Follow Us On Facebook and Twitter
No Comments
Posted in Nashville Mortgage, home loans nashville, mortgage nashville
Tagged Nashville Mortgage
Tagged Nashville Mortgage
30Aug10
Mortgage Lending in Nashville
Nashville has proven to be a wonderful place to live through the years. Stable home values and more culture than you can shake a stick at makes Nashville a great place to have a home. Given the current economic state and unpredictable housing industry it is more important than ever to have a trusted mortgage broker. There have been some bad mortgages practices even here in Nashville. My assement of a mortgage broker that you can trust is one that will tell you the truth about your financial circumstances rather than try to sell you on whatever loan will make him the most points.
That being said I would like to try to give out some helpful loan knowledge for next time someone is trying to sell you on something. I will explain an 80/20 loan.
Pat yourself on the back if you have already noticed that the two numbers in an 80/20 loan add up to 100. Feel free to eat an extra cookie today if you guessed that the 100 number that you get from adding 80 and 20 stands for 100%. That’s right an 80/20 loan is actually 2 loans, one loan of 80% of the home’s value and the other consisting of the remaining 20%.
This may seem like a waste of time to have 2 loans with the existance of 100% loans, but there is a method to the madness. A 100% loan is a high risk investment for both the bank and the borrower. Therefore the bank requires the borrower to pay a mortgage insurance premium round about $80 monthly to help compensate for the risk of the loan. The way to not be in the penalty requiring the payment of a mortgage insurance premium is to only owe 80% of the total value of your home. Yes that is the big reason for the 80/20 loan. It is a way to get, in essence, a 100% loan without having to pay the extra $80 monthly in mortgage insurance to the bank. I don’t really have have a problem with the 80/20 concept, other than the fact that it’s a 100% loan.
The last aspect of 80/20’s that I deem worth mentioning in that the 2nd loan that is given for the remaining 20% of the loan can be kinda hairy. In my experience they can be 3 or 5 year adjustable rate mortgages, which is a discussion for another time. This 20% loan in an 80/20 mortgage is the one that you want to make sure nothing strange gets slipped past you with. Since it is only effecting 20% of the loan many people overlook long term possibilities. A common increase in monthly payment down the road could end up eventually eating up the $80 a month that you were trying to avoid paying in the first place.
Hope this has helped your loan vocabulary. Remember, talk to a trusted Nashville Mortgage Broker. It’s a big decision.
Check out Murfreesboro Mortgage for news on Mortgages in Murfreesboro.
We’re in the market for a house, and it would seem that the lowering Fed rate would trickle down to the mortgage business. Instead, those rates keep going UP! How do they expect people to help out the economy by buying homes when they keep making it so unattainable and unattractive?
Mortgage rates are not driven by fed rates. They are driven by the bond market, which competes with mortgage backed securities for capital. Investors need to buy the mortgages from the originators, and the rates are determined by their pricing models. As a previous poster noted, mortgage rates follow the 10 year treasury most closely. The spread between the 10 year and mortgage rates has been increasing due to increased fears of inflation (which the fed cuts make even worse) and the general perceived riskiness in the mortgage market (forclosure rate?). As such, investors are saying they’d rather invest in other securities because the rates are not paying them enough for the risk they are taking. That is why rates sometimes go up when the fed cuts.
I wanted to save a little bit of money for a few months and buy a house before the end of August. Will the morgage rates still be as low as they are now in August 2008? Also what detemines if mortgage rates rise or fall?
Mortgage rates are going to be low for a long time. The economy is falling apart and keeping interest rates low is one of the few things that the government can do to help the economy. The Chairman of the Federal Reserve decides the rate of interest that is charged to banks. This influences the interest rates on home loans. Good question.
Analysis and Discussion with Christopher Harms of Capitalsource Finance (Taking Stock)
Duration : 0:8:29
No Comments
Posted in Nashville Mortgage
Tagged Business, Economy, Editors, Estate, Finance, Government, Issues, Law, Legal, Personal, Pick, Politics, Real
Tagged Business, Economy, Editors, Estate, Finance, Government, Issues, Law, Legal, Personal, Pick, Politics, Real
I am buying a new home and I have the cash to buy it for all cash, but I ultimately want to refinance. Would it be cheaper if I bought it all cash and refied, or if i financed as a purchase? Or would it not matter…
Purchase loans are generally better. Put down 20%-25% and you can get a decent loan. Look at paying discount points to buy the rate down for the life of the loan. It is not as easy as you think to refinance and take a large amount of cash out. Hang on to your cash and get a loan. Find an honest mortgage comsultant, it isn’t easy!
Financial Bus Tour on CNN Open House. Dave Muti and financial advisors offering free financial advice to the public.
Duration : 0:3:40
8May09
Why do 30 year mortgage rates continue to rise, while the fed continues to lower the fed funds rate?
It seems as though when money is more readily available, the 30 yr mortgage rates should drop.
the fed rate you’re refering to is the rate for overnight borrowing to what is in the industry referred to as window loans - loans that keep the banks liquid amounts where the government requires. funding for mortgages, which are long term by nature, comes from investors. there are still too many nervous people hessitant to invest in mortgages again. so basically, these two pools of money come from different sources and while one might be inclined to think they should move the same direction, there is nothing that really ties them together.
I’m looking for mortgage rates online and want to build modular next year, now just looking for the best deal and wondering when today’s Fed actions will be reflected in the offers I find.
Cuts in daily interest rates from the central bank to the commercial banks do not directly translate to mortgage rates if we are thinking of fixed rate long term mortgages. What drives mortgage rates is the long term rates for bonds and GICs. As banks have to pay less for funds from those sources they can cut long term mortgage rates. We can find examples of long term rates moving in exactly opposite directions compared to daily interest rates.
John Taylor, President & CEO of the National Community Reinvestment Coalition (NCRC), appearing on CNN to discuss President Obama’s mortgage modification plan.
Duration : 0:3:47
No Comments
Posted in mortgage nashville
Tagged cnn, cra, foreclosure, help, homeowners, housing, john, live, modification, mortgage, ncrc, obama, taylor
Tagged cnn, cra, foreclosure, help, homeowners, housing, john, live, modification, mortgage, ncrc, obama, taylor
