Smart Borrower Blog

Archive for August, 2007

Using APRs to Evaluate Mortgages

One of the tools consumers have at their disposal to evaluate competing mortgage offers is the annual percentage rate or APR calculation. The APR is a recalculation of the interest rate factoring in all of the cost associated with a particular loan. Using an APR is valuable because it puts a numerical value on the cost of the loan. By law, mortgage lenders are supposed to disclose the APR on any mortgage loan. The disclosure is called the Truth in Lending form or TIL for short. Anytime you see an advertisement for mortgage interest rates, you will always see... more »

You and Your Adjustable Rate Mortgage

If you happen to be one of the millions of Americans who refinanced their homes over the past 5 years there is a good chance that you chose an adjustable rate mortgage for your home financing needs. Who could blame you? With historically low rates these short-term loans offered monthly payments that were hundreds of dollars cheaper than their fixed rate counterparts. However, with the recent shift in the mortgage market it is important that you and your adjustable rate mortgage become familiar with each other to ensure that the mortgage that saved you money doesn’t end up costing you... more »

Home Loans - Looking More Closely at the Market

When asked to contribute to the Loan.c blog, I felt that my biggest contribution could be in reporting the news on mortgages and loans. Not being an expert in the field like Morgan Brown or Russ Martin, I felt this would be the best way for me to contribute. Morgan, Russ and our editor Lauren Blair agreed. I thought it would be a cakewalk. My forte is research, and I follow the news closely. Writing as I have for so many years made me feel I was in a position to cover this nicely. Doom and Gloom in the Market... more »

Mortgage Market - Why are Investors Anxious?

The market, shaky at best, closed up for the week, with the Dow Jones closing down 31.14, but up 0.4% for the week. The S&P 500 and NASDAQ also closed up for the week. Investors, anxious because of the mortgage market, are making the market volatile by the signs of trouble that are tied to the debt market. Volatility, measured by a popular index of options trading, is at its highest level in 4 years. Little comfort is being taken in the fact that volatility is lower than it was earlier this decade and in the late 1990’s. Part of... more »

Mortgage Concerns Trouble US Market

The sub prime market is taking a huge bite out of the world’s finances. Sub-prime loans are loans that are made to people with less than perfect credit scores. World-wide, this trend has put a lot of investors in deep trouble. This trend will not only hurt the world market, but will make it even harder for people with good credit to secure a loan. What the Central Banks Are Doing In the banking industry world wide, banks are starting to charge higher interest rates for loans that they make to other banks, indicating that they look to limit their... more »

Recent Program Changes Require Careful Consideration

In the continuing wake of the mortgage market shakeout lenders left standing continue to make significant changes to the loan products available for home owners and home buyers. It has become a full time job just to keep up with the daily changes made by banks as they try to find profitable loan products. What does this turmoil mean to you as a home owner and home buyer? Home Owners If you are in a long-term fixed loan that you are happy with - congratulations, you are in an enviable position. You may want to consider opening a home equity... more »

Is My Loan OK?

If you’ve seen Jim Cramer on CNBC, or read the financial section of your local newspaper this weekend you’ve heard about the tectonic changes occurring in lending. The big news of the week was the revelation that American Home Mortgage was closing its doors; leaving approximately $750 million worth of loans in a lurch. These loans did not fund, and after this week’s round of credit tightening it is a dubious wager to bet they’ll fund at all. If you are a homeowner who was lucky enough to avoid the AHM mess, but still has a loan in process here... more »

Facing Foreclosure? Get the Facts and Take Action!

Studies on foreclosure reveal that nearly half of all people who succumb to foreclosure never speak with their lender about financial problems keeping them from making mortgage payments. The result? Thousands of foreclosures that could have been avoided through different options available to home owners. Now NeighborWorks America is teaming up with many of the biggest names in the mortgage market to deliver public service announcements on foreclosure assistance. The ads will run nationwide starting this month as networks provide free air time for the announcements. If you are facing foreclosure or know someone who is, point them to the... more »