How to Make Home Buying Easy on your Budget

Most people buy a home only once or twice in their lifetime, and it rarely makes sense to buy if you expect to move within two years. Most buyers live in their new homes an average of seven years or more. During a housing slump it may not seem like real estate values will ever go up, but it usually does. Homes appreciate about 4-5% per year as a fairly general rule. 

Financially, there’s a lot at stake when you buy or sell a home. Unfortunately, many of the factors involved are beyond your control. An inspector might discover a fault that you were unaware of, or interest rates could jump without warning. The first step is to hire a good real estate agent. Here’s how you can eliminate buyer’s remorse and purchase the home you love for a price you can afford:

* Bear the location in mind

What type of neighborhood would you like to live in? What school district would be suitable for your family? Where do you like to shop?

Do you own a vehicle, or would you have to take public transportation? Do you need a driveway? If you already have an area in mind, you can start by driving around and looking for “For Sale” signs.

* How much house can you afford?

Even if you’re short on funds, the home buying process will go smoothly if you get familiar with the real estate market and narrow down your choices to fit within your budget.

Speak to a lender to see how much you can get pre-approved for. You can use your pre-approval letter as leverage, especially if the seller receives another offer similar to yours.

* House size matters

You can start the process of finding a perfect home once you have a workable price range. List the things you want, like hardwood floors, skylights or a spacious living room, and the things you definitely need, like three bedrooms, a garden, a first-rate school district, etc. If you discover a house that comes close to having all your needs but doesn’t have all you want, give it another look.

During a housing slump, it’s possible to buy a large home at significantly less than its listing price. This is because so many people are desperate to sell. Remember to take into consideration the physically challenged family member who may need wheelchair access, or the heart patient who cannot climb too many stairs to get to her room.

* Find a way to finance your new home

There are a number of mortgage loans nowadays that suit many different people for different reasons. The three most common are fixed rate, where your payment is fixed for the life of the loan, adjustable rate, where the rate can go up or down after a few years, depending on the market, and interest only mortgages, where for a specified time you’re allowed to make payments that cover only the interest portion of your monthly mortgage payment.

Thinking About a 40-Year Home Mortgage Loan? Think Again…

We received an article from Dane Smith today, talking about the inefficiencies of a 40-year home mortgage. Dane brings to light some very excellent points in his article, titled…

Why I Hate 40-Year Loans

During the subprime crisis we saw the advent of numerous bizarre loan products. In general the new loan products were designed to get people into houses they could not normally afford. As people started to default on their mortgages banks realized many of these loan products were not a good idea. During the subprime crisis we saw most of these new loan programs fall to the wayside. I think in most cases this is a good thing. Many of these new loan products reduced the chances that individuals could gain equity in their homes by paying off principle. When difficult times arose for people they were in a difficult position because although they had made years of payments their loan balance had not changed. The worst of the new loan products had “teaser rates” so that individuals made low payments for a few years until the rate and their mortgage shot up. Its a wonder why banks are surprised by the number of foreclosures.

The one product that has seemed to survive the subprime meltdown is the 40 year loan. I am not a fan of the 40 year loan. Mostly because the savings are minimal. Lets look at the current mortgage interest rates from Wells Fargo for a 40 year, 30 year and 15 year loan.

40 Year Loan = 6.375

30 Year Loan = 5.75

15 Year Loan = 5.125

Now using a mortgage calculator, lets look at the mortgage payments on a 200k house.

40 Year Loan = $1,153.14

30 Year Loan = $1,167.14

15 Year Loan = $1,594.64

While the difference between a 30 year loan and a 15 year is substantial, $441.50, the difference between a 40 year loan and a 15 year loan is only $14 per month. A little savings but is it really worth adding a whole extra 10 years to your mortgage. So over 30 years $14 dollars a month amounts to $5040. On the other hand an extra 10 years of mortgage payments comes out to $138,377. To run the numbers a different way by putting down a mere $2400 on your 30 year loan you would get the same mortgage payment as you would on a 40 year loan.

