Archive for July, 2010

Should I Lock In My Mortgage Rate Now?

If you have been keeping track of the mortgage interest rate market recently, you probably noticed that there is alot going on and that mortgage rates keep going lower and lower…

So the question people are asking is “When should I lock in my mortgage rate?”

It is only natural… everyone wants to get the best deal possible and everyone wants to get the best price… but wait tooo long and you end up with a higher mortgage interest rate…

So what is one to do with mortgage rates?

Here is what mortgage guru had to say….Jack Pritchard. In most cases, he says, the borrower’s credit and a computerized estimate of property value can be obtained within a few minutes, while the borrower’s income can be verified or at least checked for reasonableness within the day. These are the critical factors involved in a lock.

That does not mean that an honest lender will always provide an immediate lock to any loan applicant. Because locking imposes a cost on the lender, no lender wants to lock a loan that is unlikely to close. If the initial information available to the lender indicates that the borrower may not qualify for the requested loan at the posted price, the lender won’t lock. In that situation, the borrower must decide whether the lender has a valid reason for delaying the lock, or is using delay as a tool for gaining a strategic advantage.

There is only one reliable way to answer that question, and that is to determine whether the lender offers an objective method of disclosing its loan prices. If a price is communicated orally, or in an email, the borrower should assume that the lender is trying to game him with the delay.

On the other hand, if the borrower can find his price on the lender’s Web site, there is no strategic advantage to the lender of delaying a lock, because the borrower can check any future lock price. It may be higher or lower than the price on the day a lock was first requested, depending on which way the market has moved, but it is the correct price on the day the loan is finally locked.

At the end of the day….waht to do?

If you like to gamble, and like the uncertainty of things.. then wait it out….

But with regard to conventional wisdom… and mortgage rates….

Bottom line, “lock ASAP” is a good rule in today’s market, but to make it work effectively, it should be accompanied by another rule: “make the lender document your price.”

There you have it.

Credit May Be Loosening Up, and Consumer Loans May Be Out There

There is no doubt that the credit supply still is tight, especially in mortgages, despite prodding by government officials to increase lending. So even if you are one of those peoople who may have less than stellar credit, you may be able to get some of the thing you want… Subprime borrowers got just 9%, or $44 billion, of all consumer loans in the fourth quarter, the latest period for which figures are available, according to Experian PLC and Oliver Wyman. That is down from 18% in 2007′s second quarter.

But some lenders are starting to take more chances on consumer loans. Many financial institutions that survived the credit crisis and resulting recession are desperate for earnings growth, but loans to businesses amount to less than 20% of all outstanding loans, said Frederick Cannon, co-director of research at investment bank Keefe, Bruyette & Woods Inc. Again, that being said, it still means that there are people that will not qualify for loans because of different circumstances.

So Can I get A Loan if I Have Bad Credit?

Depends….

Another strong lure: Fewer borrowers are falling behind on payments. Excluding mortgages, about 5.5% of consumer loans were at least 30 days past due at the end of the second quarter, down from the year-earlier 6%, according to Equifax Inc. and Moody’s Analytics.

Some lenders said they are willing to stretch because borrowers who take on credit in the early stages of an economic recovery often are less risky and thus more profitable than those who borrow later. Federal Reserve Bank of St. Louis economist Williams Emmons said some credit loosening is normal given the U.S. economy’s growth since the end of the recession.

Financial institutions also claim they are getting smarter about who deserves a loan.

If you are working on cleaning up your debt, and getting a better credit score… and years have passed since you have had your situation, then you may be in a position to qualify for a loan even if you have bad credit.

Where Can I Find A Bad Credit Home Refinance Loan?

If you are one of those people looking for a bad credit home refinance, today may be your lucky day….

The reason Im saying this is because it appears that things may be changing, and actually changing in your favor. What we are talking about is this…

A spokeswoman for Capital One said customers who “fully settled” their old debts might get a credit-card solicitation “with appropriately conservative spending limits.” The spokeswoman said, however, that doesn’t mean “that a consumer will receive a card.”

Capital One won a court judgment against Ms. Davis for the money owed and she repaid it.

Fannie Mae, seized by the U.S. government in 2008 to avert the mortgage company’s failure, launched an initiative in January that allows some first-time home buyers to get a loan with a down payment of as little as $1,000. Securities firm Morgan Stanley Smith Barney, a brokerage operation jointly owned by Morgan Stanley (NYSE: MS – News) and Citigroup Inc. (NYSE: C – News), is offering some clients home-equity credit lines of as much as $2.5 million.

Credit-card issuers mailed 84.8 million offers of plastic to U.S. subprime borrowers in the first six months of this year, up from 43.7 million a year earlier, estimates research firm Synovate. Nearly 8% of loans for new cars in the latest quarter went to borrowers with the lowest range of credit scores, up from 6.2% in 2009′s fourth quarter, according to J.D. Power & Associates and Fair Isaac Corp.

This may not be for everyone… but at least it shows possible signs that the economy is changing.

don’t get me wrong, there is still plenty of gloomy skies out there, and the economic environment is not looking to change much in the near future, but again, it points to light ahead of the tunnel, however dim that may be.

