Recent News

The Disassociation Between Mortgage Rates And The 10-Year Treasury Note

This chart may read like gibberish, so I notated it. It's meant to illustrate that daily mortgage rates are not based on the yield of the 10-Year Treasury Note. Sure, there is a long-term correlation between the two, but "long-term" doesn't do us any good when we're looking to lock...

FHA Loans May Get Tougher Soon — Just Like Conforming Loans Did

There were two news pieces written on FHA home loans today. Separately, they're interesting but uneventful. Together, they could be a harbinger of tougher times ahead for two groups: Home buyers that use FHA financing American taxpayers that fund the FHA The first FHA story was front page in the...

The 72.73 Percent Probability For Morning Mortgage Rate Quotes

The pace at which mortgage rates change each day is quickening. This pie chart puts it in pictures. In the last 2 months, mortgage rates changed mid-day nearly 75 percent of the time. This means that an offered rate at 9:00 A.M. is likely expired by 4:00 P.M. (and has...

Why Even “The Gamblers” Are Asking To Lock Mortgage Rates As Early As Possible

If you look at mortgage rates today and compare them to January's numbers, not much has changed: 30-year fixed: Still hovering near 6 percent 7-year ARM: Still lower than 30-year fixed rates 5-year ARM: Still lower than 7-year ARM rates But on a day-to-day basis, the market is not as...

Why New Construction Condo Mortgage Guidelines Should Be Granted “Special Exceptions”

Fannie Mae's new mortgage guidelines rightfully scrutinize buyers and owners of condominiums. Since late-2007, mortgage markets have a new emphasis on collateral, or the value of the underlying property, and in a condo building, collateral can be wiped out for reasons beyond the borrower's control: Foreclosure-like sales prices in a...

Fannie Mae Cheatsheet : New Guidelines Start Monday, June 2, 2008

This weekend, Fannie Mae is overhauling its mortgage approval system. Earning an "Approve/Eligible" is going to be decidedly tougher than in the past. For home buyers that have been in the market since January, this is not news; Fannie has been steadily trimming its serviceable market. Its changes were like...

What International Buyers Need To Know About Today’s Foreign National Mortgage Market

As the dollar slides against the world's currencies, foreign national buyers are flocking to U.S. housing market for second homes and investment properties. Looking at the graph, it's not hard to see why. Since September 2007, a European's cost to buy a $300,000 property in the United States has fallen...

HELOC Repossession : Why You Should Protect Your “Insurance Policy”

As home values stagnate around the country, mortgage lenders are actively trimming their exposure to home equity. Until recently, they've done it one of two ways: They eliminated no downpayment loans (except in rare circumstances) They capped second mortgages (i.e. home equity loans) at 95% of the home's value But...

It Takes 18.5 Years To Pay More Principal Than Interest With An Amortizing Mortgage

During the first few years with an amortizing home loan (i.e. principal + interest), homeowners often feel like their entire monthly payment is going towards interest. Well, not all of it goes towards interest, the graph tells us. Just most of it. If you're in the early years of mortgage,...

How Fannie And Freddie Are Making Remortgages Cost-Prohibitive

Mortgage rates have been trending lower for the last months or so. Unfortunately, most people can't take advantage -- government-sponsored mortgage financiers have added mandatory mortgage fees that negate the discount. It's like buying an item on sale, but having to pay twice the sales tax. If you're not saving...

Mortgage Video: Why It Matters When Mortgage Guidelines Change (Redux)

In January, I made this 5-minute video to illustrate how mortgage guideline changes are impacting American homeowners regardless of their income, assets or credit score. If you haven't seen the video before, watch it now. It's a story you need to hear. If you have watched the video, watch it...

Soon-To-Be Homesellers: Your Most Effective Mortgage Strategy

Mortgage planning is about recognizing the right home loan product for the right homeowner at the right time. It's a challenge because not only do products change, but homeowners' lives change and the times change, too. However, change is good because new mortgage landscapes means new mortgage planning opportunities for...

5 Things That Don’t Control Mortgage Rates

This is a short list of things that don't control mortgage rates: 10-Year Treasury Note The image at right is evidence -- even as treasuries were improving yesterday, we can plainly see that mortgage rates were sucking eggs. Green means better rates; red means worse rates. The Fed Funds Rate...

Foreign National Mortgages For Investment Properties Returns

Over the last six months, the U.S. Dollar has been on a steady slide versus the Euro, raising the purchasing power of the Irish and other EU citizens against all-things American. This includes U.S. real estate. The graph above illustrates, in real terms, the cost of a $300,000 property in...

How To Get Ready For The NEXT Time Mortgage Rates Plunge

On January 22, 2008, mortgage rates fell quickly and without warning. They touched levels not seen in 5 years and then stayed there for a period of 28 hours. During those 28 hours, homeowners around the country received calls from their mortgage guy. The call went something like this: Mortgage...

A “New” Form Of Mortgage Insurance That Gives Tax Deductions To Everyone

Private Mortgage Insurance (PMI) came back in vogue in 2007 for a number of reasons, the most widely-known of which was that PMI was suddenly tax-deductible. But it came with a catch. Only families earning less than $100,000 could take the full tax deduction. For everyone else, PMI was same...

The 80/20 Rule Of Foreclosures in America (January 2008)

RealtyTrac released foreclosure data for January 2008 and its report includes a nugget about real estate repossessions. The full-size version is easier on the eyes. Breaking out the data state-by-state, we can see that the Pareto Principle holds: 80 percent of the bank repossessions last month came from 20 percent...

How To Use Interest Only Loans To Your Advantage When Planning Your Finances

One advantage of using interest only loans versus amortizing loans is that it opens the door to more sophisticated financial planning. One way in which that's possible is that interest only loan payments are re-calculated each month based on how much money you are currently borrowing. The industry term for...

How Mortgage Rates Went From (Relative) Riches To Rags In 30 Days

You are about to read a 3-minute summary of the last 4 weeks in mortgage lending. It's the second-best 3-minute summary you will get today -- the above recap of Airplane! ranks #1. January 21, 2008: While U.S. Markets are closed for Martin Luther King, Jr. Day, international stock indices...

The One-Day Change To Your Closing Date That Will Save You Money

A mortgage rates is born from the price of mortgage bonds and nothing else -- not the Fed Funds Rate, not the 10-year treasury note, and nothing else, either. But mortgage rate pricing doesn't end there; from the price of mortgage bonds, all we get is the "base mortgage rate"....