The basics:
A reverse mortgage is a type of home loan that lets you convert a portion of the equity in your home into cash.
The requirements:
Age: You must be 62 or older.
Living status: The home has to be your primary residence.
Equity: You'll need about 40% equity in your home.
Additional costs: No mortgage, but you'll have to pay the cost of property maintenance, taxes and insurance.
Legacy: Leaving the home to an heir is a less likely option than with a regular mortgage because it can use up the equity in your home. Often, you or your heirs give up the home when the loan comes due (soon after you move out or die).
Is your credit mortgage-ready? Get your free credit score at myBankrate.
You're a candidate for a reverse mortgage if:
You want to live in your home until you die.
There are no heirs to leave your home to.
You can afford to maintain the home.
You want a line of credit or an increase in monthly cash flow.
Choices of accessing your equity:
A lump sum of cash at closing.
Equal monthly payments for as long as you live in the home.
Read more: http://www.bankrate.com/finance/mortgages/reverse-mortgage-cheat-sheet.aspx
Monday, September 21, 2015
Friday, September 11, 2015
Mortgage rates inch higher
Average long-term U.S. mortgage rates inched up this week as financial markets awaited the Federal Reserve's crucial decision next week on interest rates.
The subdued gains followed a sharp drop the previous week, as global markets continued to whipsaw amid economic disruption in China and uncertainty over the Fed's interest-rate policy.
Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage edged up to 3.90 percent from 3.89 percent a week earlier. The rate on 15-year fixed-rate mortgages rose to 3.10 percent from 3.09 percent.
Investors and economists are closely watching whether the Fed moves at its meeting next week to raise a key interest rate, as has been long anticipated. A rate hike by the Fed could bring higher rates for home loans. The Fed has kept its key short-term rate near zero since the financial crisis struck seven years ago.
Many observers had hoped for a clear signal from the government's report on U.S. employment in August, issued Friday, the final snapshot of the job market before the Fed's policy-making body meets. The report showed that unemployment fell to a seven-year low of 5.1 percent, but hiring slowed — a mixed bag of news.
The Labor Department report gave a view of an economy growing at a modest but steady pace.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan rose to 0.7 point from 0.6 point.
The average rate on five-year adjustable-rate mortgages fell to 2.91 percent from 2.93 percent; the fee rose to 0.5 point from 0.4 percent. The average rate on one-year ARMs rose to 2.63 percent from 2.62 percent; the fee held steady at 0.3 point.
read more: http://www.chicagotribune.com/business/ct-mortgage-rates-inch-higher-20150910-story.html
The subdued gains followed a sharp drop the previous week, as global markets continued to whipsaw amid economic disruption in China and uncertainty over the Fed's interest-rate policy.
Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage edged up to 3.90 percent from 3.89 percent a week earlier. The rate on 15-year fixed-rate mortgages rose to 3.10 percent from 3.09 percent.
Investors and economists are closely watching whether the Fed moves at its meeting next week to raise a key interest rate, as has been long anticipated. A rate hike by the Fed could bring higher rates for home loans. The Fed has kept its key short-term rate near zero since the financial crisis struck seven years ago.
Many observers had hoped for a clear signal from the government's report on U.S. employment in August, issued Friday, the final snapshot of the job market before the Fed's policy-making body meets. The report showed that unemployment fell to a seven-year low of 5.1 percent, but hiring slowed — a mixed bag of news.
The Labor Department report gave a view of an economy growing at a modest but steady pace.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.6 point. The fee for a 15-year loan rose to 0.7 point from 0.6 point.
The average rate on five-year adjustable-rate mortgages fell to 2.91 percent from 2.93 percent; the fee rose to 0.5 point from 0.4 percent. The average rate on one-year ARMs rose to 2.63 percent from 2.62 percent; the fee held steady at 0.3 point.
read more: http://www.chicagotribune.com/business/ct-mortgage-rates-inch-higher-20150910-story.html
Wednesday, September 2, 2015
What NJ county is the best for mortgage approval?
A new report from SmartAsset.com determined the counties in the Garden State where homebuyers are most likely to be approved for a mortgage.
Many NJ mortgages are still in trouble
The rankings are part of a bigger study on the best mortgage markets across the country.
