Wells Fargo finds mortgage myths hamper home purchases

NEW YORK (Reuters) – Getting a mortgage in the United States may be easier than many borrowers think, according to a survey released Monday by Wells Fargo Co (WFC.N), the largest U.S. mortgage lender.

Nearly two-thirds of respondents thought that a very good credit score was necessary to buy a home, and more than 40 percent thought they needed a down payment equal to at least 20 percent of the purchase price to buy a home.

Under government-backed programs, first-time home buyers with subprime credit scores can get a mortgage insured by the Federal Housing Administration, and they can put down as little as 3.5 percent of the purchase price.

Since the financial crisis, lenders have clamped down on mortgage credit. The Mortgage Bankers Association’s Mortgage Credit Availability Index, which measures the ease with which borrowers can take out a home loan based on credit scores, loan-to-value ratios and other factors, fell by more than 80 percent from early 2007 through August 2014.

But there are other reasons why consumers are not taking out loans like they once did, including the fear of being turned down. In 2013, those fears kept 19 percent of families from taking steps to get a consumer loan, up from 18.5 percent in 2010 and above the 16.4 percent rate of families who were actually turned down for credit, according to the Federal Reserve’s most recent survey of consumer finances.

Even if mortgage credit is hard to come by, there is demand for homes: more than two out of three respondents in Wells Fargo’s survey said it was a good time to buy.

Franklin Codel, Wells Fargo’s head of mortgage production, said his bank has taken steps to expand the pool of eligible home buyers. Earlier this year it lowered the minimum credit scores, or FICO scores, for loans that are backed by the government the Federal Housing Administration, Fannie Mae, or Freddie Mac.

“When we expanded FICO ranges, we saw not only an increase in applications but we also saw an increase in approval rates,” Codel said, without providing specifics on application volume or approval rates.

Codel also said that the federal government, along with Wells Fargo and the realtors and consumer groups with whom it works, can play a role in dispelling these myths through some kind of outreach program along the lines of what they did with the government-subsidized Home Affordable Refinance Program and the Home Affordable Modification Program.

Because Wells Fargo’s survey is the first of its kind, it is difficult to say how attitudes toward home ownership have changed over time. Fannie Mae’s August national housing survey found a similar number of borrowers – 64 percent – thought it was a good time to buy a home, though tied an all-time low and was down from the 71 percent response rate in the August 2013 survey.

(Editing by Eric Walsh)

Article source: http://www.reuters.com/article/2014/09/15/us-wells-far-mortgages-idUSKBN0HA0TG20140915

A Better Mortgage for Lower-Income Borrowers

The economic recovery has lifted values for many homeowners, but stagnant wages and tighter lending standards have locked many low- and moderate-income families out of the market. A pair of unlikely partners think it has a solution. On one side is Edward Pinto, a scholar at the conservative think tank American Enterprise Institute who has blamed the financial crisis on government affordable-housing policies. On the other is Bruce Marks, a longtime consumer advocate who founded and runs the Neighborhood Assistance Corporation of America. They’ve just launched a new program, which NACA is testing for Bank of America (BAC), to try to create a mortgage that’s both more affordable and less risky for borrowers and lenders.

Pinto says he and Marks started working on the idea after clashing on a panel in May. Pinto was skeptical of the typical way to help lower-income borrowers—reducing the amount of down payment on a 30-year mortgage. He says the housing crash showed that people who aren’t well-off can’t build equity fast enough in a typical 30-year loan, which makes them more vulnerable if the economy and home prices slump. “The volatility around one house in any given locality can be huge,” Pinto says. “We have put the people who can least afford the volatility into a house.” Marks’s nonprofit, on the other hand, is dedicated to helping low- and moderate-income people buy homes, often by helping them get loans with no down payment.

They agreed to meet and engaged in what Pinto calls “a very loooong, detailed conversation” about how to help people afford homes while they build equity faster. After the initial session, Pinto says, they “spent hours and hours and hours meeting and talking and outlining how this can done.” Eventually, they came up with a mortgage they call the Wealth Building Home Loan.

