Loan Chat

Major Lenders Compared

2007-01-01T10:45:00.000-08:00

As of December 28, 2006, the current nationwide average for a 30 year fixed rate mortgage is 6.18% with 0.40 points. Last year at this time, the 30-year FRM averaged 6.22 percent.

Assuming a 30 year fixed loan on a single family residence in California valued at $400,000 with a $300,000 loan amount, on a borrower with good credit, with a point program around 1 point - lets see how the interest rates offered by the major lenders are doing in comparison to the national average:

Bank of America - 6.000% with 1.081 points. APR = 6.393%

Chase - 6.000% with 1.250 points. APR = 6.118%

Citibank - 6.375% with 0.875 points. APR = 6.511%

Ditech - 6.250% with 1.000 points. APR = 6.477%

ELoan - 6.125% with 0.756 points. APR - 6.237%

ETrade - 5.875% with 1.000 points. APR - 6.102%

Indy Mac Bank - 5.875% with 1.169 points. APR - 6.028%

Union Bank of California - 6.250% with 1.000 points. APR - 6.379%

Wachovia - 5.750% with 1.250 points. APR - 5.975%

Washington Mutual - 5.750% with 1.250 points. APR - 5.881%

Wells Fargo - 5.875% with 1.375 points. APR - 6.134%

Of the major lenders, Washington Mutual bests the competition with an APR of 5.881%. (APR is the effective annual interest rate once points and fees are factored into the cost of the loan). Note of interest: CountryWide, who consistantly seemed to have higher than average rates, no longer posts their current rates online.

Major Lenders Compared

2006-12-23T10:53:00.000-08:00

As of December 21, 2006, the current nationwide average for a 30 year fixed rate mortgage is 6.13% with 0.40 points. Last year at this time, the 30-year FRM averaged 6.26 percent.

Assuming a 30 year fixed loan on a single family residence in California valued at $400,000 with a $300,000 loan amount, on a borrower with good credit, with a point program around 1 point - lets see how the interest rates offered by the major lenders are doing in comparison to the national average:

Bank of America - 5.875% with 1.237 points. APR = 6.058%

Chase - 5.875% with 1.000 points. APR = 5.968%

Citibank - 6.000% with 0.750 points. APR = 6.466%

Ditech - 6.125% with 1.000 points. APR = 6.350%

ELoan - 6.125% with 0.589 points. APR - 6.221%

ETrade - 5.750% with 1.000 points. APR - 5.982%

Indy Mac Bank - 6.000% with 0.804 points. APR - 6.149%

Union Bank of California - 6.125% with 1.000 points. APR - 6.253%

Wachovia - 5.625% with 1.000 points. APR - 5.825%

Washington Mutual - 5.625% with 1.000 points. APR - 5.741%

Wells Fargo - 6.125% with ? points. APR - 6.353%

Of the major lenders, Washington Mutual bests the competition with an APR of 5.741%. (APR is the effective annual interest rate once points and fees are factored into the cost of the loan). Note of interest: CountryWide, who consistantly seemed to have higher than average rates, no longer posts their current rates online.

CBOE to trade home price options

2006-03-17T19:16:00.000-08:00

The CBOE Futures Exchange (CFE) announced today that it plans to launch National Association of Realtors Existing-Home Sales Median Price futures contracts. Through a licensing agreement with the National Association of Realtors (NAR), CFE has created five new futures contracts designed to track the median price of existing-home sales nationally and in four distinct regions within the United States. CFE plans to launch the new contracts in the second quarter of 2006, pending regulatory approval.

The new contracts will be traded electronically, via CBOEdirect, and will be cleared through the triple-A rated Options Clearing Corporation (OCC). At expiration, the futures contracts will be cash-settled, meaning settlement will result in the delivery of a cash amount based on the final settlement price, determined by the surveys conducted by the NAR. See http://cfe.cboe.com/ for more information

Bay Area housing market cools

2006-03-17T10:11:00.000-08:00

Bay Area home sales tumbled in February for the 11th month in a row and prices rose at their slowest clip in two years as the region's real estate market showed further signs of easing after several years of feverish activity.