Obviously everyone’s situation is different and in a small number of cases a 40 year loan might be warranted. But in general the 40 year loan adds extra years to a person’s loan for a minimal benefit.

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Ki works as a realtor in the Austin real estate market. He provides updated stats on the market on his Austin real estate blog along with a free search of the Austin MLS.

Thanks for that insightful article, Dane.

If you’d like to talk to a local, Sacramento lending professional about finding the right mortgage for you, just drop us a line today and we’ll put you in touch with the best person to meet your needs.

Can You Find the Perfect Loan Without a Mortgage Broker?

Ron Mark is here with us today to show us how a mortgage broker can help us find the right home mortgage for our budget and goals. Ron has been working with mortgages locally in California for many years and, as many of us know well, recommends seeking professional assistance for something you’re not familiar with that has as large of a financial impact on your life as a mortgage. Let’s hand it over to Ron…

How can a mortgage broker help you? by Ron Mark

Whenever one mentions the term mortgage broker one thinks of a person that can help obtain a loan through mortgage. For most people mortgage means signing the house to a lender for a big sum of money that they can repay over a long period of time in small installments. However things are not as easy as they seem and knowing where to apply for a loan or when to apply for it as well as how to prepare your application successfully are extremely important steps in getting the loan you want under the terms you want. This is where a specialized broker comes to scene.

The mortgage broker can explain the process step by step, can help you get the necessary documentation; can explain all the terms used in the mortgage industry and help you make an informed decision. If you are looking to buy a home consider the homes for sale in California especially if you like the location. Of course there are homes for sale in all the states, but there is an advantage when searching through the homes for sale in California. The mortgage broker in California has fiduciary duties. This means that he is responsible toward you the client and has to have low service fees. He or she can also explain the difference between pre-approval and pre-qualification and can help you with both. The pre-approval follows all the steps of the full approval and can present you in a higher position when facing the lender. The broker is the mediator of the meeting and the one responsible of helping you get the better part of the deal.

Although the price of the homes for sale in California and other states in the United States is declining, most of the prices for houses are still obligated to take a mortgage loan. A mortgage loan or simply known as mortgage means that the loan has as a guarantee a valuable asset of the person that intends to take such a loan. A mortgage loan is given for a long period of time and the installments reflect the interest rate too. One of the most important things one needs to understand when thinking of a mortgage loan is the foreclosure or repossession clause the lender has. The characteristics of a mortgage may also differ from case to case. Since there are no specific rules when it comes to applying for a mortgage it is essential to contact a broker specialized in mortgage loans, a broker who works in the area where you intend to buy or build a home.

Another reason why you need a broker specialized in mortgage when buying a home is his or her ability of explaining the different types of mortgage loans. The general characteristics are similar from state to state, but these kinds of loans are subject to legal conditions and local guidelines. The general characteristics are the interest that can be higher or lower; the duration of the loan usually around 30 years, and the payment and regularity of payments. The most common loans are the fixed rate mortgage and the adjustable rate mortgage. The first one states that the payments are fixed and cannot change for the duration of the loan. The second one as the name explains it has an adjustable interest rate and the risk is taken by the borrower and not the lender. In most of the cases where houses are being bought or build, the borrower has to put a downpayment before getting a mortgage loan.
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Even though there are homes for sale all over the country the homes for sale in California are becoming more and more popular not only because of the weather and region but also because of the mortgage broker which has to act in the best interest of his or her consumers.

Thanks for that exceptional read, Ron.

If you’re a reader who would like to learn more about the mortgage industry before you go broker-hunting, just drop us a line and we’ll let you know our recommendations absolutely for free.

Will the Credit Crunch Affect Your Ability to Get a Home Mortgage?

Today we’re joined by Chris Clare, a market expert in the housing industry. One of the topics on everyone’s mind these days is how the state of the economy will affect their ability to get financing for their home. Let’s take a look at what Chris has to say about it.

