ING Direct Mortgage Rates September 2, 2010
ING DIRECT offers mortgages for purchase transactions as well as refinances at competitive interest rates. ING DIRECT is the operating name of ING Bank which is headquartered in Wilmington, DE. ING DIRECT does banking business online, over the phone and by mail. ING Direct mortgage applicants can apply online or over the phone.
As an online mortgage lender, ING Direct delivers home mortgages with low closing costs and fees. ING Direct mortgage’s are not without closing costs such as the title search, appraisal, flood certification fee and other third party fees that must be paid at closing. Based on the information from ING Direct on their mortgage products, the first page of the loan application can estimate closing costs.
There is no application fee associated with the ING Direct mortgage application. There is also no origination points charged to obtain an ING Direct mortgage.
ING Direct’s online mortgage application form is quite simple and easy to navigate.
ING Direct mortgages are available on purchase transaction with a minimum down payment of 20%. ING Direct mortgages can be obtained for owner occupied properties and vacation homes with a down payment of 25% needed for vacation home mortgages.
One of the reasons ING can offer competitive mortgage rates is that the loan programs are for adjustable rate mortgages. Since most home loans are not held for than five years, the ING DIRECT mortgage options are for a 5/1 adjustable rate mortgage and a 7/1 adjustable rate mortgage.
With the adjustable rate mortgages offered by ING DIRECT, the mortgage rate can adjust either up or down at a maximum of 2 percentage points annually after the fixed term ends, and cannot increase by more than 6 percentage points over the life of the loan. The mortgage rate will not change during the initial fixed period of either 5 or 7 years.
Current ING Direct mortgage rates include:
5/1 adjustable rate mortgage has a mortgage rate of 3.25% and an APR of 3.396%
7/1 adjustable rate mortgage has a mortgage rate of 3.50% and an APR of 3.499%
Once an application is accepted by ING DIRECT, the mortgage rate is guaranteed for 60 days for purchases and 45 days for a refinance even if mortgage rates go up.
The ING DIRECT mortgage rate information is current as of September, 2, 2010. Mortgage rates are subject to change at any time and all home loans are subject to bank approval. The mortgage rates listed are based a loan amount of $250,000.00 and a 20% down payment.
For more information on the mortgage loans and mortgage rates offered by ING DIRECT, the mortgage lender can be reached at 1-866-327-4599.
Mortgage Loans and Earnest Money Deposits
Once an interested home buyer wants to make an offer on a property, along with a contract to make the offer, the buyer will make an earnest money deposit to go with the offer.
The earnest money deposit is a good faith deposit to indicate that the buyer is serious about the offer and their intentions to consummate a transaction. The earnest money deposit is not to be confused with a down payment. The mortgage loan approval is not dependent or related to the earnest money deposit.
This deposit money is given to the real estate agent, attorney or seller at the time of the offer and if the seller accepts the offer, the earnest money is held in escrow until closing. If the earnest money is documented properly, it will generally be applied to the down payment or the buyer’s portion of the closing costs when the purchase goes forward.
If the purchase offer for the home is rejected, the earnest money is usually returned, since there is no legal contract between the buyer and seller. If the buyer withdraws the offer or does not fulfill the contract terms after the contract is properly executed by buyer and seller, the earnest money may be forfeited.
The amount of the earnest money deposit varies significantly depending on factors such as local practices in the specific market area, the price of the home, and the supply and demand for homes at that time of contract negotiations.
It is, of course, generally in the seller’s best interest to see a large earnest money deposit. With the larger deposit, the seller is in general more convinced to accept the purchase offer. This is a strategy that is more likely to be utilized in high demand markets where homes are selling at a brisk pace. In other markets, earnest money deposits of $500.00 or $1,000.00 are quite acceptable.
Understanding the market is the principal guideline for determining the amount of the deposit. Real estate professionals will all have opinions on what is a satisfactory amount, but unless the housing market has a strong demand and low supply, a lower earnest money deposit is not likely to dissuade a seller.
