4MortgageInfo

How Does Fannie Mae Works?

Tue, 15 Apr 2008 23:16:43 +0000

In 1938, Fannie Mae was established by the US Government to promote the growth of home ownership by providing a secondary mortgage market. What is a secondary mortgage market? Well, the secondary mortgage market exists in the buying and selling of a mortgage from one lender to another. The bank, or Mortgage Company that provided you with your loan, can turn around and seek to sell your mortgage to a company such as Fannie Mae. This frees up their cash to make another mortgage loan. And the cycle of growth is expanded and sustained in this manner. The idea and concept worked, and today, Fannie Mae has helped millions of Americans achieve the dream of home ownership. Until recently, Fannie Mae was a part of the US Government, and was overseen by the Housing and Urban Development branch of that government. Now, however, Fannie Mae is a privately held, stock ownership company that promotes the growth of the housing industry by making it possible for many low-to-middle income Americans to own homes. Investors just like you and I can purchase stock in the Fannie Mae Corporation, and not only increase our won wealth, but also help to fund the home ownership possibilities for a new generation of Americans.

January 1, 2008 -- First time buyer home Loan (0)
January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
December 4, 2007 -- Mortgages for People with Bad Credit (2)

Three Rules of Thumb for Mortgage Refinancing

Thu, 17 Jan 2008 01:34:36 +0000

You might think that deciding to refinance a mortgage requires only a quick comparison of loan interest rates. Unfortunately, that’s not really true. Refinancing is trickier than that! Fortunately, three useful rules of thumb can often help you make sense of refinancing opportunities.

Rule 1: Don’t Ignore Total Interest Costs

You really want to use refinancing as a way to reduce the total interest cost you pay. While that sounds simple in principle, it is sometimes difficult to do. The interest costs you pay are a function of the interest rate, the loan balance, and the loan term period.

When people refinance, they tend to focus solely on the loan interest rate. But they often don’t pay as much attention to the loan term or the loan balance.

When you use refinancing—even refinancing at a lower interest rate—to increase your borrowing or to extend the time over which you borrow, you often aren’t saving money.

Rule 2: Trade Expensive Money for Cheap Money

For refinancing to make economic sense, however, you do need to swap higher interest rate debt for lower interest rate debt. This calculation, however, is tricky. To make an apples-to-apples comparison, you must look at the annual percentage rate that will be charged on your new loan—this is the best measure of the new loan’s interest rate cost—and then compare this to the loan interest rate on your old loan.

You don’t want to compare interest rates on the two loans nor do you want to compare annual percentage rates on the two loans. Again, just to make this perfectly clear: You want to compare the loan interest rate on the old loan to the annual percentage rate on the new loan.

When the annual percentage rate on the new loan is lower than the loan interest rate on the old loan, then you are truly paying a lower interest rate.

Comparing annual percentage rates with loan interest rates seems confusing at first. But note that you would pay only interest on your old or current loan, so that’s all you need to look at in terms of its costs. With a new loan, however, you would pay both interest and any origination or closing cost fees. The annual percentage rate wraps the interest rate charges and setup charges, origination charges, and closing cost fees into one interest rate-like number.

Rule 3: Don’t Lengthen the Repayment Period

Be careful that you don’t extend the length of time you borrow by continually refinancing. For example, one common rule of thumb states that every time interest rates drop by two percentage points, you should refinance your mortgage. However, there have been times in recent history when following this rule would have had you refinancing your mortgage every few years. This could mean that you would never get your mortgage paid off. If you refinanced every few years, you would suddenly find yourself still 30 years away from having your mortgage paid.

annual percentage rate, interest rate, loan, mortgage, refinance, Refinancing, rule

April 15, 2008 -- How Does Fannie Mae Works? (2)
January 1, 2008 -- First time buyer home Loan (0)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
December 4, 2007 -- Mortgages for People with Bad Credit (2)

First time buyer home Loan

Tue, 01 Jan 2008 01:57:59 +0000

Are you a first time buyer? If yes then, you will have a lots of questions in your mind such as whether your should look for a bank, building society or a specialist lender? How much you need to borrow and how much will it cost? There are many mortgage lenders in the financial market that offer first time buyer mortgage loan to their borrowers.Over the last few years, the property market is going up constantly. Buying a home has really become a tough job. It is also one of the big investments that you make in your life. However, you can get into the property ladder through first time buyer mortgage.