The Credit Crunch What Does it Mean to You

by Chris Clare

The aim of this article is to define the credit crunch and explain how it may have an affect on you as a borrower. Although it is compiled with the UK market in mind, due to similarities between the different countries within the European and world markets, the effect it may have on the individuals within these markets will likewise be similar.

First of all lets discuss what is the credit crunch? The credit crunch that most people have heard about first started in the US. It was primarily bought about by two situations, the first of which was the way in which money was being lent and secondly how the money was derived by the lenders making the loans.

When lenders loan money it is invariably not out of their own pockets, in that it is not exactly their own money. This sort of money is known as securitised money. It is money that has been borrowed from somewhere else before being loaned on to the public. The source of this money comes from what is known in the business as money markets. Vast sums of money are borrowed from these money markets by the lenders, sometimes millions at a time. The money borrowed from the money markets by the lenders is called the tranch of money.

Once that tranch of money has been lent to borrowers, they then set about borrowing more but what has already been lent is known as a lending book. That lending book has a value to institutional investors. Institutional investors are people such as pension companies or large investors who want to own loans lent to others that are going to be repaid but don’t want to go through the hassle of actually lending it in the first place and dealing with the end user. Lending books depending on their quality can have quite a high value.

It is the quality of these lending books that plays such an important role as to why we have a credit crunch at all. Ideally, a lending company would obtain a tranch of money for lending at a set rate. They would then lend this money to their borrowers at a percentage higher than that, and would therefore be making a profit. However, there are two significant possibilities which can ruin this ideal situation. The first is if the secondary lender lends poor quality money to the public. That is to say that some or all of that money has not been paid back and so is not effectively there to lend. The other possibility is if the money being distributed by the primary lenders, the distributors of the tranches of money, runs out.

Both these scenarios have occurred in the United States. Erratic payment and non payment of loans obtained by the public have left the secondary lenders with a trail of bad debt on their lending books which have in turn led the institutional investors to leave the markets. This has a subsequent effect on the secondary lenders in that there are less institutional investors to borrow money from and the ones that remain will be far more scrupulous in scrutinizing the loan books before putting their money forward, and so continues the downward spiral. The secondary lenders need money to borrow and continue on but the investors are not willing to invest in what they can perceive from the loan books to be bad debt and therefore bad investment opportunities.

All this has had a corresponding effect in the UK and it is evident that many of its lending companies main source of business relies on securitised lending. Although this is not a reflection of the UK’s more stringent methods of lending, it does show the caution with which the international money markets are treating the whole process of borrowing and lending.

The situation in the US is causing untold damage to the money lending industry in the UK and there is no doubt that many corporations could be destroyed by it. This may seem a world away from Joe Public, but as lenders tighten their belts on lending requirements in order to keep a high quality lending book, we will continue to find it more difficult to borrow money.

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Advice on mortgages from qualified Independent Mortgage Advisors help information and free to use mortgage calculators please visit Mortgage Route

Thanks for that excellent insight, Chris! I know our readers garnered a ton of useful information to help them understand what’s happening in the financing market during these turbulent times.

If you’re a reader who would like to talk one-on-one with an industry expert about your personal financial goals and home ownership possibilities, just let us know and we’ll put you in touch with someone very knowledgeable on the subject. You can contact us by dropping us a line on this page.

Buying Your First Home? Don’t Miss These Vital Keys to Your First Mortgage!

One of the most important parts of manifest destiny and the American dream is home ownership. Owning your own home can be a very smart investment decision since prices tend to increase faster than the inflation rate, and now, with the recession dropping home prices and interest rates to their lowest in the last decade, there isn’t a better time to buy! Because of the current market timing and the fact that it’s a widely known as a smart investment, now is the time to start considering the idea. Before you rush out, call a realtor and start looking for a house, you should start by seeking out the perfect mortgage for your budget.