After Bankruptcy And Bad Credit And The Economy

Millions of people are dealing with bad credit… and it isn’t getting any better. Worse off, many people have been left in shreds and trying to get back on their feet after bankruptcy.

Looking out into the economic forecast, one question many are asking is, regardless of whether I have bad credit, or went through a bankruptcy, what can I expect with the economic recovery, and what about the fears of a double dip recession?

Federal Reserve policies have greatly increased the amount of reserves that banks have available since the economic crisis began. Banks now have over $1 trillion in excess reserves on their balance sheets and are being paid 25 bps on these reserve balances.

With interest rates on safe treasury bills now near zero, banks are holding large quantities of excess reserves because they wish to show a high level of liquidity to investors and regulators. The Fed should do all it can to encourage banks to lend out these reserves. One way of doing this is to cut back to zero the interest rate that the Fed pays on excess reserves.

The Fed should also engage in open market policies that encourage banks to extend loans to businesses and consumers. This can be done by the Fed buying securitized packages of these loans in the open market.

There is little question that the Federal Reserve’s purchase of more than $1 trillion of conforming mortgages (those under $417,000) has helped keep those rates low. Currently the rate on 30-year fixed rate mortgages has fallen to a modern-day low of 4.69%. For a median priced house of $220,000, this works about to a very affordable payment of $687/month for a mortgage covering 80 percent of home value. These low rates have stabilized the housing market.

But the market for higher priced homes has suffered, as the premiums that lenders have charged for “jumbo loans” has jumped markedly and in some cases these mortgages are not available at any rate. The paralysis of the higher priced housing market hurts the whole industry since it prevents owners of these homes, such as “empty-nesters,” from downsizing. The Fed, by providing a liquid market for jumbo mortgages as well as other high-yielding credit card and auto loans, will encourage banks to lend in these markets.

The most recent Case-Shiller report showed prices rose 2.3% in March, compared with March 2009. The National Association of Realtors recently reported that in April the median existing home price rose 4% in the past year; existing home sales were up 7.6% in April to a seasonally adjusted annual rate of 5.77 million.

• Hurry Up and Close to Get the Home-Buyer Tax Credit

• When Buying a Short Sale, There Are No Easy Answers

• Be Prepared for Bull, Bear or Bust

While it’s too soon to quantify the degree of the effect, the deadline for the home-buyer tax credit likely played into the numbers. Contracts needed to be in place by April 30 to qualify, and some economists say that incentive made buyers move earlier than they would have otherwise. Any bump from a temporary credit is soon over.

How Can I Get A Loan Even If I Have Bad Credit?

I bet you wish you were the federal government right?

You can get all kinds of money. all you do is print it… If you have bad credit, and are trying to figure out how to get a loan, the Federal Government may not be who to ask. But, it may be interesting to note that even the Federal Government is headed the same way you probably were and that is what got you in your financial mess….

See… you were probably running a financial deficit, meaning you were spending more money than you were making, thus putting you in a financial bind, and then causing you to be in a position that you couldn’t afford.

Think Greece, or Spain… Well, it appears that the United Stated Government is headed in that same direction.

Right now, the government is spending more money than it makes, and it may be not long before the feds can’t pay their bills, and are dealing with the same bad credit issues that you were.

If you are looking for a bad credit loan, just rememver that you need to make sure your financial house is back in order first.

Bad Credit Loans And The Financial Reform Bill

One of the things that bad credit loans and people with bad credit have to deal with today is alot of doing from what happened with Wall Street excesses of the past few years.

Yes, it’s true that there are people that have bad credit these days, and some of them were irresponsible, but then again, there are many people out there today that have bad credit because they lost their job, or they got stuck not being able to get any kind of credit since the credit markets have dried up.

And, forget being able to refinance now that you have bad credit. There are many people out there…. good people just like you that are now in the position that they can t get any kinds of loans.

Here is some info on the upcoming Financial Reform Bill which is making it’s way to Presiden’t Obama’s desk as we speak.

Let’s see what happens…

Senate Democrats on Tuesday said they had cobbled together the bare minimum of 60 votes needed to close off debate and advance to a final vote later this week. Supporters included three Republican centrists from the Northeast, Senator Scott Brown of Massachusetts, Susan Collins of Maine and Olympia J. Snowe, also of Maine.

The three Republicans may be joined by others, but the bill is still certain to fall far short of the wide bipartisan majority that some Congressional leaders had predicted given the unanimous agreement among lawmakers in both parties that the rules for Wall Street needed to be rewritten.

In the House, only three Republicans supported the bill. “I think it’s just the times we’re in,” said Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, a main author of the legislation along with Representative Barney Frank, Democrat of Massachusetts and chairman of the Financial Services Committee.

With a fiercely competitive midterm election cycle under way, the shared goal of tightening regulation of the financial industry gave way to charges by Republicans that Democrats were overextending the reach of government and failing to address the root cause of the crisis by not dealing with the mortgage giants Fannie Mae and Freddie Mac.