http://articles.mychoicedeals.com/ Articles at The Article Planet en-us http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-hold-steady.html http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-hold-steady.html Wed, 09 Sep 2009 23:05:09 -0500
The general consensus is still that rates are going to eventual move up rapidly when the economy recovers. As long as the economy stay in the doldrums there is a decent chance rates will stay below 5.5. To put today's rates in historical context the all time low for the 30 year rate is 4.81 (reached in April 2009). So the 30 year rate is still very close to its all time low. Below are mortgage rates for the major mortgage products for the last few weeks and from January 22 (6 months ago).

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jan 22, 2009
30-yr 5.04 15-yr 5.12 5-yr ARM 4.80 1-yr ARM 5.24

For the most part mortgage rates have stayed low in spite of some encouraging signs with the economy. In addition to rates we can also look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also translated rates from August 13th (2 weeks ago) and January 22 (6 months ago) into a mortgage for a 200k loan.

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Aug 13
30-yr $1109.36
15-yr $1548.44
5-yr ARM $1043.29
1-yr ARM $1039.68

Jan 22
30-yr $1078.53
15-yr $1594.11
5-yr ARM $1049.33
1-yr ARM $1103.16

As we saw with mortgage rates the mortgage payments are relatively stable from 2 weeks ago.

So what do we expect over the next few months? As long as the economy stays down barring other developments in the financial sector mortgage rates should stay low. When the economy starts to rebound though mortgage rates are generally expected to start rising.

What is our advice to people considering getting a loan? Basically it's the same as it has been for the last few months. I would avoid getting a 5 or 1 year arm if at all possible. Since rates should be higher in the future it makes sense to lock into long term rates while they are low. It's also a good idea to start the loan process before starting your home search. We are still in one of the strictest lending environments we have seen in decades. Minor credit issues that were ignored before are stopping loans from going through today. Starting the loan process early on can give a potential borrower time to clear up any issues on their credit report.
]]> http://articles.mychoicedeals.com/finance/mortgage/what-you-need-to-know-about-fixed-rate-mortgages.html http://articles.mychoicedeals.com/finance/mortgage/what-you-need-to-know-about-fixed-rate-mortgages.html Sun, 06 Sep 2009 03:09:37 -0500
The fixed rate mortgage is by far the most common type of mortgage. When new homebuyers begin pricing loans, these are typically where people will start. Most fixed rate mortgages advertised also usually talk about the rate for a 30 year "fixed" rate. When people talk about their mortgage, there is a very good chance that they are referring to their 30 year fixed. A little less common are the adjustable rate mortgages. Of course there are dozens of different mortgage products available based on the needs you have. Interesting that the selling of "money" is basically packaged in different forms just like any other product or service.

These fixed rate mortgages are most commonly setup with 15 or 30 year term, but also have options for a 10 year or 20 year, or even a 40 year mortgage. The longer the mortgage term, typically the lower the interest rate as the bank or financial institution that is extending the loan will typically make more money, at least via interest paid on the loan. This is why the shorter term rates are typically a higher rate.

One of the main benefits to the fixed rate mortgage is that your monthly payment won't change for the duration of the loan. In many companies in the US, you'll also have the advantage of being paid every 2 weeks. If you setup your mortgage to work on this same two week payment schedule, you'll end up making 26 payments per year (52 weeks per year / 2 for every other week) which is the equivalent of 13 months of payments instead of 12 months. Of course this option can be worked out at the time you're applying for your loan as well.

With a fixed rate mortgage, at the end of the term, your home will be paid off completely. Several mortgage products have a balloon payment at the end of the term which means you'll have a larger lump sum, usually a multiple of 10 to 20 times your monthly, or in the event of some interest only products, the principal would be due at the end of only a couple years into the mortgage product which would either require you to pay off the home completely or refinance the balance.

On a typical 30 year fixed rate mortgage, you'll pay your monthly payment of which a percentage of that amount would go toward the principal and the other percentage goes towards interest. This is done on a sliding scale, so the first years of the mortgage, you'll be paying more in interest to the bank than paying down your loan. This is as designed by the banks who fund these mortgages. Their expectation is that they get their interest paid to them before you're "allowed" to use more of your regular monthly payment to go towards the principal. This is all done behind the scenes, but it is interesting to know that you won't start paying more towards your principal than interest until year 22 of your mortgage. There isn't anything to prevent you from paying down your mortgage early, however, and may be a very good idea depending on your life situation.