Freddie Mac's weekly mortgage survey - released March 16, 2006

2006-03-16T17:47:00.000-08:00

Freddie Mac today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 6.34 percent, with an average 0.7 point, for the week ending March 16, 2006, down from last week’s average of 6.37 percent. Last year at this time, the 30-year FRM averaged 5.95 percent.

The average for the 15-year FRM this week is 5.98 percent, with an average 0.7 point, down from last week’s average of 6.00 percent. A year ago, the 15-year FRM averaged 5.47 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.93 percent this week, with an average 0.7 point, down from last week when it averaged 6.03 percent. A year ago, the five-year ARM averaged 5.31 percent.

One-year Treasury-indexed ARMs averaged 5.37 percent this week, with an average 0.8 point, down from last week when it averaged 5.45 percent. At this time last year, the one-year ARM averaged 4.20 percent.

Commerce Bank offers mortgage for low-income residents of Wichita, Kansas

2006-03-14T08:54:00.000-08:00

Commerce Bank is offering a home mortgage for low-income Wichitans that requires only $500 down. The program is a partnership with Sunflower Community Action, an advocacy group for low-income Wichitans. The group approached Commerce about the program a few weeks ago.

To qualify for the loan, a borrower must have an annual income that is at or below the median for the Wichita area. That's about $39,900 for a local household. The borrower must have $500, which Cook said can be a down payment or can cover some portion of closing costs. Cook said many low-income applicants can also qualify for a $1,000 grant from the bank, which can also offset upfront costs.

Check out http://www.commercebank.com/ for more details

Higher Mortgage rates = lower affordability

2006-03-13T13:42:00.000-08:00

Interest rates are the highest in years, helping to make housing markets even more overvalued. A recent report figures that 71 of the 299 largest U.S. housing markets were "extremely overvalued" at year's end, up from 62 markets a quarter earlier. The report arrives at a fair market value based on population, income and interest rates and factors in historical premiums or discounts.

Rates have a direct affect on affordability. For example, a jump in interest rates from 6 percent to 7 percent on a 30-year loan adds about 10 percent to a monthly mortgage bill. A homeowner who financed a loan of $300,000 at 6 percent would pay about $1,800 a month. At 7 percent, the monthly payment would be $1,995.

Click here to see the rankings for the 299 U.S. housing markets.

Freddie Mac's weekly mortgage survey - March 9, 2006

2006-03-10T10:35:00.000-08:00

Mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.37 percent this week, according to its weekly survey. That was up sharply from a nationwide average of 6.24 percent last week and left 30-year rates at the highest level since they averaged 6.44 percent the week of Sept. 5, 2003.

Macquarie Mortgage Choice introduces a flexible first-mortgage home equity line of credit with built-in security

2006-03-09T15:27:00.000-08:00

The Macquarie Mortgage Choice lets borrowers cap their interest rate for an initial period at the level they choose. MMC, the latest product from Macquarie Mortgages USA Inc. is a mortgage loan designed to help build assets, reduce monthly payments,
save interest and accelerate principal payoff. Macquarie Mortgage Choice
combines a home equity line of credit (HELOC) with an interest-only (first 10
years), variable rate loan with initial periodic interest rate cap options
that offers both flexibility and security against rate increases, plus the
potential to benefit from rate decreases. The Macquarie Mortgage Choice
offers:

- Up to 100% LTV first-mortgage HELOC*
- Interest-only payments for the first 10 years of a 30-year term
- 1-, 2- or 5-year initial periodic interest-rate-cap options
- A choice of Prime or 1-month LIBOR index
- No borrower-paid mortgage insurance, escrows or prepaid interest at
closing
- Access to available equity with free checkbook
- Purchases or cash-out refinances
- No seasoning on refinances
- No minimum draw amounts
- No maximum number of monthly transactions
- Loans up to $2 million**

Macquarie Mortgage Choice gives borrowers the option to cap their interest
rate at a level they are comfortable with for a defined period of time. This
means that if interest rates rise during the period of time chosen, the
borrower knows what their maximum rate will be. However, if interest rates go
down the borrower has the advantage of their interest rate also going down, as
they are not locked into a fixed rate.

