Recent News

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"....

Why Mortgage Rates Don’t Look Like They’re Coming Back Down Any Time Soon

If you're shopping for mortgages right now, or are in the process of buying a home, this week was not your buddy. In early-January -- right up until the surprise 0.750% cut to the Fed Funds Rate January 22 -- mortgage rates were the lowest that they'd been in three...

How Ignoring Adjectives Can Improve Your Understanding Of Mortgages

If you spend enough time reading the papers and watching the news, you'll notice a subtle bias when reporters talk about mortgages and real estate. It's usually in the verb choice or use of adjectives. Reporters serve up a healthy dose of connotation to go with the facts. With respect...

Maintain The Mortgage Status Quo, or A Bunch Of Things You Should Do While Waiting For Your Home Loan Approval

The term status quo means different things to different people. In England, it's a quote-unquote rock band, for example. In America, "status quo" is something different. It's an expression often used as an allusion to old and stodgy social mores. Except in mortgage lending. In those circles, status quo is...

“Low Mortgage Rates” Is Not A Selling Feature, It’s A Planning Standard

When mortgage rates fell in early-January, it breathed life into a huge swath of loan officers that were getting ready to leave the business. It's a terrible turn of events for homeowners and homebuyers. With everyone focused on rate, rate, rate, the lowest-of-the-low loan officers are in their natural habitat....

Measuring The Statistical Insignificance Of The Monthly Jobs Report (February 2008 Edition)

The economy shed 17,000 jobs in January 2008 according to this morning's Non-Farm Payrolls report. Because markets had expected a job gain of 70,000, the negative number supports the idea that the economy is slowing down faster than markets had planned. This is because when fewer people work, there are...