This conservative mortgage program is possibly the easiest to understand of the mortgage products that are available. The key to success with this style or any other style of mortgage is to find a loan officer that you can trust who will guide you through the process of pricing loans, understanding the terms of a loan, whether a fixed rate, variable, interest-only, or other loan, and basically someone you can work with who can become familiar with your situation and provide appropriate advice for what your home ownership goals and objectives are. A good loan officer will typically be familiar with other loan products that will work for you as well. ]]> http://articles.mychoicedeals.com/finance/mortgage/when-rates-start-to-rise.html http://articles.mychoicedeals.com/finance/mortgage/when-rates-start-to-rise.html Sat, 05 Sep 2009 00:15:29 -0500
The Bank of England's Monetary Policy Committee has slashed the base rate from 5% in October to a record low of just 0.5%. If you've got a £150,000 tracker mortgage, you could be paying nearly £400 a month lees in repayments!

Enjoy it while it lasts, however, because one thing's likely - sooner or later, interest rates will rise again.

When will interest rates rise?

No-one knows exactly when interest rates will rise again, or by how much. But, for the purposes of this piece, we've assumed rates will stay at 0.5% until April 2010, after which they'll steadily increase each month until they reach 5%. They'll then stay at this level until March 2012.

Important note

This is not a forecast. It's a scenario to understand the impact of rising interest rates on your mortgage repayments.

Mortgage case study

A best-buy, three-year, fixed rate mortgage for people borrowing up to 75% of their home's value of 3.99%.

We're comparing this mortgage to a lifetime tracker with the same loan-to-value ratio offering a current rate of 2.89% or 2.39% above base rate.

Calculations are based on a £150,000 repayment mortgage taken out over 25 years.

(See full table on fixed verses base rate tracker at confused.com)

Results

The first year

Total tracker monthly mortgage repayments would come to £8,508. That's more than £1,000 less than the £9,588 repaid by the fixed rate mortgage holder.

The second year

Tracker mortgage customers repay a total of £11,840, while those on the fixed rate deal remain at £9,588.

If interest rates stayed at 5% for a year, a tracker mortgage would face repayments of £13,332 during the 12 months - a whopping £3,744 more than the fixed rate.

The third year

Over a three-year period, the tracker mortgage customer would repay a total of £33,680.

The homeowner, on a fixed rate mortgage, would pay nearly £5,000 less, at £28,764.

Fixed rate vs tracker - the big difference

The fixed rate mortgage customer would have the security of knowing their repayments would remain the same throughout the three years.

The tracker mortgage customer would see their repayments soar by 57% - a considerable amount of extra money needed on a monthly basis.

The final word

Interest rates may stay low for longer than we've assumed here. They could also rise at a slower pace than we've predicted. Under a different scenario, the tracker mortgage customer could come out on top.

Equally, the base rate would have to rise further before repayments on tracker mortgages, with lower margins above the base rate, became more expensive than a best-buy, fixed rate deal.

Whatever timescale a rate rise takes place over, and whatever margin above base rate they're on, if you've got a tracker mortgage, expect significant hikes in your monthly repayments if the base rate goes up to 5% again. ]]> http://articles.mychoicedeals.com/finance/mortgage/no-need-to-get-negative-about-negative-equity.html http://articles.mychoicedeals.com/finance/mortgage/no-need-to-get-negative-about-negative-equity.html Fri, 04 Sep 2009 23:58:23 -0500
The January 2009 figures from the Halifax House Price Index show the value of the average property has fallen nearly £36,000 since its peak in July 2007.

As a result, anyone who bought a home at the end of 2006, with a deposit of 5% or less, is now likely to find they owe more on their mortgage than their home is worth - the definition of negative equity.

But while this may seem like a dire position, it's important not to panic. Sue Anderson, of the Council of Mortgage Lenders (CML), says: "While negative equity might be frustrating, it's not a problem unless you find yourself in payment difficulties or needing to move.

"There are plenty of simple steps you can take to improve your equity position, especially with low interest rates, meaning many more people can afford to overpay their mortgage."

For homeowners who do worry about slipping into negative equity, or for those who think they may already be in it, there are a number of steps to improve the situation…

Step 1

The easiest way to get out of negative equity is to reduce the size of your mortgage. This might sound impossible, but with interest rates falling to record lows, cheaper borrowing costs are on your side. First, shop around and compare mortgage rates to see if you're getting a good deal. Then, if you do remortgage, use any savings you make to overpay your loan.