The buyer should have a contingency to inspect the property and withdraw the offer within a certain time frame written into the contract, with this in mind; it is in the buyer’s interest to make the smallest amount of earnest money possible. If the buyer cannot obtain a mortgage within a certain time frame, for example, the earnest money will be returned in full if the offer stated such a contingency.
To avoid any complications with a mortgage lender about the earnest money deposit and subsequent credit at the time of the mortgage loan closing, copy the check before submitting it with the contract and then copy the front and back once it clears the bank. The mortgage lender will then have ample proof that the funds deposited were the buyers and have already cleared the bank and the buyer will get a full credit for those funds as they may be applied to the down payment or mortgage closing costs at the time of settlement.
US Bank Home Mortgage Arkansas Conway
US Bank home mortgage loan officer contact for Conway, Arkansas. U.S. Bank Home Mortgage is the retail mortgage lending division of US Bank. The company HQ is based in Minneapolis, Minnesota.
To begin the home mortgage process with US Bank, a prospective borrower can contact the loan officer, speak a representative through the toll free phone number of 888-831-7524 for new home purchases or 800-365-5001 for existing mortgage refinance transactions or a prospective borrower can fill out a mortgage loan application online.
US Bank home mortgage loan officers and representatives can provides information and resources to compare mortgage loan options, mortgage rates, home equity loans and refinancing rates. Mortgage rate information is also available on the US Bank website.
US Bank home mortgage loan options include fixed rate home mortgages with a variety of terms, adjustable rate mortgages, government loan programs and jumbo loans. Mortgage loan programs, mortgage interest rates, fees, closing costs, terms and conditions are subject to change without notice and may vary depending upon credit history and the transaction. All home loans are subject to bank approval.
Kim Smith
Mortgage Loan Officer
U.S. Bank Home Mortgage
1122 Van Ronkle
Conway, AR 72032
Office: 501-328-0444
TollFree: 877-738-2783
Cell: 501-472-4188
Fax: 501-450-0034
Kimberly.smith@usbank.com
US Bank provides various banking and financial services. US Bank is based in Minnesota and has bank branch locations in 24 states. The bank operates over 2,500 bank branches and 5,000 ATMs. Bank retail services and products include checking and savings accounts, credit cards, mortgages, home equity and student loans as well as insurance and private banking.
The bank delivers it products and services through the retail bank branches, telebanking, online banking, direct mail, and automated teller machine services.
Mortgage Rates January 11, 2010 on 30 Year fixed Rate Home Loans
Mortgage rates have been inching up slowly but steadily over ansthe past several weeks. Though mortgage rates are up, the increases have been mild and rates remain at relatively low levels.
The enclosed list of mortgage rates includes some of the largest mortgage lenders in the U.S. Among the list of mortgage lenders and mortgage rates are a number of 30 year term home loans with a rate of 5.25% and no points. Mortgage rates from the top lenders can be found lower on the list with added cost of paying points along with closing costs.
As mortgage rates have become slightly more volatile, the biggest change in mortgage rates has been the increase in the average amount of points and fees charged. The enclosed list searches among the top mortgage lenders and post the rates with the lowest points
30 year fixed rate mortgages with no points can be found at the following large mortgage lenders:
US Bank 30 year rate is 5.250 with 0.000 points and an APR of 5.317%
Phone number: 888-831-7524.
AimLoan.com 30 year has a rate of 5.250% with 0.000 points and an APR of 5.337%
Phone number: 888-411-4246.
Shelter Bank 30 year rate is 5.250 with 0.000 points and an APR of 5.810%
Phone number: 800-251-7115.
In addition to those rates a few large US mortgage lenders have rates that at 5.25% or lower with less than a one point origination fee.
Citibank 30 year fixed rate is 5.250% with 0.125 points with an APR of 5.443%
Phone number: 800-667-8424.
Chase Bank 30 year is at 5.250% with 0.250 points and an APR of 5.323%
Phone number: 800-873-6577.
Fifth Third Bank offers a slightly lower 30 year rate at 5.115% with 0.500 points and an APR of 5.272%
Phone number: 866-351-5353.