The key was to make it a 15-year loan, which allows borrowers to pay off the principal—and build equity—much faster and generally at a lower interest rate because shorter-term loans are less risky for lenders. Still, a shorter term also means higher monthly payments. To counter this, they looked for way to reduce the interest rate. The Wealth Building loan requires borrowers to have private mortgage insurance and restricts them from taking out a home equity loan. To enable borrowers to afford to pay “points”—an upfront fee that lowers the interest rate—the mortgage program allows loans to cover up to 100 percent of the value of the home, as opposed to the 96.5 percent cap in Federal Housing Administration mortgages. Pinto says he hopes some banks will cover the cost of points for some low-income borrowers as part of their community development programs.

In assessing creditworthiness, lenders typically focus on monthly payments as a percentage of borrowers’ income. Pinto’s program uses the so-called “residual income” approach that the Veterans Administration successfully uses. As I reported this summer, many economists prefer the VA’s approach, which adds up what a family spends on necessities such as transportation and child care and then looks at what’s left for housing. This approach to underwriting should make the loans less risky—which should, in turn, lower the interest rate.

Pinto says he’s in discussions with regional banks and mortgage lenders to start additional pilot programs. “In order to be a game-changer, you need to have a lot of people doing it,” Pinto says, pleased with the response he and Marks found when they announced the program at a recent conference. There, Joseph Smith, monitor of the $25 billion National Mortgage Settlement over faulty foreclosure practices, said in prepared remarks that after doing “a lot of listening” to borrowers, advocates, and public officials, he’s come to believe that “absent substantial home equity at the outset, the 30-year fixed rate mortgage increases the fragility of a borrower’s overall financial position and puts the borrower at risk for a very long time.” Smith praised the new program, adding: “Gentlemen, I tip my hat to you.”

Article source: http://www.businessweek.com/articles/2014-09-15/a-better-mortgage-for-lower-income-borrowers

There’s No Such Thing as Free Mortgage Refinancing

PHOTO: No free lunch and no free refi.

The next time you see an ad to refinance your mortgage for “free” or with “no closing costs,” run the other way. The Federal Trade Commission has just fined a mortgage lead generator company half a million dollars for making claims like that. The FTC says the company broke not one, not two, but three laws and rules by marketing mortgages refinances this way.

The defendants are certainly not alone. I see similar ads everywhere—from online to on telephone poles. The wording varies but they are all making the same false promise of a mortgage or refi with no closing costs. It’s a lie. How to they get away with it? Two ways:

In scenario one, instead of giving you the best possible mortgage interest rate for which you qualify, they charge you a higher rate. That means you’re paying extra every single month for 30 years. Trust me, closing costs are actually a better deal.

In scenario two, they tack the closing costs onto the amount of principal you owe. You still end up paying the closing fees, you just pay them at the end instead of the beginning —AND you pay interest on them for 30 years. Yuck.

“An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else.”

For more information about obtaining a mortgage fair and square, Check out the Federal Trade Commission’s resources for home owners here.

Opinions expressed in this column are solely those of the author.

Elisabeth Leamy is a 20-year consumer advocate for programs including “Good Morning America” and “The Dr. Oz Show.” She is the author of “Save BIG” and “The Savvy Consumer.” Elisabeth is also a professional speaker, delivering talks nationwide on saving money, media relations and career success. Elisabeth receives her best story tips from readers, so please connect with her via Facebook, Twitter or her website to share your ideas.

Article source: http://abcnews.go.com/Business/thing-free-mortgage-refinancing/story?id=25468937

Current Mortgage Rates Change a Bit at Bank of America, Wells Fargo and …

Current Mortgage Rates Change a Bit at Bank of America, Wells Fargo and SunTrust on September 15, 2014HSBC has signed a deal with the US regulators to pay a fine of $550m for settling claims for sale of misleading mortgage backed securities to the biggest US mortgage players, Freddie Mac and Fannie Mac. The lawsuit filed with a US court accused HSBC bank for making $6.2 billion out of mortgage backed securities look lawful, which they did not. HSBC has earlier denied the allegations but now agreed to the same.

It is the sixteenth bank to secure a deal with the Federal Housing Finance Agency over a similar issue. Fannie Mac and Freddie Mac lost a whopping amount of $30 billion (approx.) in the financial crisis, and were bailed out by the United States Government.

