30-Year Fixed Mortgage Rates Slide Below 4%, For Second Week in a Row …

SEATTLE, July 22, 2014 (GLOBE NEWSWIRE) — The 30-year fixed mortgage rate on Zillow® Mortgages is currently 3.97 percent, down eight basis points from this time last week. The 30-year fixed mortgage rate hovered between 3.96 and 4.08 percent for the majority of the week, before settling at the current rate on Tuesday.

“Rates dropped below 4 percent on Thursday amid the uncertainty and turmoil following the MH17 flight disaster and ongoing military activity in the Middle East,” said Erin Lantz, vice president of mortgages at Zillow. “This week, despite a fair amount of domestic economic data slated for release, we expect events in the Middle East and Ukraine will continue to put a damper on rates.”

Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.

The rate for a 15-year fixed home loan is currently 3.01 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.77 percent.

Purchase Mortgage Application Activity

Zillow predicts tomorrow’s seasonally adjusted Mortgage Bankers Association Weekly Application Index will show purchase loan activity to increase by 4 percent from the week prior. Zillow combines loan requests made on Zillow Mortgages last week with the previous week’s Mortgage Bankers Association (MBA) Weekly Application Index to predict the MBA’s Weekly Application Index for purchase loans, which will be released tomorrow. For more information about this prediction, visit http://www.zillow.com/research/mortgage-app-index-part-one-7016/.    

Below are current rates for 30-year fixed mortgages by state. Additional states’ rates are available at: http://www.zillow.com/mortgage-rates.


About Zillow Mortgages

Zillow Mortgages, operated by Zillow, Inc., is a free, open, and transparent lending marketplace, where borrowers connect with lenders to find loans and get the best mortgage rates.  Borrowers anonymously submit loan requests and receive an unlimited number of custom mortgage quotes with real rates directly from thousands of competing lenders.  Zillow Mortgages also provides mortgage calculators, mortgage advice, mortgage widgets, and lender directories

Zillow is a registered trademark of Zillow, Inc.

The Zillow logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10012

CONTACT: Media Contact:
         Alison Paoli, Zillow
         206-757-2701 or press@zillow.com

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Article source: http://money.cnn.com/news/newsfeeds/articles/globenewswire/10090475.htm

Reverse mortgages: the basics

Published: July 22, 2014 1:51 PM

By LYNN BRENNER. Special to Newsday

A reverse mortgage can be a good source

A reverse mortgage can be a good source of income if you’re 62 or older, house-rich and cash-poor.
(Credit: iStock)

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First of two parts

I’m 89 and my wife is 85. We’re on a fixed income and find it very difficult to pay our bills, even though we’re very frugal. We’ve been married 67 years. Is it a good idea to get a reverse mortgage on our home of 50 years?

It certainly sounds as if you should consider one.

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I can’t squeeze reverse mortgages into a single column, so this will be the first of two; the second will appear next week. This week: the basics. Next week: the potential pitfalls.

These loans are available only to homeowners who are 62 or older. The amount you can borrow depends on your age, the appraised value of your house and the government’s estimate of future interest rates. Currently, an 85-year-old can borrow 63.5 percent of the appraised value of her house, says Mike Temares, a HUD-certified reverse-mortgage counselor at Nassau County Family and Children’s Association, but this percentage may become smaller after Aug. 3.

You must use part of the loan to pay off any existing mortgage. You can take the rest as a lump sum, a line of credit, monthly payments or any combination of the three. None of it is taxable.

As long as you pay your property taxes and homeowners insurance premiums, no payments are due on the reverse mortgage loan until you move, die or sell the house. Then, you or your heirs must repay the loan plus accrued interest and fees. But your total debt can’t exceed the market value of the house. If it sells for less than you owe the bank, federal insurance pays the difference. The cost of this insurance is included in the price of the reverse mortgage.

The bottom line A reverse mortgage can be a good source of income if you’re 62 or older, house-rich and cash-poor.

Websites with more information nwsdy.li/reversemortgages and nwsdy.li/reversemortgageFTC

TO ASK THE EXPERT Send questions to Ask the Expert/Act 2, Newsday, 235 Pinelawn Rd., Melville, NY 11747, or email act2@newsday.com. Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.