Step 2

If you're already on a variable rate mortgage, such as a tracker deal, you'll have seen a sharp fall in your monthly repayments since the Bank of England first began to aggressively cut interest rates in October 2008. Someone with a £150,000 mortgage who is not on a fixed-rate deal will have seen monthly repayments fall by around £350 during this time. Consistently using this money to overpay your home loan will not only reduce the amount of capital you owe, but will also reduce the amount you pay in interest each month - meaning more of the money will be used to erode the outstanding debt.

Step 3

Homeowners on interest-only deals should also consider switching to a repayment one. While this will not make a big difference immediately to the amount you owe, it will mean you start to reduce your mortgage, rather than just relying on house price rises to provide you with an equity cushion.
]]> http://articles.mychoicedeals.com/finance/mortgage/guide-to-mortgage-life-assurance.html http://articles.mychoicedeals.com/finance/mortgage/guide-to-mortgage-life-assurance.html Fri, 04 Sep 2009 23:43:28 -0500 mortgage debt if the holder dies. It is a decreasing term policy, which means the sum you're insured for reduces in line with your mortgage.

It should not be confused with mortgage payment protection insurance (MPPI), which covers monthly mortgage repayments if the holder is unable to work due to certain illnesses or an accident, or if they lose their job.

Who should buy mortgage life assurance?

Mortgage lenders strongly advise all borrowers to have some form of life insurance in place in case they die before their mortgage has been paid off. This minimises the risk of their property being repossessed.

It's worth considering mortgage life assurance if your partner could struggle to pay the mortgage on their own. It's a particularly important consideration to take out cover if you have dependant children. This will ensure they avoid the trauma of losing their home, as well as one of their parents.

How much does it cost?

Mortgage life assurance costs an average of £7.77 a month*. This is based on someone aged 25 taking out decreasing term insurance on a £100,000 mortgage being repaid over 25 years.

What if I Already Have Life Cover?

Prices vary according to the individual policyholder's circumstances. The higher an insurance company thinks the risk of you dying is, the more you'll have to pay. As a result, smokers, older people and those with certain medical conditions can all expect to pay more.

Policies offering broadly similar levels of coverage for the policy outlined above range in price from £5.08 a month to £16.04. Many mortgage lenders have tie-ups with insurance firms, or their own insurance arms, and may offer you cover when you arrange your home loan.

Is it worth it?

If you live on your own, have no dependants and nobody you want to leave an inheritance to, you may decide you don't need cover. For those with partners and families, life assurance can offer peace of mind.

If you're weighing up the pros and cons, consider whether you have other financial products that would enable your family to continue to comfortably pay the mortgage if you died. You may already have a standalone life insurance policy, savings and investments that would cover any outstanding debt, or death in service benefits from a company pension scheme.

Choosing a policy

As with all financial products there are variations between the different policies on offer. Some will pay out while the holder is still alive if they are diagnosed with a terminal illness.

Others offer so-called accelerated critical illness cover, where they will pay out on diagnosis of one of a number of predefined critical illnesses, such as a heart attack, cancer or a stroke.

Switching policies

As with all financial products it's worth checking you're currently getting the best deal on your current policy.

If it's several years since you first took out a policy, you may find premiums for a new policy are more affordable now than they were back when the market was less competitive.

If you do decide to switch policies, make sure your new cover is in place before you cancel your old one. Try not to leave yourself exposed to a period without life insurance.

*based on data from financial information group Defaqto ]]> http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-and-the-economy.html http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-and-the-economy.html Mon, 31 Aug 2009 22:06:41 -0500
The question of course is why mortgage rates are falling. Generally once the economy starts improving interest rates should rise. I think what has happened is that while the actual economy has improved the expectations about the economy have fallen. During the last 2 months people thought the economy might experience a V shaped recovery. Basically once the economy turned around it would recover quickly.

But since that time more people are now expecting a U shaped recovery. Basically the economy is going to recover but it's going to occur more slowly. On the positive side these lower expectations could be lowering mortgage rates. Here are mortgage rates for the last few weeks.

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

As we can see for the last few weeks the 30 year mortgage rate has been hovering from 5.20 to 5.29 until this week when it abruptly fell to 5.12. In addition to rates we like to look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also did the same thing with rates from August 6 (2 weeks ago) and rates from January 15 (6 months ago).

