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Archive for Mortgage – Page 9

Big Change is Coming for FHA Loans

By BankAim · Comments (0)
Monday, September 13th, 2010

FHA LoanThe Federal Housing Administration (FHA) is making some big changes to their mortgage insurance structure.

Starting October 4th 2010 the upfront mortgage insurance fee will be lowered from 2.25% down to 1%.

Sounds great doesn’t it?  Well hold on just a second…

FHA mortgage insurance is making up their losses by nearly doubling the monthly mortgage insurance that is mandatory on FHA loans.  Currently monthly mortgage insurance on a FHA loan is .55%, as of October 4th this will be .90% or even higher.

How does this affect you?

Typically borrowers apply for an FHA loan because the down payment requirement is only 3.5%, which is much lower than a conventional loan.  If you qualify for an FHA loan today your up front mortgage insurance may be $2,000 and your Monthly Mortgage insurance may be $90 (hypothetically).

If you get a FHA loan after October 4th your upfront mortgage insurance would be just under $1000, but your monthly mortgage insurance would nearly double at over $160 a month.  In this hypothetical scenario you would save $1,100 up front and spend $70 more per month.  It would only take 16 months before you spent more money monthly than you would have paying the mortgage insurance up front. After 3, 5, or even 10 years you are going to spend thousands of dollars more on the MI.

Now in a real loan the numbers may look different, but this scenario is meant to show you how the Federal Housing Administrations changes are going to affect you if you apply for a FHA loan after October 4th.

To Sum it all up…

In summary the new changes are going to end up costing homeowners who stay in their house longer than just few years thousands of dollars more.

If you stay in your home just a short time, like under 2 years, this new deal may end up saving you money.  Have your Loan Officer crunch the numbers so you know what type of upfront costs and monthly costs will be associated with your FHA loan.

And if you can qualify and close your FHA loan before October 4th 2010 that may save you thousands of dollars over the life of your mortgage insurance.

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Categories : Bank Info, Mortgage
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Should I do a FHA Loan for My Mortgage?

By BankAim · Comments (0)
Thursday, September 9th, 2010

An FHA Loan could be the answer you are looking for.

FHA loans are insured by the Federal Housing Administration (FHA).  There are some certain rules and benefits that come with FHA loans.

Here are the details you will need to know about an FHA loan.

Benefits of an FHA Loan:

  • Low Down Payment – FHA only requires 3.5% down payment on purchases.  Compare this with 5% on conventional loans. (5% if you are lucky, most likely the down payment will be no less than 10%.)
  • Lower Closing Cost Fees – This is one of the rules for the broker. There are certain fees that cannot be charged into an FHA loan which makes your closing costs less expensive.  Now most brokers and banks will try to make this up somewhere else so they do not have to pay those fees.  This is okay because those fees need to be paid, but you can ask them where they are making up the money for the fees that cannot be covered.  It will either be more points on the front or in the YSP (What is YSP?)
  • Lighter Credit Requirements – This means your credit score can be lower and still qualify for a FHA loan.

Cons of an FHA Loan:

  • Up Front Mortgage Insurance – FHA loans charge an upfront mortgage insurance fee of 1.5%.  You will have to pay this on the front of your loan making it more expensive than a conforming loan.  The fees cost less but mortgage insurance ads more.
  • PMI – Most people that opt for an FHA loan do so because of the 3.5% down payment.  This means you will have to pay a monthly mortgage insurance.  For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.

If you are in the market for a mortgage be sure to ask your broker about an FHA loan. An FHA Loan could be the answer you are looking for.

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Categories : Mortgage, Personal Finance
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Mortgage Rates Slightly on the Rise – September 9

By BankAim · Comments (0)
Thursday, September 9th, 2010

Rates Moving UpMortgage rates back bounce to where they were on August 26th.

It is not to often these days that we see rates on the rise.  Although some experts think that is about to change.