The counties were ranked according to loan funding rate, which is the ratio of mortgage applications to mortgages approved.
Morris County topped the list at 64.9 percent, followed by Somerset (63.8 percent), Hunterdon (63.7 percent), Cape May (63.3 percent), Mercer (61.9 percent), Monmouth (61.6 percent), Bergen (61.3 percent), Burlington (60.7 percent), Gloucester (60.7 percent), and Ocean (60.1 percent).
Hudson County finished among NJ’s counties at 54.8 percent.
Complete New Jersey rankings
“The top 10 for New Jersey all had loan funding rates above 60 percent, which is really a very high number,” said AJ Smith, SmartAsset Managing Editor/VP Content Strategy. “The state average is 59.66 percent, and nationally 58.69 percent of mortgage applications are turning into actual mortgages.”
Smith said several criteria play into the higher loan funding rate.
“Things like higher income, better credit scores,” she explained. “Those types of things can make you more attractive to the mortgage lenders.”
The loan funding rates are one piece of the puzzle that SmartAsset used to find the best mortgage markets in the US.
“We looked at loan funding rate, borrowing cost, property tax, and mortgage payments,” Smith said.
Read More: http://nj1015.com/what-nj-county-is-the-best-for-mortgage-approval/
Many NJ mortgages are still in trouble
The rankings are part of a bigger study on the best mortgage markets across the country.
The counties were ranked according to loan funding rate, which is the ratio of mortgage applications to mortgages approved.
Morris County topped the list at 64.9 percent, followed by Somerset (63.8 percent), Hunterdon (63.7 percent), Cape May (63.3 percent), Mercer (61.9 percent), Monmouth (61.6 percent), Bergen (61.3 percent), Burlington (60.7 percent), Gloucester (60.7 percent), and Ocean (60.1 percent).
Hudson County finished among NJ’s counties at 54.8 percent.
Complete New Jersey rankings
“The top 10 for New Jersey all had loan funding rates above 60 percent, which is really a very high number,” said AJ Smith, SmartAsset Managing Editor/VP Content Strategy. “The state average is 59.66 percent, and nationally 58.69 percent of mortgage applications are turning into actual mortgages.”
Smith said several criteria play into the higher loan funding rate.
“Things like higher income, better credit scores,” she explained. “Those types of things can make you more attractive to the mortgage lenders.”
The loan funding rates are one piece of the puzzle that SmartAsset used to find the best mortgage markets in the US.
“We looked at loan funding rate, borrowing cost, property tax, and mortgage payments,” Smith said.
Read More: http://nj1015.com/what-nj-county-is-the-best-for-mortgage-approval/
Wednesday, August 26, 2015
Fox News Delves into Reverse Mortgage Successes, Changes
Following a column published late last week by Fox News’ Bob Massi, the network also produced a video segment featuring reverse mortgages this week.
In his look into reverse mortgages, “How to Have a Reverse Mortgage Success Story,” Massi interviews two couples who have successfully used reverse mortgages to improve their retirement situations. In one case, a married couple is using the reverse mortgage as a way to delay drawing down on stock market investments, and in the other case, the borrowers have used the reverse mortgage for medical expenses, among other items.
Massi also interviews reverse mortgage professional Josh Shein of Home Point Financial; a lender that acquired Maverick Funding in a deal announced late last year.
The reverse mortgage is “one of the most misunderstood items in real estate,” Massi says in the segment, which covers specific misunderstandings such as the idea that the bank takes the home from the borrowers.
“When it comes down to it, it’s just a loan,” Shein says. “… the balance of that loan grows over time.”
Massi also covers recent reverse mortgage changes, including willingness and capacity requirements that apply through the financial assessment that is now part of the origination process.
source: http://reversemortgagedaily.com/2015/08/25/fox-news-delves-into-reverse-mortgage-successes-changes/
In his look into reverse mortgages, “How to Have a Reverse Mortgage Success Story,” Massi interviews two couples who have successfully used reverse mortgages to improve their retirement situations. In one case, a married couple is using the reverse mortgage as a way to delay drawing down on stock market investments, and in the other case, the borrowers have used the reverse mortgage for medical expenses, among other items.