By first finding out how much house you can afford, you’re doing yourself and your realtor a huge favor since there won’t be the question of ‘can I afford it.’ If it’s not in your budget, don’t bother looking, and if it is in your budget, you can be confident that you can find financing for it. Since buying a home is the largest single investment most Americans make, it’s definitely not to be taken lightly. If you spend a short while to learn about mortgages before you get started, it will be worth it.

To begin your home mortgage search, talk to credit unions, banks, and brokers in your area. You’re looking for someone to hold your hand through the process, but you also want a decent rate with low fees, so make sure to shop around.

When you’re looking at rates, you will be shown two different types - variable/adjustable rate (ARM) and fixed rate. The ARM rate is usually shown as a promotion at a cheap rate, sometimes called a “teaser.” After the fixed period of the ARM is up, you can expect rates to rise significantly if you get into one of these adjustable rate mortgages.

ARMs have two specific things you look for to use in your analysis - when the rate adjusts (anywhere between one month to 10 years) and what the cap on the interest rate is. Usually, the rate will adjust to whatever the prime rate (the federal government chooses this number) is at the time of the adjustment, plus a certain percentage of ‘mark-up’ that pays the bank. When you discover the rate cap, use a mortgage payment calculator to find out how much your maximum monthly payment is, worst case. That’s not to say your mortgage will actually adjust to that rate, but it’s a prudent idea to plan for different scenarios - including worst case.

In the current economic environment, we have extremely low interest rates. By signing on an ARM right now, you would more than likely end up with higher payments later, as the economy rebounds and the rates increase again. However, if you plan to move into a new home before your interest rate is set to adjust, it isn’t a bad idea to capitalize on the low rate. If you feel that rates will continue to drop in the future, an ARM can put you in a great position to take advantage of that.

Fixed rate mortgages are less complicated than ARMs because you know exactly what your payment is for the life of the mortgage. The fixed rate, as it implies, locks in your interest rate for the entire duration of the loan, which is great for current economic times with low interest. This type of mortgage protects you if interest rates go up, and if interest rates fall, you’ll have the option to refinance at the lower rate.

The length of the term on your mortgage can greatly affect the total amount that you pay over the course of the loan term. A shorter, 15-year mortgage has much less compound interest tacked on, so the payments won’t actually double that of a 30-year mortgage. 15-year mortgages can be surprisingly affordable, but if your income can vary from month to month, and it might be a stretch, go for the longer term. With the 30-year mortgage, you can always make additional principal payments during good months to help pay off the loan quicker - effectively racking up less in interest.

Becoming a home owner is an important step in everyone’s life, and with the right home mortgage loan, it can be just as affordable as your rent payment. Start building equity and investing in you home today - you’ll look back on this moment and be glad you did.

5 Sizzling Ways To Finance A Home This Summer

Today we have Victor Benoun bringing us the best tips on financing a home in this turbulent market. Thanks for joining us, Victor, and we are anxious to hear your advice, so without further adieu…

5 Sizzling Ways To Finance A Home This Summer

by Victor Benoun

Despite the negative press we are pounded with daily concerning the aspect of the housing market, and the difficulties in the banking system, it is in fact a fair time to buying a home. Prices have not been this low in years, interest rates remain at historical lows, and buyers have tremendous bargaining power. Whether you are considering purchasing a house or refinancing an real property, here are a few helpful hints to make your transaction as even as a summer day!

1. Get pre-approved. Pre-approval differs from pre-qualification as pre-qualification is purely a thumbnail sketch of your financial background. A credit report frequently is not run and no financial documentation is reviewed. Pre-approval requires income tax returns, pay check stubs, bank statements, liabilities, anything that might be indispensable for a lender to make an adequate assessment of your ability to repay a mortgage. In addition, a credit report is requested and reviewed for your credit-worthiness.

2. Improve your credit score if necessary. A credit score is a numerical demigod of the likelihood of you repaying your debt. It is based on the amount of fly open credit trades you have, how near at hand you are to your available credit, as well as your paying habits. In the case of credit scores, your foregone does equal your future. You can improve your credit score by paying down your debts, closing credit cards you no longer use, and of course paying on time.