Article source: http://www.newsday.com/lifestyle/retirement/reverse-mortgages-the-basics-1.8865811

Why you may be paying for someone else’s mortgage relief

They'll rent it back to you. (Rick Wilking / Reuters)
They’ll rent it back to you. (Rick Wilking / Reuters)

In recent years, banks have agreed to spend billions of dollars to help struggling homeowners as part of settlements with the government related to the lenders’ alleged misconduct during the housing crisis.

If all works as planned, the relief should end up helping many people who are struggling to keep up with their mortgage payments. But it may not work out as well for investors who purchased the mortgages that these homeowners took out.

Who are the investors? They include unions, pension funds, 401K savings plans and mutual fund shareholders, not just Wall Street firms,  according to the Association of Mortgage Investors. In other words, they’re the general public, as AMI likes to put it.

And recent multibillion-dollar government settlements with JPMorgan Chase, Citigroup and others hurts those investors, the group says.

The settlements call on the banks to grant various forms of relief, such as modifying the mortgages of “underwater” borrowers by reducing the size of their loans. (These are borrowers who owe more on their mortgages than their homes are worth.) When that type of debt forgiveness takes place, whoever owns the loan takes a hit because they don’t get paid as much as was promised. In some cases, the banks own the loans. But in others, the banks have bundled the loans into securities and sold them to investors, which means the investors (and the firms that manage their money) get burned when a loan is modified. That’s why AMI is calling foul.

“If they want to settle and help consumers who need help, terrific,” said Vincent Fiorillo, president of AMI’s board and global sales director at Doubleline Capital. “If you want to take the investors’ money to settle, that’s where I have a problem. The investors are not the bad actors here.”

In its record $13 billion settlement with the government last year, JPMorgan agreed to grant $4 billion in consumer relief.  On Tuesday, the monitor who tracks the distribution of that relief money reviewed a small sample of the bank’s loans (100 of them) to make sure the bank is correctly recording the aid, and it is.  But the review also shows that 44 percent of those loans are owned by investors, not the bank.

More than two years ago, when the government and 49 U.S. attorneys general negotiated a $25 billion settlement with some of the nation’s largest banks, investors paid almost a quarter of the $20 billion that was set aside for relief, said Laurie Goodman, director of the Urban Institute’s Housing Finance Policy Center.

The deal was set up to encourage banks to modify their own loans.  For instance, every dollar of debt that the bank forgave on its own loans would be applied to the $20 billion total.  But for every dollar of debt forgiven on an investor-owned loan, the bank was credited only about 50 cents.  Even so,  investor-owned loans made up 39 percent of relief credited to Bank of America and 29 percent of relief credited to JPMorgan under that deal, Goodman said.

When the government and state authorities last year ordered Ocwen Financial to provide $2 billion of relief for underwater borrowers, investors carried the vast majority of that cost burden, Goodman said. Ocwen only services loans, meaning it collects borrowers’ payments. It does not own loans.

“The investors have a huge point,” Goodman said. “The banks are basically spending their money.”

In some of these deals, like the $7 billion Citigroup settlement last week, banks are not allowed to forgive mortgage debt on investor-owned loans without the investors’ permission. But investors say that the trustees charged with granting permission work for the banks, not the investors, underscoring an inherent conflict of interest regarding the trustees’ role.

The Justice Department, which negotiated many of these settlements, did not return calls seeking comment. It also has not responded to two letters AMI sent to U.S. Attorney General Eric Holder, including one sent last month, said Chris Katopis, the group’s executive director.

“We ask that we be included in any negotiations from this point forward to make sure our economic interests are protected and not sacrificed by the parties the government has charged,” Katopis wrote in the most recent letter.

David H. Stevens, head of the Mortgage Bankers Association, said that investing comes with risks, and just about anyone with a financial stake in the housing sector got hit with unprecedented risks once the housing market tanked and the government rushed to its rescue. No one escaped unscathed, he said.

“Investors can be screaming from the corners that they’ve been harmed, but it’s tough to say the government can touch everybody else’s mortgages but not mine,” Stevens said.

On the other hand, the government is playing an outsize role in supporting the mortgage market right now. Policy makers are struggling to scale back the government’s footprint and lure the private sector back. And these types of settlements are likely to discourage their return, he said.

