Smart Borrower Blog

Archive for the ‘Mortgages’ Category

Obama Announces New Mortgage Refinance Aid

On Wednesday, President Barack Obama announced some modifications to his administration’s previous foreclosure-prevention plans in hopes of extending relief to more struggling homeowners. “I am sending Congress a plan that will give every responsible homeowner in America a chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” he told an audience in Falls Church, VA as quoted in a New York Times article. “No more red tape. No more runaround from the banks.” The President did admit that previous efforts have been less effective than expected, but he said this new round of... more »

Fed Keeps Rate At Rock Bottom, No Changes Likely Until 2014

After its two day meeting, the Federal Reserve decided to leave its target interest rate unchanged, and also forecasted that it will not raise rates until the end of 2014. The federal funds rate, the Fed’s main method of affecting inflation and the economy, will remain in the range of zero to 0.25 percent for at least the next six weeks. It was predicted in a statement that, “Economic conditions…are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” Low Fed rates have kept mortgage, car and student loan rates exceptionally low for... more »

Parents Helping Kids Get Mortgage Loans

In these days of economic uncertainty, many potential homebuyers are asking their parents for help. Today buyers are facing the most stringent lending standards in decades as well as a shaky job market. They are often in need of a good chunk of change in order to qualify for a home purchase. According to a survey from Better Homes and Garden Real Estate as reported in a CNN Money article , one in five baby boomer couples have already helped at least one of their children buy a house. That help has come in the form of giving cash for... more »

Home Prices Dip in September

Home prices across the nation fell in September, after posting gains during the spring and summer, according to the latest reading of the Standard & Poor’s/Case-Shiller index. Prices fell 0.6 percent from September to October, and 3.6 percent from the previous year. Out of the 20 cities tracked by the index, prices dipped in 17, breaking the five month streak where at least half of the cities showed monthly increases. “The plunging collapse of prices seen in 2007 to 2009 seems to be behind us,” says David Blitzer, chairman of the S&P index committee, as quoted in a USA Today... more »

Lawmakers Plan to Raise FHA Loan Limits Again

Congressional and senate lawmakers are seeking to raise FHA mortgage loan limits. Originally, FHA loan limits were raised during the housing crisis in 2009. As private lenders high-tailed it out of the market and government-backed agencies were left to pick up the mortgage lending slack, loan limits for loans backed by Fannie Mae and Freddie Mac were temporarily raised as well. In New York, Los Angeles, and San Francisco, where home prices were above the $625,000 loan limits, Congress temporarily raised the loan imits to $729,750 due to the expensiveness of an area. This raise aimed to help people who... more »

Reverse Mortgages Draw Younger Crowds

A rising population of baby boomer retirees are changing the landscape for reverse mortgages. These loans that have historically appealed to older, single homeowners are now garnering more attention from the youngest qualifiers. The average reverse mortgage applicant today is around the age of 62 or 63, according to Peter Bell, president of the National Reverse Mortgage Lenders Association (NRMLA) as quoted in a Reuters article. And whereas older widowed women were the major borrowers about 15 years ago, now mortgage companies are most likely to see boomer couple applying for the loans. A reverse mortgage is a loan against... more »

Student Loan Debt Reaches Record Levels

Total student loan debt in the U.S. has surpassed national credit card debt, according to new figures from the Federal Reserve Bank of New York. New student loan funds borrowed last year grew to $100 billion dollars, a record high, and now total outstanding student loan debt has reached $1 trillion for the first time in history. Full-time undergraduate students borrowed an average of $4,983 last year, according to the College Board. That figure is more than double the average from 10 years ago, after adjusting for inflation. In the wake of the current economy, default rates on student loans... more »

Fed Hopes to Lower Interest Rates, But Will It Help?

In order to “support a stronger economy” and keep inflation at the right level, the Federal Reserve decided today to purchase bonds with longer maturities, while selling off its shorter-term bonds, in hopes that long-term interest rates will continue to fall. The Federal Open Market Committee announced that it will buy $400 billion worth of Treasury securities with maturities of six to 30 years, over the next eleven months. It will simultaneously sell off an equal amount of its Treasuries that mature within three years or less. “This program should put downward pressure on longer-term interest rates and help make... more »

Lower Loan Limits for Fannie Mae and Freddie Mac Make it Harder to Buy Homes

On October 1st , Fannie Mae and Freddie Mac will lower the loan limits for home loans they buy from lenders, according to an article on USAToday.com. The consequence of this change is that it may force prospective home buyers to get into a much more expensive loan, and a loan that will be much harder for them to acquire. In 2008, Freddie Mac and Fannie Mae raised loan limits to help stimulate the economy, from $417,000 for single family homes to $729,750. Starting next month, that limit could fall as low as $625,500 in some areas, depending on the... more »

Consumers Make Progress With Timely Credit Card Payments

In the latest quarter, consumers stayed current on their credit card payments at an impressive rate, according to data from credit reporting bureau TransUnion. Of all credit card accounts during the second quarter of 2011, only 0.6 percent were delinquent by 90 days or more, representing the lowest rate in 17 years. This number is down 19 percent from the first quarter this year and down 35 percent from the same period of 2010. A major reason for the falling rate is simply that Americans are shedding their credit card debts. The New York Federal Reserve Bank said recently that... more »