3. Inquire how much wherewithal is exigent for a down compensation and closing costs, and are there restrictions where the stock comes from. Often, assumptions are fabricated by the consumer that down payments can come from a credit card, a personal loan, cash on hand, or a little gift. It is wise to discuss this in move on in terms of what is allowable or not. Do not wait until you are under compromise to discover the source of your funds can not be used.

4. If you find a home that is right for you, do not wait for the market to drop. Believe it not sundry homes today still sell with multiple offers. According to an article in The Los Angeles Times, dated June 1, 2008, ‘Homes in service qualification that are listed at $300,000 or underADJ Expensiveness are drawing as in as 15 to 20 bids from home buyers and investors, looking for bargains.’ It is very toilsome to time the market as to when the supporting has been reached. Prices have already dropped by record amounts, and there is just no way to say how much lower they may go.

5. In financing a home, now is a benefit time to contemplate long-term. By that I mean to consider a 30 year fixed rate mortgage. Rates are still at low record levels so it is greater time to lock something in and not worry about it.

People oftentimes make life changing decisions based on beliefs which in reality no longer exist. Loan programs have transitional as well as the criteria for being approved. Before ever stepping foot into an yawn house meet with a lender what programs are available and what you qualify for.

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Victor Benoun is President of The Mortgage Source, Inc., and author of Your Castle No Hassle. He has 29 years experience in the mortgage industry and is available for keynote speaking and consulting. For free housing and mortgage reports, visit his website at http://www.yourcastlenohassle.com.

Thanks for that wonderful report, Victor! We are glad to have you as a resource to our readers!

Readers, if you’d like to speak with an industry expert like Victor, feel free to drop us a line today. Our consultations are always free for the Sacramento community!

Take 13 Years off your Mortgage! Without Paying a Cent More per Month!

We’ve all been looking for the magic bullet to help reduce the duration of our mortgages, but here it is! Without increasing your monthly payment ONE CENT, your can have the bank redirect more of your payment to your principal, and less to your interest. Without further adieu…

Payoff Your Mortgage ~ Use the Fastest Method Without Cutting Into Your Paycheck

WARNING: You’re at a strict disadvantage mortgage companies charge as much interest as plurality as possible without informing you in a clear way all the steps you can take to change it.

The current system requires your payments come after an ‘amortization schedule’, which forces most of your stock to go towards interest.

In the first five years, you could end up spending five times more in interest than in mortgage principal - and that’s a huge chunk out of your paycheck! So if you make $12,000 in principal payments, you end up spending $60,000 in interest. Unbelievable! For a homespun calculation go to Bankrate.

And when you move, the bleeding starts all over again…

The banks know you’ll apparently move again or refinance in 5 years, and then the cycle of paying more interest starts all over again.

It takes years before your loan balance is reduced by a minute amount-how unfair is that?

How several years have you been paying off your mortgage and are you really further ahead?

But here’s how to fight back…

You’re going to love this…there’s an improved wise you can use to reduce these interest payments.

The way to do this is simple. Apply more of your monthly mortgage repayment to principal rather than interest without changing your repayment or refinancing your mortgage.

For example, if you pay $1,200 towards your monthly mortgage repayments, $1,100 goes towards interest and $100 towards principal object in the life of the mortgage.

You can pay more to principal, underADJ Expensiveness to interest…and it’s perfectly OK with the bank!

Hang onto your seat, now there is a way to apply $900 towards interest and $300 towards principal without changing your lifestyle or paying more anything…and the best part is that the banks will gladly accept this!

This fashion has been on every side forever but nobody has figured out how to use it.

Until now.

Wouldn’t you like to shave 13 years off your mortgage? You can! Here’s how…

Your mortgage can be paid off in one-half to one-third of the time. Most of our clients shave at least 13 years of their mortgage without spending a cent more.