Massi also interviews reverse mortgage professional Josh Shein of Home Point Financial; a lender that acquired Maverick Funding in a deal announced late last year.
The reverse mortgage is “one of the most misunderstood items in real estate,” Massi says in the segment, which covers specific misunderstandings such as the idea that the bank takes the home from the borrowers.
“When it comes down to it, it’s just a loan,” Shein says. “… the balance of that loan grows over time.”
Massi also covers recent reverse mortgage changes, including willingness and capacity requirements that apply through the financial assessment that is now part of the origination process.
source: http://reversemortgagedaily.com/2015/08/25/fox-news-delves-into-reverse-mortgage-successes-changes/
Friday, August 21, 2015
Fixed Mortgage Rates Dip, Could Fall Further
Average long-term U.S. mortgage rates edged lower this week, with the key 30-year loan rate remaining under 4 percent. The 10/1 Adjustable Rate Mortgages are available starting at 3.71% with an April of 3.585%.
Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.6 point for the week ending August 20, 2015, down from last week when it averaged 3.94 percent.
15 year fixed rate mortgages start at 3.500% at the bank carrying an April of 3.811% today. 30 year jumbo loan interest rates at the bank are listed at 4.625% and April of 4.777%.
[How borrowers can help make the mortgage application process go smoother].
QuoteAttributed to Sean Becketti, chief economist, Freddie Mac.
The one-year ARM average was unchanged at 2.62 percent with an average 0.3 point.
The typical price on five-year adjustable-rate mortgages rose to 2.94% from 2.93%; the charge remained at zero. The 3 year ARM interest rates have been published at 2.250% today with an April of 3.261%.
Mortgage rates barely moved from last week, with rates once again coming in below 4%, the latest Freddie Mac Primary Mortgage Market Survey found. For 5/1 ARMs, the rate was 2.76 percent.
“Overall inflation grew an underwhelming 0.2 percent year-over-year in July, but core inflation remains steady at 1.8 percent keeping chances alive for a potential rate hike in September”.
The speed on 15-year fixed-rate mortgages eased this week to three.15% from three.17%. One-unit housing starts in July 2015 jumped to 782,000 units, up 12.8 percent from June and up 19 percent from a year ago. “Overall housing markets remain on track for the best year since 2007″.
read more: http://www.tjcnewspaper.com/fixed-mortgage-rates-dip-could-fall-further-16378/
Freddie Mac reported that the 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.6 point for the week ending August 20, 2015, down from last week when it averaged 3.94 percent.
15 year fixed rate mortgages start at 3.500% at the bank carrying an April of 3.811% today. 30 year jumbo loan interest rates at the bank are listed at 4.625% and April of 4.777%.
[How borrowers can help make the mortgage application process go smoother].
QuoteAttributed to Sean Becketti, chief economist, Freddie Mac.
The one-year ARM average was unchanged at 2.62 percent with an average 0.3 point.
The typical price on five-year adjustable-rate mortgages rose to 2.94% from 2.93%; the charge remained at zero. The 3 year ARM interest rates have been published at 2.250% today with an April of 3.261%.
Mortgage rates barely moved from last week, with rates once again coming in below 4%, the latest Freddie Mac Primary Mortgage Market Survey found. For 5/1 ARMs, the rate was 2.76 percent.
“Overall inflation grew an underwhelming 0.2 percent year-over-year in July, but core inflation remains steady at 1.8 percent keeping chances alive for a potential rate hike in September”.
The speed on 15-year fixed-rate mortgages eased this week to three.15% from three.17%. One-unit housing starts in July 2015 jumped to 782,000 units, up 12.8 percent from June and up 19 percent from a year ago. “Overall housing markets remain on track for the best year since 2007″.
read more: http://www.tjcnewspaper.com/fixed-mortgage-rates-dip-could-fall-further-16378/
Monday, August 17, 2015
Tech takes paperwork out of home mortgages
Doug Johnson serves as the chief financial officer of two hospitals in the Wisconsin-Minnesota border area but doesn’t consider himself to be especially tech-savvy.
