Tips Guides

For the second week in a row 30 year mortgage rates held steady at 6.52. 15 year mortgages last week moved from 6.07 to 6.1. The week they returned to 6.07. So basically the fixed rates are holding steady. 5 Year Arms fell from 6.05 to 6.02 and 1 Year Arms fell from 5.22 to 5.18. So they didn’t move that much. But what is interesting is the overall trend. This week marks the 3rd week in a row that both 5 and 1 year arms have fallen. The 1 year arm has fallen from 5.49 to 5.18. This continues an overall trend of the difference between 30 Year Fixed mortgages and 1 Year growing. On May 1st 30 Year Arms were at 6.06 and 1 Year Arms were at 5.29. Mortgage rates since then have risen up to 6.52 while 1 Year arms have fallen to 5.18. The question of course is why banks are making arms (the mortgage product that is partly responsible for the high rate of foreclosures) more attractive. And I don’t have an answer on that. Below are the mortgage rates for the last few weeks.

August 14,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.02 1-yr ARM 5.18

August 7,2008
30-yr 6.52 15-yr 6.1 5-yr ARM 6.05 1-yr ARM 5.22

July 31,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24,2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

As always I like to translate the mortgage rates into an actual mortgage payment. So using our free mortgage calculator below are what today’s rates would translate into for a 200k mortgage. I also run the numbers based on what mortgage rates were at on May 1st.

August 14th
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1201.67
1-yr ARM $1095.75

May 1st, 2008
30-yr $1206.82
15-yr $1643.73
5-yr ARM $1164.60
1-yr ARM $1085.89

On the one hand in general I am against arms. They are generally dangerous so I don’t like to recommend them. But with such a wide gap between arms and traditional mortgages they are hard to ignore. If you do get an arm I would be prepared for your mortgage to jump substantially. For the most part I would consider an arm if you had enough money in savings to pay off the property if rates jumped up dramatically over the year.

The other factor to consider when getting a mortgage is credit scores. While for the first half of 2007 all one had to do to get a mortgage was show up at a bank over the last years banks have gotten a lot tighter. Additionally, interest rates now more than ever are tied to ones credit score. So if you are planning on buying a house sometime in the near future its a good idea to figure out what your credit score is now to make sure there are no outstanding debts or problems you need to fix.

Escapeso Realty provides current information on mortgage interest rates on their site. They also provide a free mortgage calculator and a mortgage rates widget.

If an owner builder understands the differences between his construction loan and other, simpler types of mortgage financing, then he will be much better prepared when starting his planning and financing. Owner builder construction loans are a more complicated process than a standard mortgage to purchase or refinance a home. Therefore, they will require a longer preparation and underwriting time.

If an owner builder does not account for some extra time required in his financing and planning stage, he runs the risk of falling behind schedule on the construction project or, worse, losing the land that he wants to build on. Therefore, understanding the reasons why an owner builder construction loan requires a longer timeline will save an owner builder from potential disaster.

The first, and main, reason that your owner builder loan will take longer than a simple purchase loan is that you, the owner builder, will need a longer time to prepare for it. Unlike standard mortgages, an owner builder construction loan will require you to choose your home plans and put together a detailed budget to build the house.

There is no way around it. You will need extra time to find the right home plans for your dream house. Depending on the source of the blueprints, an owner builder can take anywhere from a week to a couple of months to get the home plans finalized.

If you are purchasing plans from an online source, then you will have your blueprints within a week or two. However, if you decide to make modifications to the plans, it could take a month or more to get the revisions. Likewise, if an owner builder needs to get those online blueprints engineered to meet local building codes, then he needs to account for extra time to do this.

Whereas online blueprints can be a fast process, an owner builder who hires an architect to design his home from scratch may need a couple of months to get it right. The length of this process will depend largely on the amount of time that your architect requires for the design, as well as the number of revisions that you request as the future homeowner during the design process.

Now that you have your blueprints finalized, your job as the owner builder is to put together budget numbers to build your dream home. It’s not a complicated process, but it does require time for you to get written price quotes from your local sub-contractors. The best way to do this is to provide a set of blueprints to the sub-contractor and wait for him to get back to you with a written estimate for his labor or materials.

