Why Now Is A Great Time For A Mortgage Refi

Mortgage rates continue to linger near all-time lows and refinance applications are through the roof. With the 30-year fixed rate sitting just above the all-time low rate at 3.52% (the record low being 3.5%) you can see why so many borrowers are taking advantage of these rates.

The end of the July 1st week saw a 21% increase in refinance applications with a 30-year fixed rate at 3.61%. Experts expect to see another surge in refi apps at the new lower rate. If you’re looking to refinance your home, now could be the time to do it. Although no one can give a definitive answer on how long rates will remain this low, you can’t argue that a 30-year fixed rate under 4% is a great deal comparatively.

Make sure to speak with a loan officer or mortgage professional and make the decision that’s best for you!

Give us a call at 866-970-7283 or https://www.amerisave.com/rates

Mortgage Rates Plummet After Brexit Vote

Since the United Kingdom shocked the world and voted in favor of a British exit from the European Union, mortgage rates have plummeted to historic lows reminiscent of the all-time low recorded in November 2012, with only a 17 basis point difference.

For the week of June 30, 2016, the 30-year fixed-rate mortgage is averaged at 3.48%, a decrease from last week’s 3.56% and last year’s 4.08%. The 15-year fixed-rate mortgage is averaged at 2.78%, decreasing from last week’s 2.83% and last year’s 3.24%.

According to the Mortgage Bankers Association, despite the plummet in rates, mortgage applications actually went down 2.6% from a week earlier.

Many experts believe this is only the beginning of rate drops, while others believe this decrease will be short lived. How long will these historically low rates last? Only time will tell.

Things They Don’t Teach You In School – But Should

“Why didn’t they teach us this in school?” We’ve all probably said, thought or heard this question numerous times in our lives. Whether it’s referring to how to file taxes, the best way to save and invest or how to negotiate contracts and salaries, I’m sure we could come up with a pretty extensive list of life essentials they never taught us during our primary education! It’s infuriating at times. However, cursing our old grade school teachers won’t help us learn the crucial skills that practically every adult will inevitably need at some point in their life.

This is where we come in. Follow the AmeriSave blog for a weekly post update that covers one of the many important skills everyone should have to survive adulthood. Because whether you’re fresh out of college or a seasoned veteran of life, adulting can be hard.

This week: How to apply for a mortgage

The mortgage process can seem  daunting to a newcomer (or anyone for that matter), but trust us, it doesn’t have to be. At AmeriSave, we strive to make the mortgage process simple and straightforward so that you will feel confident and knowledgeable about your loan. Let’s break it down into steps:

Step 1: Apply for a pre-approval – This is an important step in your mortgage process. Ask just about any homeowner, and they will confirm how stressful it is looking for a home but not really knowing exactly how much home you can afford. With a pre-approval, after submitting all of the paperwork (W-2’s, pay stubs, federal tax return, bank and investment statements) you will be told the loan amount the lender is willing to give you.

Step 2: The application – At this point you have found a home and decided on a loan program. Now you’re ready to apply for your loan. You may need to provide more documentation and any additional information your lender may need. After you’ve applied and been approved for your loan amount, you will receive a commitment letter as well as your loan estimate.

Step 3: The appraisal – The property that you intend to purchase will need to be appraised. Your lender will order the appraisal in order to determine the loan amount based on the appraised value.

Step 4: Underwriting – After your lender collects all of your information, they put together a file that is then sent to the underwriter. The underwriter’s job is to make sure all of the requirements for the loan are met. This can typically result in more information being needed on your part before the loan can be finalized.

Step 5: Pre-Closing – You’re now in the final stages of the loan process. In this stage the loan is approved, your title insurance can be ordered and you can schedule your closing date.

Step 6: Closing – Congrats, you did it! Your loan is now closed, and you’re ready to move in!

Now that you have a bit more knowledge on the loan process you’re ready to apply for a pre-approval and begin your own loan process.

(Click here to check out our rates)

Mortgage Rates Hit Six Month Low

Mortgage rates fell again this week, hitting a six-month low as investors reacted to weak economic news in the U.S. and to reports that the European Central Bank may ease monetary policy.

The 30-year fixed-rate mortgage fell 4 basis points to 4.33 percent. A basis point is one-hundredth of 1 percent.

The 15-year fixed-rate mortgage fell 3 basis points to 3.42 percent. The average rate for a 30-year jumbo mortgage fell 4 basis points to 4.35 percent. A jumbo mortgage is generally a loan of more than $417,000.

The 5/1 adjustable-rate mortgage fell 3 basis points to 3.31 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

Shop rates. Takes only seconds with no personal info.

