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The Mortgage Professor: Should home sellers pay the settlement costs of buyers?

Consumer / Home and Consumer News /

Q: In an effort to sell my house, I agreed to pay up to $8,000 of the buyer's closing costs. Is there anything I can do to keep the amount as far below $8,000 as possible?"

A: At this point, no. If you agreed to pay "up to" $8,000 of the buyer's costs, you will almost surely end up paying $8,000 or very close to it.

WHY A SELLER'S COMMITMENT ...Read more

The Mortgage Professor: How to unleash the reverse mortgage market

Consumer / Home and Consumer News /

Last week's article indicated that the market for home equity conversion mortgages -- the federal government's reverse mortgage program -- is not a shoppers market because the product is not well-defined, the prices charged are obscure, and borrowers have no reason to be confident that the product selected will be delivered at the agreed-upon ...Read more

The Mortgage Professor: How to unleash the reverse mortgage market

Consumer / Home and Consumer News /

The need for a robust reverse mortgage market is large and growing. At the end of 2015, there were about 24 million homeowners ages 65 and older, and that number is growing by about a million each year.

The Center for Retirement Research at Boston College estimates that more than half of them "may be unable to maintain their standard of living ...Read more

The Mortgage Professor: Rent or buy? The question that never seems to go away

Consumer / Home and Consumer News /

Should you rent or buy?

The question never goes away because it is confronted anew by every new cohort of households. The letters I receive on the topic, such as the one below, haven't changed in the last 20 years:

"I am a 48-year-old divorced female. I have been renting for the last 10 years. ... My friends keep telling me that renting is '...Read more

The Mortgage Professor: 4 ways to purchase a house with a reverse mortgage

Consumer / Home and Consumer News /

Many home purchasers are seniors. Some become homeowners for the first time, but most have been and want to remain homeowners. They just don't want to remain in their current house. They may want a house that has no stairs, or one that is closer to family or friends, or one in a warmer climate. In many cases, they want to downsize, both the ...Read more

Mortgage rates drop to lowest level since May 2013

Consumer / Home and Consumer News /

Concerns about the strength of the global economy plus the Federal Reserve's decision this week to keep interest rates from rising have driven mortgage rates to the lowest level since May 2013.

According to Freddie Mac's most recent survey, 30-year fixed-rate mortgages have dropped to 3.54 percent. A 15-year mortgage dropped to 2.81 percent. ...Read more

The Mortgage Professor: Mortgage document deluge

Consumer / Home and Consumer News /

Last August, the Consumer Financial Protection Bureau put into force new regulations that integrated the mortgage loan disclosures required by the Truth in Lending Act, or TILA, and the Real Estate Settlement Procedures Act of 1974, or RESPA. The new regulation is named the TILA-RESPA Integrated Disclosure Rule, or TRID.

The first three parts ...Read more

The Mortgage Professor: Mortgage document deluge: Educational docs and those to hold on to

Consumer / Home and Consumer News /

In the first two parts of this series of columns, I explained how the large number of documents involved in a mortgage closing can be divided into four basic groups, each of which should be viewed as distinct by borrowers. In this installment, I'll review the categories I refer to as "educational documents" and "future use documents."

...Read more

The Mortgage Professor: Mortgage document junk docs to breeze through

Consumer / Home and Consumer News /

Everyone who has ever closed a real estate transaction knows that the number of documents that must be signed at the closing table is enormous. I refer to this as the "mortgage document deluge," which I've been exploring in a series of articles aimed at helping borrowers cope with the barrage. Borrowers need to know which documents in the pile ...Read more

Wells Fargo is offering low down payment mortgages without FHA backing

Consumer / Home and Consumer News /

LOS ANGELES -- Wells Fargo & Co. has started offering a new type of mortgage that requires a tiny down payment and could appeal to customers who might otherwise get loans backed by the Federal Housing Administration.

Most big banks have pulled back from offering FHA loans after dealing with lawsuits and billion-dollar settlements connected with...Read more

The Mortgage Professor: Does the new rule help with the mortgage document deluge?

Consumer / Home and Consumer News /

For years, the Consumer Financial Protection Bureau worked to integrate the mortgage loan disclosures required by the Truth in Lending Act, or TILA, and the Real Estate Settlement Procedures Act of 1974, or RESPA. The bureau's work, done under the TILA-RESPA Integrated Disclosure Rule, or TRID, resulted in new requirements that went into effect ...Read more

The Mortgage Professor: Borrower decisions on a HECM reverse mortgages

Consumer / Home and Consumer News /

When a borrower is weighing whether or not to take out a home equity conversion mortgage -- the reverse mortgage offered through the Federal Housing Administration -- there are three key decisions to consider.

The first applies to the draw options -- the combination of upfront cash, monthly payment and credit line that best meet the borrower's ...Read more

The Mortgage Professor: Where savings discipline is plentiful and where it is scarce

Consumer / Home and Consumer News /

Savings discipline is the willingness to forgo spending now in order to accumulate the funds needed to meet a valued objective in the future. The objective is critical because it must outweigh the costs of the discipline required.

-- Homeownership as the objective: The objective of home ownership, for example, is a very powerful motivator. It ...Read more

The Mortgage Professor: Assuring price integrity in a dysfunctional market: Introducing the price checker

Consumer / Home and Consumer News /

You are a senior who finds an advertisement for reverse mortgages appealing, except that you don't trust ads to tell the whole truth about anything. You have a well-justified fear that if you respond to the ad, a glib sales person will take over the process, perhaps seducing you into a deal that you will later regret.

To avoid making a serious ...Read more

The Mortgage Professor: Becoming a homeowner when you don't qualify for a mortgage

Consumer / Home and Consumer News /

Lease-to-own contracts and land contracts are different legal ways to transfer occupancy of a property from an existing owner who does not want to occupy it to someone else who does but cannot immediately qualify for the financing required to purchase it outright. Both lease-to-owns, known as LTOs, and land contracts, known as LCs, offer wannabe...Read more