Mortgage rates are subject to change at anytime. Interest rates change regularly, based on fluctuations in the interest rate market.
In order to determine the borrower’s ability to repay the loan and adjust the mortgage rate to match any added risk on a particular borrower’s home loan, the mortgage lender will evaluate income and assets as well as debts and credit history.
Call the mortgage lender to obtain the most current home loan rates and obtain a written list of the estimated closing costs associated with your mortgage transaction to avoid any misunderstandings regarding the proposed transaction. A good faith estimate is required by federal law; it includes charges from the mortgage lender and third party charges, and approximate costs for property taxes and homeowner’s insurance.
Mortgage rates offered by the listed local mortgage lenders and banks are accurate of January 10, 2009. Rates may change and additional conditions will apply.
The above lenders all offer mortgage rate lock options with various conditions. Once a borrower locks in a mortgage rate the mortgage rate will not change regardless of what happens in the interest rate market as long as they close on the home loan on or before the rate lock expiration date.
Wisconsin Mortgage Rates at Tri City National Bank
In the search for a mortgage lender with competitive mortgage rates in Wisconsin, one choice is southeastern Wisconsin based Tri City National Bank. Tri City National Bank is located in southeastern Wisconsin and has a service area for mortgage loans that covers properties located in Milwaukee, Racine, Kenosha, Waukesha, Ozaukee and Washington counties in the State of Wisconsin.
Along with home loans, Tri City National Bank offers various deposit products, including savings, investors choice, demand, NOW, and money market deposit accounts. The bank also provides secured and unsecured consumer loans, commercial loans, instalment loans, real estate loans and other loans to individuals, small business, and a range of organizations.
Tri City National Bank offers fixed rate home loans with terms ranging from 15 years to 30 years. Tri City National Bank also offers 1 – 3 year adjustable rate mortgages (ARM). The bank also offers new home construction loans, balloon loans and assisted financing with the Wisconsin Housing Economic Development Association (WHEDA).
Tri City approves and processes mortgage loans locally providing quick and convenient service. Tri City National Bank current mortgage loan products and mortgage rates include:
15 year fixed term mortgage rate at 4.38% with 1.0% origination fee and an APR of 4.53%.
15 year fixed term mortgage rate at 4.50% with 0.0% origination fee and an APR of 4.55%.
20 year fixed term mortgage rate at 4.88% with 1.0% origination fee and an APR of 5.00%.
20 year fixed term mortgage rate at 5.13% with 0.0% origination fee and an APR of 5.17%.
30 year fixed term mortgage rate at 5.00% with 1.0% origination fee and an APR of 5.09%.
30 year fixed term mortgage rate at 5.25% with 0.0% origination fee and an APR of 5.28%.
Mortgage rates displayed assume a fully amortized $150,000 mortgage loan with a 20% down payment and closing costs paid by the borrower. Mortgage rates and annual percentage rates (APR) are subject to bank approval and approved credit with a 20% minimum down payment. Bank rates and mortgage rates are subject to change and additional conditions and other restrictions may apply. For current mortgage rates and home loan information, a bank representative can be reached at 888-874-2489.
Mortgages and Being a Successful Landlord
If you are ambitious, energetic, smart, and have some money and good credit, owning a rental property might seem like a great idea, but you also need a wide tolerance for the many things that can go wrong. The challenges are always there, especially if you are taking the hands on approach to property management.
There are also many legal and logistical hurdles, and you need the right accountant and lawyer to make sure you are on the right path. There’s a lot of work involved in being a landlord, and if you don’t do it right, you can end up losing money.
Mortgage loans used to acquire property for rent have a higher standard than other mortgage loans. Home mortgages for rental properties will require a larger down payment and entail a slightly higher mortgage rate.
Mortgage lenders view rentals properties or non owner occupied properties as home loans that entail a much greater level of risk. Since the risk is higher for the mortgage lender the standards to become approved for a mortgage that is used to purchase a non owner occupied property is more rigorous.