Read More:
https://www.bankrate.com/finance/mortgages/rate-roundup.aspx#ixzz31ofSUdJq

Common Real Estate Scams And How To Avoid Them

During the housing bubble scams commonly manifested among fraudulent brokers issuing predatory loans or, as home flipping reached a feverish pitch, real estate gurus charging tens of thousands for get-rich-quick courses. When the bubble burst, many of those same swindlers set their sights on cash-strapped folks facing foreclosure.

But as housing recovers and technology evolves, real estate scams have not subsided. Rather, despite government initiatives on both the federal and state level, they’ve blossomed into more elaborate and sophisticated ploys.

Rental Scams

The scam: Most renters search for homes and apartments online.  Scammers take advantage of internet listing data of actual homes for rent or sale and repost them as their own on popular sites like Craigslist. The scammer may ask for a security deposit or broker fee upfront.  The most common scam is to ask for a fee for a phony credit check.  This scammer will collect this fee from sometimes hundreds of people and then simply disappear.  If prospective renters do hear anything at all back from the “agent” again, it will be to issue a denial of their “application”.

How to spot it: Be wary if you’re asked to wire any money upfront, especially if you’ve never met or signed a contract.  Some scammers have actually gained access to homes, advertising and showing them at alluringly low prices, so don’t let your guard down just because the “agent” has walked you around a home.  Finally (do we really have to say this?), if the person responding to your inquiry is out of the country, but asks you to wire any fees to someone, don’t walk, run!

Read more about rental scams on the FTC’s website.

Loan Modification Scams

The scam: Millions of homeowners have faced foreclosure in the last five years and millions more are still underwater on their mortgages.  The sheer desperation of these borrowers have led them to be prey for those running loan modification scams. A number of scams fall into this category: fake foreclosure counseling, forensic loan auditing, non-existent class action lawsuits, leaseback programs and fraudulent “government” modification programs.  Most of these scams begin with a simple phone call to a distressed homeowner, promising a lifeline in the form of a foreclosure related service.  In almost all cases you will be asked for fees to get the process started. In the fake leaseback deal, you surrender the title or deed to your home.

How to spot it: Again, be wary of telephone callers asking for fees upfront. Scammers have gotten better over the years and know that it may take 3-4 telephone meetings before you feel comfortable paying a fee. Foreclosure counseling is provided for free from agencies approved by Housing and Urban Development, a government agency.  Before accepting any loan modification, contact a reputable lender to investigate your options and compare the offers. Most large lenders, like AmeriSave, are approved to offer government housing programs like the Home Affordable Refinance Program (HARP).  AmeriSave, having been in business for over 10 years and continued to operate while the housing bubble burst, is a direct lender that has refinanced hundreds of thousands of homes.

Check current mortgage rates here.

Read more at Loan Modification Scam Alert.

Workshop Scams

The scam: Get-rich-quick schemes have been around since houses were built out of mud and stone. With historically low mortgage rates more people have renewed their interest in investing in real estate.  Many self-proclaimed real estate investing experts hold educational seminars promising to divulge the secret of making millions through real estate investing with a course that costs little to no money.  You leave the course, having spent more cash on an advanced course that offered nothing but mystery and vague tips.  Your options for recourse are few, as when you enrolled in the course, you signed a release that prevents you from taking legal action.

How to spot it: Not every workshop or real estate expert is a con-artist. Avoid being scammed by doing your homework. Ask your investment advisor, read up online and check out the company’s Better Business Bureau rating.

Real Estate News: No Housing Bubble In Sight

The following article appeared in Mortgage Professional America on July 17th, 2013.

Some are saying that the sharp rise in mortgage interest rates in June, driven by bond market responses to the Fed, is leading to a bubbling housing market. But CoreLogic shares a more optimistic housing recovery outlook in its July MarketPulse Report.

CoreLogic Chief Economist Mark Fleming, Ph.D., and Deputy Chief Economist Sam Khater say the market is not experiencing a housing bubble. Instead, the recent rise in mortgage rates is helping to slow the pace of current appreciation, preventing another bubble.

“Rates would have to rise appreciably higher to cause a housing market downturn,” the economists wrote in the report.

Instead, housing affordability is near its height due to historically low interest rates and home prices.

Home prices were less affordable as pricing boomed in the middle of the decade. In fact, the affordability index reached a low point in June 2006 when prices reached their apex, meaning the national median-income family could no longer afford the national median-priced home. Despite recent increases in prices, all but two states are affordable today, and most states are near their recent affordability high points, according to the report.

“While the rational or irrational nature of buyers’ expectations is not clear in housing today, CoreLogic believes there is still a long way to go before housing again becomes unaffordable,” the economists said in the report. “Even with the most recent prices gains and interest rate hikes, CoreLogic still observes high levels of affordability by historic standards.”

