Mortgage rates down, but can you get one?
Fed action spurs boom in refi applications
By Inman News, Thursday, December 4, 2008.Mortgage rates have plunged since the Federal Reserve said it would spend $600 billion to buy mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae, but tightened underwriting standards mean many people won't be able to take advantage of them.
The Mortgage Bankers Association said applications for refinance loans shot up 203 percent on an adjusted basis for the holiday-shortened week ending Nov. 28. Applications for purchase loans were up a more modest 38 percent.
The average rate for 30-year fixed-rate mortgages decreased to 5.47 percent from 5.99 percent, and points decreased to 1.16 from 1.23 for 80 percent loan-to-value (LTV) ratio loans, the MBA said.
"Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship," said MBA forecaster Orawin Velz in a statement. "When rates plummeted following the Fed's announcement that it would buy GSE debt and MBS, many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
Rates on loans eligible for purchase by Fannie and Freddie have come down by nearly a full percentage point since the Fed's Nov. 25 announcement that it would provide massive liquidity to mortgage markets (see story).
Each 1 percent decrease in interest rates translates roughly into a 10 percent increase in home buyer purchasing power, which the National Association of Realtors estimates can generate 500,000 additional home sales.
After the Fed's announcement, NAR said it would continue to push for a temporary, government-financed, interest-rate buy-down program to get rates down to 4.5 percent or less, as one component of stimulus measures proposed by the industry group to stimulate home sales.
But tightened underwriting standards will disqualify many with less-than-stellar credit scores, and an estimated 12 million homeowners who owe more than their homes are worth may also find it difficult to purchase or refinance a home.
Rates for conventional, conforming loans could fall to 5 percent by the end of the year, but about half of borrowers who could benefit from lower rates will be shut out, Inside Mortgage Finance publisher Guy Cecala told the Washington Times.
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Submitted by Lenn Harley on December 4, 2008 - 2:49pm.
As long as the number of homes on which the owners owe more than they will appraise for, buyers are going to be limited to foreclosures and short sales.
We need a massive write-down of mortgage balances to meet assessed or appraised value.
Millions of home owners are hostage to a mortgage that they cannot refinance and a house that they cannot sell.
Lenn Harley
Broker
Homefinders.com
800-711-7988
Submitted by jason la on February 26, 2009 - 5:41pm.
Anyone can use a simple mortgage calculator to find out what they can afford to borrow. Once you know how much you make have saved and can afford looking for a mortgage shouldn't be to hard.
Submitted by Mark Peter on April 30, 2009 - 10:22pm.
In recent years, adjustable mortgage rates have allowed people to easily buy a home or other real state. However, the assumption that income would increase over time to allow the higher charges once the introductory rates expired has failed for many people. Homes for rent back plans can be a good option for home owners who are facing foreclosure or eviction to allow them to stay in their homes. Under this plan, a home owner can enter into a contract with a financial institution to sell and rent back the home from the financial institution, with the option to buy it back again later.
Submitted by Jon Henry on April 30, 2009 - 11:28pm.
Receiving mortgage advice early on is invaluable for any home owner. When problems do occur, mortgage advice and debt counseling can often be combined. Ways of saving money can be discussed, methods to make extra money identified and a complete solution brought into action to Stop Repossession.An extension of the mortgage term does result in more interest being paid, but also brings the monthly repayments down. Being able to stop repossession is all about making life more affordable and spreading the cost over longer helps to achieve this objective.
Submitted by Asmi Rejith on May 5, 2009 - 3:14am.
With lease options and lease purchases the seller has a landlord-tenant relationship with their buyers until they actually purchase the house.The reason is in
Lease options and lease purchases the seller retains ownership of the house until the buyer actually exercises the purchase agreement. The reason that mortgage assumptions are more limited is because of the qualifying criteria that must be met. First, the existing lender must be willing to let a new buyer assume the mortgage. Most mortgages are non-assumable, however, given the challenged market conditions many areas are experiencing this may be negotiable with the lender. In order for the buyer to assume the mortgage, however, they must be able to qualify. The lender will not let just anyone assume it. If the buyer can qualify for the existing mortgage they can likely qualify for a new mortgage as well.How long a Lease extension will I get?