The starting point of the tighter lending standards is a larger down payment than there is on a standard owner occupied home loan. On top of that requirement, the mortgage rate will normally be at least ½ of a percent higher. The closing costs may be higher as well since non owner occupied purchases usually require more discount points by the mortgage lender. The remainder of the closing costs should be similar, only the points will be greater. Since must all home loans are initially evaluated using an automated underwriting model, potential borrowers will find that these models generally require a slighter higher credit history or credit score than the models used for owner occupied properties.
It may be useful to compare mortgage rates and mortgage costs with a mortgage calculator to see just how much the monthly mortgage payments will be as well as the true cost of t a new home loan to purchase a rental property.
Here’s a quick run-down of what every landlord needs to know regarding conditions that are not specific to the mortgage lenders.
Take care of the record keeping aspects of running your business. Open a bank account for the property and run all bills and rental income through that account. This will simplify your paperwork come tax time.
Finding good tenants will at times be the most time-consuming part of your business. It’s tempting to rent to friends, friends of friends, or relatives, and that can become complicated, especially if you are a bit of a soft touch and are the type of person who is willing to help folks out. This isn’t the place for that.
Think of a tenant as a kind of business partner, someone you can rely on to do their part. Check their references (speak with their previous landlords), pull their credit report and consider running a background check. The National Tenant Network and Registry SafeRent sell credit reports from the three major credit bureaus (Experian, Equifax and TransUnion), as well as more in-depth tenant reports including an eviction judgment check, a criminal report, and verification of employment and landlord references. A modest investment can get you very useful information.
Beyond that, manage your tenants professionally. Don’t become too personally involved. Cleaning up messes in a tenant relationship can be costly, time consuming, and maddening. Be firm but fair with them and they will respect you. Be tough and strong willed, and demand that they meet their obligations.
The building itself can be trouble too, hopefully not but be prepared. If you can’t or won’t pay someone else to repair problems or do standard maintenance, you’ll get used to calls from tenants at all hours complaining of pests, broken pipes, clogged bathtubs, exposed electric wires and other common problems. You need to be handy, or be willing to pay someone who is. A reliable handyman or woman is your best friend.
You should also be aware of your rights as a landlord. Normal wear and tear is something you have to pay for, but you shouldn’t have to pay for deliberate or extremely negligent damage.
You always must be prepared for the worst because even in the best of situations you will have tough days. Talk to other landlords, or join a local landlords group. People with experience have a lot of good advice to go along with some horror stories. Some will recommend that you budget for only ten or eleven months rent to cover eventual late rent or vacancies. Others will make you aware of federal and local laws that protect the rights of tenants. Here are some of the common issues that landlords must pay attention to.
Discrimination
Make sure you have legal reasons to reject an applicant, or you risk getting sued for discrimination. For example, you can’t reject an applicant solely on the basis of his or her race, color, religion, national origin, family status, gender, disability or handicap. You are allowed to refuse renting to tenants with pets or applicants who have previous bankruptcy filings, insufficient income, or lack positive references from previous landlords.
Steering
Steering is encouraging a potential tenant to take one apartment over another. Landlords can easily do this even if their intention is innocent. A landlord who says to a single mother with a teenage daughter, ‘You should take the upstairs unit or the unit in the back’: that’s called steering and it’s illegal. The landlord may have had the best of intentions but under federal and state law he or she has to allow the tenant to choose the unit they want among those that are available.
Security Deposits
One of the most common cases handled in small claims court is a landlord-tenant dispute over a security deposit. Have a clear written agreement that spells out how the security deposit works, and make sure that you are following the law. Some states limit the amount of the deposit you can collect or require you to hold it in a separate account that accrues interest. Generally, landlords can use the deposit for unpaid rent and repairs that are beyond normal wear and tear, but there may be additional state-specific limitations.
Insurance
Whether you rent out a single-family home to one tenant or an entire building with dozens of apartments, you need separate homeowners insurance for your rental properties. This type of insurance can be expensive and you should understand the costs before investing. The more units you rent and the more people there are, the more risk you have, and insurance companies will make you pay for that.