Aug 20
30-yr $1088.35
15-yr $1536.12
5-yr ARM $1021.7
1-yr ARM $1036.07

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

As we can see there is some savings compared to 2 weeks but nothing too substantial. Compared to 6 months ago a mortgage payment would be 1.83 percent more. So basically we are seeing rates and mortgage payments slightly higher than 6 months ago and slightly lower than the last few months.

What we are going to see moving forward depends on the economy. If we experience a V shaped recovery we should expect mortgage rates to move up quickly. This is because the massive amount of money the US government has poured into the economy during the recession should lead to inflation when the economy recovers. But if the economy experiences a U shaped recovery and continues to lurk around in the doldrums we should see low interest rates for the next few months.
]]> http://articles.mychoicedeals.com/finance/mortgage/home-loans-mortgage-broker.html http://articles.mychoicedeals.com/finance/mortgage/home-loans-mortgage-broker.html Sun, 30 Aug 2009 03:35:39 -0500
A licensed, experienced mortgage broker is a individual all impending home buyers must endeavor to get on their side. In picking a experienced broker your task of securing the best finance deal for buying a fantasy house could be attained easier than you might ever imagine.

There are many brokers obtainable these days as well as the web, of course, is one of the quickest techniques to locate them, except the web may also make it easy to choose the wrong one. That's the reason it's so valuable that you are precise when deciding on the broker and furthermore that they spend the amount of needed to make sure that you're happy the entire course, plus provide the finest possible service.

A lot of people often overlook is that a very supportive and thoughtful broker could actually produce a difference to a total point of view on the subject of acquiring a home loan. A helpful broker can be a determining feature between a painless, minimal-anxiety loan or an challenging, difficult home loan.

Thus the important issue is, "How Do I Distinguish If I Possess A Good Home Loans Broker?" Here are various incredibly basic things that can show you immediately in the case the mortgage broker isn't top-of-the-line. These factors consist of the following:
1. First of all, remember to utilize common sense. How do you determine the quality of any other qualified authority you hire such as a doctor, lawyer, accountant, etc.? Don't you sense a good feeling for this individual upon your first meeting discussion? When they take time to chat to you and clarify any questions, and has an excitable stance, most likely he or she is the perfect candidate for the responsibility of obtaining you the best home loan.

2. Research the brokerage firm by making use of the internet. Enter the loan brokerage firm's webpage and take some time to read the site's information. Here at Finance Ezi we offer you complimentary mortgage loan calculators that can enable you to acquire a mortgage arrangement suited to your own financial circumstances.

3. Certify that your broker willingly and pleasantly and willingly answers any questions that you might have. If he or she looks to be disconcerted or put-out because of your questions, then probably you have not used the suitable broker for you. The broker should answer any and all questions you hold without becoming frustrated or stumped.

4. Insist on the broker for specific timelines as much as possible. Although it is sometimes impossible to give detailed dates for finalization of home loans, it is important that the broker understands that time is precious in making your loan become a reality. Again, if the broker seems to be unenthusiastic to commit to a time frame then most likely you have a broker who attempts to take on too many clients at one time or simply does not place importance about meeting your deadlines. This can end in disaster when you have a diversity of low-cost home loans to consider.

Also take into account if you are unsure or unclear about anything in regards to a cheap home loan, you should be entitled to comfortably request your broker for answers. If you don't understand adjustable mortgages or are unclear about closing costs and fees, then by all means, ask us a good mortgage broker that will happily provide you with comprehensive explanations. They should take all the time you require to explain and detail any specific information you might require to make the loan process a comfortable and stable experience. Answer every question you ask so you will never have to ask us twice. ]]> http://articles.mychoicedeals.com/finance/mortgage/call-for-fsa-to-regulate-buy-to-let-as-tenant-demand-strengthens.html http://articles.mychoicedeals.com/finance/mortgage/call-for-fsa-to-regulate-buy-to-let-as-tenant-demand-strengthens.html Thu, 27 Aug 2009 23:50:21 -0500
One such expert, and a buy to let mortgages specialist, is Steve Olejnik. He highlights that in regards to the increases in yields on a region by region basis (Midlands at 7.4 percent, North East at 6.8, North West at 6.7, Wales at 6, Scotland at 6, South West at 5.9 and South East at 5.8), residential property is now currently an attractive investment.

However, as the Paragon research shows that now is a great time for first-time landlords to invest in property, data from Exact Mortgage Experts casts a somewhat different light on the positive developments in the market.

