Archive for Mortgage News

According to Reuters, Millions of households would no longer benefit from federal tax deductions for charity donations, mortgage interest payments and property tax under Republican tax plans being debated in the U.S. Congress, a think tank said on Thursday.

The Institute on Taxation and Economic Policy said that up to 29 million U.S. households now writing off donations, home loan interest and state and local property tax payments would no longer be able to do so under either of the two plans.

While all 3 deductions are maintained in some form in one or both of the rival Senate and House of Representatives bills, far fewer tax-payers could take advantage of them because of other proposed changes, said the Washington-based group

Read the Reuters article.

Categories : Mortgage News
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What explains the increase in profits for mortgage  companies? First, it is more expensive to originate a mortgage-refinance today than in the past.
Guarantee fees: Fannie Mae (FNMA) and Freddie Mac (FMCC) have boosted their guarantee fees that they charge to lenders. These have gone up by around one-quarter of one percentage point over the past year.
Loan put-backs: Fannie and Freddie have also become much more aggressive about putting back defaulted loans to lenders when they find underwriting flaws. Banks have faced billions of dollars in losses, and they have tightened up their standards and are collecting mountains of paperwork every borrower file that they underwrite. This means it takes longer to process loans.
Mortgage servicing values: The cost of mortgage servicing, or collecting payments and handling delinquent mortgages, has gone up.
Hedging lending costs: Because it takes longer to originate loans, banks are having to pay for longer rate locks, which may boost the cost of loans.
Mortgage production costs: Licensing of loan officers, higher fixed costs in paying those loan officers, and other production expenses have gone up. It is more expensive to find, train, and pay loan officers and to bring in borrowers than in the past. Read the original WSJ article.


Categories : Mortgage News
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No Cost Mortgage Refinancing

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In most cases, homeowners save money when refinancing their home.  However, with the cost of refinancing rising it is important to try and negotiate your closing costs prior to making the commitment to refinance.  Mortgage refinancing costs can be a deterrent for borrowers who are looking for the best home refinance loan.  But with refinance rates at a 50-year low there are things you can do to reduce or even absorb lending costs.

Negotiate Closing Costs When Refinancing

Vince Ingui is a mortgage consultant who works with Louviers Mortgage told some borrowers recently that the key is to find out at how loan closing costs are categorized.

No closing costs out of pocket means you don’t have to pay for closing costs at closing because the refinance loan enables you to finance the closing costs into the mortgage. So in this case, the borrower would still have refinance costs but they do not have the pull money out to pay for it.

No cost mortgage refinancing is when a lender actually pays the closing costs.  The lender pays for 3rd-party lender fees like, title,  appraisal, escrow and notary.  He warns that often times the mortgage refinance rate is higher, when the company offers a no cost refinance. Ingui suggests that either they are going to make it in the closing costs or with your rate and more times than not you will pay a higher interest rate.”  Ingui warned homeowners to watch out for additional fees when they are comparing quotes for house refinancing. Beginning in January, those fees are required to be included in the so-called “good faith estimate.”  The time has never been better for mortgage refinancing if you meet the criteria to qualify.

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Timing the Lowest Mortgage Rates for Refinancing

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With record low mortgage rates, millions of homeowners have an opportunity to reduce the interest on their loan and get better terms so they can pay off their mortgage quicker.  According to Fox News’ mortgage expert Chip Cummings, “Now is the time to refinance your mortgage because money is cheap.”  Many of homeowners have been targeting interest rates in the 4 to 5% range to make it worth their while to refinance.  Since the closing costs typically range from $2,000 to $3,000 on a home refinance, borrowers have to make sure that the refinance rate lowers their payment enough to justify refinancing.  Conventional, FHA and VA refinancing application volumes have been surging as the rates have dipped to the lowest level since Freddie Mac began recording mortgage rates in 1971.

Best Time for Mortgage Refinancing with Record Low Rates

Jerry Mlinar an Illinois mortgage lender with Woodfield Planning recommends that borrowers who currently have an adjustable rate on their mortgage act fast.  Mlinar said, “Talk to a mortgage professional about which refinance loan best suits your criteria and qualifications is the first step.  Millions of homeowners lost their home equity when the property values plummeted a few years ago and many borrowers are no longer eligible for traditional refinancing.  Mlinar points out that borrower should only be considering mortgage refinance options that you actually qualify for.


Best Jumbo Mortgage Refinancing in Years

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Jumbo mortgage rates declined significantly over the last few weeks.  As of July 12th, borrowers could refinance with a 10/1 jumbo rate starting at 4.75%.  This was exciting news for California homeowners looking for the best jumbo mortgage refinance opportunity in years.

Jumbo Mortgage Rates Available at 4.75% and Fixed for 10-Years

According to iServe Lending’s George Kaganovich, a mortgage lender in California, “This is wonderful news for thousands of California homeowners who have been stuck in adjustable jumbo mortgage rates for years.”   In high costs areas like California and New York, borrowers have been unable to refinance out of their variable rate loans.  The jumbo refinance guidelines were tightened over the last few years and the jumbo mortgage rates were significantly higher than the highly publicized conforming rates. Kaganovich said that for many of their clients it ment saving thousands of dollars a year.

Bloomberg reported that yields on the Fannie Mae bonds have advanced to 3.73% from a record low of 3.63% reached July 6th, down from 4.67% on April 5th.  The gain has been slower than benchmark Treasuries, whose yields have begun to jump as stocks rallied.

Freddie Mac reported that the average fixed mortgage refinance rate for a conforming mortgage declined to a record low 4.57% in the week ended July 8th.   The MBA report indicated that the average fixed jumbo mortgage with a fixed jumbo declined to a record low 5.25% in the week ended July 8th.


Will Mortgage Refinance Rates Rise in 2011?

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