Nevertheless, he was able to complete the entire mortgage-application process for an Arizona vacation home that he and his wife wanted to buy, entirely online. That included shopping for interest rates and terms, inputting personal information and uploading the required supporting documents, including copies of income-tax returns, pay stubs, bank statements and more.
“It went without a hitch,” said Johnson, 47, who admits he was initially concerned about online security. “If you have access to the Internet and a cheap scanner, that’s all you need.”
Johnson did the mortgage-application process through Guaranteed Rate, a national residential mortgage lender based in Chicago. The company’s software guides applicants through the loan-shopping exercise and lets them input personal data, see their credit scores, upload key documents through a private and secure system and receive online approval. Applicants going through the company’s all-digital route currently can qualify for a $250 credit on closing costs.
Guaranteed Rate claims it has the first all-digital mortgage, but many competitors also are going in the same direction, letting customers apply for mortgages, process much of the paperwork and do related tasks day or night, using a desktop computer, tablet or smartphone.
No longer such a slog
Applying for a mortgage and supplying supporting documents — traditionally one of the most time-consuming, paperwork-intensive and frustrating financial exercises around — increasingly is being automated. That means applicants will find the process easier, faster and, possibly, less expensive than before.
Americans already have embraced online interactions for other financial products and services. They pay bills online, check credit card transactions, buy and sell stocks, adjust 401(k) balances and pull up their credit reports. The vast majority of taxpayers file their tax returns online.
Five years from now, digital applications and document submission for home loans might be just as prevalent, though it isn’t quite there yet.
“It’s not as widespread as you might think,” said Rick Hill, vice president of industry technology for the Mortgage Bankers Association. Many people still prefer to meet face to face with a loan officer, especially first-time home buyers.
read more: http://www.usatoday.com/story/money/personalfinance/2015/08/14/digital-breakthroughs-improve-home-mortgage-process/31182619/
Nevertheless, he was able to complete the entire mortgage-application process for an Arizona vacation home that he and his wife wanted to buy, entirely online. That included shopping for interest rates and terms, inputting personal information and uploading the required supporting documents, including copies of income-tax returns, pay stubs, bank statements and more.
“It went without a hitch,” said Johnson, 47, who admits he was initially concerned about online security. “If you have access to the Internet and a cheap scanner, that’s all you need.”
Johnson did the mortgage-application process through Guaranteed Rate, a national residential mortgage lender based in Chicago. The company’s software guides applicants through the loan-shopping exercise and lets them input personal data, see their credit scores, upload key documents through a private and secure system and receive online approval. Applicants going through the company’s all-digital route currently can qualify for a $250 credit on closing costs.
Guaranteed Rate claims it has the first all-digital mortgage, but many competitors also are going in the same direction, letting customers apply for mortgages, process much of the paperwork and do related tasks day or night, using a desktop computer, tablet or smartphone.
No longer such a slog
Applying for a mortgage and supplying supporting documents — traditionally one of the most time-consuming, paperwork-intensive and frustrating financial exercises around — increasingly is being automated. That means applicants will find the process easier, faster and, possibly, less expensive than before.
Americans already have embraced online interactions for other financial products and services. They pay bills online, check credit card transactions, buy and sell stocks, adjust 401(k) balances and pull up their credit reports. The vast majority of taxpayers file their tax returns online.
Five years from now, digital applications and document submission for home loans might be just as prevalent, though it isn’t quite there yet.
“It’s not as widespread as you might think,” said Rick Hill, vice president of industry technology for the Mortgage Bankers Association. Many people still prefer to meet face to face with a loan officer, especially first-time home buyers.
read more: http://www.usatoday.com/story/money/personalfinance/2015/08/14/digital-breakthroughs-improve-home-mortgage-process/31182619/
Tuesday, August 11, 2015
Why Risky Borrowers Still Aren’t Getting Mortgages
Fannie Mae, Freddie Mac, the Federal Housing Finance Agency and the Obama administration over the past year have tried mightily to expand mortgage access for riskier borrowers.
But despite those efforts, there’s little evidence so far of borrowers with weaker credit making a strong return.
On Tuesday and Thursday, Freddie and Fannie released their quarterly earnings reports. Both companies said that the credit scores of loans that they back are actually higher year-to-date than they were last year. Freddie, for example, says that this year through June the weighted average credit score of loans it purchased from lenders was 751–on a scale of 300 to 850–up from 744 in 2014.
