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Mortgage Advisory News Service |
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Mortgage Market Turmoil - August 2007
Many of my clients have been asking what all the recent turmoil in the financial markets means at a consumer's level. How does this hit home for you and me? What you should know. What you should do. |
Who's Hijacking Your Privacy?
The answer will shock you. The companies we expect to be the most protective of our personal data are up to something sneaky. You should know about it. And take precautionary measures. |
Where Have All The Homebuyers Gone?
Should home sellers hold out for their price? Or would they be better served by moving on to buying a bargain? In simple terms, it is highly unlikely that you will receive a sellers' market premium on the sale of your current home and a buyers' market discount on the purchase of your next home. |
Why all the Interest in Interest-Only Mortgages?
A lot of homeowners in our area have opted for interest-only loans for their homes. Is this the right home loan for you? What is an interest-only mortgage loan anyway?
An interest-only mortgage is a mortgage where the borrower has the option of making interest only payments for a set period of time (say the first 10 years of a 30 year loan). Traditional mortgages require borrowers to pay interest and principal each month, but interest-only loans don't require that you pay any principal during the interest-only period.
Why would someone be attracted to this type of home loan? |
Are Non-traditional Mortgages Contributing to a Bubble?
Forecasting an impending real estate bubble seems to be a favorite topic of media pundits lately. Whether it's a bubble, a burp, or a blip, the news coverage frequently mentions "non-traditional" mortgages as an indicator of a market suffering from irrational exuberance. Nothing could be further from the truth.
"Non-traditional" mortgages are interest-only mortgages and mortgages with a negative amortization feature (a.k.a. deferred interest loans). The terms of these loans don't require you to pay any principal. Additionally, with a negative amortization loan you can pay less than the interest due, thereby deferring the difference and adding it to your original loan balance.
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The Benefits of a Reverse Mortgage - Don't Believe the Myths
In celebrating Older Americans Month this past May, it became more evident than ever that we all need to gain a better understanding of reverse mortgages. Not on the top of your "need-to-know" list? Keep this in mind: America's aging population reached a turning point in 2006. One of the nation's largest generations, the baby boomers, started turning 60. As many as 78 million people constitute the baby boom generation, and they stand to make an enormous contribution to the rich character and wisdom older adults offer to all of us. When Older Americans Month was established in 1963, only 17 million living Americans had reached their 65th birthdays. Couple this with the New York Times reporting (April 4, 2006) that "the majority of American workers think they'll be able to retire comfortably, but most aren't saving nearly enough to meet that goal, according to a new study."
So, where will these Americans find the resources to fund their retirements? |
What if Everything You Thought You Knew About Home Equity Was Wrong?
Would you invest in something that wasn't liquid and had no rate of return?
Does the equity in your home make you feel secure?
Truth be told, the equity in your home is not the same as money in the bank. Money in the bank is accessible to you whenever you need it. But there's no ATM for the equity that's locked in your home. When you need it, will it be too late or too difficult for you to get the equity out of your home?
Equity in the house = Less risk for the bank, NOT less risk for the homeowner.
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Top 10 Credit Reporting Myths
Paying off (and not canceling) your debt does not erase the fact that you previously carried a lot of debt. Credit reports have a long memory and if you were over-extended within the last few years it will still be reflected in your credit scores despite the fact that you have no major debt today. And closing accounts will lower your score for a period of time. |
Do multiple credit inquiries affect my credit score?
Inquiries that occur from a consumer requesting their own credit file are not used in determining the score. Also inquiries that are incurred when lenders access consumer credit files in the process of pre-approved credit solicitations or for managing existing accounts are not used by the score. |
What factors are used to calculate my credit score?
There are five types of information used to calculate a credit score at any given point in time. Each type of information counts as a percentage of a total credit score:
Payment history = 35%
Amounts owed = 30%
Length of credit history = 15%
New credit = 10%
Types of credit in use = 10%
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Is a 30-Year Fixed Rate Mortgage Right for You?
When people consider whether to get a fixed rate mortgage or an adjustable rate mortgage, they come out in favor of the fixed rate mortgage by a margin of two-to-one. It shouldn't be a surprise to anyone that the 30-year fixed rate mortgage is still the most popular mortgage. But as a borrower, are you really considering all of the important points when deciding what type of mortgage best suits your situation?
The following fact alone speaks volumes on this issue and should cause borrowers to seriously consider whether a 30-year fixed rate mortgage is appropriate for their circumstances: Ninety percent of mortgages are paid off within seven years. |
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