Bank of America Mortgage Rates

At the beginning of a new trading week, the Charlotte based lender, Bank of America (NYSE: BAC), advertises its standard, long term, 30 year fixed mortgage home loan deals at a little higher interest rate of  4.250% and an annual percentage rate of 4.366%. As per the mortgage interest rates published by the bank on September 15, 2014, the 15 year fixed mortgage deals can be seen traded at a lending price of 4.125% and an annual return rate of 4.277%. For the seekers of flexible home loan options, 5 year adjustable rate mortgage plans would be ideal options at an interest rate of 3.500% and an annual return rate of 3.660% this Monday.

Under the refinancing home loan category, the mortgage shoppers can spot the popular 30 year fixed rate mortgage home loan packages being listed at an interest rate of 4.375% and an annual percentage rate of 4.510% today. For the seekers of shorter and less expensive refinancing deals, 15 year fixed rate mortgage home loan deals are up for grabs at an interest rate of 4.250% and an annual return rate of 4.388% this Monday. The seekers of flexible home loan deals can now secure the 5 year refinancing adjustable rate mortgage home loans at an interest price of 3.625% and an annual percentage rate of 3.777%.

Wells Fargo Mortgage Rates

At the San Francisco based mortgage lender, Wells Fargo (NYSE: WFC), the benchmark 30 year fixed rate mortgage home loan packages can be seen coming out at an interest rate of 4.500% and an annual percentage rate of 4.747% on September 15, 2014. For the borrowers interested in short term home loan deals, 15 year fixed rate mortgage home loans would be perfect options at an interest rate of 3.750% and an APR yield of 4.056%.

Heading towards the refinancing mortgage division, the customers can spot the 30 year fixed rate mortgage home loan deals being listed at an interest price of 4.375% and an annual return rate of 4.460% today. The short term, 15 year refinancing fixed rate mortgage plans can now be locked in at an interest price of 3.625% and an APR yield of 3.772% this Monday.

SunTrust Mortgage Rates

In the standard, long term lending section at SunTrust Bank (NYSE: STI), 30 year fixed rate mortgage home loans are now listed at an interest rate of 4.375% and an annual percentage rate of 4.4853% on September 15, 2014.  In the short term home loan division, 15 year fixed rate home loans can be seen quoted at an interest rate of 3.300% and an APR yield of 3.5109% this Monday.

Heading towards the adjustable rate mortgage division, the 5 year flexible rate home loans can be seen traded at a starting lending rate of 3.200% and an annual return yield of 3.0908%. For the borrowers seeking more flexible home loan deals, 7 year adjustable rate mortgage plans would be ideal options at an interest price of 3.750% and an APR yield of 3.3954% to begin with.

Disclaimer: The rates quoted above are basically the average advertised by a particular lending company. No guarantee of taken from the lender’ aspect whether the borrower will qualify for the mortgage rates mentioned in the article. The lenders dole out interest depending upon various facets, some of which may be unique to the borrower. This website does not engage in the sale or promotion of financial products and makes no claims as to the accuracy of the quotation of interest rates.

Article source: http://usfinancepost.com/current-mortgage-rates-change-a-bit-at-bank-of-america-wells-fargo-and-suntrust-on-september-15-2014-22947.html

Can You Get a Mortgage With a Low Credit Score?

Fear of a loan denial has led some consumers with low credit scores to simply not bother applying for a mortgage. But, while you’ll still have to provide proof of your income and assets and an explanation of your low credit score, it is possible to get a mortgage with a low credit score from some lenders.

“Your credit score is a piece in the qualification puzzle, but it’s not the whole puzzle,” says Josh Moffitt, president of Silverton Mortgage Specialists in Atlanta.

View Today’s Lowest Mortgage Rates!

‘Fair’ to ‘Poor’ is Considered a Low Credit Score

There aren’t any hard lines between a “good” and “bad” credit score. The scores break down like this:

Credit Score

A number, roughly between 500 and 850, that summarizes a consumer’s creditworthiness.

The higher the score, the more able and willing a consumer is to repay a loan, lenders believe. The best mortgage rates and terms go to borrowers with credit scores of 740 and higher. Generally, a “low” credit score is in the “fair” to “poor” ranges below.

750 and higher = excellent 749 to 700 = good 699 to 650 = fair 649 to 600 = poor 599 or lower = bad

Borrowers’ Credit Scores are Falling

Lenders in 2014 are approving more loans with lower credit scores. According to mortgage software provider Ellie Mae, 33% of closed loans in spring 2014 were for borrowers with a credit score below 700, compared with 27% a year earlier.