“If you’ve broken the trust, how do you get them back?” Stevens said.

Article source: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/22/why-you-may-be-paying-for-someone-elses-mortgage-relief/

Freddie Mac: Mortgage rates level off, 30-year loans average 4.12%

The cost of getting a mortgage has leveled off, with Freddie Mac saying lenders were offering 30-year fixed-rate home loans this week at an average interest rate of 4.12%. That rate is little changed from the average of 4.15% over the last 10 weeks.

The survey, released Thursday, showed a statistically insignificant decline from the 4.13% average that Freddie Mac reported last week. Interest rates on other types of home loans also leveled off, with the 15-year fixed mortgage averaging 3.23%, down from 3.24% a week ago.

Bank of America earnings tumble 43% on mortgage litigation costs

The trend means that solid borrowers are snagging 30-year mortgages at 4.125%, or 4% if they pay lenders the 0.5% of the loan amount that Freddie Mac factors in. Appraisal, title insurance and other third-party expenses are not included in the survey.

Solid borrowers who pay higher points upfront still can obtain 30-year loans in the high 3% range — remarkably cheap by historical standards, though well above the 3.31% average that Freddie’s weekly survey recorded twice in the fall of 2012.

According to industry insiders, it has become somewhat easier to take advantage of the low rates.

lRelated Wells Fargo profit rises 3.8% as home lending regains some traction
BusinessWells Fargo profit rises 3.8% as home lending regains some tractionSee all related

A home loan credit availability index published by the Mortgage Bankers Assn. increased from 115.1 in May to 115.8 in June. Increases indicate a loosening of credit; the index was benchmarked to 100 in March 2012. 

John Shrewsbury, chief financial officer at No. 1 mortgage provider Wells Fargo Co., said lenders now have largely adapted to the safe-lending standards published last year by the Consumer Financial Protection Bureau.   

That’s made it a bit easier for them to relax their internal guidelines a bit, Shrewsbury said.

Citigroup to pay record fine in $7-billion mortgage settlement

Citigroup to pay record fine in $7-billion mortgage settlement Jim Puzzanghera, E. Scott Reckard Citigroup Inc. will provide $7 billion in cash and consumer relief to settle federal and state investigations into the sale of defective mortgage investments during the subprime housing boom, the Wall Street giant and federal officials said Monday. Citigroup Inc. will provide $7 billion in cash and consumer relief to settle federal and state investigations into the sale of defective mortgage investments during the subprime housing boom, the Wall Street giant and federal officials said Monday. ( Jim Puzzanghera, E. Scott Reckard ) –>

But he noted: “There are still people who might qualify [under the consumer bureau’s guidelines] who perhaps are having trouble getting a loan.”

Wells Fargo, he said, has “reduced its overlays somewhat,” a reference to the tighter lending standards that the bank and many of its competitors impose over the minimum requirements of the consumer bureau and loan backers such as Freddie Mac, Fannie Mae and the Federal Housing Administration.

Follow @ScottReckard for news about banks and mortgage lending.

Copyright © 2014, Los Angeles Times

Article source: http://www.latimes.com/business/personalfinance/la-fi-re-freddie-mac-mortgage-rates-20140717-story.html

Current Capital One Mortgage Rates for 21st of July

Before moving to Mortgage rates from one of the most popular US based mortgage provider, Capital One, the latest news from the stock market about Capital One is that the stock prices of the bank gained by 0.59 to reach 67.60. Those who are looking for investment may find it as a good opportunity.

To our latest rates from the Capital One Financial (NYSE:COF), the bank published latest rates for fixed and adjustable mortgage loans today. To start with, published rates for 15-Year fixed rate loans today are 3.375% interest rate with an APR of 3.442%. This equals to a monthly payment of $1,771.90. The benchmark 30 year fixed rate loan is offered today for 4.125% interest rate with 4.153% APR that equals to $1,211.63 monthly rate.

For the Adjustable Rate Mortgage (ARM), the bank offers following rates today!