Under a traditional home loan, borrowers can access their home's equity
only by taking out a second mortgage or by refinancing. With the Macquarie
Mortgage Choice HELOC, they can access their home's available equity any time
they need it. All they have to do is write a check from their mortgage
accounts.

You can get more information about Macquarie Mortgages USA's products and
services at http://www.macquariemortgages.com

New law in Mexico allows insurers to provide mortgage insurance

2006-03-08T12:15:00.000-08:00

A new law in Mexico allowing insurers to provide mortgage insurance is likely to help position the private sector as the main engine for the housing market.

Two U.S. insurers, AIG United Guaranty Corp. and Genworth Financial Inc. (GNW), are working to get authorization to provide mortgage insurance in Mexico. The legislation, which had already been approved by the lower house of Congress, was passed by the Senate on Tuesday. Since July, only the Federal Mortgage Society, known by its Spanish acronym SHF, has been providing the insurance, which covers a portion of a home loan in the case of default.

Government estimates have said mortgage insurance can knock about a half percentage point off the mortgage rate and result in down payments of under 10%. Mortgage insurance also is viewed as an important part of the development of Mexico's nascent market for mortgage-backed securities because it creates an extra layer of risk coverage.

Lend America named official mortgage source of NHRA

2006-03-06T17:10:00.000-08:00

NHRA officials announced today that Lend America, a nationwide leader in the home mortgage industry, has signed a multi-year agreement to become the Official Mortgage Source of NHRA.

Freddie Mac's weekly mortgage survey

2006-03-02T16:44:00.000-08:00

Freddie Mac reported today that rates on 30-year, fixed-rate mortgages averaged 6.24% this week, down from 6.26% last week.

The 30-year mortgage declined for three straight weeks at the beginning of the year, then posted four straight increases, hitting a high for this year of 6.28% three weeks ago.

Rates on 15-year, fixed-rate mortgages, averaged 5.89% this week, unchanged from last week.

One-year adjustable rate mortgages edged up slightly to 5.34%, from 5.32% last week.

Rates on 5-year hybrid adjustable-rate mortgages edged up to 5.97% this week, from 5.96% last week.

A year ago, 30-year mortgages averaged 5.79%, 15-year mortgages stood at 5.33%, 1-year adjustable-rate mortgages were at 4.14% and 5-year hybrid adjustable-rate mortgages averaged 5.17%.

Home Values Nationwide Up 13% in 4th Quarter

2006-03-02T09:39:00.000-08:00

The average U.S. house continued to gain value through the end of 2005, posting a fourth-quarter increase of nearly 13 percent from the fourth quarter of 2004, according to a government report released this week.

In the home price survey by the Office of Federal Housing Enterprise Oversight, all but one of 275 metropolitan housing markets showed improved value, many at record rates of increase. In the market that was an exception, Burlington, N.C., prices fell 1 percent over the year.

However, two reports this week showed slower sales of new and existing homes. The report on sales of previously owned homes, released by the National Association of Realtors, showed sales down for the fifth straight month.

Existing home sales fall for 5th straight month

2006-03-01T10:41:00.000-08:00

Sales of existing homes fell for a fifth consecutive month in January, the National Association of Realtors recently reported in the latest sign that the once-sizzling housing market is cooling rapidly.

The National Association of Realtors reported that home sales fell 2.8 percent to a seasonally adjusted annual rate of 6.56 million units, the slowest pace in two years. The news came a day after the government reported that sales of new homes fell 5 percent in January.

ARM demand falls, refinancing drops

2006-03-01T10:29:00.000-08:00

An increasing number of borrowers have been converting their ARMs into new fixed-rate loans as the difference between adjustable and fixed mortgage interest rates narrow, analysts say.

Last week’s drop in rates managed to marginally impact demand for home refinancing.