Three Ways To Improve Your Credit Score

All too often, low credit scores keep individuals from obtaining loans, credit cards, and other forms of financing. Over a long enough period of time, there are ways for individuals of all incomes and debt levels to repair their credit and get back on their feet.

1. Obtaining a credit card is perhaps the simplest way to develop a good credit score, as it establishes reliability and creditworthiness in the eyes of the credit bureaus. Although you do not need to carry a balance in order to have a good score, using a credit card or two and paying off the balances on time can help you gradually boost your credit score. For individuals who do not qualify for a credit card, many banks offer secured credit cards, which contain a balance equal to the deposit made.

2. Another relatively simple way to improve your credit score is to pay off existing credit card balance. For a large number of people, credit card debt represents the primary factor in a low credit score. To repair a damaged credit score, you should start by repaying all credit cards and other revolving accounts. In general, credit bureaus grant higher scores when they see a large difference between available credit limits and the amount of credit actually used.

Tips:

  • If you have more than one card, paying off the one with the lower balance first will allow you to put that money towards the payment on the higher balance card.
  • Check your interest rates and focus your attention on the card with the highest interest rate.
  • Call the card issuer and negotiate a lower rate based on the length of time you’ve been a customer and your solid payment history.

3. Whether or not you pay your credit card bills in full every month, charging a large percentage of your card’s credit limit represents a red flag for credit bureaus. As such, you can increase your credit score by limiting purchases to 30 percent of a card’s maximum limit. Many credit card companies offer text or email alerts at user-specified amounts, which can help you keep track of your monthly spending.

First Quarter Mortgage Industry Update

As we reflect on first quarter, 2013 we find a real estate market which after many years appears to be gaining some stability and strength.  As a result, in many markets there seems to be more home purchase demand than supply as evidenced by lower inventory, increasing values as well as multiple contracts on properties for sale.   This a positive sign.

Looking further into the first quarter and specifically at interest rates, the markets experienced some volatility which in the opinion of this writer will continue throughout the remainder of the year.  You might remember as we entered 2013 rates were near their historic low and throughout the first quarter rates trended up.   Then toward the end of the quarter, they trended back down once again teetering on their low levels.  Mortgage volume, and in particular the amount of refinance business, directly trends these interest rate gyrations so it too dropped accordingly.  Lenders and investors both built staffing to accommodate the high volume of business in the last half of 2012 to increase capacity and controlled volume by margin management.  And when rates rise and volumes slow, adjustments are made.  And so the cycle of the business continues.  Low rates mean less origination capacity and higher profit margins.  Higher rates mean more origination capacity and lower profit margins.

During the first quarter additional industry information circulated around how the GSE’s (Government Sponsored Entities aka Fannie and Freddie) would be utilized going forward.  The main topic of conversation has been on continued increases in the G Fees (guarantee fees) associated with mortgage backed securities which not only drive higher rates to the consumer and additional income to the GSE’s, but further would make private placement mortgage backed securities more attractive to private investors (purpose is to drive more private capital into the mortgage business allowing for less industry reliance on the GSE’s).  Another area of discussion around reducing the industry’s reliance on the GSE’s is the reduction of the maximum conforming loan size eligible for purchase.  In essence, more loans to the jumbo market which seems in itself to have revived over the first quarter.   And all of this is happening at a time when the GSE’s are now reporting a return to profitability. Stay tuned as the outcome of these and many other policies will impact our industry.

In the end the changes mentioned above are good for our industry as it must change in order to become a more productive and profitable contributor to our economic recovery and expansion.  AmeriSave is well positioned to move with these changes as they occur.

Here’s to continued expansion of the real estate business and expansion of the mortgage origination business.

How To Save Money On Mortgage Payments

Financial advisors generally recommend spending in the range of 30% of a household’s monthly income on a mortgage payment.  Some homeowners have seen their incomes decline in the last few years and others may have budgeted more than 30% for their mortgage payments to begin with.  If you’ve found yourself in one of these positions, consider employing one or more of the following tips to get your monthly budget back on track.

Shop Around for a Better Rate

If your rate is above 4%, you may want to shop around for a better rate.  You can talk to your existing lender about refinancing or you can shop an online lender like AmeriSave.  Online lenders will often have very competitive rates because of the low overhead and operating costs associated with operating a brick and mortar brokerage.  Shopping for a rate and locking it in at www.amerisave.com is simple and fast.

Check current interest rates at AmeriSave here.