Adjustable (ARM) Mortgage Loans: Capital One 21st July

5/1 Adjustable Rate 3.125% APR with 2.906% Interest
7/1 Adjustable Rate 3.250% APR with 3.006% Interest

According to above mentioned rates, monthly payment for 5/1 Adjustable Rate will be $1,070.94 while for the 7/1 Adjustable Rate, monthly payment for the mortgage loan will be $1,088.02.

Capital One also guarantees fixed rate for 60 days for refinancing or buying your home that means that you have a peace of mind with guaranteed rate even if rates fluctuate during the time period.

The above mentioned rates are for mortgage loans up to $417,000. For the higher amount of loan, bank published different rates. For the loan range of $417,001 and $625,500, the fixed price 30 year rates offered today are interest rate of 4.125% with an APR of 4.142% ($2,423 monthly payment). For 15 year fixed rate, the rates offered today are 3.375% interest rate with 3.405% APR ($3,543.80 monthly payment).

For the same range, 5/1 Adjustable Rates are 3.125% interest rate and 2.896% APR that equals to $2,141.88 monthly payment. Similarly, interest rate of 3.500% along with 3.113% APR rate is published on 21st July for 7/1 Adjustable Rate Mortgage Loan.

For Loans higher than $625,501, the banks offers different rates that include 3.875% interest rate and 3.899% APR for 15-Year Fixed Rate, 4.375% interest rate and 4.389% APR for 30 Year Fixed Rate, 2.625% interest rate and 2.729% APR for 5/1 Adjustable Rate and 3.125% interest rate and 2.934% APR for 7/1 Adjustable Rate.

Disclaimer: The advertised rates were submitted by each individual lender/broker on the date indicated. Rate/APR terms offered by advertisers may differ from those listed above based on the creditworthiness of the borrower and other differences between an individual loan and the loan criteria used for the quotes.

Article source: http://www.morningledger.com/current-capital-one-mortgage-rates-for-21st-of-july/137374/

Where will mortgage rates head this year?


“The multifamily rental market has led the rest of the housing sector into recovery,” said Freddie Mac (OTC FMCC) chief economist Frank Nothaft. “There’s no question the single-family recovery is moving slowly, but it continues to doggedly press forward and we are cautiously optimistic.”

Arts and Craft Gem15 photos

Jeff Clabaugh
Broadcast/Web Reporter- Washington Business Journal


We’re now more than halfway through 2014, and Freddie Mac is revising its forecast for the housing market, expecting little change in sales or mortgage rates for the rest of the year.

Freddie Mac’s economic and housing market outlook projects new housing construction will increase by 14 percent compared with 2013, with multifamily construction accounting for about one-third of new construction this year.

“The multifamily rental market has led the rest of the housing sector into recovery,” said Freddie Mac (OTC FMCC) chief economist Frank Nothaft. “There’s no question the single-family recovery is moving slowly, but it continues to doggedly press forward and we are cautiously optimistic.”

Freddie Mac says home sales will accelerate the remainder of the year, though its forecast remains at 5.4 million for the full year, down 2 percent from 2013.

Existing home sales will be 3 percent lower than last year, but new home sales may be up as much as 15 percent.

Freddie Mac expects mortgage rates to rise only modestly for the rest of the year, with 30-year rates averaging 4.4 percent by the end of the year.

It also lowered its forecast for mortgage originations by 6 percent to $1.175 billion, citing a lackluster spring home buying season and a sharp drop in refinancing.

Jeff Clabaugh covers general assignment and provides business coverage for WTOP.

Article source: http://www.bizjournals.com/washington/breaking_ground/2014/07/where-will-mortgage-rates-head-this-year.html

BB&T earnings hit by mortgage, tax charges

BBT 1422

BBT booked net income of $425 million in the second quarter, down from $547 million a year earlier in part due to $88 million worth of mortgage and tax-related reserve adjustments.

Matt Evans
Reporter- Triad Business Journal


BBT Corp. second-quarter’s profit dropped 29 percent, in part due to $88 million worth of mortgage and tax-related reserve adjustments.

The Winston-Salem, N.C.-based reported a profit of $547 million, or 58 cents per share, down from $425 million, or 77 cents, in the year-ago period.

