Wednesday, November 9, 2011
Monday, November 7, 2011
5 Tips for Deciphering Your Home Loan’s Good-faith Estimate
Published: April 9, 2010
Knowing how to read your good-faith estimate can help you save money on your home loan.
When you apply for a mortgage, the lender has three days to give you a good-faith estimate of the fees and interest rate you’ll pay, as well as other loan terms. Here are five tips for using the new three-page form to your advantage.
1. Know which fees can increase and by how much
In the past, lenders provided an estimate of the costs involved in getting your home loan, and if those costs rose by the time you closed on your home, tough luck. The good-faith estimate shows some fees the lender can’t change, like the loan origination fee that you pay to get a certain interest rate (commonly called points) and transfer costs.
The form also lists the charges that can increase by up to 10%, like some title company fees and local government recording fees. The lender must cover any increase over that amount.Finally, the good-faith estimate lists the fees that can change without any limit, such as daily interest charges.2. Look for answers to basic loan questions
In the summary section, lenders explain your loan’s terms in simple language. Can your interest rate rise? If so, a lender must spell out how much the rate can jump and what your new payment would be if it does. Can the amount you owe the lender increase, even if you make your payments on time? If it can, a lender must show you the potential increase.
3. Evaluate the “tradeoffs” on a loan
In the new “tradeoff table,” you can ask lenders to provide details on the tradeoffs you can make in choosing among home loans. If you’d like the same loan with lower settlement charges, how will the interest rate change? If you’d like a lower interest rate, how much will your settlement charges increase?
4. Compare apples to apples with the shopping chart
Included on the good-faith estimate is space for you to list all the terms and fees for four different loans, so you can make side-by-side comparisons.
5. Know what’s missing from the good-faith estimate
The new form lacks some key information, such as how much you’ll reimburse the sellers for property taxes they’ve already paid on the home. It also doesn’t tell you the amount of money you’ll have to bring to the closing table. Some lenders have created supplemental forms providing that information. If yours hasn’t, ask for it.
More from HouseLogic
More on the new good-faith estimate form
Other web resources
The new U.S. Housing and Urban Development good-faith estimate
More on shopping for a loan G.M. Filisko is an attorney and award-winning writer who has encountered many settlement statements that bore no resemblance to the lender’s good-faith estimate. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
Friday, November 4, 2011
Tuesday, November 1, 2011
New Mortgage Refinancing Plan is introduced for Homeowners
This program is directed towards homeowners who are current and up to date with their Fannie Mae and Freddie Mac loan payments in the last 6 months and only one late in the last 12 months. New Rules will be released on November 15, 2011.
The Obama administration is launching yet another high-profile campaign to shore up the housing market -- and with it, the economy -- by making it easier for some struggling homeowners to refinance underwater mortgage loans at today's ultra-low interest rates.The federal government's new rules will encourage borrowers to secure new loans no matter how much value their homes have lost during the nation's housing crisis, with the hitch that they can't have missed any mortgage payments for the last six months.The plan could help 1 million to 2 million people get significantly lower monthly payments in hopes of stabilizing the real estate market. On top of that, it would boost the economy by putting about $2,500 more in a typical homeowner's pocket each year, administration officials said.But given the huge problems that continue to plague the real estate market, the plan is less a solution to the foreclosure crisis than a firebreak to try to prevent things from getting worse, analysts said. In particular, the program won't help the 3.5 million borrowers who are seriously delinquent on their loans or are already in default."It's a step forward, but what we need is a leap forward," said John Taylor, president of the National Community Reinvestment Coalition, an association of organizations that promote access to affordable housing.The Obama administration has struggled to find a fix for the housing crisis. A program to lure banks to permanently modify mortgages has fallen so far short of its goals that Republicans have pushed to kill it. And the refinancing program, designed to help millions of homeowners, has been revised several times in hopes of making it more effective.Separately, Federal Reserve officials have hinted in recent days that they could launch another program to buy up mortgage-backed bonds in an effort to pull home loan rates lower."They keep trying to find something that's going to work and so far they haven't found the silver bullet. Arguably there's no silver bullet," Bert Ely, an independent banking analyst, said of the Obama administration's attempts to help the housing market."More moderate approaches haven't worked, so now they're trying something that frankly is more radical," he said.The plan could help borrowers such as James Perry, 36, an editor for a television show who owns two properties that are underwater, meaning