The group’s seasonally adjusted index of refinancing applications edged up 0.1 percent to 1,573.5 compared to 1,571.4 the previous week.

Refinancings, however, decreased as a percentage of all mortgage applications, falling to 38.1 percent from 38.2 percent.

Home loan demand falls / mortgage rates drop

2006-03-01T10:24:00.000-08:00

Consumers filed fewer loan applications to purchase homes last week despite a drop in long-term interest rates. The Mortgage Bankers Association’s seasonally adjusted purchase mortgage index -- considered a timely gauge on U.S. home sales -- decreased 1.9 percent to 400.8 for the week ended Feb. 24 from the previous week’s 408.7.

The index was also well below its year-ago level of 440.0.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.18 percent, down 0.04 percentage point from the previous week.

The 30-year fixed-rate mortgage, the industry benchmark, is substantially above its 2005 low of 5.47 percent in late June, but below its 2005 high of 6.33 percent reached in the week of Nov. 11.

California home sales fall 24 pct in January

2006-02-28T09:33:00.000-08:00

The declines reflect a weakening in consumer confidence and a rise in mortgage interest rates, according to the California Association of Realtors,

Carper, Castle Unveil $6 Million Program for First-Time Homebuyers in Delaware

2006-02-27T18:56:00.000-08:00

U.S. Sen. Thomas R. Carper and U.S. Rep. Michael N. Castle today announced a more than $6 million program called First Front Door that will help lower-income first-time homebuyers across Delaware with down payment and closing costs. See firstfrontdoor.com for details.

Why Those in the Real Estate Business Will Always Put a Positive Spin on the Real Estate Market

2006-02-27T09:05:00.000-08:00

1. Buyers' agents get nothing if there is no sale, so they want their clients to wildly overbid, the exact opposite of the buyer's best interest.
2. Mortgage brokers take a percentage of the loan, so they want buyers to take out the biggest loan possible.
3. Appraisers need mortgage brokers for their business, so they are going to give the appraisals that brokers and agents want to see, not the truth.
4. Banks get origination fees but have been selling most mortgages, so they take no risk on those loans. They do not care about the potential bankruptcy of borrowers, so they will lend far beyond what buyers can afford. Banks sell most loans to Fannie Mae or Freddie Mac. The conversion of low-quality housing debt into "high" quality Fannie Mae debt with the implicit backing of the federal government is the main support for the housing bubble. That is going to end as Fannie Mae shrinks.

Even for loans that banks keep, they have a motive to lend beyond what buyers can afford. Banks designate interest as "income" whether they receive it or not. As long as borrowers do not actually default, additional borrower debt is counted as bank income, and banks can claim higher "earnings". That is going to end when those borrowers cannot even make the principal payments.
5. Newspapers earn money from advertising placed by Realtors®, so papers have a strong motive to publish the Realtors'® unrealistic forecasts.
6. Owners themselves do not want to believe they are going to lose huge amounts of money.

What is their argument for buying vs. renting, even in a down market?

"There are great tax advantages to owning."

Nationwide rate update

2006-02-23T18:52:00.000-08:00

Rates on 30-year, fixed-rate mortgages slipped to 6.26 percent from 6.28 percent last week, Freddie Mac reported in its nationwide survey. Last week's rate marked a two-month high.

Rates on 15-year, fixed-rate mortgages fell to 5.89 percent from 5.91 percent. One-year adjustable rate mortgages dipped to 5.32 percent from 5.36 percent. However, rates on five-year hybrid adjustable rate mortgages edged up to 5.96 percent from 5.95 percent.

Rates do not include add-on fees known as points. The 30-year, 15-year and five-year hybrid adjustable each carried a nationwide average fee of 0.6 point this week. The one-year ARM carried an average fee of 0.7 point.

A year ago, 30-year mortgages averaged 5.69 percent, 15-year mortgages stood at 5.22 percent, one-year adjustable-rate mortgages were at 4.16 percent and five-year hybrid adjustable rate mortgages averaged 5.05 percent.