Borrowers with Low Credit Scores Often Get FHA Loans

Lenders are typically more lenient with credit qualifications for borrowers who opt for government-insured Federal Housing Administration loans, but Clint Madison, a senior mortgage adviser for Envoy Mortgage in Walnut Creek, California, says his company approves both FHA and conventional loans for borrowers with credit scores as low as 620.

“With the market slowing down, standards are relaxing a little bit because lenders are getting hungry for business,” Madison says.

Carrington Mortgage in Santa Ana, California, accepts applications from borrowers with a credit score as low as 550 for FHA loans, with minimum down payments of 10%.

Demand is There for Low-Score Borrowers

“There’s a huge segment of underserved borrowers today,” says Ray Brousseau, executive vice president of the mortgage lending division of Carrington Mortgage Services. “In 2005, 1 out of every 7 loans were approved for borrowers who had a credit score under 630. By 2013, 1 out of every 500 borrowers had a credit score that low.”

3 Things About Getting a Mortgage With a Low Credit Score

  • Lenders are becoming less strict about credit scores.
  • Some lenders see a difference between irresponsible applicants and those who lost jobs.
  • Proving a year of on-time rent payments could be helpful.

Brousseau says that Carrington is able to offer loans to borrowers with low FICO scores because employees have experience in managing subprime loans.

“We invested in people with expertise in manually underwriting loans and making common-sense decisions about borrowers, and they’re joined at the hip with servicers who talk directly to borrowers and help them manage their loans,” Brousseau says. “Our loans are perfect for the group of people that got caught up in the recession and lost their job or had their hours or pay cut or had to move and take a loss on their home.”

Automated and Manual Underwriting

Two methods that lenders use to approve or deny mortgage applications:

  • Fannie Mae and Freddie Mac have software programs (Desktop Underwriter and Loan Prospector) that can automatically approve loans based on the borrower’s credit score, income, total debts and other criteria. That is automated underwriting.
  • In other cases, the lender may approve loans based on the lender’s judgment. That is manual underwriting.

Qualifying for a Low-Credit Mortgage

Moffitt explains that lenders run loan applications through automated underwriting systems from Fannie Mae or Freddie Mac. The applications must meet the standards established by their investors.

“If a loan doesn’t make it through the automated system, you can look at it manually and find out why the credit score is low,” Moffitt says. “Sometimes investors will allow a loan to be approved with a low credit score but with other compensating criteria, such as having six months of cash reserves in the bank or no late payments for the past 12 months.”

How to Improve the Odds of Approval

Moffitt says you increase your chances of an approval if you can verify that you’ve paid your rent on time for the past 12 months and that you won’t have a payment shock on your housing payment.

“If you’re paying $500 a month in rent, then we wouldn’t want your payment to go above $750 if you also have a low credit score,” Moffitt says.

Another way to offset the impact of poor credit is to make a bigger down payment, particularly a payment of 20% or more. If you can only go from 3.5% to 5% for your down payment, Moffitt says, you’re better off keeping the extra cash in reserve.

Explaining a Low Score

Madison says that borrowers with a lack of credit history and therefore a low score can sometimes overcome their score with nontraditional forms of credit such as utility and rent payments. If you have a long credit history and a low score, you’ll need to explain it.

“You can provide a letter about the circumstances that caused your score to drop, such as a job loss or a death in the family, which could make a difference to a lender,” says Madison.

Some of the common issues that can cause your credit score to drop that lenders view as less risky are issues with a late medical bill or student loans, says Moffitt. He says a default on a car loan would be much worse than those financial issues.

Lending is a Judgment Call

At Carrington, borrowers with a low credit score must go through an educational process to make sure they understand their loan.

“We make sure that if there’s a potential problem with the borrower, we won’t make the loan,” says Brousseau. “Just because FHA guidelines say a loan is permissible doesn’t matter because our underwriters will make decisions based on common sense.”

If you’ve got a low FICO score, consult with a few lenders to see if your reasons for your low score can be overcome enough for a loan approval.

Copyright 2014, Bankrate Inc.

