Mortgages and Real Estate
Simple tips for when to refinance your mortgage in 2010
We keep hearing about all those homeowners who want to get their mortgages refinanced but can't, but we seldom hear much about the wisdom of whether or not you should seek to refinance in the first place. It is not always as cut and dry as it might seem.
With that in mind, and courtesy of the Salt Lake Tribune, a few quick pointers on how -- and when -- to refinance your mortgage.
Right now, mortgage rates are at some of their lowest levels since World War II (you know, the "black and white" war) which is why in October, an estimated 66% of all mortgage applications were for refinancing to a lower rate.
But, says the Tribune, quoting a California based real estate lawyer, in order to really benefit from refinancing, the going rate should be at least "0.50 percent lower than your current mortgage."
It is important to take into consideration that the actual cost of any refinance would end up chipping away at any savings you may get from the lowered rate. Therefore, real estate lawyer Timothy McFarlin tells the Tribune, "many consumers these days will need at least a 1 percent difference in rate to truly come out ahead."
You should, of course, ask the lending institution that holds the mortgage whether it can offer you a no-fee refinancing. I know, in this day and age of greed, it seems highly unlikely that your lender would even consider this. But it never hurts to ask and, to keep you as a customer, (provided, that is, that you are a good one) the lender just may agree to waive fees for the refinancing. A win-win situation, really.
Because a revitalized (we can only hope) economy translates into higher interest rates eventually, those with adjustable-rate mortgages, says the paper, may be wise to try and move into a fixed rate loan as soon as possible to lock in the lowest rate possible now.
Of course, there are many other factors that you should consider before taking the steps toward refinancing your mortgage, but these small tips should help point you in the right direction.
Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."
Home resales up, new-home sales slide
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/05/home2.jpg)
First, the good news: First-time buyers taking advantage of the government's tax-credit incentive helped yank sales of previously owned homes up by 7.4% in November from October, according to the National Association of Realtors, a trade association. Sales are up 44.1% from a year ago, with about half of them generated by first-time buyers.
Economic indicators to watch in 2010
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/economic.jpg)
Tracking certain economic indicators can help you decide the most opportune time to buy or sell a home, expect a raise, or how to distribute your 401(k). With hundreds of indicators fighting to garner your attention it can be confusing to know which ones mean the most to you.
Military service members get increase in allowance for housing
While President Obama is preparing to send more military personnel to Afghanistan with the new year, for those servicemen and women who are remaining in the United States, the Department of Defense has announced an increase in 2010 for what is known as the Basic Allowance for Housing.
'Realtorsaurus' may go extinct in 2010: More Realtors embrace hi-tech
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/modern-house.jpg)
How about having buyers use their cell phone cameras to scan a bar code on a for-sale sign which then downloads all the home's details? Or an iPhone app to serve as a lockbox smartkey? Or mobile video text-messaging to send virtual tours and slideshows to would-be buyers?
All are coming.
Joseph Ferrara of TheClozing.com, a real estate news aggregator site, predicts increased reliance on technology in the property sales industry in the coming year.
Ferrara says a new cell phone from AT&T with an attachable projector will enable agents to show slide shows, photos, and videos to clients in the field. He expects a new iPhone or BlackBerry app for the National Association of Realtors Property Resource will become a must-have.
Among other technologies we can expect to gain popularity next year, Ferrara predicts video e-mail, web sites that allow agents to bid on listings, and services that allow buyers to quickly obtain home details by pointing cell phone cameras at a bar code on the "For Sale" sign or magazine ad. Now if he could only predict some buyers.
Loan modification Snafu: Defaults continue to rise
Add to home loan modification woes the latest missive from the federal government: serious delinquencies reached 6.2% in the third quarter, up nearly 17% from the previous quarter.
The release begins to add some context to earlier complaints that few of the temporary modifications under the government's Home Affordable Modification Program (HAMP) were being converted into permanent modifications. Though banks' sloth in getting folks into meaningful long-term adjustments remains a major factor worthy of scrutiny -- only 1% of the loans have been converted after all -- borrowers clearly share some responsibility.