Todays rates are slightly higher than they were last week.

  • 30-Yr Fixed – 4.35 %
  • 15-Yr Fixed – 3.83 %
  • 5/1-Yr ARM – 3.56 %

Last week rates looked like this.

  • 30-Yr Fixed – 4.32 %
  • 15-Yr Fixed – 3.83 %
  • 5/1-Yr ARM – 3.54 %

These rates are based on the Freddie Mac Primary Mortgage Market Survey.  Banks all over the nation are polled for there current rates and these are the averages.

The 30 year fixed is base off of 0.7% points, while the 15 year and the 5/1 ARM are based off of 0.6% points.

Old Article? See todays mortgage rates.

Should you lock your rate in now?

Rates are at the lowest they have been in many decades.  It is foolish to not lock in now while they are this low.  You may make the estimation that rates will continue to fall in a week economy, but to me the risk/reward factor is not large enough to float your rate.

Once lenders catch a glimpse of a strengthening economy those rates are likely to shoot up by a half percent or more.

Back in January and February of 2008 rates were dipping close to 5%.  There was a frenzy of refinances and loan locking.  Many people decide to try and float their rate to get under 5%.  Within an hours time lenders put a hold on rates so no one could lock.  When that hold was lifted rates were sitting back at 5.5% and continually rose after that.

Many people missed out on 5% fixed rates, including me. Yes, I decided to try and hold out for a lower rate.  That decision as cost me more than 60 dollars a month for more than a year and half now.  To date I have blown $1080.  If I stay in this mortgage for just 5 years that will be a  $3600 dollar mistake, and if I stay in the house for the entire term of the mortgage it will have been a $21,600 dollar mistake.

You know, I have never actually done the math on that decision and it hurts.

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Do Not Be Fooled By Radio Mortgage Ads

By BankAim · Comments (0)
Wednesday, September 8th, 2010

Radio Playing Mortgage AdvertisingSome of these radio ads I hear for mortgage rates and mortgage offers just make me laugh.

I worked as a loan officer for 5 years so I know the reality behind the sneaky little marketing tricks mortgage companies try to pull on radio listeners every day.

Here is one for you…

“We will pay all your closing cost for you.  If you come in with a 2 hundred thousand dollar loan, you will leave with a 2 hundred thousand dollar loan.”

Now here is the truth.

Yes mortgage companies can pay all the closing costs on your loan for you, but it sure is not coming out of there “generous” pockets.  No no… YOU will be the one footing this bill.

Just like pretty much everything else in life this offer IS too good to be true.

Here is how they do it.

When a mortgage broker chooses a bank to fund the refinance or purchase that you are doing, the bank will actually pay the broker for that business and if they offer you a higher interest rate.  They do this through something called Yield Spread Premium or YSP. (see our Mortgage Help for a more detailed explanation of YSP).

If the base rate for the day is 4% the broker could tell you that the rate is 4.25% today and the bank would pay them say 1% of the loan amount to lock at the higher rate.  YSP is not the tricky marketing tactic.  YSP is a normal part of loans that is fully disclosed and you can learn to use YSP to your advantage.

The problem lies in the fact that all a “We will pay all your closing cost for you” loan is that it is a loan with a much higher interest rate so that the YSP is greater.  Then the mortgage broker uses the YSP money to pay the closing costs.  But remember the mortgage brokers are in it to make money so they will also be sure to include enough left over for them to make money, this only makes your rate even higher.

These types of loans only leave you with a much higher interest rate than you could have gotten.

This loan will work in one situation.

This loan will work if you are planing on being in the loan short term.  If you stay in the loan for just a few years the higher interest rate payments will catch up and eventually overtake the amount you saved by doing a no closing cost loan.

Since it is meant to be a short term loan you should look into a 5/1 Adjustable Rate Mortgage. This will save you more money because the interest rate will be lower.

Now you know.