The budgeting and bidding process can take an extra few weeks for an owner builder. But, if you don’t take the time to do it right, you will be setting yourself up for failure during construction. That’s why it’s so important for an owner builder to understand the extra time required in his planning as compared to a simple purchase or refinance loan that doesn’t have any blueprint or budgeting requirements.

In addition to a longer planning phase, an owner builder construction loan will also have a slightly longer underwriting timeline. The extra time requirement is due to the fact that owner builder loans basically require two underwriting approvals - one for the borrower’s qualifications and one for the project itself.

In other words, even the most qualified owner builder client is not going to get through underwriting if he is building a home with a sub-par appraisal or budget. On the other hand, a very weak borrower will not get approved in underwriting just because he is building a home with a great budget and appraisal. Therefore, both sides of the underwriting approval process are equally important.

The extra time needed for owner builder planning and underwriting is not a big deal as long as you understand the reasoning behind it and plan accordingly. If an owner builder understands the timeline, he can plan for a successful project. But, an owner builder who thinks his construction loan is the same as a simple purchase or refinance mortgage is going to set himself up for failure right from the beginning.

Chris Esposito provides owner builder construction financing nationwide through his Owner Builder 101 program. Visit www.OwnerBuilder101.com to get all the information you need to be a successful owner builder, saving tens of thousands on your next home. Or call Owner Builder 101 at (877) 876-3688.

There are good and bad things that come with the deed in lieu of foreclosure. If you are unable to make the monthly mortgage payments on your home anymore you might consider this as your option. There are pros and cons to this which might help you make your decision.

Pros / Positives

The biggest positive of the deed in lieu of foreclosure is that your credit doesn’t suffer as much as it would if it displayed a foreclosure. A foreclosure looks really bad on your credit and it can stop you from being able to buy another home for at least 10 years. No one wants a foreclosure on their credit. Being able to avoid this is a really good thing.

The deed in lieu has another positive aspect that it can happen quickly. The quicker you are released from the mortgage payments each month then the less you owe on the back payments and penalties for late fees. Many banks forgive the penalties, late fees, and back payments while others will come after you for it. The quicker you sign over the title to the home the less money you may owe.

Cons / Negatives

Some people look at the time factor as a bad thing. The sooner you sign the title over in a deed in lieu of foreclosure means the sooner you have to be moved out of the house. Some people live in their home up until the day the sheriff’s office comes to evict them out. This can be up to a year of free rent in a place. A deed in lieu needs to take place quickly upon you realizing you cannot sell your home.

The bank also has a requirement for people who want to sign over the title to their home for a deed in lieu of foreclosure. This requirement is that you attempt to sell the house first. You will have to register the home with a real estate agent. You might have to pay for an appraisal and fees for an agent. If you don’t have any money this may be tough for you to get through the process of working with the bank.

One of the things you must think about is that you cannot be eligible for a deed in lieu of foreclosure if there are any liens on the property. If there are liens on the property, there is no way you will be able to avoid the foreclosure unless you pay up the back payments you have missed on and keep the home. Chances are good you are looking forward to a legal battle also if there are liens.

Conclusion

There are many pros and cons of a deed in lieu of foreclosure you might consider if you are no longer capable of making the monthly payments for your home. You can benefit from not having a foreclosure on your credit record and being free of the debt sooner. It is important to keep in mind that you should be entirely moved out of your home when you are considering a deed in lieu of foreclosure.

Don’t fall victim to foreclosure! Learn unique methods that will help you secure your financial future today. Get the Foreclosure Survival Handbook and discover how a deed in lieu of foreclosure can help you today.Please visit: http://www.homesforeclosurehelp.com

If you want to stop foreclosure now there are many things you can request to the bank or lender if you want to keep your home. The things you can do include a reinstatement plan, repayment plan, loan modification, loan refinance, loan forbearance, and more. If you really want to keep your home you should consider these things.

1 - Reinstatement Plan

A reinstatement plan includes the late fees, the amount of money past due, and attorney costs if there are any. This is the amount of money owed if you want to bring your loan up to current. You will be eligible for a reinstatement if you can come up with a lump sum of money.

