Tighter Mortgage Lending Has Arrived

Friday, May 1st, 2020

According to a recent Philadelphia Inquirer article, mortgage lenders have recently begun raising minimum credit scores, requiring higher down payments, triple-checking employment status, and even eliminating certain loan types altogether. As job loss reaches staggering heights due to the coronavirus pandemic, lenders are worried that high unemployment numbers will translate into mortgage defaults and late payments down the road. Chase recently announced that it would raise its minimum credit score requirement to 700 and hike the minimum down payment up to 20 percent, from 3.5 percent. Lenders large and small across the country are following suit. Wells Fargo and US […]

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Prepping For Your Refi

Wednesday, April 1st, 2020

In these tough times, a rare silver lining has come in the form of mortgage refinancings. Where rates are headed is anyone’s guess because these are unprecedented times and markets are reacting in ways nobody has ever seen. Though historically low 10-year Treasury yields should coincide with plunging mortgage rates, other factors, including investors pulling money out of mortgage-backed securities amid a broad asset selloff, caused rates to tick up recently. Some lenders are so overwhelmed with refi requests that they are slowing the flow of business by raising rates. The dynamic situation requires that borrowers get ready to act […]

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Treasury Yields Hit New Lows

Tuesday, March 3rd, 2020

Federal Reserve Chairman Jerome Powell signaled on Friday that the central bank is prepared to cut interest rates if needed. “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” Mr. Powell said in a statement released Friday afternoon. “The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.” The Fed used similar language last June to indicate it was prepared to cut interest rates if needed after the U.S.-China trade war threatened to aggravate a […]

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When & How to Cancel PMI

Tuesday, February 4th, 2020

Cancellation using original value The Homeowners Protection Act of 1998 (HPA) covers single-family primary residences whose sales were closed on or after July 29, 1999. HPA provides for borrower-requested cancellation and lender required cancellation. Borrower-requested cancellation under HPA Borrowers must provide a written request for MI cancellation to the lender, who cancels the MI policy: • The date the mortgage loan balance is first scheduled to reach 80% of the original property value, based solely on the initial amortization schedule , regardless of the outstanding balance of the loan OR • The date the mortgage loan balance actually reaches 80% […]

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Homeowners Opt to Refinance to Get Cash

Thursday, January 2nd, 2020

Many U.S. homeowners who need cash are taking it out of their properties. This recent trend illuminates the crosscurrents in the U.S. economy: After roughly a decade of rising home prices, homeowners are flush with record amounts of home equity they can tap. But many Americans remain short on cash and are increasingly relying on debt to fund their lives. While mortgage rates have crept slightly higher lately, they are still lower than what borrowers would pay if they tapped a credit-card or home-equity line of credit. Cash-out refis made up a significant share of refinancings in the third quarter, […]

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Warranties Aren’t Just for Cars

Tuesday, December 3rd, 2019

Houses are pretty good at keeping secrets. A hairline crack in a pipe or a worn belt on the clothes dryer may go undetected until something goes wrong. To assuage potential buyers fearful of hidden hazards like these, many sellers offer a one-year home warranty that covers certain repairs to appliances, plumbing and electrical systems, as well as heating and air conditioning. The warranties are a common sweetener to close a home sale, especially if the property has been on the market for a long time. But buyers should know that when something goes wrong, home-service contracts have strict limits […]

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Fed Hints They’re Done Lowering Rates…for Now

Friday, November 1st, 2019

Mortgage rates rose Friday after data showed the economy added more jobs than expected last month, a sign of ongoing growth. The yield on the benchmark 10-year Treasury bond rose, snapping a three-session streak of declines, settling at 1.727% compared with 1.672% before the report and 1.691% Thursday, according to The Wall Street Journal (WSJ). On Friday the Labor Department said the U.S. added 128,000 jobs last month, more than the 75,000 expected by economists surveyed by WSJ. The agency also revised data from August and September to reflect gains of 95,000 more jobs than had previously been estimated. Some […]

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Latest Housing Data

Tuesday, October 1st, 2019

The housing market is a bit better lately. But considering the overall economic environment, the improvement still counts as underwhelming. On Thursday, the National Association of Realtors reported that its index of pending home sales—sales of previously owned homes that are under contract but haven’t been finalized—bounced back in August, putting it 2.5% above its year-earlier level. That follows Wednesday’s Commerce Department report showing that new-home sales jumped last month and last week’s report that existing-home sales firmed in August. The biggest factor behind the pickup in housing has probably been the decline in interest rates. Earlier this month, the […]

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Computer Appraisals Cut Costs

Tuesday, September 3rd, 2019

The next time you buy a house or refinance, your lender might deploy a drone and a computer algorithm to size up your property instead of a tape-measure-toting human appraiser. According to a recent Wall Street Journal article, federal regulators are moving to allow a majority of U.S. homes to be bought and sold without the involvement of licensed appraisers, by increasing from $250,000 to $400,000 the value of homes exempt from a human evaluation. In doing so, they are opening the door to more appraisal work being performed from afar and by computer models. Proponents of the change, primarily […]

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Will More Rate Cuts Follow?

Thursday, August 1st, 2019

The Federal Reserve cut interest rates 0.25% yesterday for the first time since 2008. The average 30-year, fixed-rate mortgage has fallen to 3.75% as of last week from 4.94% last November. For home buyers or owners looking to refinance their mortgages, the lower rates could easily save thousands of dollars over the life of a loan or enable them to purchase a bigger house than they could have afforded in December. The decline in mortgage rates since then would shave $175 off the monthly payment on a $250,000, 30-year loan. As for further rate cuts ahead, Fed Chairman Powell commented […]

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