so many people being more conservative these days, money is flowing into the banks, and they are beginning to have more funds available to borrowers.
If you’re looking for a jumbo loan, don’t expect an easy application, though. There are many lenders out there, and these loans will differ from lender to lender. Make sure you do plenty of research about your loans and what you qualify for.
Generally speaking, your best option is a conventional, or conforming, loan. These loans usually require a 720 credit score, full documentation, and at least 20% down. If you are looking into a jumbo mortgage and need some help, contact CREFCO. We’re always glad to help you with your loan situations.
http://www.crefco.com
(866) 854-4242
Wednesday, May 27, 2009
What’s the Right Type of Mortgage for Me?
With the current real estate market as it is, many people have begun to educate themselves about mortgage loans and the options available. Whether you are looking to refinance your current mortgage or looking to purchase a new home, researching mortgage options is the best thing you can do in this current market.
As you research, you will quickly learn about many different loans and the options they give to the borrower. As these options build up, you will begin to see which options are most beneficial to you and the right choice as to which mortgage loan to get will become obvious. Make sure to keep in mind your financial situation, what you can afford, and your future plans. These will help you narrow down the options and the benefits they have for you.
Mortgages come in many different types nowadays, but all can generally be categorized into Fixed Rate, Adjustable Rate, or Hybrid mortgages. Fixed rate mortgages have the interest rate fixed in stone for the life of the loan, so you will not have to worry about the rate increasing and your mortgage payments increasing. Currently, in this market, fixed rate loans are the most popular and common. Adjustable rate mortgages allow for the rate to fluctuate, up or down, to match the market. These can be useful if the interest rate drops, but are often painful when rates hike up. Nowadays, with rates as low as they are, many people believe the floor to be nearby, indicating that the only direction for a rate to adjust is up. Thus, adjustable rate mortgages have fallen to the wayside more or less. Hybrid loans are a combination mortgage where the rate is fixed for the first few years and then becomes adjustable.
Generally speaking, if you are planning on staying in your home for the next five years or more, a fixed rate will be more beneficial due to predictability and stability over the life of the loan. Interest rates are amazingly low right now, so even with less than perfect credit, it is possible to get a good fixed rate on your mortgage.
While looking into the different loan options, you should look into government insured loan programs. The Federal Housing Administration has a loan insurance program to help boost the real estate market. Low down payments and competitive fixed rates make this an option to look into. If you are a veteran, the Veterans Administration has a VA home loan option that may be right for you. Even the U.S. Department of Agriculture has a loan insurance program. The USDA rural development loan helps people get into homes in areas of under 10,000 people for no money down.
We’ve covered a fair amount, so remember these basics and you’ll do fine:
• Research, research, research! Focus on the pros and cons of each type of mortgage loan
• Compare your research to your personal situation to find the best plan for you.
• Make sure to research government insured loans, such as the FHA loan and USDA loan.
Make your final decision after you’ve evaluated your options and you’ll do fine. If you have any questions during your research, you can contact CREFCO toll free. We’re glad to help. You can also visit us online. We even have forums set up to help you during your research.
(866) 854-4242
http://www.crefco.com
http://www.crefco.com/forums
As you research, you will quickly learn about many different loans and the options they give to the borrower. As these options build up, you will begin to see which options are most beneficial to you and the right choice as to which mortgage loan to get will become obvious. Make sure to keep in mind your financial situation, what you can afford, and your future plans. These will help you narrow down the options and the benefits they have for you.
Mortgages come in many different types nowadays, but all can generally be categorized into Fixed Rate, Adjustable Rate, or Hybrid mortgages. Fixed rate mortgages have the interest rate fixed in stone for the life of the loan, so you will not have to worry about the rate increasing and your mortgage payments increasing. Currently, in this market, fixed rate loans are the most popular and common. Adjustable rate mortgages allow for the rate to fluctuate, up or down, to match the market. These can be useful if the interest rate drops, but are often painful when rates hike up. Nowadays, with rates as low as they are, many people believe the floor to be nearby, indicating that the only direction for a rate to adjust is up. Thus, adjustable rate mortgages have fallen to the wayside more or less. Hybrid loans are a combination mortgage where the rate is fixed for the first few years and then becomes adjustable.
Generally speaking, if you are planning on staying in your home for the next five years or more, a fixed rate will be more beneficial due to predictability and stability over the life of the loan. Interest rates are amazingly low right now, so even with less than perfect credit, it is possible to get a good fixed rate on your mortgage.
While looking into the different loan options, you should look into government insured loan programs. The Federal Housing Administration has a loan insurance program to help boost the real estate market. Low down payments and competitive fixed rates make this an option to look into. If you are a veteran, the Veterans Administration has a VA home loan option that may be right for you. Even the U.S. Department of Agriculture has a loan insurance program. The USDA rural development loan helps people get into homes in areas of under 10,000 people for no money down.
We’ve covered a fair amount, so remember these basics and you’ll do fine:
• Research, research, research! Focus on the pros and cons of each type of mortgage loan
• Compare your research to your personal situation to find the best plan for you.
• Make sure to research government insured loans, such as the FHA loan and USDA loan.