According to AboutProperty, after a survey of 549 mortgage brokers, 54 percent said that they think the buy to let market should be regulated by the financial services authority (FSA). Additionally, almost half of those asked said that 90 percent of their buy to let clients were amateur landlords. This has lead Alan Cleary from Exact to re-state what he had suspected all along, that the FSA should have started regulating the market in 2004.

"The lack of regulation meant it was too easy for amateurs without a commercial head on their shoulders to jump on the bandwagon," Cleary stated to About Property. "It was a mistake to assume that because BTL was viewed as a commercial endeavour, it could be left unregulated. The number of amateurs landlords in the private rented sector with sizeable portfolios now well under water is proof of the fact."

With FSA regulation is seems that the risk of a few amateur landlords making unwise investments will be lessened, which, according to Cleary and the majority of those asked in the Exact survey, will greatly reduce the number of buy to let mortgage arrears - which are currently above the market average.
]]> http://articles.mychoicedeals.com/finance/mortgage/are-mortgage-rates-primed-to-rise.html http://articles.mychoicedeals.com/finance/mortgage/are-mortgage-rates-primed-to-rise.html Wed, 19 Aug 2009 22:44:02 -0500
What is interesting is that the current (small) upward movement in mortgage rates might be the beginning of the rise that many in the financial industry have predicted. If the economy continues to rebound this could be the beginning of mortgage rates steadily moving up to 10% or higher. This is of course dependent on the continued movement of the US economy out of the current recession. While the government has made some statements about curbing inflation it seems more concerned with making sure the US exists the recession.

Of the 4 major indexes 3 moved up this week. The 30 year note rose from 5.22 to 5.29, the 15 year mortgage rose from 4.63 to 4.68 and the 5 year arm rose from 4.73 to 4.75. The 1 year arm fell from 4.78 to 4.72. What is also interesting is that when rates were at their lows a few months ago the 5 and 1 year arm was higher than the 30 year fixed rate, which is highly abnormal. Since the 30 year rate has gone up (and the arms have stayed down) the 30 year rate is now above both arms. And now the spread between the 30 year rate and the arms is back to normal. Below are the rates for the different mortgage products for the last few weeks and for January 15 (6 months ago).

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

- - -

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

In addition to rates it's always interesting to look at actual mortgage payments. We took today's rates and using a mortgage calculator translated them into a payment for a 200k mortgage. We also did the same thing with rates from July 30, 2009 (2 weeks ago) and January 15, 2009 (6 months ago).

Aug 13
30-yr $1109.36
15-yr $1548.44
5-yr ARM $1043.29
1-yr ARM $1039.68

Jul 30
30-yr $1104.4
15-yr $1549.47
5-yr ARM $1043.29
1-yr ARM $1049.33

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

As we can see that while rates have risen the effect on a mortgage payment (looking at the 30 year fixed rate) is relatively small.

So what is our advice to potential buyers looking for a mortgage? I would start the process of looking for a lender/mortgage early on. Financing is stricter than it has been in the past and its good to start the process early so any potential problems can be resolved (i.e. credit report problems or extra documentation that is needed). Additionally, with a possible spike in inflation looming there is more of a risk of rates rising than falling so it makes sense to lock in early.
]]> http://articles.mychoicedeals.com/finance/mortgage/mortgage-fraud-at-all-time-high.html http://articles.mychoicedeals.com/finance/mortgage/mortgage-fraud-at-all-time-high.html Sun, 16 Aug 2009 00:50:22 -0500
From 2007 to 2008, the FBI's annual report showed that the industry experienced an increase of more than 83.4 percent in actual mortgage fraud dollars. Last year mortgage fraud cost lenders in excess of $1.4 billion in liability, says the FBI report, and higher figures are expected for the 2009 fiscal year. Just through June of 2009, fraud figures exceeded the previous year during the same time period by around $208 million.

There were over 63,000 incidents reported by lenders regarding mortgage fraud in 2008, which was 33 percent more than reported in 2007. Increased reported incidents are partly attributed to more intense scrutiny of borrower details. Reporting inflated income in order to buy a larger home, or applying for modification under the pretense of a false job loss, have been identified as increased contributors to fraud more recently.

In the report, the FBI attributes much of the fraud to market insiders, which includes mortgage brokers, real estate agents and brokers, lenders, property appraisers, title companies, underwriters, accountants and others. Stating that insiders are attracted by the allure of low-risk, high-yield returns, the report does not expect the numbers of those involved in fraud to diminish. Due to the complexity of the mortgage process, industry insiders find ways to make a quick buck without drawing immediate attention.