Article source: http://www.foxbusiness.com/personal-finance/2014/09/11/can-get-mortgage-with-low-credit-score/

Mortgage Rate Forecast: Will The Federal Reserve Begin Guiding Interest Rates …

The Federal Open Market Committee meets this week. Will mortgage rates keep dropping, even as QE3 reduces in size?

Current Mortgage Rates Spiking

Mortgage interest rates worsened last week, pushing pricing to its worst levels since late-April.

Conventional mortgage rates had been hanging near 4.10%. This week, they open closer to 4.25%.

The rise in rates is bad news for HARP mortgage applicants and other refinancing households who now will now face higher loan costs and fewer opportunities to save money; as well as for today’s home buyers who have yet to lock a mortgage rate.

Rates also worsened for FHA loans, VA mortgages, and USDA home loans.

Freddie Mac “Delayed” Survey Puts 30-Year At 4.12%

Freddie Mac reported 30-year fixed rate mortgage rates rising 0.02 percentage points to 4.12% last week nationwide. The rate was available to borrowers willing to pay 0.5 discount points at closing, plus normal closing costs.

Discount points are optional, one-time closing costs. 1 discount point comes at a cost equal to one percent of your loan size such that 0.5 discount points costs $500 per $100,000 borrowed.

However, because Freddie Mac’s survey is conducted during the early part of the week, it failed to capture the changes in mortgages from Wednesday afternoon through Friday’s market close.

Mortgage rates rose by quite a bit in last week’s back-half. Mortgage rate shoppers trying to lock a mortgage rate may see rates closer to 4.25 percent, overall.

Regardless, as compared to the start of the year, today’s mortgage rates are pretty excellent.

Recall that on January 1, 2014, mortgage rates were at a 16-week high. Rates had been moving higher as the domestic economy showed signs of improvement; as global markets were expanding; and, as the Federal Reserve prepped to reduce its market stimulus footprint.

Since then, however, the U.S. economy has mostly side-stepped and key global economies such as China have shown signs of a slowdown. In addition, conflict in Ukraine and in various parts of the Middle East have weighed on markets. These events have sparked a bout of safe-haven buying, which has benefitted U.S. mortgage bonds.

If you’re shopping for a mortgage or looking for the lowest rate, then, be sure to compare lender pricing. During tumultuous times, mortgage rates will often vary between banks.

Despite Freddie Mac’s survey, some mortgage lenders offer rates in the 3s.

Click to compare today’s low mortgage rates.

Mortgage Rates May Stop Rising This Week

Since the start of the year, mortgage rates have moved steadily and slowly downward. 30-year mortgage rates averaged 4.53% on January 1, and had moved to 4.12% by last week.

This week opens with mortgage rates higher, but that could change by mid-week. This is because, at 2:00 PM ET Wednesday, the Federal Open Market Committee (FOMC) will adjourn from its sixth scheduled meeting of the year — a two-day, closed-door affair which begins Tuesday morning.

Don’t expect the Federal Reserve to move “off-course”.

The group will likely vote to keep the Fed Funds Rate within its current target range near zero percent, where it’s been since December 2008; and it will likely move to “taper” its third round of quantitative easing (QE3) by another $10 billion.

A $10 billion taper would be the Fed’s six such taper since January months, and would reduce the cumulative size of QE3 to $25 billion. 

In theory, reducing the size of QE3 would lead mortgage rates higher. However, since the QE3 taper began, mortgage rates have managed to drop; the result of safe-haven buying and a smaller pool of available mortgage bonds.

Investors are buying U.S. bonds at a faster pace than the Fed can exit the market.

Incidentally, a similar pattern emerged when the original QE ended in 2009, and when QE2 ended two years later. Mortgage rates fell despite analyst calls for an increase.

Mortgage rates have dropped close to 0.375 percentage points since the QE3 taper started. 

How low are mortgage rates? Click to see for yourself.

Mortgage Rate Movers: Week Of September 15, 2014

Mortgage rates will have ample opportunity to move this week — up or down. The economic calendar is stacked, and it includes a meeting of the Federal Open Market Committee.

Any time the Fed meets, mortgage rates can bounce. 