In today’s litigious climate, make sure you have enough liability coverage. If your tenant’s dog bites your neighbor’s child, they’re most likely to go after the tenant but if there’s some negligence on your part they may go after you.
Professional Management
If your finances allow it, property-management companies can do most of the heavy lifting for you. They market the property, maintain it, screen tenants, collect rent, pay the bills, prepare financial statements for you and keep up with the fair housing laws. Management company fees can be up to 10% of the rental income. If you live far from the rental property), for example, you may need a management company to run your business. You might also be better off with professional help if you aren’t especially handy or if you find that being a landlord is taking you away from your job or personal life.
Getting your business off the ground will involve some paperwork other than handling the mortgage lenders requirements. Some states require that you get a business license for your property in order to rent it out. First-time landlords should consult with a real estate attorney and a certified public accountant (CPA) before getting started. A CPA can help you figure out how much rent you should charge in order to make your business profitable, while an attorney can be priceless as you learn the intricacies of the fair housing laws, among other legal issues.
Using a Mortgage Loan for Debt Consolidation
Cash out refinance transactions for debt consolidations is a popular mortgage transaction. Cash out refinances represents a large portion of mortgage refinance transactions each year. For consumers that own a home and have a fair amount of consumer debt, a cash out refinance for debt consolidation purposes is well worth considering.
Sometimes a person can get into debt problems without much effort at all. Perhaps you have even experienced credit problems and are showing various signs of damaged credit do the debt overload. If you are willing to be disciplined, in a serious fashion and you own a home, one way out may be a cash out refinance to consolidate these debts. This may help you solve your credit and debt situation despite some of the inherent risks involved with such a home loan.
It may be possible to refinance your mortgage that you currently have with a loan amount greater than the existing loan balance. This is called cash out refinance. The extra money obtained from the new refinance transaction can be used to pay off other bills and debts. A cash out refinance for debt consolidation loan gives the home loan borrower money to pay off their existing debt, resulting in just one monthly payment and quite possibly a lot less stress. With discipline, this home loan makes it much easier to manage your budget since you only have to worry about a single monthly mortgage payment schedule. This type of refinancing option means you will pay a longer term and subsequently more mortgage interest over the life of the debt.
When applying for refinance for debt consolidation, make sure you explain this to the mortgage lender and loan officer. During the qualifying process for a refinance, the debt ratios the mortgage lender will evaluate are as if the new mortgage loan is in place. When this mortgage loan is for cash back to pay off consumer debt the application will not consider the existing payments of the debt being paid off to calculate the debt ratios.
The three key factors in evaluating your loan request will be the debt ratios, the loan to value and your credit report. In order to make sure the debt ratios are not excessive, it is important that the mortgage loan application does reflect the debts to be paid off otherwise the home loan application could result in a loan denial for an excessive debt ratio.
When you consolidate various high interest rate debts into one mortgage loan the results can be very attractive and appealing. With a debt consolidation mortgage, you do not have to pay different interest rates to creditors, or pay your creditors at different times of the month. A debt consolidation mortgage refinance combines your debts into one loan payment a month, one that you should be more manageable.
Since mortgage loans are secured by real estate, the interest rate or mortgage rate is generally much lower than that of credit cards and personal loans. And in most cases, the interest paid on a mortgage is tax deductible. With discipline, you can now budget better to increase savings or prepay on the new refinanced mortgage and extinguish all of your debt early.
Be careful; do not use the freedom of lower monthly payments to avoid getting your financial house in order. Do not increase in your unsecured debt after you consolidated through a mortgage refinance. Pay strict attention to your financial outlays and use the home loan to improve your financial health.
Benefits of a cash out refinance for debt consolidation include:
The ability to take all different types of high interest loans and combine them into one lower interest mortgage when you enter into a refinance. This pays off the higher interest debts.
Improves your credit rating by reducing the amount of outstanding debts per account.
