The News Review:
- Borrowers get gift of lower mortgage rates
- See if lender will let you pay insurance taxes
- Mortgage rates fall but many borrowers will have trouble qualifying
Borrowers get gift of lower mortgage rates
Seattle Post Intelligencer
“It’s pandemonium around here right now” says Bob Walters chief economist for Quicken Loans. “This is going to have a major effect on refinancing opportunities and it should absolutely translate into increased home buying. The Fed’s action helps not only buyers but also homeowners with adjustable-rate mortgages who want to refinance into fixed-rate loans. The mortgage and real estate industries look upon the announcement as a gift from Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. Ryan Kennelly a mortgage banker for Residential Mortgage Services Inc.
See if lender will let you pay insurance taxes
San Francisco Chronicle USA
Q: My husband and I are purchasing a house from the estate of his uncle. The house is assessed at $300000 but they have agreed to sell it to us for $150000. Why is it necessary for us to pay private mortgage insurance if the loan-to-value ratio is at 50 percent?I almost feel like the mortgage companies are just trying to get extra money from us by having us refinance soon. Even in this economy this house would sell for higher than the loan amount. A: Generally lenders require that home buyers obtain private mortgage insurance when they do not put down at least 20 percent of the purchase price. This is referred to as the loan to value. In your situation although the house is worth $300000 the purchase price (which is what lenders look at) is only $150000.
Mortgage rates fall but many borrowers will have trouble qualifying
Los Angeles Times CA
Homeowners who want to refinance existing mortgages may be more likely to take advantage of the lower rates but many people who bought during the real estate bubble won’t be able to qualify for a new loan because they have little equity or are “upside down” — owing more on their homes than they are worth. “I anticipate it will increase refinance activity but there will be nothing dramatic” said Terrin Griffiths an economist for the California Credit Union League which represents credit unions in California and Nevada. Jeff Lazerson a Laguna Niguel mortgage broker said all the customer calls he received Tuesday were from people seeking to refinance not buy homes. Many are trying to get out of adjustable-rate mortgages scheduled to reset to higher rates next year he said. But most who called were rebuffed because they were upside down on their current mortgages or had credit scores too low to qualify. “Out of all the people calling about 30% at most can get help” Lazerson said. Adjustable-rate mortgages were especially popular in 2005 and 2006 because home buyers expected prices to continue to rise enabling them to refinance before the loans reset.
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