he owes more on the mortgages than the homes are worth.Perry bought a condominium in Santa Monica in 2005, near the height of the market, and rented it out after he couldn't sell it. Its value has dropped about 6%, he said. He owns a larger home in Tarzana for his growing family, and its value has plunged nearly 20%.Refinancing both properties could save him about $400 a month, Perry said. "I am not a rich guy, so $400 a month will help," he said. "I have two kids. I would like to put that toward some college savings, and it would just make for a little more breathing room. We are not in any sort of trouble, but an extra $400 a month will obviously make us happier."Perry said he tried refinancing the Santa Monica home about a year ago, paying about $500 for the appraisal, but the home's value didn't allow him to qualify for a low rate. Given that experience, he didn't bother trying to refinance the Tarzana home.The plan announced Monday amounts to a sweeping overhaul of the 2½-year-old Home Affordable Refinance Program, easing rules and reducing fees to allow many more homeowners potentially to take advantage of historically low mortgage rates. Through August, the program had helped 894,000 homeowners refinance.The revisions include lifting a ceiling that barred participation by borrowers who owed more than 125% of the value of their homes, and using a controversial modeling method to replace costly appraisals that are among the fees that have kept some homeowners from refinancing."These are important steps that will help more homeowners refinance at lower rates, save consumers money and help get folks spending again," President Obama said in touting the changes during an appearance in Las Vegas on Monday.Nevada, California and Florida are among the states hit hardest by the subprime housing bubble crash.About 14.6 million mortgages nationwide were underwater at the end of the first quarter, about 29% of the nearly 51 million residential mortgages nationwide, according to Moody's Analytics and Equifax. The rate was higher in California, where about 2.1 million mortgages are underwater, a third of the state's 6.3 million mortgages.Perry's refinancing problems were typical, mortgage experts said. Even though HARP allows underwater homes to qualify, banks usually won't refinance a loan in which the borrower owed more than 105% of the value.The new rules, including waiving some key legal liabilities banks can have if the loans go bad and no longer require a new appraisal, should help considerably, said mortgage broker Jeff Lazerson, head of Mortgage Grader in Laguna Niguel, who is working with Perry."It is actually going to work," Lazerson said.Obama and administration officials tried not to oversell the effect of the new refinancing program, having been sharply criticized for projecting that another initiative -- the Home Affordable Modification Program -- would help 3 million to 4 million homeowners. That program has permanently modified the mortgages of about 816,000 homeowners since it started in 2009.The changes in the refinancing program were announced by the independent Federal Housing Finance Agency, which has been working with the White House to find ways to help more homeowners.HARP is for homeowners with mortgages owned or backed by Fannie Mae or Freddie Mac, the housing finance giants that were seized by the federal government in 2008 as they teetered near bankruptcy. The firms own about half of all U.S. mortgages.Detailed new rules will be issued Nov. 15 and the Federal Housing Finance Agency estimated that they could result in the number of refinances through the program doubling by the end of 2013.Rep. Dennis Cardoza (D-Atwater) said that's not nearly enough help. "I think it's a step in the right direction, but a baby step," he said. Cardoza would like to see every homeowner be enabled to refinance.Housing and Urban Development Secretary Shaun Donovan said the additional money in the hands of consumers would help stimulate the economy, which in turn would help stabilize the housing market. "It's the equivalent of a substantial tax cut for these families," he said.But even by the most optimistic projections, analysts said the program was unlikely to provide much of a stimulus to the overall economy. Based on the White House's estimate that each refinancing would save a borrower an average of $2,500 a year, the program would add $2.5 billion to $7.5 billion in annual consumer spending -- a pittance in an economy exceeding $14 trillion."This is not going to turn around the economy, stabilize the housing market or reduce the unemployment problem," said Phillip Swagel, a University of Maryland professor and former chief economist at the Treasury Department in the last Bush administration.He and other analysts say federal officials could have gone further and made deeper changes to boost refinancing activity even more. For example, officials could have done away with borrower fees entirely. As it is, Mark Zandi, chief economist at Moody's Analytics, estimates that closing costs will drop from about $3,500 currently to $2,000 under the new program."Another impediment to even more refis is that many of these potential [borrowers] will be very reluctant to participate given their concerns about their incomes and jobs," Zandi said.jim.puzzanghera@latimes.comdon.lee@latimes.comalejandro.lazo@latimes.com
Copyright © 2011, Los Angeles Times
How To Be $1,000 Richer By 2012
My favorite tip is the piggy bank upgrade. Just imagine how much you'll have saved for the whole year by following these tips.