First time buyer mortgage could be the best option for buying a home. The loan is secured against your property. Therefore, you get mortgage at lower interest rates. However, some lenders offer 100 per cent mortgage and other ask for some down payments. You need to ask the lenders about it before applying for the mortgage. It is also very important to shop around of the financial market. First time buyer mortgage has been designed especially for buying a home.

Many mortgage lenders ask for higher interest rates. Due to lack of knowledge of the market trends, many first time borrowers get trapped with higher interest rates. To avoid such a situation, you should look for the current market trends. You can gather all the information through the Internet. Just click on different financial sites and look for the first time mortgage loan offers.

Apply as a first time buyer. Get loan approval and buy your dream home to start a new life.

Borrowers, buying a home, current market, down payments, dream home, first time buyer mortgage, interest rate, interest rates, investments, Lenders, loan, loan approval, market trends, mortgage, mortgage first time buyer, mortgage lenders, mortgage loan, property ladder, time borrowers, time mortgage, tough job

December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
December 4, 2007 -- Mortgages for People with Bad Credit (2)
April 15, 2008 -- How Does Fannie Mae Works? (2)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)

Zero Down Mortgage Loans - First Time Home Buyer Loan Programs

Tue, 04 Dec 2007 04:08:06 +0000

Because of a larger variety of mortgage loans available, first time home buyers may become easily overwhelmed with the home buying process. Understandably, those entering the housing market may not know which loan program best fits their needs. Working with a mortgage broker is helpful. They can guide you through the entire process and help you select a loan with the least out-of-pocket expense.

Main Setback of Purchasing a New Home

Buying a first home is an American dream. The home buying process involves paying out-of-pocket cash for down payments and closing costs. Unfortunately, many families are unable to achieve this dream because of having a small cash reserve.

Years ago, families would have to postpone buying a home until they had acquired adequate funds. Because of rising home prices, many families can no longer afford to wait. Thus, several first time home buyers are taking advantage of zero down mortgage loans.

How Do Zero Down Mortgage Loans Work?

There are many different types of mortgage lenders. Some lenders will only finance 80, 90, or 95 percent of the home price. Thus, homebuyers would need a down payment for the remaining percentage. With a zero down home loan, the lender offers 100% financing.

Zero down mortgage loans make the goal of purchasing a new home reachable. Even if a homebuyer cannot afford to pay their own closing fees, a mortgage broker should be able to locate zero down mortgage loans that offer 103% or 107 % loans. The majority of lenders require a high credit rating for the latter choices.

Options Available to First Time Home Buyers

First time home buyer loans offer unique financing, and most loans are tailored to individuals needs. Getting a home loan does not require good credit. In fact, several lenders are eager to offer first time home buyer loans to those with bad credit or past bankruptcy.

Home buyers can choose from several loan terms: 15-year, 20-year, 30-year, or 40-year. Lenders offer a variety of loan options, which create affordable living. Because of low interest rates, buyers can take advantage of a low fixed rate. Furthermore, there is also the popular interest-only mortgage option for those buying homes in overpriced markets.

First Time Home Buyer, Loan Programs, mortgage loans, Zero Down Mortgage Loans

January 1, 2008 -- First time buyer home Loan (0)
December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
December 4, 2007 -- Mortgages for People with Bad Credit (2)
April 15, 2008 -- How Does Fannie Mae Works? (2)
January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)

Interest Only Mortgages and the LIBOR, What is it?

Tue, 04 Dec 2007 03:35:14 +0000

What is LIBOR and why would we want to use a LIBOR? How does LIBOR tie into interest only mortgages. I myself until recently had no idea what a LIBOR was or is, or if I wanted to use one.

LIBOR is the London Inter Bank Offered Rate. In a more useful definition, it is the interest rate offered by a specific group of London Banks for U.S. deposits with a stated maturity date. It compares to the CD rate that your local bank would offer to you. The important connection to make here is the role the LIBOR plays in interest only mortgages. As more and more of our mortgage loan market turns to this type of loan product, we will begin to hear more about LIBOR and the many uses and influences in our day to day life.