Kick Your Private Mortgage Insurance to the Curb

If your original loan was more than 80% of the home’s appraised value when you signed the agreement, then you are paying private mortgage insurance.  If you purchase a home for $200,000 with an $8,000 down payment and signed a 30 year fixed loan at 3.25%, then your payment would be approximately $835 per month plus an estimated $180 for PMI.  If you’ve lived in your home for a number of years or you feel that the value has increased to a point that the balance of the mortgage falls below 80% it may be wise to try to have your lender cancel out the PMI premium.  Most of the time, the homeowner will have to pay for an independent appraisal to determine the current value, but with the average appraisal cost between $400-$600, you would see big savings in just 2-3 months.

Check Into Government Sponsored Assistance Plans

If your current financial situation is making it difficult for you to make your mortgage payments or if you owe more than your home is worth, check into the following programs.

Home Affordable Modification Program (HAMP) – For borrowers who are employed, but are having financial difficulty making payments.  You must have obtained your mortgage before January 1, 2009, owe less than $729,750 and have sufficient income to support a modified payment.  Read more on HAMP here.

Principal Reduction Alternative (PRA) – For homeowner’s whose homes are worth significantly less than they owe, the program seeks to encourage mortgage investors to reduce the principal amount owed.  To be eligible, the same criteria listed above for the HAMP program apply, additionally, the mortgage must not be held by Fannie Mae or Freddie Mac, you must occupy the home as your permanent residence and your mortgage payment must be more than 31% of your pre-tax monthly income. Read more on PRA here.

Appeal Your Property Taxes

If you’re one of the millions of homeowners whose home value has decreased dramatically, check your property tax records to see if your home is over-valued by the county you live in.  If you feel the value is over-stated, you can appeal the value to the board of assessors and possibly receive a reduction in assessed value.  We can’t speak for every county, but generally you can back up your claims by obtaining a market analysis for comparable properties recently sold in your neighborhood.  Backing up these claims with a recent independent property appraisal will make your case stronger.  While you’re at it, check the property information card the county has on file.  This writer once found that the square footage had been incorrectly recorded by over 1000 sq ft. resulting in a refund of overpaid property taxes for two years!

HARP Hits 2 Million, Mortgage Interest Tax Deduction Under Spotlight, And Home Ownership Trends

2 Million HARP Refinances

Government sponsored housing agencies Fannie Mae and Freddie Mac have reached a major milestone, 2 million refinances have been closed since inception of HARP (Home Affordable Refinance Program) in March of 2009.  HARP is setup to assist homeowners who are current on mortgage payments, but unable to refinance due to declining housing values.  The program has been credited with pumping millions back into the economy, as reduced mortgage payments lessen the squeeze on monthly budgets.  The ability to refinance keeps a frustrated homeowner from throwing in the towel, walking away from a property and adding another foreclosure to a saturated market.

Mortgage lenders like AmeriSave are following HARP legislation carefully in 2013.  In his 2013 State of the Union, President Obama spoke of supporting legislation changes to HARP that would open up HARP to an estimated 12 million eligible homeowners.  The bill, S. 249, was introduced by U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) and states that under the bill borrowers would see reduced refi fees, no cost appraisals and extension of HARP for one year past its current expiration.  HARP is currently scheduled to expire on December 31, 2013.  Source: Housing Wire

Government Overstates Cost of Mortgage Interest Tax Deduction

As the federal government tries desperately to reduce the deficit in the federal budget, nearly every loophole and deduction are fair game for the chopping block.  Did you know that prior to the Tax Reform Act of 1986, interest on all personal loans (including credit cards) was deductible?  TRA86 changed that, but did keep the mortgage interest deduction to encourage more homeownership in middle-class Americans.  Homeownership has exploded since 1986, fueled by an abundance of inventory and ease of obtaining a mortgage.  In 2010, when the deduction came up for elimination, the Joint Committee on Taxation projected that the popular write-off would cost the government $137.7 billion dollars in lost tax revenue in 2013.  The good news is that the Committee recently published revised estimates that peg the figure closer to $69.7 billion for 2013.  The change in the figure is due to changes in the economy and tax legislation.  The deduction isn’t off the chopping block yet, but the revised report may have bought it some time.

Home Ownership Trends

The quintessential American Dream: Homeownership.  Since 1960’s the national rate of homeownership has remained in the 67% range.  US Census data shows that 52% of foreign-born US residents own their home, compared to 67% of native-born Americans.  At nearly 75%, owner-occupied homes are most common in suburbs and rural areas.  Just over 84% of married couples own their home, compared to 50-60% of single males and females.  Some numbers suggest that the importance of homeownership to young adults (born after 1980) has declined.  Only 39% of young adults are homeowners compared to the national rate of 65%.  Possible factors for a lack of interest in homeownership in this age group include a trend in marrying and starting a family later to the age group simply preferring the flexibility and short-term commitments involved in renting.