Most mortgage loans allow prepayment without penalty, allowing the borrower to have the option of not only consolidating many consumer debt payments into one but also to pay a higher monthly mortgage payment if they choose and reduce the total debt early.
By paying off debts that may have been outstanding, you stop and eliminate debt collection activities, foreclosure, bankruptcy, and other potential negative actions that affect your overall credit status.
The process to get a debt consolidation mortgage is fairly simple. Research and shop around for repayment plan that meets your budget and risk, and find the lowest mortgage rate and closing costs that you can. Be cautious before signing anything and make sure you understand all the repayment terms, mortgage rates, and costs of the refinance transaction. Use the mortgage calculators to evaluate the mortgage rates and mortgage payment options.
Using a cash out refinance mortgage for a debt consolidation can make sense, and help overcome severe debt problems, but it does result in higher interest and higher fees. It will take discipline to make sure the new payment amount is handled in a timely fashion. You will have a longer mortgage term and pay more over the length of the loan. It is often smart to restructure your debt this way, but this does result in a larger single debt amount. For this reason it’s smart to investigate shorter-term mortgage options to try and avoid paying a larger amount of money over time.
Mortgages and Yield Spread Premiums
Abusive lending practices and an uproar over deceptive sales practices in the mortgage industry often focuses on unscrupulous tactics regarding mortgage rates and closing costs that are exploited by loan officers and mortgage lenders. One such aspect of mortgage lending deceit involves the disclosure of the yield spread premium on the good faith estimate and settlement statement for a home loan.
The issue was addressed once again when the Federal Reserve Board (the Fed) adopted a number of new rules that involve certain prohibitions regarding good faith estimates regarding mortgage rates and closing costs and for mortgages made on or after October 1, 2009.
These new rules which are a combination of the rules adopted by the Fed and others from the U.S. Department of Housing and Urban Development (HUD) ensure that consumers receive mortgage loan good faith estimates of the costs of a mortgage earlier in the mortgage application process and that the disclosures better explain the costs of the home loan and terms of the loan. The disclosures will cover areas such as the potential for monthly mortgage payments to rise, any prepayment penalty the mortgage loan may have for paying off the loan early, and any fees that may be paid by the mortgage lender to a mortgage broker for originating or bringing in the loan business. This last aspect is what the industry refers to as the yield spread premium.
Yield spread premium disclosures apply mostly to mortgage brokers but in certain cases it may also be a requirement for mortgage lenders or correspondent lenders as well.
A yield spread premium (YSP) is a payment the mortgage broker may receive from a mortgage lender when they sell or deliver the mortgage loan to the lender. A mortgage broker’s job is to facilitate the origination and processing of a mortgage loan. The mortgage broker may close the home loan in their name but ultimately the loan is funded by a mortgage lender. The mortgage lender pays the broker the difference in the mortgage rate and points that are required by the mortgage lender to fund or purchase the loan and the mortgage rate and points charged to the home loan borrower by the mortgage broker.
Technically, the yield spread premium is the dollar value of the difference between the lowest interest rate a wholesale mortgage lender would have accepted for a given mortgage loan transaction and the mortgage rate a mortgage broker induces or sells the borrower to agree upon. The greater the spread between the two mortgage rates, the higher the yield spread premium payment to the broker.
As an example, if a mortgage broker handles a borrowers request for a home loan with a rate of 5.5% and two points and the mortgage lender agrees to fund that same loan at a mortgage rate of 5.5% and 1 point, the difference between the two points charged and the one point the mortgage lender takes to fund the loan has is the brokers compensation or profit. Often the difference involves the mortgage rate and/or the points charged.
When the mortgage rate quoted by the mortgage broker is higher than the mortgage rate agreed to be the mortgage lender, the difference is the compensation to the broker which is referred to as the yield spread premium. The spread between the two mortgage rates, the rate charged the borrower and the rate the mortgage lender will agree to buy or fund the loan at, is paid as a percentage of the loan amount to the broker. If the mortgage broker quotes a very high mortgage rate of 6.50% and the mortgage lender is willing to fund or buy that same loan with a rate of just 5.00%, the yield spread premium would be very high. That is an extreme example that would not often be done. However, yield spread premiums are often a considerable amount of the mortgage broker’s income.