The $88 million adjustment to the amount of reserves the bank holds came after the U.S. Department of Housing and Urban Development notified BBT late in the quarter that it would be auditing its Federal Housing Administration-insured loan origination process. While HUD hasn’t made any findings yet, BBT CEO Kelly King said based on the experience of other mortgage lenders with such audits and on a review of BBT’s own exposure, it’s appropriate to set aside money to pay potential charges now.

The bank (NYSE: BBT) also had a tax adjustment of $14 million after the IRS notified it of a stance related to an income tax position currently under examination.

Beyond those issues, King said BBT’s core results were strong and included a 7 percent annualized growth rate in average loans and 12 percent growth in deposits. Revenue was up 3 percent annualized from the first quarter, and credit quality also improved.

“Average loan growth was robust in nearly all loan portfolios,” King said. “Commercial lending was up across the board during the second quarter, with CI up 10 percent, CRE – construction and development up 18 percent, and CRE – income producing properties up more than 3 percent. The sales finance portfolio increased 26 percent during the quarter, and the other lending subsidiaries portfolio was up 12 percent, reflecting seasonally stronger demand.”

Matt Evans covers technology, entrepreneurship, higher education and financial services. Contact him at 336-370-2916.

Article source: http://www.bizjournals.com/baltimore/news/2014/07/21/bb-t-earnings-hit-by-mortgage-tax-charges.html

China’s First Mortgage Debt Since Crisis Shows Li Concern

China will revive mortgage-backed debt sales this week after a six-year hiatus, as the government extends help to homebuyers in a flagging property market.

Postal Savings Bank of China Co., which has 39,000 branches in the country, plans to sell 6.8 billion yuan ($1.1 billion) of the notes backed by residential mortgages tomorrow, according to a July 15 statement on the website of Chinabond. The last such security in the nation was sold by China Construction Bank Co. in 2007, Bloomberg-compiled data show.

Premier Li Keqiang is seeking to avert a collapse of the real-estate market after data last week showed new home prices dropped in a record number of cities in the world’s second-largest economy. The central bank in May called on the nation’s biggest lenders to accelerate the granting of mortgages to first-home buyers, and cities including Nanning, Hohhot and Jinan eased property restrictions.

“The government has eased its attitude toward the property market since property demand plunged this year,” said Wang Ying, an analyst in Shanghai at Fitch Ratings Ltd. “The policy measures it has taken this year have conveyed a message that property curbs will not be as strong as before.”

Prices Fall

Selling mortgage-backed securities can help banks free up space on their balance sheets for more lending by transferring the risk of the loans to buyers of the products. Authorities are allowing the revival of such offerings after housing prices fell in 55 of the 70 cities last month from May, the National Bureau of Statistics said on July 18, the most since January 2011 when the government changed the way it compiles the statistics. New mortgages in Shanghai, China’s financial center, declined 2.2 percent in the first half, according to a statement posted on the central bank’s Shanghai head office website last week.

Photographer: Brent Lewin/Bloomberg

Premier Li Keqiang is seeking to avert a collapse of the real-estate market after data last week showed new home prices dropped in a record number of cities in the world’s second-largest economy. Close

Premier Li Keqiang is seeking to avert a collapse of the real-estate market after data… Read More


Photographer: Brent Lewin/Bloomberg

Premier Li Keqiang is seeking to avert a collapse of the real-estate market after data last week showed new home prices dropped in a record number of cities in the world’s second-largest economy.

The pressure on Chinese developers was underscored by the collapse in March of Zhejiang Xingrun Real Estate Co., a builder south of Shanghai. Developers, including China Vanke Co. and Greentown China Holdings Ltd., have cut property prices since March to boost sales. The slump comes as economic growth is set to cool to 7.4 percent this year, the slowest in more than two decades, according to the median estimate of economists surveyed by Bloomberg.

“The economy’s slowdown and the property market’s weakness are quite obvious in the first half,” said Fitch’s Wang. “Many developers’ first-half sales account for only less than 50 percent of their annual targets while they used to achieve more than 50 percent of the targets in previous years.”

Supplemental Measure

The northern city of Hohhot responded by waiving checks limiting the number of properties each resident is allowed to own, according to a statement on the local housing authority’s website on June 27. The eastern Chinese city of Jinan canceled purchase limits from July 10, the official Xinhua News Agency reported on its official microblog earlier this month, citing the local property management bureau.