The complete weekly calendar is as follows :

  • Monday : Empire State Manufacturing Survey
  • Tuesday : None
  • Wednesday : Consumer Price Index (CPI);  Housing Market Index; FOMC adjourns
  • Thursday : Jobless Claims; Philadelphia Fed Survey; Housing Starts
  • Friday : None

Rate shoppers should also be attuned to Federal Reserve Chairman Janet Yellen’s post-FOMC meeting press conference. The Chairman will face questions from members of the press and her answers typically influence the future direction of mortgage rates.

In general, comments which suggest that the U.S. economy is slowing, or that inflation rates are expected to remain low, may result in mortgage rates moving lower. By contrast, comments indicated a strong U.S. economy and high rates of inflation would lead mortgage rates up.

Get A Mortgage Rate Quote Now

It’s been a good few weeks for mortgage rates. Pricing has improved from the start of the year and may continue to drop into fall. Or, after the Fed meeting, we may discover that the Fed is intent on guiding rates higher.

Get the current mortgage rates live. Rate quotes are available online with no cost, with no obligation, and with no social security number required to get started.

Click to get today’s rates now.

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The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Article source: http://themortgagereports.com/16623/mortgage-rates-forecast-federal-reserve-fomc

Should You Pay Off a Mortgage Early? The Answer May Surprise You!

Source: U.S. Navy.

Imagine a married couple — let’s call them Matt and Donna Smith — bought their dream house two years ago. The house was $250,000, and they paid $50,000 as a down payment. Since then, both have gotten raises, and with the extra cash, they are now asking themselves a crucial question: Should we pay off the mortgage early?

The math on this is clear: You should absolutely not pay off a mortgage early. You could lose money by doing this. But it’s funny how math is much less absolute when it’s dropped into the real world. There are hidden variables at play that make the decision to pay off a mortgage early the best option for the vast majority of Americans.

Here’s why.

Couldn’t I make more by paying the mortgage on schedule?
Mortgage rates are still at historical lows right now — that’s an important factor in the math. Back when Matt and Donna bought their house, they took out a 30-year, $200,000 mortgage with a 4% interest rate. That equates to monthly payments of roughly $950. But after getting their raises, they can throw $1,200 at the mortgage.

A quick Internet search showed that the stock market averages roughly a 9% return per year over long periods of time. “Even if it’s only 6%,” Donna thinks, “it makes more sense to invest our extra cash instead of putting it toward a home. The stock market can give us a higher return.”

And, on paper, she’s right. Here’s how the two scenarios would play out in terms of the overall value, assuming the home’s value continues to appreciate at roughly 3% per year, while the stock market returns its average 9%.

Source: Author’s calculations. Home equity values calculated using amortization tables

Like any chart trying to predict the future, this isn’t perfect. The family could move, wages could rise, or any other number of variables could change. But the bottom line is clear: Using this simple math, not paying off a mortgage early means more money in your pocket (and house) at the end of 30 years.

Who wouldn’t want more money when all is said and done?

Can you really expect returns like that?
Here’s where the first lurking variable rears its ugly head. It is true that the SP 500 — since as far back as 1871 (though it wasn’t technically the SP 500 then) — has returned an annualized gain of 9.07% per year after dividends are reinvested. If every investor like Matt and Donna got returns like that, that would be phenomenal.

The problem is that the average investor does far, far worse than 9.07%. In fact, a recent release by JPMorgan Funds shows just how poorly the average investor has done over the last 20 years: 2.5% per year.

Why does this happen?

In a nutshell, the average person is not a good investor. They buy high, sell low, and generally shoot themselves in the foot over and over again by paying high fees. Because of this painful truth, paying off a mortgage early looks like a much better decision.

Of course, if you have a track record of successfully controlling your emotions and holding stocks for the long run, this might not apply to you.

But another key variable might.

What’s your goal: money or financial independence?
Earlier, I wrote: “Who wouldn’t want more money when all is said and done?”

Admittedly, that was a loaded question; there’s a caveat to it. What if you have less money but also a greater sense of financial independence? Would that change things? There’s nothing that can match the feeling of knowing you own your home outright and the bank can’t take it away. There’s also nothing like knowing you never have to make a rent or mortgage payment again for the rest of your life.

Wes Moss, author of You Can Retire Sooner Than You Think, has found — in his own surveys — that the psychological benefits of paying off a mortgage early are undeniable: “There’s a world of happiness and freedom out there just waiting for you once your biggest monthly expense is eliminated. … Happiness levels rise undeniably as mortgages vanish.” 

