Sarasota Mortgage Rates | The Mortgage Skinny

Are you interested in trying to improve your credit scores so that you can get a better interest rate on your mortgage?  In this article I’ll show you how to go from that sub prime loan with prepayment penalties and high interest rates to an A-paper loan with low closing costs and low interest rates.  Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime” – can range anywhere from A-minus, B-paper, C-paper or D-paper loans. Read the rest of this entry »

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Here’s a quick update I found on CNNMoney.com that shows you what the market is looking like.  After reading this article I have to agree that the applications are starting to pick up for both purchases and refinances.  Even though we’ve been seeing a slight increase in interest rates over the past week the average rates for a 30 year fixed is right around 6.25% which is still a great rate.

NEW YORK (Reuters) — U.S. mortgage applications skyrocketed during the first week of 2007 as interest rates fell for the first time in five weeks, lending support to the view that the housing market is stabilizing, an industry trade group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, jumped 16.6 percent to 671.1 for the week ended Jan. 5.

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In today’s market many people are starting to feel the pressure of having to make those high and forever changing Home Eqiuty Line Of Credit payments.  The prime rate right now is at 8.25%, and we can finally thank the Fed for not adjusting the Fed Funds rate the last few times they’ve met. But with an ever changing economy and market, it’s still an uncomfortable feeling to have.

So How can borrowers get out of a HELOC hole?

Prepay the loan. If they have the cash, they could pay off the loan immediately. If it’s less than three years since taking out the loan, however, they would probably incur a penalty of between $350 and $500. That’s probably worth it, especially for a large loan.

Take a cash-out refi. Refinance the primary mortgage and pay back the full amount of the Heloc. Rates are a couple of points lower on a 30-year fixed rate today than on a HELOC. Application fees, title search and insurance and other expenses will increase the total debt but monthly payments may still be lower than the blended total of the old primary mortgage and the Heloc. Plus, with a fixed rate, borrowers know exactly what their payments will be.

For borrowers with low rate primary mortgages, however, this is not recommended; they would be refinancing at a higher interest rate. Currently, 30-year fixed rate loan average 6.11 percent.

Switch to a fixed rate home equity loan. Unlike HELOCs, home-equity loans are usually fixed-rate loans. They don’t cost as much as a mortgage refinancing to execute but there still are some closing costs. Plus interest rates run a point or so higher than for 30-year, fixed rate mortgages, but that’s still a savings compared with Helocs.

Visit CNNmoney.com to learn more.

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CNNMoney wrote an article about 25 rules that will help you save, invest, and live happier.  In today’s market we need all the help we can get when it comes to saving and making sound investment decisions.  If you’re able to discipline yourself to follow these 25 rules then your a better person than I.

1. For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.

2. It’s worth refinancing your mortgage when you can cut your interest rate by at least one point.

3. Spend no more than 2 1/2 times your income on a home. For a down payment, it’s best to come up with at least 20%.

4. Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.

5. Never hire a roofer, driveway paver or chimney sweep who is going door to door.

6. All else being equal, the best place to invest is a 401(k). Once you’ve earned the full company match, max out a Roth IRA. Still have money to invest? Put more in your 401(k) or a traditional IRA.

7. To figure out what percentage of your money should be in stocks, subtract your age from 120.

8. Invest no more than 10% of your portfolio in your company stock - or any single company’s stock, for that matter.

9. The most you should pay in annual fees for a mutual fund is 1% for a large-company stock fund, 1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.

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To Sumarize the latest in the Housing market: New home sales data came out on Wednesday, Dec. 27th with a positive message.  Home Sales rebounded, up .04 million to 1.05 million in October.  The average median home price came in at $251,700 in November which is about a $3,000 increase since October.  This is good news since we’ve had a decline in home sales in the fall of this year, as well as an increase in the amount of homes put on the market.  Even though the pace of home sales is down 15.3 percent from the hot market we were in last year, it’s up nearly 7 percent from the decline that we had in July. 

This doesn’t mean that we are completely out of our decline in home sales but it is an indicator that we might be getting close.  There are still an overwhelming amount of properties for sale which has turned this market into a buyer’s market.  Developer’s are going to continue to hand out incentives, such as paying up to 6% closing costs and paying a year’s worth of Home owners Association dues.  But I have a feeling that this is a sign that we’re getting closer to bottoming out (if we haven’t bottomed out already), and that 2007 we’re going to see a slight change for the better.

So for all of you buyer’s out there, now is the time.  It’s your market!  Read the posts before this and realize that the power is in your hand.

Blake Gratton, The Mortgage Skinny

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NEW YORK (MarketWatch) - It’s no secret that the housing market  finally, after a long while, belongs to the buyer. Home sales and prices   sagged in 2006, and 2007 is not expected to be too different. According to David Lereah, chief economist for the National Association of Realtors, buyers have a “window of opportunity” in 2007 to take advantage of lower mortgage interest rates and seller flexibility.

Colby Sambrotto, COO of ForSaleByOwner.com, a no-commission real estate marketplace, offers these rules for shopping for a new home in a buyer’s market:

Don’t limit yourself. While you should look for homes that are listed with real estate agents, don’t discount properties that are for sale by owner. They make up about 25% of the market, and you may be able to find a good deal with one of them thanks to a lack of agent commission and fees.

Hold onto a property for a while. Now is not the time to buy a condo or home to flip quickly for a profit. Make sure you buy a property at a good value - you’re more likely to have a good sale in the future. Read the rest of this entry »

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