And no, you do NOT have to refinance or get another mortgage; just have an perforate mind and a disposition to tackle a common math problem!

The concept is really simple. All you have to do is use a mortgage checking account the right way. Once you set this up you enter upon immediately allocating more of your payments to principal rather than interest and end up paying your mortgage much faster. The best part of all, the banks happily accept this.

Here are the 7 basic steps you need to follow:

1. Calculate your personal ‘HELOC number.’

2. You set up a Home Equity Line Of Credit (HELOC) for the Heloc number.

3. You pay your bills and mortgage on time.

4. You assignment cash to your HELOC at the right time.

5. Your bank takes care of the rest-and they’re happy to do it!

6. Create a spreadsheet to make sure you stay on track.

7. …and YOU PAY OFF YOUR MORTGAGE AS EARLY AS 13 YEARS SOONER THAN NORMAL, AND SAVE AN AVERAGE OF $67,636 CASH!

You will NOT have to change your day-to-day spending habits or your lifestyle to take advantage of this concept. It’s a sound, smart way to pay down your mortgage.

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Go directly to http://www.eqxl.com, EquityExcel. You will find out the step by step method to pay off your mortgage and the risks to avoid so that you don’t lose your home in the process, and you will be on the path to financial success.

That was a real eye opener! I’ve been waiting for this info for a long time! If you’d like to speak with someone who can talk more in-depth about your personal situation for absolutely no cost, just let us know by dropping us a line today.

Is Your Mortgage Lender Doing the Best They Can? Find out with These Questions…

Today we have Brian Jenkins joining us to give us some very important tips about talking with your mortgage lender. If you’re wondering if you’ve selected the right lender, discussing these ideas with them will help you find out for sure. Enjoy!

Real Estate ~ Important Questions To Ask Your Mortgage Lender

Most of us will only buy a few homes during the course of our life. Combine this fact, with the axiom that home mortgages are perpetually the largest single debit that most people carry, and you can see why choosing a mortgage lender can be nerve wracking. In what is frequently the biggest business transaction of your life, there are certain questions that you can ask that will better help you follow your loan and negotiate the best deal.

What type of loan do you advise?

There are in nonconformist types of loans, and the competent lender should help you grasp each one, and explain the benefits and drawbacks of each. Adjustable rate mortgages are frequently touted for low interest rates, but they are not the best pick for everyone. The rate typically remains low for a year or two, but when it adjusts up, the amount of the monthly liquidation can increase enough that the home owner has trouble meeting their monthly obligations. Fixed rate loans have a fixed interest rate over the life of the loan. The fixed rate is every day a little higher than the adjustable rate mortgage rate, but you have the advantage of cognizant each month exactly how much your reckoning is. If rates drop substantially, you can always refinance your loan. Interest only loans are not as common. In interest only loans, the monthly arrangement is only the amount of interest on the mortgage. These types of loans are best suited for people who have high and steady incomes, and resolution on animated in a home a number enough for it to bodily increase in value. At the end of the loan term, the home owner will either refinance the loan, or pay the balance of the loan in full. If the home has not appreciated during the loan term, it can be onerous to refinance.

What are interest rates and annual percentage rates?

A qualified mortgage lender should be more than willing to lift the veil what their interest rates are for out of place types of loans, as well as the annual percentage rate. They should also be willing to run the numbers for you so that you can see exactly how the anomalistic percentage rates affect the amount of your monthly payment.

How much will the loan cost?

The qualified mortgage lender should supply you with a advantage faith estimate. This is an estimate on the amount of cash that it will cost to shut up your loan. This service faith estimate is not an exact amount, but should be very close, and include appraisal fees, medal insurance and any other fees that the lender requires to fill up the loan. If the lender is unwilling to give you a advantage faith estimate, it is likely that there will be some surprises on closing days. Some disreputable lenders pad the closing costs with administrative fees that are unnecessary and add up quickly. Before you commit to one lender, you should see a copy of the improvement faith estimate that lists every fee you will be to pay to occlude on the loan.