Many critics of the mortgage industry have charged that yield spread premiums amount to kickbacks that give brokers and other loan originators financial incentives to steer consumers to higher rate home loans. Clearly the federal government believes there are abuses with yield spread premiums as evidenced by the new disclosure rules and in fact, the issue of abuse in yield spread premiums and proper mortgage rate and cost disclosures is a topic visited by the federal regulatory agencies as well as state regulatory agencies in the mortgage lending industry regularly.
Jumbo Mortgage Loans
Mortgage loans that are considered jumbo loans are those that exceed the limits that have been set by the government sponsored agencies, Fannie Mae and Freddie Mac. The Housing and Economic Recovery Act of 2008 changed Fannie Mae’s charter to expand the definition of a conforming mortgage loan. According to provisions of the Housing and Economic Recovery Act of 2008 (HERA), the national loan limit for mortgage loans to be securitized or purchased by the government agencies of FNMA and FHLMC is set based on changes in average home prices over the previous year, but cannot decline from year to year.
Fannie Mae and Freddie Mac each year set the limit on what constitutes a conforming loan, based on the October-to-October changes in mean home price following the terms set by The Federal Housing Finance Agency (FHFA). The Federal Housing Finance Agency (FHFA) has announced that the conforming loan limit will remain $417,000 for 2009 for most areas in the U.S. but specified higher limits in certain cities and counties. The conforming loan limit is the maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009. The high cost areas are determined by the Federal Housing Finance Agency.
Every year the limit is reset to a new number in the month of January, while the numbers are constantly changing on a yearly basis, one of the most recent updates disclosed that the maximum loan amount is $417,000 for condominiums and single-family homes. Once your loan has exceeded this pre-set limit, you are no longer applying for a standard loan or conforming loan, but rather, you have moved into the jumbo loan category. The 2009 general conforming mortgage loan limits are identical to the 2006, 2007, and 2008 conforming mortgage loan limits.
The reason why some people need a larger home loan does not always mean they are seeking out the biggest and most expensive houses to live in. There are some parts of the country where starter homes can cost more than $500,000. The person who would choose to purchase these more expensive homes may find that a standard, conforming loan will not be sufficient. The mortgage loan often needed to buy these higher priced homes is called a jumbo loan. Jumbo loan applications have risen measurable in recent years due to the rapid increase in housing prices.
Typically there is a slightly higher mortgage rate associated with jumbo loans. Sometimes the definition of higher mortgage rate can be staggering; anywhere from a mortgage rate that is ¼% higher to 1% higher than conforming sized home loans. This is because both Fannie Mae and Freddie Mac only buy mortgage loans that are conforming loan size, to repackage into the secondary market, making the demand for a non-conforming loans or jumbo loans much less. Since these mortgage loans are not securitized by Fannie Mae or Freddie Mac, the less liquid market for jumbo loans leads to a somewhat less uniform set of standards.
Jumbo mortgage loans have many of the same options and attributes that are available on conforming loans. They will however, all have some restrictions. The variety of home loan types is not usually as vast with jumbo mortgage loans but you will certainly find 30 year fixed rate jumbo loans, 15 year fixed rate jumbo loans, adjustable rate jumbo mortgages, and a host of hybrid mortgage loan types. All of these jumbo loan programs will feature slightly higher mortgage rates than if they were compared to national averages. The higher mortgage rates apply to both purchase transactions as well as refinances.
The qualifying requirements for jumbo home loans will also be more stringent. Required credit scores will be higher. Down payment requirements will more restrictive leading to larger down payments and lower loan to values. Financial reserves or funds that are available after the mortgage loan closing costs and down payment will need to be more substantial.
This not to say that jumbo home loans will have extremely high interest rates or a thicket of qualification requirements. It is simply that jumbo home loans have discernibly higher requirements and theta a jumbo home loan borrower should be prepared that in order to borrow much more than the standard mortgage loan borrower they will have a somewhat higher burden during the mortgage underwriting process.
