Massachusetts
Factors of HELOC Borrowing
September 3, 2009 by Mortgage Align · Leave a Comment
For some analysts especially in the mortgage market, the Home Equity Line of Credit or the HELOC is a growth sector because of several perceived factors. Such factors may differ in states like Rhode Island, but generally the standards are the same. Mortgage loan borrowers and those seeking refinancing may encounter the following factors:
First among the factors that propel the growth rate of HELOC is the rise in retail sales channels that connects mortgage, a refinance home loan and other loan products to the public. Second, the trend in home values is also following an upward surge. This is significant because the equity’s worth also rises. Thirdly, the prevailing trend features a combination of low rates and modern inflation. Also, because of tax-deduction for mortgage loan it also became more attractive to loan borrowers in California, Massachusetts and elsewhere.
Massachusetts
Factors Of Home Equity Lines Of Credit
September 2, 2009 by Mortgage Align · Leave a Comment
For some analysts, especially in the mortgage market, the Home Equity Line of Credit or the HELOC is a growth sector because of several perceived factors. Such factors may differ in states like Rhode Island, but generally the standards are the same. Refinance home loan borrowers and those seeking refinancing may encounter the following factors:
First among the factors that propel the growth rate of HELOC is the rise in retail sales channels that connects mortgage, refinance home loans and other loan products to the public. Second, the trend in home values is also following an upward surge. This is significant because the equity’s worth also rises. Thirdly, the prevailing trend features a combination of low rates and modern inflation. Also, because of tax-deduction for home loan it also became more attractive to loan borrowers in California, Massachusetts and elsewhere.
Massachusetts
Reverse Mortgages to the Rescue
July 24, 2009 by signaturerm · Leave a Comment
For Frank and Carol Rider, a reverse mortgage is providing a cushion, giving their investments time to recover from the bear market. The Riders, both in their early seventies, borrowed about $200,000 against their home in New Mexico. They used the money to pay off their traditional mortgage and to take $1,500 a month for the next 20 years to supplement their pensions and Social Security benefits. “We’re trying to maintain our lifestyle,” says Frank, noting that he and Carol travel extensively year-round.
For Luther and Peggy Combs, their reverse mortgage is a lifeline that saved their home from foreclosure. The Combses, both in their early sixties, had high hopes for a comfortable life when they moved from Chicago to central Florida a few years ago. But Luther lost his job when the economy soured, and the couple found themselves deeply in debt. Although they had to use every penny of their home equity to pay off their bills, the reverse mortgage wiped out their monthly house payments and made it easier for them to sleep at night.
You can take it with you
A reverse mortgage can be a good option for people who want to relocate or move to a smaller home but who don’t want to sink all their cash into a new house or who may not qualify for a traditional mortgage. In the past, the only way they could take out a reverse mortgage was to stay put. But new rules that took effect in January allow seniors to use a reverse mortgage to buy a new home. Say you own a house in Massachusetts worth $500,000 and you want to buy a $400,000 house in Florida. If you were to sell your house and pay cash for your new home, you’d have just $100,000 left to add to your savings. But now you can take out a reverse mortgage on the new home. For example, if you took a $100,000 reverse mortgage on the Florida house, you’d have twice the amount left–$200,000—to add to your savings.
How it works
You must be at least age 62 to take out a reverse mortgage. Plus, your house (current or future) must be your primary residence, and your mortgage must be either paid off or have a small balance. Unlike a traditional loan, there are no income or credit-score requirements, and you may use the money as you wish. The older you are, the higher the appraised value of your home (up to the maximum federal loan limit) and the lower the interest rate, the greater the amount you can borrow. As part of the economic-stimulus package, Congress raised the reverse-mortgage loan limit to $625,500 through the end of 2009. After that, the lending limit reverts to $417,000, unless Congress intervenes. As a rough rule of thumb, a 65-year-old might be able to borrow up to 35% of a home’s value, says Eric Bachman, founder of Golden Gateway Financial, a reverse-mortgage lender in Oakland, Cal. The percentage rises to 45% for a 75-year-old, and 55% for an 85-year-old. (To get a personalized estimate of how much you can borrow, go to www.goldengateway.com.)
You can take your payment as a lump sum, a monthly cash payout, a line of credit held in reserve or a combination of all three. No repayment is due until the last homeowner moves out or dies, at which point the home can be sold to pay off the debt. The loan repayment can never exceed the home’s market value (even if it declines), absolving your heirs of any liability.
