Surging mortgage rates aren't just raising the cost of purchasing a new home. An alarming number of recent home buyers have discovered they already owe more on their property than it's worth, according to a new analysis.
Some 250,000 people who took out a mortgage this year to buy a home are now underwater, meaning they owe more on their loan than the home is worth, Black Knight, a mortgage software provider, found. Another million have less than 10% equity.
Those unlucky home buyers got caught in the crunch between historically high housing prices and rapidly rising mortgage rates, which in recent months have caused real estate values ...
Read More...
FHFA to Change Credit Score Model for New Applicants
The Federal Housing Finance Agency (FHFA) announced that it will begin using new credit scoring models for borrowers applying for a purchase money mortgage or a mortgage refinance.
The FHFA approved FICO 10 T and Vantage Score 4.0 as the new credit scoring models for conventional mortgages, or loans backed by Fannie Mae and Freddie Mac. The switch is expected to be a multi-year effort as the FHFA works with industry stakeholders to shift to the new credit score models, the agency said.
This is the first major update in 20 years. For the last 20 years, mortgage lenders have been required to use the Classic FICO model. This has ...
Read More...
Mortgage Forbearances Will Be Ending Soon – Then What??
Mortgage forbearance won't last forever. Here's what to do if it's coming to a close.
Mortgage forbearance has been a lifeline for many borrowers during the coronavirus pandemic. Under normal circumstances, forbearance lets you pause your monthly mortgage payments for a period of time that's determined by your mortgage lender. But under the CARES Act, all borrowers are entitled to up to 15 months of forbearance.
If you put your mortgage into forbearance early on in the pandemic, then you may be required to start making payments on your loan again in the coming months. In addition, and more importantly, there is no guarantee that your ...
Read More...
Decrease in Real Estate Inventory Now Driving Home Prices
While many people still think that the last housing crisis in the United States was largely due to banks offering too many subprime mortgages, it's now clear that wasn't actually the case. Instead, recent research pins the blame on house flippers and speculators, who pumped markets up, then defaulted in large numbers when they were unable to turn a profit on their investment properties.
Now, however, a different set of circumstances entirely looks poised cause a different type of housing crisis.
Since the real estate market crash took the wind out of the construction boom of the 2000s, fewer homes are being built per U.S. household than ...
Read More...
Have You Been Rejected for a Mortgage? Get a Grip and Fight Back
How many Americans are rejected for a mortgage loan on an annual basis?
Data are scarce on the topic, but a Federal Reserve study shows that one in eight Americans were turned down for a mortgage in 2015 -- and overextended credit was at the top of the list of reasons lenders used to reject mortgage applicants. The Federal Reserve study pointed out that a high debt-to-income ratio -- i.e., the amount of money you borrow against the amount of money you make -- was a top credit-based reason for mortgage rejections.
If you've been turned down on a mortgage loan due to bad credit, get a grip and fight back.
Sure, the bad news is that ...
Read More...
Mortgage Debt and Retirement
Lucky are those at retirement age that have their home paid up in full. This helps the retiree achieve peace of mind and a new future to look forward to. But for those who still have a balance with their mortgage company, their dream of living free of debt at retirement could be only a pipe dream.
The Consumer Financial Protection Bureau maintains statistics and one of these statistics record the number of people who have not paid off their mortgage by retirement age. In 2011, 30% of property owners who reached 65 still owed payments on their mortgage. This is an eight point rise from 22% in 2001. Senior citizens also saw an increase in ...
Read More...
The Economy Under the Upcoming Trump Administration
The Question of the US Economy for 2017
Experts on all sides are weighing in regarding what the future economy will be like for the next four years. This is not a simple task. There are many factors to consider. For example, what will happen to the nation’s economy if the NAFTA trade agreement is nullified? What about the job market? Will jobs increase? Will the ‘repeal and replace’ of Obamacare help or hinder the economy? What will happen to interest rates of saving accounts, mortgages and credit cards? Will there be an epidemic of personal and business bankruptcies or a substantial decrease of debt? How will the stock market react to these ...
Read More...
Determining an Annual Mortgage Payment that You Can Afford
Are you thinking about buying a house? If so, you will likely have to shop around for a mortgage loan. Lenders offer mortgage loans at different terms of agreements. These loans are secured loans that mean that the lender can seize your property in case of a default. That is why it is important to consider carefully when selecting a mortgage loan.
Before applying for a mortgage loan, you must make certain that you can afford the mortgage payments. As such, it's important to find out how to calculate the monthly mortgage payment, which is a topic that we will cover here.
Calculating Mortgage Payments
A number of factors determine the ...
Read More...
How the Subprime Mortgage Crisis Began
The subprime mortgage crisis that shook the financial industry in the US in 2008 was triggered by the burst of the housing bubble. It resulted in a large number of foreclosures and delinquencies, and caused reverberations in other sectors including manufacturing, financial, automotive, hotel, retail, and others.
In this article we will look at how the mortgage crises had started, and what were its consequences on the economy in the US.
How the Subprime Mortgage Crisis Began?
A number of factors can be linked to the subprime mortgage crises, with experts assigning blame to regulators, credit agencies, financial institutions, and ...
Read More...
Types of Loans Available for Mortgages
Before you venture into home buying, you should review the types of mortgage loans that are available, as there are quite a variety . Please use the information below as a guideline to help you determine which would be the best mortgage loan for you.
A study conducted by Consumer Financial Protection Bureau estimates that half of mortgage borrowers do not shop around, while 47 percent do not even compare lenders.
There are a wide range of options available in the market for the types of loans to choose from. Your decision to choose types of loan can make or break you as a loan seeker (borrower). Basic knowledge of loans available for ...
Read More...
What Makes Me Different From the Others?