New site offers free estimates of home values

2006-02-23T18:43:00.000-08:00

Check out zillow.com which simply takes an address, uses information from the county’s tax appraiser’s office, and come up with an estimate. However, before you bet the farm on the valuation you get from zillow.com, be sure to get a second opinion from your local realtor.

California Luxury Home Values Increase in 2005... duh

2006-02-23T18:41:00.000-08:00

Luxury home values rose to all-time highs in Los Angeles, San Diego and San Francisco in 2005 on the strength of double-digit gains, but appreciation slowed significantly in the fourth quarter, according to the First Republic Prestige Home Index™ by First Republic Bank, one of California's leading providers of full-service banking, investment management, and trust services.

The Index, which has tracked luxury homes since 1985, found:

-- Los Angeles values rose 0.7% from the third quarter of 2005 to the fourth quarter of 2005 and rose 16% for the year. The average luxury home in Los Angeles is now a record $2.29 million, up $316,000 from a year ago.

-- San Diego values rose 0.7% from the third quarter of 2005 to the fourth quarter of 2005 and were up 13.3% for the year. The average luxury home in San Diego is now a record $2.09 million, up $245,000 from a year ago.

-- San Francisco Bay Area values rose 1% from the third quarter of 2005 to the fourth quarter of 2005 and gained 13.2% for the year. The average luxury home in San Francisco is now a record $2.88 million, up $336,000 from a year ago.

CA to help first-time home buyers qualify for 40- year loan with $0 down

2006-02-21T18:27:00.000-08:00

Up till now, first-time California buyers trying to stretch financially to purchase a house with a 40-year mortgage - instead of the standard 30-year loan - had to turn to the private sector.

But soon the state of California will offer a helping hand. The California Housing Finance Agency says it plans to offer its own 40-year home loan this spring with a fixed, below-market interest rate.

While CA residents will not need a down payment, they will have to qualify as first-time buyers and meet CalHFA's income requirements and other criteria. The agency says its 40-year mortgage is for people who can't afford to buy a house with a 30-year loan and are averse to risky financing that threatens future payment shock, such as adjustable-rate, interest-only loans.

For example: A household using a zero-down, 30-year CalHFA mortgage would need to earn about $72,500 a year to buy a home selling for $355,000. The same family using a 40-year loan could qualify with an income of about $68,400.

CalHFA has offered traditional fixed-rate, 30-year mortgages for nearly three decades. Last year it launched a fixed-rate, 35-year loan with interest-only payments for the first five years. That plan now accounts for 40 percent of its mortgages.

CalHFA promises interest rates that officials say they try to keep at least one-half to one full percentage point below prevailing market rates. But borrowers must qualify as first-time buyers and fall within CalHFA's income and home price caps, which vary by region.

Though they're new for CalHFA, 40-year loans are old news among private lenders, who last pushed them in a big way during the height of the previous real estate cycle in the late 1980s and early 1990s.

More lenders have begun to offer 40-year loans as a way to attract borrowers who are having a harder time qualifying for the riskier forms of financing. With the rise of short-term interest rates over the past year and a half, such loans have gotten more expensive. And many lenders are simply searching for something different to attract borrowers amid the recent slowdown in refinancing and home purchases.

However, CalHFA's 40-year loan does have some drawbacks:

* The agency expects the interest rate to be roughly one-eighth of a percentage point higher than its 30-year loan. As of last week the 30-year loan had a rate of 5.5 percent.

* Borrowers won't pay down the principal nearly as fast when compared with a traditional 30-year mortgage. This means the cost of the 40-year loan will be significantly higher over its full term.

CalHFA officials predict their 40-year loan will account for 15 percent to 20 percent of the agency's loan business within the first year.

Debt Consolidation Home Loans Now Available with First Guarantee Mortgage

2006-02-20T18:19:00.000-08:00

Debt Consolidation Refinance “Payment Buster” Program to Help Homeowners Reduce Credit Card Debt

Debt consolidation home loans can help consumers take control of their credit card debt load by paying off their credit card balances with a home refinance loan.