2 - Repayment Plan

The most common way to stop foreclosure now is to work out a repayment plan with the bank. The bank will allow you to repay a portion of the amount of money you are delinquent on each month to get paid off. You will be required to get back on track with your monthly payments. In addition to the monthly payments you will have to make monthly payments on the delinquent amount as if it is a loan. You can negotiate with the lender how you can pay off the amount owed to the bank. You may need to have a down payment for the arrearages also.

3 - Loan Modification

There are lenders who will allow you to stop foreclosure now by offering a loan modification or restructure. If you have the ability to make your monthly payments on your home loan but you cannot catch up with the past-due amount the lender might be willing to take the past due amounts and add them to the principal balance. This new amount may re-amortize over a new period of time and possibly extend your mortgage note. Modifying the loan may bring it down to a more affordable monthly payment.

4 - Loan Refinance

Some lenders will completely refinance your loan. If you find yourself in a position you want to stop foreclosure now and you can no longer afford the monthly payments a bank may work with you. A loan refinance will completely refinance your loan. Usually, in order to do this is if you have made all of your payments on time for 12 straight months and you show a financial stability. If you are looking at foreclosure because you cannot make your payments and have missed payments it may be too late to refinance. Refinancing your loan is the best option before you end up in the bad situation.

Conclusion

There are many things you can do to stop foreclosure now. You should consider talking to your lender and find out what they will allow you to do. Banks don’t want you to foreclose. They want you to keep your home. There are options for you to keep your home if you can financially afford the payments. You should talk to your bank and find out what you can do to save your home and your credit. They may give you a new payment entirely or put what you owe on the end of your loan.

Don’t fall victim to foreclosure! Learn unique methods that will help you secure your financial future today. Get the Foreclosure Survival Handbook and discover how to stop foreclosure now.

Please visit:
http://www.homesforeclosurehelp.com

Hundreds of thousands of Americans have either been foreclosed on, or are facing foreclosures. Neither the banks, nor the homeowners want this to happen. Banks don’t want it to happen because they’re forced to write down foreclosures, which runs the risk of the bank failing. Homeowners don’t want to lose their homes.

The root cause of most foreclosures is bad lending practice at the start of the lending process, it used to be that home buyers had to show 30% of the list value of the home as a down payment, and a year’s worth of pay stubs to get a mortgage. Equal opportunity in lending laws meant that this was deemed discriminatory. When this was combined with an incentive structure that paid huge commissions for loan origination, based on the value of the loan, the end result was ultimately predictable.

The loans that were written are commonly referred to as “liar loans”, and the upper end consequences can be read in the financial section of your local newspaper, and in the Wall Street Journal, where they’ve made the front page; most of the bank failures we’ve seen so far have come from banks leveraging mortgage driven securities.

What doesn’t make the papers is the impact this fiasco has on American homeowners. Millions of new homeowners, often ill educated on what, exactly they were signing, moved into homes with Adjustable Rate Mortgages, often with interest only introductory periods. When those rates adjusted (with the Federal Reserve rate), or the “interest only period” ran out, those home owners suddenly saw their monthly housing bill triple.

Even worse, because of the sudden price collapse on housing (and in many markets, it’s nowhere near bottom, and they can’t even see where bottom might be, those home owners are stuck with a mortgage that’s worth more than the probable resale value of the house.

This is where loan modification comes in. Loan modification is a negotiation technique, and with leg work and persistence, you can get various terms of your loan modified. This is, in some ways, like a refinance option.

Mortgage loans are built around two terms, the interest rate and the time period over which the loan has to be paid off. The interest rate is the percentage of the remaining balance that the bank takes as a profit on each payment, and it’s usually compounded. Compound interest, over the lifetime of a typical mortgage, adds up to a hefty sum of money.

Now, most loan modifications are either reductions in interest rates, or extensions of the term of the loan. A very few will actually re-assess the value of the home and adjust (write off) part of the loan. To get a loan modification package, you have to demonstrate a hardship that has reduced your income substantially, one that would keep you from making regular payments, while still maintaining a regular income stream.