Residential mortgage-backed debt is one of the supplemental measures the government can use to help avert a plunge in the property market, according to Frank Chen, Shanghai-based head of China research at CBRE Group Inc., a commercial real-estate services company based in Los Angeles.

Cooling economic expansion has pushed the yield on China’s benchmark 10-year sovereign note down 25 basis points this year to 4.3 percent. The yuan has fallen 2.5 percent against the dollar in the same period.

While China started allowing securitization in 2005, it halted the development in 2009 after a collapse in subprime RMBS triggered the global financial crisis. The government resumed approving issuance in 2012 with limits to ensure risks are properly taken into account.

Complication Risk

“MBS can help banks diversify risks and boost liquidity,” CBRE Group’s Chen said. “But if the financial engineering gets overly complicated, it may pose similar risks as what we saw in the U.S. subprime crisis. That’s why China has been cautious in developing the securitization market.”

Even with the gradual approach, sales have expanded at a faster pace this year. Chinese banks have issued 89.6 billion yuan of securitized products, compared with 3.6 billion yuan in the same period last year and 15.8 billion yuan for all of 2013, Bloomberg-compiled data show.

China Postal Savings will sell 6 billion yuan of AAA rated tranche A securities, 477 million yuan of A- rated tranche B notes and 341 million yuan of subordinated securities, according to the statement to Chinabond. The maturity date is December 31, 2039.

Economic Support

The residential mortgage default rate for China Construction Bank Co., the biggest provider of home loans in the country, was only 0.17 percent last year, compared with 0.99 percent for all types of lending, according to the bank’s annual report.

The relative safety of mortgages stems in part from the 30 percent minimum downpayment requirement for first-time home buyers. That is a high percentage globally, according to CBRE’s Chen.

“Risks of China’s RMBS are very low, in our view,” Chen said. “In China, mortgage default rate is the lowest among all types of bank loans. Also, China’s homebuyers are required to pay a minimum down payment of 30 percent, which is a high percentage globally.”

Xu Hanfei, an analyst at Guotai Junan Securities Co., also said the resumption of mortgage-backed securities is a signal that the government is relaxing controls on the property market.

“The regulators will accelerate approval of ABS and MBS to make better use of existing credit and support the economy,” Xu said.

To contact Bloomberg News staff for this story: Judy Chen in Shanghai at xchen45@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net; Sandy Hendry at shendry@bloomberg.net Andrew Monahan, Sandy Hendry

Article source: http://www.bloomberg.com/news/2014-07-20/first-mortgage-debt-since-crisis-shows-li-concern-china-credit.html

This is the worst thing about getting a mortgage

By Amy Hoak, MarketWatch

Prospective home buyers are confident that they’ll be able to find an affordable mortgage to make their purchase. Still, they’re thoroughly overwhelmed by the amount of information they have to wade through when securing a mortgage.

That’s according to a survey to be released on Monday by Discover Home Loans, a subsidiary of Discover Financial Services

/quotes/zigman/470130/delayed/quotes/nls/dfs DFS

. It found that 87% of people planning to buy a home in the next year and a half are pretty sure they’ll be able to get a mortgage they deem affordable. The survey also found that 94% of prospective buyers think purchasing a home is a good investment.

Getty Images

More than 75% of first-time home buyers report feeling overwhelmed by paperwork and other mortgage information.

But 63% are overwhelmed by the amount of mortgage information available, including anything from what they find online, to offers from lenders, to the stack of paperwork that accompanies any mortgage transaction. An even greater percentage, 76%, of first-time buyers reported feeling overwhelmed.

It makes sense that buyers today are confident they’ll be able to get an affordable mortgage—they’re taking a lot longer to educate themselves on the mortgage process before they start shopping, said Cameron Findlay, chief economist of Discover Home Loans. If they weren’t pretty sure they could get a mortgage they’d be able to afford, they probably wouldn’t consider buying to begin with. (Although presumably that doesn’t apply to everyone; 13% of those planning to buy a home said they aren’t confident they’ll be able to secure an affordable rate on their mortgage.)