Tighter lender requirements that are making it more difficult to obtain a mortgage are a contributor to the strained industry. In addition, many in the mortgage industry are no longer experiencing the benefits of the long gone real estate boom and turn to fraudulent methods to fill the gap in income.

Along with traditional methods, other major targets expected to be pursued by fraudsters are minorities and seniors struggling with foreclosure, along with federal economic stimulus programs. State-wide incidents in Florida reveal increased numbers of Hispanics being defrauded by Hispanics operating fraudulent companies under the pretense of financial and foreclosure assistance.

Federal programs operating under the Emergency Economic Stabilization Act (EESA) and the Housing and Economic Recovery Act (HERA) have opened the door to additional fraud opportunities, and are expected to become new targets for fraudsters.

California has revealed incidents of mortgage fraud perpetrated by organized crime and gang members. Along with new fraud methods, traditional modes are expected to increase and will be more closely monitored by the mortgage industry and law enforcement as communication methods become more enhanced.

The FBI is bracing itself for record high mortgage fraud. In attempts to get a handle on the mortgage fraud epidemic, the federal branch created the National Mortgage Fraud Team (NMFT). The FBI will use the team to further continue to partner and provide valuable information to the mortgage industry and law enforcement in order to capture and deter mortgage fraud perpetrators. ]]> http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-stay-even.html http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-stay-even.html Sun, 16 Aug 2009 00:15:21 -0500
Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Looking above the 30 year mortgage rate has only moved from 5.14 to 5.25 in the last month which is remarkably stable considering the changes in the economy and the mortgage industry. Rates are still higher than what we saw six months ago but the change is not huge. To illustrate this let's look at changes in actual mortgage payments. Using our free mortgage calculator we took today's rates and translated them into a payment for a 200k loan. We did the same thing with rates from July 23 (two weeks ago) and rates from January 15th, 2009 (6 months ago).

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jul 23
30-yr $1098.22
15-yr $1548.44
5-yr ARM $1042.08
1-yr ARM $1045.7

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

From two weeks ago we are see a change of $2.47. This is pretty insignificant. When mortgage rates first started dropping we saw a difference of $35 from one week to the next running this same calculation. Compared to 6 months ago we see a rise of $31.94 or 2.98 percent. Considering the time frame this is still a relatively small change.

First off what is my advice for people looking for a home and a mortgage? I would still avoid arms. Nothing has changed basically arm's offer a small benefit right now but with most experts predicting higher rates in the future it makes sense to look in for a longer period of time with a 30 year fixed mortgage. What is our prediction moving forward? Long term I would expect rates to move up perhaps to 10 percent or more. In the short term I have been saying that it's hard to know. Know with the economy improving I would expect to see higher rates than what we are currently experiencing a month from now. That is assuming the economy doesn't start sliding backwards.
]]> http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-start-to-trend-upward-again.html http://articles.mychoicedeals.com/finance/mortgage/mortgage-rates-start-to-trend-upward-again.html Wed, 12 Aug 2009 21:06:03 -0500
Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jul 02, 2009
30-yr 5.32 15-yr 4.77 5-yr ARM 4.88 1-yr ARM 4.94

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

In addition to looking at rates it's always nice to translate them into actual mortgage payments. We used a mortgage calculator to translate a 200k loan into a mortgage payment based on current rates. We also did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Jul 30
30-yr $1104.4
15-yr $1549.47
5-yr ARM $1043.29
1-yr ARM $1049.33

Jul 16
30-yr $1090.82
15-yr $1543.3
5-yr ARM $1052.96
1-yr ARM $1044.5

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

So while payments are higher (assuming one got a 30 year mortgage) they are not that much higher. Compared to 6 months ago a mortgage payment (on a 200k loan) would be $35.65 more a month or 3.33 percent higher. Enough for a fee extra coffee's a month but nothing substantial. But if rates spike up to 10 percent (as some predict) the payment would be 1755.14 which would be a 58.92 percent increase.

So what is our advice? As has been true for the last year I would avoid the arms like the plague. Although rates are up over the last few months historically speaking rates are still very low. There are very few cases where it makes sense to get an arm and risk refinancing in a few years at potentially a much higher rate. And if rates go down substantially (which is pretty unlikely) one can always refinance at the lower rate.

Also in the same vein if one is considering getting a mortgage in the next month or so I would suggest looking in early if one can do so without extra fees. Although rates could go either way there is a more of a risk of them moving up than down over the next month.
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