So now you know the how the “We’ll pay the closing cost for you” loans work.  Do not be fooled into thinking they are something greater then they actually are.

If you are looking for a stable fixed mortgage find a bank or broker with more straight forward, honest advertising.  Or even better, ask your friends who they recommend.

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Categories : Mortgage, Personal Finance, Tips
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Wells Fargo Mortgage Rate Review

By BankAim · Comments (0)
Wednesday, September 1st, 2010

Wells FargoWells Fargo is one of the nations largest banks.  Sometimes large banks are able to offer very competitive mortgage rates for their customers.

In this case Wells Fargo is showing some good average mortgage rates.  Most of the rates are falling right in line with national average.

Remember rates may change depending on where you live, but this is a good start.

These rates are based on 1 point (1% of the loan amount) being paid for origination.

Term Rate APR
30-Year Fixed 4.375% 4.559%
30-Year Fixed FHA 4.375% 5.100%
15-Year Fixed 3.750% 4.069%
5-Year ARM 2.875% 3.209%
5-Year ARM FHA 3.250% 3.074%

If you want to check out more info at Wells Fargo or read the fine print click here.

Check out the National Mortgage Rate Averages Here.

Wells Fargo has been around for well over a century. Over 150 years ago, Henry Wells and William Fargo founded a company that has become a legendary part of America. This heritage is still very much a part of Wells Fargo’s identity today.

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Categories : Bank Info, Mortgage
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Bank of America Mortgages Rates and Tips

By BankAim · Comments (0)
Tuesday, August 31st, 2010

Bank of AmericaBank of America is one of the nations largest financial and lending institutions.  Because of their size Bank of America can offer some very competitive mortgage rates often times below the national average.

Bank of America has a system which will show you the rates for your local area.  Different parts of the nation may have higher or lower interest rates than others.  B of A helps you narrow down the mortgage rates to your area.

For this example I am going to use Washington State because that is where BankAim was founded.

Washington State Purchase Mortgage Rates from B of A:

  • 30-Year Fixed-Rate – 4.500% with an APR of 4.656%
  • 15-Year Fixed-Rate – 4.125% with an APR of 4.414%
  • 3/1 ARM – 3.375% with an APR of 3.365%
  • 5/1 ARM – 3.375% with an APR of 3.296%

Mortgage rates for purchases are based on 1 point which is equal to 1% of the loan size, 20% down payment and a conforming loan amount which is typically under $417,000*.

(*Conforming loan amounts may change due to the area you live.)

Washington State Refinance Mortgage Rates from B of A:

Rates for a refinance remain the same assuming you have an 80% Loan to Value(LTV) or lower, and are under the conforming loan limit for your area.  These refinance rates are also based on 1 point.

For Washington State Bank of America rates are above the national average mortgage rates. Personally I know of a few mortgage brokers that can currently offer under the national average so I would definitely shop this rate around instead of going with Bank of America.

If you want to see what B of A offers in your area and read their fine print you can do that here.

Remember to check the articles date for accuracy.

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Categories : Bank Info, Mortgage
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Free Falling – Mortgage Rates – August 26th

By BankAim · Comments (0)
Thursday, August 26th, 2010

According to the Primary Mortgage Market Survey by Freddie Mac mortgage rates have continued to free fall.

Currently Rates are:

  • 30 year fixed – Averaged 4.36% – Last week it was at an average of 4.42%. A year ago this week the 30 year rate was at 5.14%.
  • 15 year fixed – Averaged 3.86% – Last week it was at an average of3.90%. A year ago this week the 15 year fixed 4.58%.
  • 5 year ARM (Adjustable Rate Mortgage) – Averaged 3.56% which was the same as last week. A year ago this week the 5-year ARM 4.67%.

The 30 year fixed and 5 year arm are based on an average of 0.7 points, and the 15 year fixed is based on .06 points.  Additionally the rates posted are based on an average from across the nation and may not necessary reflect the mortgage rate you will receive if you refinance today.