To be sure, mortgage rates dropped early this year, causing a boom in refinance activity. Borrowers who are refinancing tend to have higher credit scores and more home equity than people buying homes, which obscures the picture.
The percentage of mortgage borrowers backed by Fannie and Freddie with low credit scores or a low down payment has also risen since mid-2013, even though it has dropped recently with a change in the companies’ business mix.
Still, with such an abundance of anecdotes from lenders who say they’re making it easier to get a mortgage, you would expect there to be a more significant change.
So what’s going on?
Some lenders are still afraid of getting sued or of taking another hit to their reputations.
On Thursday, Fannie Mae CEO Timothy J. Mayopoulos said that Fannie and the FHFA have made great strides toward working with lenders to ease their concerns about being hit with penalties by Fannie years after they’ve made a loan.
Problem is, Fannie isn’t the only entity that lenders have to answer to. In the past few years, lenders have been under scrutiny from the Justice Department, Consumer Financial Protection Bureau and dozens of state attorneys general and lawmakers for alleged mistakes and abuses before, during and after the financial crisis. Some lenders think the scrutiny is overzealous and have pulled back from making certain loans as a result.
“When I meet with lenders, it’s very clear that there’s great concern about the legal and regulatory enforcement from any number of players at the federal and state level. It’s not something that we at Fannie Mae control,” Mr. Mayopoulos said. He said that the actions have had a “substantial effect on the mindsets of lenders, at least as they express it to me.”
Many borrowers with mortgage-eligible but poor credit don’t know they could qualify.
Even though some lenders have said that they’re expanding mortgage access, some borrowers have had it beaten into their heads over the last few years that it’s hard to get a mortgage. Those perceptions are hard to change, even if the reality has.
read more: http://blogs.wsj.com/economics/2015/08/10/why-risky-borrowers-still-arent-getting-mortgages/
But despite those efforts, there’s little evidence so far of borrowers with weaker credit making a strong return.
On Tuesday and Thursday, Freddie and Fannie released their quarterly earnings reports. Both companies said that the credit scores of loans that they back are actually higher year-to-date than they were last year. Freddie, for example, says that this year through June the weighted average credit score of loans it purchased from lenders was 751–on a scale of 300 to 850–up from 744 in 2014.
To be sure, mortgage rates dropped early this year, causing a boom in refinance activity. Borrowers who are refinancing tend to have higher credit scores and more home equity than people buying homes, which obscures the picture.
The percentage of mortgage borrowers backed by Fannie and Freddie with low credit scores or a low down payment has also risen since mid-2013, even though it has dropped recently with a change in the companies’ business mix.
Still, with such an abundance of anecdotes from lenders who say they’re making it easier to get a mortgage, you would expect there to be a more significant change.
So what’s going on?
Some lenders are still afraid of getting sued or of taking another hit to their reputations.
On Thursday, Fannie Mae CEO Timothy J. Mayopoulos said that Fannie and the FHFA have made great strides toward working with lenders to ease their concerns about being hit with penalties by Fannie years after they’ve made a loan.
Problem is, Fannie isn’t the only entity that lenders have to answer to. In the past few years, lenders have been under scrutiny from the Justice Department, Consumer Financial Protection Bureau and dozens of state attorneys general and lawmakers for alleged mistakes and abuses before, during and after the financial crisis. Some lenders think the scrutiny is overzealous and have pulled back from making certain loans as a result.
“When I meet with lenders, it’s very clear that there’s great concern about the legal and regulatory enforcement from any number of players at the federal and state level. It’s not something that we at Fannie Mae control,” Mr. Mayopoulos said. He said that the actions have had a “substantial effect on the mindsets of lenders, at least as they express it to me.”
Many borrowers with mortgage-eligible but poor credit don’t know they could qualify.
Even though some lenders have said that they’re expanding mortgage access, some borrowers have had it beaten into their heads over the last few years that it’s hard to get a mortgage. Those perceptions are hard to change, even if the reality has.
read more: http://blogs.wsj.com/economics/2015/08/10/why-risky-borrowers-still-arent-getting-mortgages/
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