This longer education period (for most) is a change from a decade ago, when people who wanted to buy a home may have felt compelled to jump into the process fairly quickly, before they were priced out of the housing market, Findlay said.

But many are still shaky when it comes to understanding their home financing, and have some work to do before fully understanding how a mortgage will fit into their budgets.

Of the 1,037 prospective buyers surveyed, 87% know what type of property they can afford, and 83% say they’re prequalified for a mortgage. But only 52% have determined their projected monthly payment. And only 59% have calculated their down payment.

One change is coming next year that could potentially help borrowers gain a clearer understanding of their options: Lenders will be required to use simplified disclosure documents to inform borrowers of mortgage terms, Findlay said. The most helpful part of the new disclosures is that all lenders will be required to use a standardized display of information, which should make comparing loans easier, said Keith Gumbinger, vice president of HSH.com, a provider of consumer loan information.

Below are some tips to make the mortgage process less confusing.

Understand your finances

“It’s best to have your financial ducks in a row so there are no surprises,” said TJ Freeborn, mortgage professional with Discover Home Loans. Start by developing a good understanding of your finances. And have a general working knowledge of what your credit score is, said Anthony Hsieh, chief executive of Loan Depot, a mortgage lender. Get prequalified or even preapproved for a mortgage loan before you start house shopping, Freeborn said.

Click to Play

Analysis: What’s next from the Fed

Federal Reserve Chairwoman Janet Yellen is still cautious about the strength of the economy.

Also think about how long you plan on staying in the home, as well as your tolerance for risk—both of which will help you determine whether to even consider adjustable-rate mortgages, Gumbinger said. By knowing the type of mortgage you want—before even talking with a mortgage banker—you won’t have to sit through pitches that don’t apply to you.

“You could lose your mind in conflicting advice,” Gumbinger said, so before talking with someone, know where you stand financially and the type of mortgage that interests you.

Find a lender you trust

When choosing a mortgage banker, get recommendations from friends and family, and check the Better Business Bureau for any red flags. The chosen person can be your guide through the process, pointing you to helpful online resources and answering all your questions, Freeborn said.

When deciding who to work with, you also want someone with a reputation for getting purchase deals done on time, Gumbinger said. And while some people may be open to online lenders, first-time home buyers may feel more comfortable with a local lender, someone they could sit across from at a desk, he said.

No questions are too small or silly

Don’t be intimidated, and ask the mortgage banker any and all mortgage questions you have. A good one will be more than happy to get you the answers you need to feel comfortable and prepared for the next steps in the process, Freeborn said.

“You have a right to ask questions, and you have a right to expect answers—and answers that you can understand,” Gumbinger said. If you get an explanation you don’t understand, speak up and say so. Don’t sign anything until all the details are clear.

Trust your instincts

If something seems too good to be true, it probably is. So when things don’t add up or you can’t get straight answers, step back and reconsider whether you’re working with the right person, Freeborn said.

Understand, however, that application and appraisal fees most likely aren’t refundable, Gumbinger said. So if you’ve already paid these costs, you might be out several hundred dollars if you switch lenders.

Also on MarketWatch:

Why mortgage rates haven’t risen as expected

How to get thousands of dollars in mortgage relief from Citigroup

To win a house bidding war, get creative


add Add to watchlist



Article source: http://www.marketwatch.com/story/4-ways-to-fight-mortgage-information-overload-2014-07-21

State Mortgage Program Cuts Rates In Western Md.

HAGERSTOWN, Md. (AP) — A state mortgage program is lowering its rates for two months in Western Maryland to entice homebuyers.

The Herald-Mail of Hagerstown reports the Maryland Mortgage Program will lower rates by a quarter percent for homes in Allegany, Frederick, Garrett and Washington counties. Any program loans that are reserved before Sept. 10 will be eligible.

Residents who want to take advantage of the Maryland Mortgage Program have to meet certain income limits and intend to live in the home. As part of the program, residents also have to complete an education course on buying a home.

Bill Ariano of the Maryland Department of Housing and Community Development says one goal of the program is to encourage first-time homebuyers.

(Copyright 2013 by The Associated Press. All Rights Reserved.)

Article source: http://baltimore.cbslocal.com/2014/07/20/state-mortgage-program-cuts-rates-in-western-md/