The LIBOR has traditionally been a tool for the commercial lender and affected more of the commercial market than the private sector. As the private market moves into a bigger risk sector than ever before, the LIBOR will loom as a larger figure in the ratio used to determine the interest to risk factor that your local banker, mortgage company, or finance company will assume. The interest only mortgage option is a bit riskier than the traditional mortgage products, in that it requires little or no down payment, and over the course of the mortgage, the interest is the only initial monies collected. That means at the end of the term, say 5 years for most, the buyer still owes the same amount of principal. Risky business, this interest only loan. Commercial loans, primarily an investment tool, have raditionally been considered the bigger risk, since these loans weren’t providing housing for the borrower.
But today, the private borrower is investing no more than a commercial borrower; in fact many times, even less. These new age borrowers aren’t really that committed to these homes, either. Most are using the interest only option as an investment tool, or a way to buy bigger than traditionally possible, or as a way to fund a professional lifestyle with a starting salary and an expected temporary stay. Either option means a bigger risk for the lender; LIBOR helps to set risk percentages and provide stable financing options for the lender.

The commercial interest only LIBOR mortgages are for commercial borrowers. These borrowers are investing in residential unit complexes. In other words, they’re borrowing to buy apartment complexes, not individual homes; nonetheless, they too are being offered the interest only options and the interest rate for these commercial interest mortgages is set by the LIBOR rate plus a certain percentage above. It is for these commercial investors that the interest only loan options should be used. The borrowers are business people, with business plans, and enough knowledge about the workings of commercial and mortgage loans, to understand a good investment versus an impossible dream. The commercial mortgage industry is a huge market, and since most of the monies borrowed exceed the $100,000.00 limit, LIBOR rates are used for determining the commercial loan rates. I still am not an advocate of the interest only mortgages; but for some situations they are the best option. In a business setting, when many factors have been thoroughly discussed and the interest only option has proven itself to be the best choice, I think it should be used

So, as you begin your trek into the mortgage market, be prepared to hear more and more about the interest only loan options, and more and more about the role LIBOR plays in this expanding market.

borrower, interest only, interest only mortgages loans, interest rate, LIBOR, loan options

January 1, 2008 -- First time buyer home Loan (0)
December 4, 2007 -- Mortgages for People with Bad Credit (2)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
April 15, 2008 -- How Does Fannie Mae Works? (2)
January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)

Mortgages for People with Bad Credit

Tue, 04 Dec 2007 02:31:22 +0000

All factors depend on his past record of handling
credits. A bad credit history implies that his appeal for a loan would be
rejected and won’t be met in most of the places. The basic problems involving, the process of procuring loan arises from the
activities of sub-prime lenders. These are those lenders who actually work
really hard for fetching loans for the people with bad credit background and low
credit score and then the charge absolutely unreasonable price for the job.
Borrowers should be careful of borrowing money from sub-prime lenders, as they
can charge high interest rates which, comparatively are too high than the market
rate. Not only this, but these lenders also charge unreasonable pre-payment
penalties. Online articles are posted in websites to inform the borrowers about
their existence and caution them.
However, it’s not absolutely impossible to
find lenders who give out loans at reasonable rates and agreeable charges, to
people who have a bad credit history. All a borrower needs to do is look around
and talk to different mortgage brokers, which would prove to be helpful to find
a lender, that can get them an approved loan with a reasonable interest rate and
fair terms of repayment.

Things that the borrower, should make sure about, are that he makes use of
the lowest interest rate and terms possible. Specially a borrower with a bad
credit history and bad credit score should make sure that he sends application
for loans to a number of different lenders, since it would be sensible for him
to make comparison between different mortgage loan quotes, so that he makes sure
that he chooses the best one.

Bad Credit, bad credit history, Borrowers, borrowing money, credit background, credit score, high interest rates, Lenders, loans, low credit score, lowest interest rate, mortgage loans, mortgage brokers, sub prime lenders

January 1, 2008 -- First time buyer home Loan (0)
December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
April 15, 2008 -- How Does Fannie Mae Works? (2)
January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)

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Tue, 04 Dec 2007 01:19:09 +0000

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January 17, 2008 -- Three Rules of Thumb for Mortgage Refinancing (1)
December 4, 2007 -- Zero Down Mortgage Loans - First Time Home Buyer Loan Programs (0)
December 4, 2007 -- Interest Only Mortgages and the LIBOR, What is it? (2)
January 1, 2008 -- First time buyer home Loan (0)
December 4, 2007 -- Mortgages for People with Bad Credit (2)
April 15, 2008 -- How Does Fannie Mae Works? (2)

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