Is there any prepayment penalty?

Although not as common as it once was, some lenders charge a fee if you pay off your mortgage early. While you may ponder that this does not apply to you, if the lender has a prepayment retribution it can be enacted even if you refinance your loan. It is important to confirm with your prospective lender that there are no penalties for prepayment of the mortgage.

How for ages will it take and what if interest rates change?

Closing can take a week or a month, or even longer. It is important to ask your mortgage lender how for a long time they anticipate it will take from the start of the process to closing. You should also ask what happens if interest rates change during the closing process. Ideally, you will lock in your rate at the proviso phase, and if mortgage rates increase, you keep this rate, but if they drop, your lender will ‘float’ your rate down with them.

How much of a down compensation is required?

Down payments can swerve greatly, depending on your credit history, the appraised appraise of the home and even market conditions. Never assume that you know, ask the lender what percentage of the loan amount you should have on hand for a down payment. This is perpetually negotiable, but you need to know person in the process if you will have enough legal tender to case the cost.

How to qualify?

Ask the mortgage lender person in the process what the qualifications are to qualify for a loan. In accession to a solid job history, you will apparently be exigent to have several years’ value of income tax statements, as well as bank statements and notice on any stocks, savings bonds or other investments. Even if you do not conception on cashing these to buy your home, they do count as assets and make it easier to qualify for a loan.

About Author: Brian Jenkins is a freelance writer who writes about topics pertaining to the mortgage industry such as a Pennsylvania Mortgage

Thanks for the the awesome article, Brian, it’s always a pleasure.

I hope you all enjoyed Brian’s article, and if you’d like to discuss your options or have any questions about your specific challenges, we’d be more than happy to assist you. Just drop us a line today.

Home Mortgage Interest Rates Continue To Fall

Is it the right time to get into a mortgage? No one times the market perfectly, so waiting around could land you with a higher rate. This article by Ki summarizes a lot of important data if you’d like to look at the numbers yourself.

Mortgage Interest Rates Continue To Fall

This was the sixth week in a row were 30 Year mortgage rates fell or held steady. In the tarry 6 weeks 30 year notes have fallen from 6.63 to 6.35. This was preceded by a sudden jump in interest rates in July where 30 year mortgage interest rates rose from 6.26 to 6.63 midst July 17th and July 24th. So during the time rates are little higher today than what we saw on July 17th they have almost fallen rear to mid July levels. It’s interesting to dot that it took one week for rates to jump from 6.26 to 6.63 and six weeks of falling rates to get occlude to the July 17th levels.

This week we also saw decreases in all the other major mortgage products. The 15 year mortgage fell from 5.93 to 5.9 and the 5 year arm fell from 6.03 to 5.97. By far the biggest mover was 1 year arms which fell almost 1/5 of a point movable from 5.33 to 5.15. Below are rates for the 4 major mortgage products for the be late few weeks.

September 4, 2008

30-yr 6.35
15-yr 5.90
5-yr ARM 5.97
1-yr ARM 5.15

August 28, 2008
30-yr 6.40
15-yr 5.93
5-yr ARM 6.03
1-yr ARM 5.33

August 21, 2008
30-yr 6.47
15-yr 6.00
5-yr ARM 5.99
1-yr ARM 5.29

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 6.10
5-yr ARM 6.05
1-yr ARM 5.22

Ok so what does this mean for a mortgage? Obviously ones mortgage would be lower with falling rates but by how much. Let’s look at a 200k mortgage and using our free mortgage calculator lets fun the numbers based on today’s rates.

September 4th
30-yr $1244.47
15-yr $1676.92
5-yr ARM $1195.24
1-yr ARM $1092.05

August 28th
30-yr $1251.01
15-yr $1680.15
5-yr ARM $1202.96
1-yr ARM $1114.33

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

So why have rates steadily fallen. I consider it has to be based on rumors (which have now proven to be correct) that the federal nation is going to takeover Fannie Mae and Freddie Mac. Basically the direction takeover provides more assurance to banks that their mortgage insurance is going to be paid out in case of default. The declining fortunes of Freddie Mac spooked some banks into pensive their mortgage insurance was harmoniously worthless. So now banks are concavity rates in their view the risk associated with the loans has gone down.