First Guarantee Mortgage a home mortgage refinance expert resource and multi-state mortgage broker located in Winter Park, Florida is now offering a “Payment Buster” debt consolidation home loan program to help homeowners with high credit card debt to refinance and gain tax benefits as well as lower monthly mortgage payments.

With the “Payment Buster” debt consolidation refinance program homeowners now have the opportunity to consolidate all their high interest credit cards payments into one low tax-deductible payment.

The benefits of consolidating credit card debt with the “Payment Buster” home refinance program are:

- Make one monthly payment instead of three or four
- Your payment may now be tax deductible
- Increased disposable income
- Gain control of your budget
- Cut your credit cards up

Homeowners can quickly apply online with the debt consolidation loan application and receive a loan offer in one hour and close within two weeks.

First Guarantee Mortgage is a debt consolidation home loan refinance expert resource and professional multi-state mortgage broker that provides a one-stop shop for consumers looking to refinance or make a new home purchase. FGM has over 550 highly trained loan specialists ready to research hundreds of lenders and home loan programs to find the right home loan solution to fit each consumer’s individual financial needs.

Percentage of home ownership is leveling off

2006-02-16T19:23:00.000-08:00

After climbing steadily for the past 10 years, the nation's homeownership rate appears to have leveled off. Recent data released by the U.S. Census Bureau puts the homeownership rate at 69% in the fourth quarter of 2005, down from 69.2% a year earlier. This is the third quarter in a row that the rate hasn't posted a year-over-year gain; and it's the first time since 1994 that the rate at year-end hasn't increased from the previous year.

Some economists say that the new data could be a sign that declining affordability is taking its toll on first-time homebuyers. Economic weakness in the Midwest may be a significant factor, where the homeownership rate is down to 72.8 percent in the fourth quarter, from 73.7 percent a year earlier.

The portion of U.S. population who own homes climbed in the mid-1990s, thanks to moderate interest rates and strong economic growth. In the past 5 years, homeownership moved higher, thanks to low interest rates & creative mortgage financing. The homeownership rate reached an all-time high of 69.2 percent in the second quarter of 2004, up from 63.8 percent a decade earlier.

Concurrently, home prices have surged. The median price for an existing single-family home was $213,000 in the fourth quarter of 2005, up 13.6 percent from a year earlier, according to the National Association of Realtors. A record 72 of 145 metro areas showed double-digit annual increases in median prices for existing single-family homes.

It will take several more quarters to determine whether the homeownership rate has actually peaked; as the Census Bureau estimates are based on a monthly survey of roughly 61,000 occupied homes, there's also the possibility of a sampling error.

Still, today's homebuyer is faced with rising home prices and higher mortgage rates. In 25 of 143 metro areas nationwide, homes were so expensive in the fourth quarter that a family earning the median income couldn't afford the median-priced home, based on conventional lending standards. Two years ago, 13 of 151 metro areas were considered unaffordable. Affordability has even dropped in the Midwest, where home-price growth has been modest.

Faced with ever-rising prices, many borrowers have turned to creative mortgage products, including: loans with low teaser rates, interest-only mortgages and piggyback loans, which allow borrowers to buy a home even if they lack the money for a traditional down payment. But rising short-term interest rates have made some of these products less attractive.

The National Association of Realtors' Affordability Index now stands at 115.8, the lowest level since the third quarter of 1991. When the index stands at 100, a family earning the median income has just enough money to afford the median-priced home, assuming a 20 percent down payment and current interest rates. Forty-three percent of first-time homebuyers purchased a home with no money down, according to the Realtors group.

There are signs that rising home prices may be leading some to choose renting over buying. The rental vacancy rate declined to 9.6 percent in the fourth quarter, compared to 10 percent at the end of last year and a high of 10.4 percent in the first quarter of 2004, according to the Census Bureau. The disconnect between record home sales and a stagnant homeownership rate could suggests that the recent growth in sales is being fueled in part by investor activity. Investors accounted for 9.5 percent of mortgages to buy homes in the first 10 months of 2005, according to LoanPerformance, a unit of First American Corp.