Make your final decision after you’ve evaluated your options and you’ll do fine. If you have any questions during your research, you can contact CREFCO toll free. We’re glad to help. You can also visit us online. We even have forums set up to help you during your research.
(866) 854-4242
http://www.crefco.com
http://www.crefco.com/forums
Wednesday, May 20, 2009
Reverse Mortgages
A reverse mortgage is a unique type of home loan that allows a home owner to convert a portion of the equity in their home into cash. This loan may be ideal for a number of reasons. Whether you are looking for money to finance a new home improvement project, hoping to pay off a current mortgage or other bill, or just looking to supplement retirement income, a reverse mortgage allows older homeowners to convert part of the equity in their home into cash without having to sell their homes.
In a reverse mortgage, the equity that has built up in a home over years of home mortgage payments can be paid out to the homeowner. However, unlike traditional home equity loans, there is no required repayment until the borrower is not using the home as a principal residence any longer.
The Federal Housing Administration (FHA) requires a homeowner to be 62 years or older to qualify for a reverse mortgage. In addition, the homeowner must either own the home outright or have a low mortgage balance that can be paid off from the proceeds of the loan. These conditions are, of course, in addition to the requirement that the home be used as a primary residence.
While this loan sounds amazing, there are still some fears and concerns in regards to this reverse loan. Many borrowers worry that the lender will be able to take the home away if they outlive the loan. That is not the case. As long as you or one of the borrowers continues to live in the home and keep the taxes and insurance current, you do not need to repay the loan. Even afterwards, you can never owe more than the value of the home after you or your heirs sell the home.
If a reverse mortgage sounds like it could be the right option for you, give us a call toll free (866) 854-4242. You can also visit our reverse mortgage page.
In a reverse mortgage, the equity that has built up in a home over years of home mortgage payments can be paid out to the homeowner. However, unlike traditional home equity loans, there is no required repayment until the borrower is not using the home as a principal residence any longer.
The Federal Housing Administration (FHA) requires a homeowner to be 62 years or older to qualify for a reverse mortgage. In addition, the homeowner must either own the home outright or have a low mortgage balance that can be paid off from the proceeds of the loan. These conditions are, of course, in addition to the requirement that the home be used as a primary residence.
While this loan sounds amazing, there are still some fears and concerns in regards to this reverse loan. Many borrowers worry that the lender will be able to take the home away if they outlive the loan. That is not the case. As long as you or one of the borrowers continues to live in the home and keep the taxes and insurance current, you do not need to repay the loan. Even afterwards, you can never owe more than the value of the home after you or your heirs sell the home.
If a reverse mortgage sounds like it could be the right option for you, give us a call toll free (866) 854-4242. You can also visit our reverse mortgage page.
Monday, May 18, 2009
Is Your Mortgage Worth Refinancing?
The answer to this question may be a little misleading at first. There are a lot of factors to consider when deciding if it is worth it for you to refinance your mortgage. Many people cite the “One percentage point” test to use as a rule of thumb, but that’s not always the case. It really depends on the amount left on your loan and the number of years left on your loan.
Assuming your loan has 13 years or less left, and you don’t owe that much (under $100,000 or so), it would probably not pay off to refinance. However, if your loan is larger (over $150,000), it may pay off in the long run to refinance. This type of loan is where the one percentage point test comes from. If you are going to cut one point or more off of your interest rate, than it may be profitable to refinance.
On the other hand, if you have a longer loan left, say 22 years or more, it’s probably not a good idea to refinance back up to 30 years. Fifteen-year loans generally run one-third of a point lower than 30 year loans. Even on a smaller loan, you may be able to save tens of thousands of dollars.
Also, if you’re cutting your interest rate, even just a little, a no-closing-cost loan can be very worthwhile, as long as there is no pre-payment penalty. Many lenders offer loans with no closing costs for a bump on the interest rate, but as long as that new rate is at least a quarter-point lower than your current rate, it’s probably a good idea.
Closing costs usually run from two to four thousand dollars, so if you have to pay them and are planning on moving within a few years, you will probably want to avoid refinancing. You should calculate how long it will take to recuperate any closing costs you have to pay. An online calculator can help you do that.
When you’re done crunching numbers and ready to refinance, call us toll free at (866) 854-4242, and we’ll help you on your way.
Assuming your loan has 13 years or less left, and you don’t owe that much (under $100,000 or so), it would probably not pay off to refinance. However, if your loan is larger (over $150,000), it may pay off in the long run to refinance. This type of loan is where the one percentage point test comes from. If you are going to cut one point or more off of your interest rate, than it may be profitable to refinance.
On the other hand, if you have a longer loan left, say 22 years or more, it’s probably not a good idea to refinance back up to 30 years. Fifteen-year loans generally run one-third of a point lower than 30 year loans. Even on a smaller loan, you may be able to save tens of thousands of dollars.
Also, if you’re cutting your interest rate, even just a little, a no-closing-cost loan can be very worthwhile, as long as there is no pre-payment penalty. Many lenders offer loans with no closing costs for a bump on the interest rate, but as long as that new rate is at least a quarter-point lower than your current rate, it’s probably a good idea.