So, even if you have more money by not paying off the mortgage early, is it worth sacrificing the happiness you’ll experience by shedding the payment years — even decades — in advance?

Article source: http://www.fool.com/how-to-invest/personal-finance/credit/2014/09/14/should-you-pay-off-a-mortgage-early-the-answer-may.aspx

Deadline approaches to collect money from mortgage settlement

There’s just one day left for homeowners to receive their portion of a mortgage settlement.

Last December, Ocwen and the two companies it bought were ordered to pay more than $2 billion to resolve allegations of mortgage servicing misconduct, but only a third of the more than 30,000 Floridians who are eligible have filed claims.

Monday will be the last day for residents to collect the money.



More information on who qualifies

Article source: http://www.wftv.com/news/news/local/deadline-approaches-collect-money-mortgage-settlem/nhMg7/

More single people seeing value in mortgage payment

Despite hurdles, young unmarrieds make inroad in homeownership ranks

Steve Ganley, 25, couldn’t qualify for some credit cards, but he did qualify for a 30-year, $150,000 mortgage at 3.99 percent through the Federal Housing Authority for his three-bedroom suburban home.


PITTSBURGH — Steven Ganley, 25, was lucky enough to earn his master’s degree in accounting from Duquesne University last year without piling up any debt. In the year after he graduated, he landed a full-time job as a staff accountant at a downtown Pittsburgh firm, lived with his parents in a suburb, and banked money each month as though he were paying rent.

Despite his clean balance sheet and careful money management, several credit-card companies turned him down. Yet he recently qualified for a 30-year mortgage at 3.99 percent through the Federal Housing Authority.

“I believe I have the world record for not establishing any credit and still being able to get a home loan,” said Mr. Ganley, who closed on a $150,000 three-bedroom, suburban home last month, which he purchased with a 5 percent down payment.

Married couples with children continue to be the leading demographic for the single-family, home-buying market across the nation.

But some singles, especially younger ones, recognize that a mortgage payment on a house often can be the same or less than what they would spend on rent.

The barriers to homeownership that many in their 20s and 30s face — higher unemployment, lower wages, and student debt — have made it less likely for people in that age group to be owners than in previous generations.

Tighter lending standards also have been a factor in a slight decline in single homebuyers, according to the National Association of Realtors in Washington.

For as long as the Realtors group has been tracking data on married couples and single buyers — since 1981 — the percentage of single home buyers has historically hovered around 20 percent to 25 percent. It fell nationally from 28 percent in 2011 to 25 percent in 2013, according to NAR.

“One of the things we have seen is that single men home buyers are about half the share of single female home buyers,” said Jessica Lautz, director of member and consumer research for the National Association of Realtors. “Single females make up the largest share of single buyers. Single female homebuyers are second only to married couples.”

Single home buyers come to the market from all walks of life, and for different reasons that often extend beyond the financial ones.

Some want an investment that will pay off down the road, while others are looking for a place to live that suits their lifestyle.

After renting for years, Christa Vattimo, 31, managed to overcome the down-payment hurdle by borrowing money from her company retirement savings account at PNC Bank, where she works as a loan analyst. She also obtained a mortgage through PNC for a $97,000, three-bedroom brick home.

“I didn’t want to keep throwing money down the drain renting,” said Ms. Vattimo, a single mother of a 10-year-old son and a 1 ½-year-old daughter. “It was important to me to be a homeowner. I want to have equity in something.

“I was nervous that I’d get denied for a home loan being a single parent with money coming out of my salary for day care and child expenses. I could not be more proud of myself being a single parent and a homeowner. Being able to do that is extremely gratifying,” Ms. Vattimo said.

The Block New Alliance consists of The Blade and the Pittsburgh Post-Gazette. Tim Grant is a reporter for the Post-Gazette.

Article source: http://www.toledoblade.com/Real-Estate/2014/09/14/More-singles-see-value-in-mortgage-payment.html

Two Mortgage REIT Picks for Higher Rates

Credit Suisse

While the eventual increase in short rates is approaching we still see relatively attractive risk-to-reward in the mortgage real estate investment trusts given the current discount to book values. This should be recognized mostly through the expected 12% dividend yield in the coming 12 months compared to modest book value declines.

We prefer the mortgage real estate investment trusts (REITs) that are building…

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