You’ll want to talk to a loan modification specialist, or a mortgage/credit counselor. Having someone who works with financial services products who’s in your corner is a handy way to start. Next, you’ll want to talk to your lender’s loss mitigation department.

The good news about loan modification is that the banks will usually be cooperative on this, once you talk to the right person. They don’t want a foreclosure, and a loan modification is very much a case of “Well, it’s this or nothing” That being said, expect the process to take at least 6 months and up to a year to happen, plan early. If you’re already getting collection calls on your mortgage, the odds of getting a successful loan modification have gone down considerably. Having a specialist in loan modification can help; much of the time spent in getting a loan modification done is spent trying to talk to the right person; you’ll start out at low level people who can’t say yes, and you’ll have to work your way up until you find the person who can. (Real power comes from the ability to say “yes” to a proposal).

Once you find the right person, you’re going to have to demonstrate good financial habits. You’ll have to demonstrate the ability to make a budget and to live within it. Getting a loan modification is very much a “last chance” sort of thing for most people with credit habits. In particular, if you’re unable to meet your current house payment, get in the habit of either making partial payments or saving that money, rather than using it to pay down other debts. The reasoning for this is that when the loan modification is negotiated, your lender is going to ask you to make at least some part of a “good faith” payment, which will usually be at least half, if not all of, the back payment penalties and fees, plus any attorney’s costs. If you don’t have the cash on hand, this is going to be a sticking point,more loan modification negotiations blow up over this than anything else.

And, once you’ve negotiated a loan modification and have lower payments, save the difference. Most home owners run into problems not because they can’t afford their homes, but because they refuse to scale down their lifestyles to match their incomes. Even then, be a realist. If you can’t really afford your home, it’s time to try to sell it, or, in a worst case scenario, let it go into foreclosure.

Peter Baptiste is known as the Foreclosure Doctor Online. Feel free to visit his blog where he provides a wealth of information on a regular basis. The Foreclosure Doctor Online

Before we talk about what happened with mortgage rates this week lets do a quick recap of what happened last week. Last week mortgage interest rates made a sudden jump over the previous week. For the entire month of June and July 30 year mortgage interest rates only fluctuated from 6.09 to 6.45. Then last week 30 year mortgage rates suddenly jumped from 6.26 to 6.63. At the time we predicted that rates would probably fall this week because usually after big spikes in mortgage rates there is a bit of a correction. We saw exactly that with all four of the major mortgage products falling, but not back to their levels from two weeks ago. 30 Year rates fell from 6.63 to 6.52. The only mortgage product to not fall substantially this week was the 1 Year ARM. Last week the 1 Year rate rose from 5.10 to 5.49. This week the 1 Year mortgage rate lost most of that gain falling to 5.27. Below are rates for the major mortgage products for the last month.

July 31, 2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24, 2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17, 2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10, 2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3, 2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

Ok so mortgage interest rates tell part of the story. But how does this translate into a mortgage payment. Using our free mortgage calculator lets translate the mortgage interest rates over the last few weeks into a mortgage payment for a 200k loan.

July 31th, 2008
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1208.11
1-yr ARM $1106.88

July 24th, 2008
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

July 17th, 2008
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

So it looks like for now rates are still relatively high. The only mortgage product that remains relatively low is the 1 year mortgage rate. Comparing it to the 30 Year mortgage rate at 6.52 the 1 Year mortgage rate comes in at 5.27. For a 200k mortgage the mortgage payment with a 30 Year loan would be 1266.76. For a 1 Year Arm the mortgage payment would be 1106.88 or about 12.6% less. While I usually avoid Arm’s that is a pretty substantial different. The only problem with 1 Year Arm’s is that their is no guarantee mortgage rates will be less in one year. And with all the volatility in the mortgage markets right now they could be somewhat higher. Looking forward its hard to tell what mortgage rates are going to do over the next month. The FED’s refusal to lower rates would tend to push mortgage interest rates up but since mortgage rates rose so much over the last two weeks we can only hope that for the time being banks are satisfied with the current rates.

Ki works in Austin Texas as a realtor. His website provides information on mortgage interest rates along with a free mortgage calculator. Their is also graphs that show historical mortgage interest rates