High fees
Your personal “bailout plan” won’t come cheap. You’ll pay the usual closing costs, plus loan-servicing fees, an origination fee of up to $6,000 and interest over the life of the loan. But what makes a reverse mortgage really costly is an initial insurance premium equal to 2% of the home’s value (up to the reverse-mortgage loan limit) plus 0.5% per month of the mortgage balance. (The Federal Housing Administration insurance protects you and the lender if your home value declines and ensures that you won’t owe money if the loan balance exceeds the home’s value.)
On a $200,000 loan, the upfront costs could exceed $20,000, says Jeff Lewis, chairman of Generation Mortgage, in Atlanta. So a reverse mortgage makes sense only if you plan to stay in your house for several years. But if you do, now could be a golden opportunity for owners of high-priced homes. Interest rates are at historic lows and loan limits may never be as generous, boosting potential payouts. And, says Lewis, “Once you lock in a reverse mortgage, declining home values don’t matter.”
To view the entire article, go to http://www.kiplinger.com/magazine/archives/2009/08/reverse_mortgage_rescue.html
Signautre RM
Massachusetts
Bernanke Keeps This Quote On His Desk
May 20, 2009 by lmcrates4u · Leave a Comment
Tish Washington, the Honest Mortgage Pro, can be reached at 877-897-4831. Now lending in AZ, CA, CO, CT, FL, HI, ME, NM, NV, OR, and WA.
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Newsletter-Chrisman, Rob (excerpt)
My son was flipping through the channels last night and asked me, “Did you hear about the new giveaway on Oprah this week? Oprah gave everyone in her audience a free Chrysler dealership.” I told him to keep his day job.
During the Civil War President Lincoln was being heavily criticized for military blunders. In 1862 he wrote, “If I were to try to read, much less answer, all the attacks made on me, this shop might as well be closed for any other business. I do the very best I know how – the very best I can; and I mean to keep doing so until the end. If the end brings me out all right, what is said against me won’t amount to anything. If the end brings me out wrong, ten angels swearing I was right will make no difference.” Ben Bernanke keeps that statement on his desk – interesting.
NO Video today rates went back down 30 yr fixed is at 4.50% at no cost
JPMorgan Chase & Co. is pulling back on its mortgage operations in Massachusetts, closing offices and reducing its headcount throughout the region. Chase, apparently, will remain active in the area but also continue to focus on their “depository footprint” where it has a banking retail presence. Six of seven state offices are expected to be closed, as was a Rhode Island office in December. http://www.bostonherald.com/business/general/view/2009_05_19_JPMorgan_Chase_to_cut_Massachusetts_mortgage_offices/
Other news:
Mortgage applications, according to the MBAA, rose 2.3% for the week ended May 15. The refinancing gauge was +4.5%, but purchases were -4.4%.
Regions Financial, which has received $3.5 billion of TARP money but was told by stress tests that it needs to raise more capital, said it plans to raise $1.25 billion through stock offerings, half of the sum that federal regulators told it to raise to withstand a potentially deep recession. The public offerings include $1 billion of common stock and $250 million of preferred shares automatically convertible into common stock.
Toll Brothers, currently the largest U.S. builder of luxury homes, saw its second-quarter revenue fall 51%. Based in Pennsylvania, they are the second-worst performing U.S. homebuilding stock this year having lost more than a third of its value since 2006.
On Monday night the House voted in favor of legislation that will give federal authorities more tools to combat mortgage fraud and create a commission to examine the financial crisis. It would authorize $490 million over two years to hire fraud prosecutors, increase enforcement actions and add funds to the Secret Service and Housing and Urban Development Inspector General. It also allocates funds to the Postal Inspection Service and sets up a commission of outside experts with subpoena power to examine the financial crisis and make recommendations. It also creates a bipartisan commission of experts with authority to review the causes of the economic situation and recommend changes.
In other Washington DC related news, Fannie Mae announced plans to securitize its holdings of mortgages that are not already packaged, into bonds. Per one trader, this helped fuel the issuance of $55 billion this month of debt backed by “seasoned” loans. Fannie’s plan is to take $256 billion of its single-family whole loan portfolio and $108 billion of multi-family loan portfolio and securitize that as well. Let’s hope that there are buyers out there! Speaking of buyers, this market is very, very quiet. “Dead in the water” as we used to say on the trading desk. The 10-yr seems happy around 3.23%, and mortgage security prices are about unchanged from Tuesday afternoon.
I am pretty good about giving people advice on careers. I tried selling real estate but I found my career listing. So I then tried mortgages but that just did not rate. Finally I tried doing appraisals but that was incomparably boring.