In all, more than six in 10 loans in the first wave, modified a year ago, are now in default, according to the report released Monday by the Office of the Comptroller of the Currency and the Office of Thrift Supervision. However, lenders take note: among modifications that actually reduced payments, the default rate was significantly lower. For instance, when payments dropped by 20%, defaults fell to 39% of loans modified in the third quarter of 2008. (see chart after jump).
The Duh Report: Lower mortgage payments are easier than higher ones
![save our home](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/repo.jpg)
I'm not sure which is scarier. Is it that this incredibly obvious fact is being reported as news or that the federal government actually spent money researching and presenting the data to confirm that it's true.
Mortgage loan modifications: More banks offering reduction in principal
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/foreclosure.red.sign.jpg)
This may be starting to change. Best for you to be armed with some key information.
A brand new government survey is showing that 13% of loan modifications in the third quarter of this year "offered a reduction in the principal balance," reports the Christian Science Monitor. That is an increase.
Here's the catch (come on, you knew there had to be one, right?) -- the banks offering the reductions in principal tend to be the ones that actually own the mortgage on the house; mortgages owned by a group of investors usually did not have their principal balance reduced, says the report.
"Good" housing news expected this week, but does it really matter to you?
![Happy/sad](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/happyandsadfaces.jpg)
Since the fiscal mess began, we have been "treated" to seemingly non-stop reporting giving us monthly and often daily temperature readings of the nation's economic state. Sometimes we feel reassured. Sometimes we feel like we've been hit over the head with a sledgehammer.
The truth is, no one set of figures does a trend make, and we shouldn't get too up or too down by any one particular set of reports.
Mortgage interest rates as low as 2% ... if you can land the loan
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/house.boarded-up.jpg)
If you're struggling to make home-mortgage payments and losing your home is a real possibility, some banks are offering sweet deals on loans, some with rates as low as 2%, according to CNNMoney. About 80% of loan modifications in the second quarter of this year resulted in lower payments, according to the Office of the Comptroller of the Currency. Three months ago that number was about 50%. Unbelievably, only 4% of all homeowners in need of so-called "workouts" are getting them.
Why? One reason is that not all banks are on board the loan-modification train. Also, many people are unaware of programs to help struggling homeowners, and some prefer to just walk away, thinking they can't possibly get a new loan, brokers say. That's a shame, because borrowers who lower their monthly payments by 20% or more re-defaulted only 34% compared with the 63% who didn't.
Advice to first-time home buyers: Look before you leap
![Dale Robyn Seigel](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/seigelgoodtmetobuy.jpg)
Siegel, whose new book, The New Rules for Mortgages, expands on this premise, warned that the burst real estate bubble has left more than wet suds in its wake. Home buyers with limited credit will find their interest and down payments higher and their access to second loans to help with the down payment virtually nil.
To complicate matters, changes are being contemplated in FHA assistance, she said, including a possible increase in required down payment to 5% and a decrease in the allowed seller concession to the buyer from 6% to 3%.
Ohio goes after mortgage servicing firms: lessons you can learn
![](https://web.archive.org/web/20091227184556im_/http://www.blogcdn.com/www.walletpop.com/blog/media/2009/12/captain-america.jpg)
One by one, step by step, he has been going after mortgage servicing companies. These are the firms that collect monthly loan payments and also manage foreclosures.
Just since this past summer, Richard Cordray has brought suit against both Carrington Mortgage Services and American Home Mortgage Servicing.
Now, he has turned his attention to HomeEq, a unit of Barclays Capital. He claims the firm is "using unfair and deceptive agreements and violating state consumer law," according to a Reuters dispatch.
Among other things, the Ohio AG alleges that HomEq came up with schemes that "released itself of all liabilities and required borrowers to waive their rights to defenses and pay more fees," says the Reuters report.
For its part, a HomEq spokesman dismisses the suit as "meritless" and vows an aggressive defense.
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Interest Rates
Type | Current | APR |
---|---|---|
30 yr fixed mtg | 5.28% | 5.41% |
5/1 ARM | 4.42% | 3.84% |
$30K HELOC | 5.16% | 0.00% |
36 month new car loan | 6.70% | 0.00% |
1 yr CD | 1.43% | 1.44% |
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