Closing costs usually run from two to four thousand dollars, so if you have to pay them and are planning on moving within a few years, you will probably want to avoid refinancing. You should calculate how long it will take to recuperate any closing costs you have to pay. An online calculator can help you do that.
When you’re done crunching numbers and ready to refinance, call us toll free at (866) 854-4242, and we’ll help you on your way.
Friday, May 15, 2009
Homeownership Incentives from HUD
The U.S. Department of Housing and Urban Development (HUD) offers incentives on the purchase of HUD foreclosed homes in an effort to make homeownership more affordable. Under this program, people can get an FHA loan to purchase a HUD home for only $100 down.
The obvious benefit of this program is that someone can get into a government insured FHA loan without the required 3.5% down payment. However, many people don’t want to participate in this program because they think these homes are run-down $12,000 homes that are not even livable.
The truth is, some of them used to be, but no longer. Back when the housing market was booming, only run-down homes could be found in this program, because those were the homes that were being foreclosed on. However, in the current market, with foreclosures above what they were previously, there are plenty of homes available through this program. In addition, HUD has a minimum home value for this program, so that is one less worry for home buyers.
So if you’re looking to purchase a home, this program might be for you. There are plenty of homes in the $100,000 - $200,000 range that you could get into for only $100. That’s how HUD is working to make homes affordable, and CREFCO is doing everything it can to help you get into programs just like this.
Get started today online or call us toll free. (866) 854-4242.
The obvious benefit of this program is that someone can get into a government insured FHA loan without the required 3.5% down payment. However, many people don’t want to participate in this program because they think these homes are run-down $12,000 homes that are not even livable.
The truth is, some of them used to be, but no longer. Back when the housing market was booming, only run-down homes could be found in this program, because those were the homes that were being foreclosed on. However, in the current market, with foreclosures above what they were previously, there are plenty of homes available through this program. In addition, HUD has a minimum home value for this program, so that is one less worry for home buyers.
So if you’re looking to purchase a home, this program might be for you. There are plenty of homes in the $100,000 - $200,000 range that you could get into for only $100. That’s how HUD is working to make homes affordable, and CREFCO is doing everything it can to help you get into programs just like this.
Get started today online or call us toll free. (866) 854-4242.
Thursday, May 14, 2009
Tax Free Debt Forgiveness Possible
Do you owe more on your home than it’s worth right now? Have you thought about refinancing to get the principle on your mortgage reduced? If you’re like so many other people in this situation, you may have avoided getting a short refinance because you don’t want to have to claim the reduction as taxable income.
It happens to a lot of people. They bought their home a couple years ago, and now with the current real estate market being what it is, their home is just not worth as much as it was a few years ago. So what options do you have when your home has gone down in value and you still owe so much on it? Well a short refinance is the mortgage industry’s standard solution. You refinance your loan to more affordable payments, and also get your lender to forgive the portion of the debt above what the home is currently valued at.
Debt forgiveness, however, usually has tax implications, and you may be worried, like so many people, that you will have to claim whatever is forgiven as taxable income. Getting something like $75,000 of your mortgage forgiven is nice, but it hurts to have to pay taxes on it. Well the good news is that the Mortgage Forgiveness Debt Relief Act of 2007 is in effect.
The Mortgage Forgiveness Debt Relief Act of 2007 applies to debt forgiven in calendar years 2007 to 2012. What it does is allow taxpayers to exclude income from the discharge of debt on their primary residence. As long as your debt was discharged on your primary residence, does not exceed the limit ($2 million), occurred between 2007 and 2012, and was not discharged for services rendered, you may qualify for this debt relief.
So if you’re in the same boat as so many others and have been holding off on refinancing to avoid tax implications, you don’t have to worry anymore. Relax, and give CREFCO a call. We want to help you with your mortgage situation. (866) 854-4242.
You can also visit us online at our website.
It happens to a lot of people. They bought their home a couple years ago, and now with the current real estate market being what it is, their home is just not worth as much as it was a few years ago. So what options do you have when your home has gone down in value and you still owe so much on it? Well a short refinance is the mortgage industry’s standard solution. You refinance your loan to more affordable payments, and also get your lender to forgive the portion of the debt above what the home is currently valued at.
Debt forgiveness, however, usually has tax implications, and you may be worried, like so many people, that you will have to claim whatever is forgiven as taxable income. Getting something like $75,000 of your mortgage forgiven is nice, but it hurts to have to pay taxes on it. Well the good news is that the Mortgage Forgiveness Debt Relief Act of 2007 is in effect.
The Mortgage Forgiveness Debt Relief Act of 2007 applies to debt forgiven in calendar years 2007 to 2012. What it does is allow taxpayers to exclude income from the discharge of debt on their primary residence. As long as your debt was discharged on your primary residence, does not exceed the limit ($2 million), occurred between 2007 and 2012, and was not discharged for services rendered, you may qualify for this debt relief.
So if you’re in the same boat as so many others and have been holding off on refinancing to avoid tax implications, you don’t have to worry anymore. Relax, and give CREFCO a call. We want to help you with your mortgage situation. (866) 854-4242.
You can also visit us online at our website.
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