Leveraging yourself out at a time when (home) prices are very high certainly could set you up for difficult times.
Lenders are allowing people reasonably unfettered access to their equity.
Mortgage rates come down when fixed-income investors think the economy is slowing, not because the Fed cuts rates.
Mortgage markets have been so flush with cash that home buyers are able to layer one risk on top of the other. It's possible to borrow more than the value of the home, put in no money of your own and pay a minimum monthly payment.
I would definitely expect more of it. Buyers may not pay for it. The seller or builder may pay for it to get a house sold.
For most home buyers, especially first-time buyers, taking a 15-year (or 20-year) mortgage is out of the question.
If it costs them more, it'll cost you more.
If the Fed's cuts succeed in stimulating the economy, then mortgage rates are actually likely to rise,
It certainly could cause a change to the marketplace, ... But you're trying to talk about whether the 14th card might fall when first one hasn't fallen yet.
People are a little more realistic about their time frame, especially young folks,
Listing the person with the higher credit score as the primary borrower, ... may knock as much as two percentage points off the interest rate.
It doesn't sound like either of them got a particularly good deal.
Most borrowers have some financial cushion so the impact won't be immediate; spending an extra $380 is manageable at first. But it's safe to say there are some who will find themselves in budgetary difficulties a year or two down the road.
There are a variety of methods by which bridge loans are made.
This would free up cash now, while still minimizing their exposure to rising rates during the period they expect to remain in the house.
Welcome to the cold reality. A lot of people selected short-term interest rate product and are now beginning to see how these things benefit the lender.
Whenever business slips a little, lenders trot this stuff out.
The question you need to ask yourself is, why would a bank be pitching you this product at this time? The obvious answer is that bankers believe rates will rise in the future. Getting you out of a fixed loan and into a variable one helps ensure profitability on your account.
Fannie Mae and Freddie Mac will even lend 103 percent of the homes value. You need to have very good credit to qualify for this kind of loan.
Fannie Mae and Freddie Mac will even lend 103 percent of the homes value, ... You need to have very good credit to qualify for this kind of loan.
The optimal thing to do is to lock in your interest rate.
What is new today is that lenders are allowing for the layering of risks on top of one another. What we don't know is what if we put all these risks together and put them in a rising interest rate environment, a declining housing market, or a weakening economy.
With rates as low as they are people can cut years off the mortgage for the same monthly payment.
Could there be some 50s? There could be some 50s.
There's no way for consumers to borrow more cheaply. But that might change if the Fed raises rates a couple more times.
These loans can be of value for people who want to save or invest the money they would have paid in principal, ... Unfortunately, the way the product has been pitched, borrowers have been encouraged to stretch their budget to buy more house.
Someone who will be out of their home within five years to seven years can save some money with an ARM. But you have to be aware of the reality that interest rates are likely to be somewhat to significantly higher in three years, five years, 10 years down the road from today.
A quarter point here, a quarter point there, and soon you start to feel the pain of significantly increased monthly payments,
They're trying to make home prices more expensive, so some of this speculative activity will decrease, and incomes will have a chance to catch up.
This is very popular right now because it lets you draw some money out of your home and improve cash flow. If you do this, resist the temptation to draw too much equity out of your home.
Does that mean (consumers will) stop borrowing because it costs them another $5 a month? Probably not. It may influence decisions. I don't think it halts decisions.
No-money-down home purchases used to be the kind of thing you only saw on late night TV.
Not only do you not own any of your home, but you may be piling up additional debts that could quickly exceed the value of the home. There are no guarantees that rates will remain at comfortable levels and no guarantee that home prices will continue to go up.
Expanding your menu (as a lender) to include as many loan choices means you get a better opportunity to scour borrowers out of niche markets.
In many markets, it's possible to borrow at prime or even a quarter to a half a percentage point below prime.
If you're making a pre-payment on your mortgage principal, ultimately you'll pay less interest,
If you're a good credit borrower you can challenge fees if they seem excessive.
If you re-extend from 15 years back out to 30 years, that might reduce your monthly payment by 30 percent, ... If there isn't a likelihood that you'll pay off your mortgage, the re-extension of the term of your loan could measurably improve your cash flow.
If you pay points up front, it's harder to get your money back. When rates are high, borrowers have to pay points to trim rates any way they can, but with rates so low there is really no need to pay those points.
If you've already got one set up, you're good to go.
If you're the gambling sort, you could get into an interest-only product and bet that the market will build equity for you.
If you've refinanced in the last 18 months or two years, this movie's a rerun. Rates aren't at compellingly low levels.
For some people a home equity line of credit is a brand new shovel for digging themselves further into debt.
You could go to almost any lender and for no fees find yourself with a decent rate.
All mortgage money may eventually cost virtually the same. You're supposed to get a break (with ARMs). Where's the break?
The current expectation is that he'll pick up the baton where Greenspan left it off.
The longer the fixed rate, the more insulated you'll be.