This is a wonderful time for those that have a mortgage to refinance to take advantage of the lowest rates this country has seen in decades. Hundreds and thousands of dollars are being saved by those able to refinance their existing mortgage to a lower rate.  The trouble for most homeowners is the lack of equity in their home caused by the current recession which makes them unable to refinance.

How will this effect the ecomony?

As for how this will effect the economy the opinions are being reflected as both positive and negative. Many believe this is just more troubling news for an ever weakening economy. Signs that things are getting worse and we are not on the road to recovery quite yet.

Other experts feel these low rates could put more money in consumers pockets due to the savings from refinancing.  This higher cash flow could help spur the economy on for the better.

Time will tell.  Let us know your thoughts in the comments below.

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As Rates Drop Refinances Rise – August 19th

By BankAim · Comments (0)
Thursday, August 19th, 2010

As Mortgage Rates continue on with record lows refinance activity is increasing dramatically.

According to the Mortgage Bankers Association 81% of new mortgage applications have been for refinance.

This nation has not seen rates like this in over 50 years, and homeowners everywhere are refinancing their mortgage to get locked into these record low mortgage rates.

Will rates keep going down? or should you lock now?

According to the experts this is no time to sit on the fence.  If you are in a position to refinance your home now is the time to get locked in.  Think of it this way.  Not since the 50′s has anyone had a mortgage rate as low as yours is going to be.  So I’d guess that locking now is the best idea.

According to the Mortgage Bankers Association the national average for mortgage rates are as follows…

  • 30-Year Fixed Rate 4.57%
  • 15-Year Fixed Rate 3.95%

If you want to see today’s rates then check out the national mortgage rates.

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Mortgage Rate Update August 12th

By BankAim · Comments (0)
Thursday, August 12th, 2010

Mortgage Rates for the week of August 12th have continued to drop to record lows.

For more than 6 months now we have seen mortgage rates fall to all time lows.  This week is no exception.

  • 30 Year Fix – 4.44%
  • 15 Year Fix – 3.92%
  • 5/1 ARM – 3.56%

It is still uncertain as we draw near to the end of the summer if this historic drop in mortgage interest rates will continue or if mortgage rates will start to increase.

If you have equity in your home or are looking to purchase a new home then now is a great time to take action.

You can use our mortgage calculator to help determine your monthly payment.

If you are visiting this page and it is not August 2010 you can use this table below to compare the interest rates above with where they are today.

Todays Interest Rates

*TermAugust 16thAugust 6th
30yr fixed4.19%4.31%
15 yr fixed3.43%3.48%
5/1 ARM2.92%2.86%

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4.25% 30 Year Fixed Mortgage Rate with Everbank

By BankAim · Comments (0)
Tuesday, August 3rd, 2010

Everbank is offering an extremely low 30 year fixed interest rate of 4.25% with a 4.374% APR.

Everbank is offering other great rates which are all falling below the national average.

  • 30-year fixed      4.250% with a 4.374% APR
  • 15-year fixed       3.750% with a 3.939% APR
  • 5/1 ARM                3.500% with a 3.397% APR

See the national mortgage rates here.

Everbank, which is headquartered in Jacksonville Florida, boasts consistent asset growth over the last 3 decades. With nearly 12 billion in assets and almost 2,000 employees Everbank prides itself on exceptional service and proven expertise in particular financial arenas.

Everbank is one of the industries fastest growing and high performing bank holding companies.

Now they can benefit you with tremendous mortgage rates which are hitting record lows.

To check out the Everbank information and fine print go here.

The 30 year fixed rate at 4.25% and APR of 4.374% is…

  • Based on a $250,000 price with 20% down payment equaling a mortgage amount of $200,000.
  • Based on a credit score of 720 or greater.
  • If 20% down payment can not be provided mortgage insurance will need to be added.

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