From Meghan Casserly, Forbes Staff
“People have the worst spending habits during the holidays,” says Alexa von Tobel, founder and CEO of LearnVest and fount of financial knowledge. “This past January, 13.6 million Americans started the New Year in debt.”
Our advice? Flip that statistic and start 2012 ahead of the game with an extra $1,000 in your savings account. Seem unrealistic during two months when you’re more likely to be making gift-lists than budget cuts? Lucky, we have experts on hand for guidance and motivation. “It’s 100% possible for the average person to become $1,000 richer by 2012 if they start right away,” says Joel Ohman, founder of the frugally-minded websites CreditCardChaser and CarInsuranceComparison.
He gets right to the point: “There are two different ways to become richer–either make more money or spend less money.” Here, a dozen thoughtful ideas on spending, saving and earning over the next 60 days. Mix and match to ring in 2012 $1,000 richer.
Save money:
Pack lunch: Cut costs by $7 each weekday and pack a sandwich instead of coughing up for another calorie-laden salad or sandwich. Expected savings by 2012: $200
Clip coupons: Some $485 billion worth of coupons were distributed in 2010, knocking down retail prices an average of $1.46 per coupon. You don’t need to be an extreme couponer to save, but borrow a page from their book and do a bit of legwork. According to Coupons.com, the average weekly savings on grocery and personal items is $40. Shoot for $100 off the monthly grocery bill and you’re on your way to a wealthier 2012. Most common coupon items are cereal, yogurt, portable snacks and baby products. Expected savings by 2012: $200
Maximize your credit cards: Make your credit cards work for you this season. Take a serious look at the rewards programs your cards offer. Jake Gibson, co-founder of NerdWallet, a personal finance site that ranks credit card perks and bank rates, stresses that maximizing rewards can earn you a serious percentage back that could go a long way towards your savings, but it depends on your spending habits. His pick for Holiday 2011: the Chase Freedom card. “You instantly earn $200 back when you spend $500 in the first three months, plus there’s no annual fee.” NerdWallet has a tool to find the right card and reward system for your spending. Expected savings by 2012: $100
Check your policies: Use couch time to compare insurance quotes from at least five different car insurance companies to see if you can save money on your car insurance rates before the end of the year, says Ohman. Thomas Fox, a personal finance expert at Cambridge Credit Counseling says a phone to service providers—cell-phone, cable, internet, utilities–call can be just as helpful. “Many providers offer budget plans, or plans not widely advertised,” he says. “Explain your usage for the service and see if the provider can offer a more affordable plan that will suit your needs.” Expected savings by 2012: $100
Piggy bank upgrade: Forget the change jar, LearnVest’s von Tobel says to create a jar for $5 bills. “Make a new rule that you can no longer spend fives,” she says. “And every time you get one, just put it away. It’s an easy, fun way to upgrade the penny jar and you’ll see savings grow in no time.” Expected savings by 2012: $100
Skip your latte: While that skinny vanilla latte might be delicious, it’s putting a serious dent in your budget (not to mention your waist). Downgrade from a $3 latte to a $1 brew from the corner deli and you’ll notice the savings right away. Better yet, home brew. $100 expected savings
For the rest of the article go to http://www.forbes.com/sites/meghancasserly/2011/10/25/how-to-be-1000-richer-by-2012/2/
Subscribe to:
Comments (Atom)
About Me
.jpg)
TRW Credit Group