So what do I expect to see over the next few months? I would be fascinated if mortgage rates don’t collate to fall now that Freddie Mac and Fannie Mae are owned by the government. The Fed has been trying to push down interest rates all year and now they have the revenue to do so (I contemplate this was part of the motivation rearward the takeover of Freddie Mac and Fannie Mae). So does this mean investors? Should they wait for mortgage rates to drop before buying? I don’t ponder so. If rates follow in succession to fall certain estate prices could rise or at least I would expect to see underADJ Expensiveness deals sitting on the market. Instead if you find a dominion to I would watch interest rates and if they string together to fall I would try and relock your mortgage rate at the new lower rate. While I expect rates to fall something unexpected that spooks banks over the next month could of course push mortgage rates postern up.

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Ki lives in Austin Texas. His website has a graph that shows mortgage rate trends. He also provides a free calculator for potential home buyers and a mortgage interest rates widget.

Thanks for sharing that excellent information with us, Ki. I enjoyed reading your report and I know our readers will find it useful as well.

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How to Choose the Right Home Mortgage Lender

Everyone is always wondering if the grass is greener with a different home mortgage lender. Most of the time, it could be. This effective guide will help you choose the right lender the first time so you don’t have to wonder about what could have been.

How To Get The Best Lender When Refinancing Your Home Mortgage

Are you considering refinancing your mortgage loan? Did you know that choosing the wrong kind of lender will cost you thousands of dollars? It makes a difference refinancing with a mortgage broker, bank, or Internet lender; the difference is thousands of dollars in unnecessary interest payments. Here are several tips to help you choose the right mortgage lender when refinancing your home.

Mortgage Questions You Need Answered

Most homeowners focus on choosing the best lender or the lowest mortgage rate when refinancing. After all, isn’t shopping for a mortgage just like shopping for a washing machine? You compare rates and closing costs and choose the best offer right? That would be true if you were shopping for kitchen appliance; however, when choosing a lender you’re basing your decision on estimates that are guaranteed to change before you close on the loan.

So if asking which lender is best is the wrong question, what should you be asking? If you’re focusing on refinancing mortgage rates when choosing a loan you’re on the right track. The question you should be asking isn’t who the best lender is, but who is the right person to arrange your next home loan. This person needs meet certain criteria in order to be in a position to offer you the loan you want; more on that later.

Who Should You Choose To Originate Your Mortgage?

First of all, should you pick an Internet mortgage site or a bank to refinance your home? Absolutely not! You should never refinance with a bank or credit union due to loopholes in the Real Estate Settlement Procedures Act that protects homeowners from abusive lending practices. The problem with those Internet mortgage sites you see on television is that you’ll be dealing with an inexperienced salesperson that does not have the authority to broker the deal you want.

You Need a Mortgage Broker

If you want the best mortgage rate you need to find the right mortgage broker…and not just any broker will do. You’ll want someone that owns their own business, a self-employed mortgage broker that does not use salespeople to close loans. You want this type of mortgage broke because the business owner will not only have the authority to negotiate but will not be sharing their commission with a salesperson. This is important because you’ll save money at closing and in the long run with a lower mortgage rate. It is possible to refinance your home with a wholesale mortgage rate and pay a one percent origination fee to the broker arranging your loan.

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Ready to refinance your home? Don’t get cheated by a dirty broker or lender - check out free, independent video tutorials on getting the best refinancing mortgage rate here.

These are some very effective tips to follow, and I’m glad we were able to share them with you. If you’d like to speak one-on-one about your personal situation to find the best plan of action, we have experts standing by to help. Just drop us a line today and we’ll get you on the right track.