When the Consumer Financial Protection Bureau substantially changed mortgage disclosure rules last year, it did not change the status of the annual percentage rate, or APR, as the system's disclosure centerpiece.
The reason for the central role of the APR, which is disclosed by lenders whenever they quote a rate, is that it pulls together the ...Read more
A mortgage shopper assumes responsibility for determining the type of mortgage that best meets her needs and finding the loan provider offering the best (or close to the best) price on that mortgage. A client, meanwhile, places herself in the hands of a loan officer or mortgage broker recommended by her real estate agent, friend, relative or ...Read more
A recent U.S. News & World Report article described how the elderly can prepare for three different emergencies commonly faced by those of retirement age. The article didn't mention, however, the best solution to two of the three problems: a reverse mortgage.
In this article, therefore, I will explain how a reverse mortgage can help seniors ...Read more
If you want to buy a home and go to a bank for a mortgage, you may get a warmer welcome than people have received in years.
The mortgage lending market is thawing. Banks are providing more mortgages after essentially closing up shop when the housing crash and financial crisis devastated mortgage brokers and many lenders in 2008, according to ...Read more
Q: I used your website to connect with one of your certified loan providers. While I provided in a timely manner all the documentation they asked for, the lender did not close within the lock period and is now asking me for $1,000 extra to cover a rate lock extension. The lender says that the holdup was due to the property appraisal not getting ...Read more
The food market closest to my home recently went out of business and was replaced by a supermarket chain. In most respects, the new store is an improvement over the one it replaced, except for one thing: Its pricing system is permeated by buy-one-get-one-free offers.
I went to the store recently to buy some blueberries, among other things. I ...Read more
The largest financial transaction most homeowners undertake is their home mortgage, yet very few fully understand how mortgages are priced. The main component of the price is the mortgage interest rate, and it is the only component borrowers have to pay from the day their loan is disbursed to the day it is fully repaid.
DEFINITION OF INTEREST ...Read more
Many senior homeowners are attracted to the idea of using a reverse mortgage to draw additional funds, but are so fearful of making a costly mistake involving their house, or being taken advantage of by loan providers, that they are immobilized and do nothing. The three-step strategy described below is directed to them. It is risk-free because ...Read more
The Starseeker GambitMr. Robert E. Birnschein
The starship Eagle is part of a slowly growing interstellar fleet tasked with searching nearby star systems to find a suitable life-supporting planet for a burgeoning humanity to colonize. Crewed by daring civilian explorers and planetary scientists the ship has crossed hundreds of light ...
If you took out a mortgage with a 7.5 percent interest rate in 1994 and still have it, refinancing in a 3.5 percent market is a no-brainer; you don't need much analysis to know that refinancing into today's rates will pay. The only possible reason a borrower would still hold such a mortgage is a marked deterioration in his credit, the value of ...Read more
On home mortgages, a large payment to principal reduces the loan balance and with it the fully-amortizing monthly payment, or FAMP. FAMP is the level of monthly payment required to repay the mortgage fully over its remaining term. Many borrowers would like a mortgage on which the monthly payment would drop to the new, lower FAMP following a ...Read more
As a federally insured reverse mortgage program under the Federal Housing Administration, the home equity conversion mortgage program is not designed to help the wealthy. In calculating maximum draw amounts, the highest property value it will recognize is $625,500. If your house is worth $1 million or $10 million, you can't draw more than the ...Read more
Before the financial crisis, many mortgage contracts contained a provision stating that borrowers who paid off their loan early had to pay a penalty. Penalties were usually expressed as a percent of the outstanding balance at time of prepayment or a specified number of months of interest. In most cases, the penalties declined with the passage of...Read more
The 15-year fixed-rate home mortgage is far and away the best option for consumers because of the low interest rate. All other things the same, including originations fees, the 15-year rate in today's market is 0.75 percent below the 30-year rate.
I recently assessed a $240,000 loan to a borrower with a high credit score who will put 20 percent...Read more
Many mortgage borrowers at some point consider making extra payments or refinancing but are confused as to which would serve them better. This article is directed to them.
EXTRA PAYMENT DECISIONS VERSUS REFINANCE DECISIONS
While borrowers refinance for a variety of reasons, only refinancings undertaken to reduce the interest rate can be viewed...Read more
- The Mortgage Professor: Is the annual percentage rate a useful disclosure?
- The Mortgage Professor: Reverse mortgage can quickly resolve common retirement-age emergencies
- The Mortgage Professor: Common mortgage-shopping mistakes
- The Mortgage Professor: Is making extra mortgage payments better than refinancing?
- Banks warming up to mortgages again after housing crisis