When shopping and comparing jumbo loans, a prospective borrower will want to research and compare as many mortgage lenders as possible and be sure to ask about the jumbo loan mortgage rates to avoid obtaining inaccurate information. There is no point in searching for the mortgage rate and qualifying requirements on a 30 year fixed rate loan only to find out that the information you receive is for a conforming loan amount.
While these mortgage rates on jumbo loans are higher than others, once you look at all of the payment options and how this interest is distributed throughout the life of the loan, you will be able to find the home loan that fits your financial situation best. Just because you have to use a jumbo loan doesn’t mean that you have to pay a jumbo monthly mortgage payment.
Draw on the mortgage calculator to help calculate the monthly payments differences between the varying jumbo loan terms as well as the rate difference between a conforming loan and a jumbo loan to thoroughly evaluate all options. A good source for mortgage calculators can be found at www.selectcalculators.com.
Home Buying and the Final Walk Through
The final walk through inspection is something that is customary for the buyer to do before closing on a new home loan and buying a house. During the walk through inspection, the buyer wants to check that the property to see that it is the same condition as the time of the contract to purchase the home was signed. The buyer should also check to make sure the property is clean and it meets any requirements that may have been established in the purchase agreement.
The final walk through is in essence a final inspection of the property prior to taking possession of the property. This process is established to determine that the property is in the condition it was represented to be in the terms of the contract. If there are problems but they were not stipulated in the contract, then the seller is generally not obligated to remedy these issues. If there are issues that were called for in the contract that were not handled before the walk through then it may be wise to enlist the help of an attorney to negotiate the best settlement.
The biggest problem that arises in a final walk through and inspections is not an issue with the condition of the property as much as it is a question of how to handle the issues that arise. Generally, the final inspection is scheduled within day or two of the mortgage loan closing. Since delaying the home loan closing or settlement is often a difficult undertaking, negotiate problems that are not significantly costly becomes a difficult assessment.
If there are any issues that arise during the final walk through, regardless of the magnitude, these concerns should be discussed before the home loan closing and transfer of ownership. When there are issues that can not be easily settled before the home loan closing and property transfer the tough question arises as whether or not to delay the home loan closing.
When there are disputes about the property conditions that are not handled until the mortgage loan closing the closing can end up lasting for hours and be very unpleasant.
It may appear that the simplest option is to delay the closing until any issues such as repairs or cleaning and removal of personal property is completed. However, more often than not delaying the mortgage loan closing and property transfer is not possible. This may arise because the buyer’s mortgage rate is locked in and the loan lock may expire if the closing date is delayed. In this case, the buyer may be forced to accept a higher mortgage rate from the mortgage lender. Delays in the home loan closing may also result in a charge for a redraw fee from the mortgage lender to prepare a new set of mortgage loan documents.
A delay in the closing may also negatively impact the seller. If the seller may need the proceeds from the sale of his old home in order to purchase a new property with new home loan. In this case, the best thing for both parties is for everyone to meet either at the closing table or preferably before hand and come to a compromise.
Final walk troughs or final inspections are generally regarded as a protection to the buyer. However, delays in the closing with regards to the home loan are the primary responsibility of the buyer since it is the buyer’s mortgage being established. A dispute that can not be resolved may very well up costing the seller money in the end but initially it may cost the buyer different mortgage terms or closing costs.
The mortgage lender is working with the buyer not the seller and the mortgage lender is not involved in disputes unless it entails the value of the property therefore the mortgage lender will not get involved in a dispute and can only charge the buyer if there is a redraw fee or if the mortgage rate has to be relocked.
These disputes are not terribly frequent but they do occur. The best advice is to have an attorney review the purchase contract before it is accepted so you know what your protections are in advance. If a dispute over the condition of the property does arrive, once again it is sound advice to consult your attorney; after all, buying a house is a very large commitment that entails a considerable sum of money.