The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.
This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.
Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.
If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or info@valleywestmortgage.com
Alan Greenspan, Former Federal Reserve Chairman on Rates...
Last week, Greenspan wrote an Op-Ed for the Wall Street Journal in which he warns of an inevitable rise in interest rates.
Here is a link to the WSJ's online excerpt for non-subscribers. The second paragraph should be more than enough to tell you that rates will rise and not only that, they MUST rise. To read the entire piece, take advantage of the subscriber link at the end of the excerpt.
So what does this mean to those who want to want to buy or refinance a home?
Rates are not likely to go any lower and home prices are still low. All indicators are pointing to taking action now or missing out! If you are currently in an ARM Loan, you need to refinance now into a fixed rate mortgage. If you are buying and you have been waiting for better rates or better prices, it's time to make a decision!
To get started now, give our professional staff at Valley West Mortgage a call at (888) 931-0007.
Should you Refinance your FHA Mortgage now?
A simple way to know if Refinancing is worthwhile...
The first question to ask yourself is, "How much money can I save each month?" A good general rule of thumb is if you can reduce your payment by $100 or more each month, it is time to look into refinancing. If your current Interest Rate on your FHA Mortgage is 5.50% or higher, you should be calling us right now, before Interest Rates start to rise again!
This is especially true if you currently have an Adjustable Rate Mortgage. You should refinance into a 30 or 15 year fixed loan while rates are still low and before your current FHA ARM Loan starts to adjust! Chances are that you will be able to save money and take away the worry of rising payments!
Refinancing your current FHA Mortgage is an easier process than it is for many Conventional (non-Government) loans. Call our Mortgage Professionals at Valley West Mortgage today and we can help you determine if you should begin the application process. 1-(888) 931-0007
Mortgage Loan Modification Vs. Refinance
What is the difference? Which one is right for me?
Loan Modification, or more specifically, Mortgage Modification is a tool that you may be able to use to stay in your home rather than loose it to Foreclosure. It differs from a Refinance in that Modification programs are designed to modify the terms of your existing Mortgage. A Refinance replaces your existing mortgage with an entirely new one. Since 5% of all Adjustable Rate Mortgages are going to "Reset" in the next 10 months, you could be in real trouble if you have one of those ARM loans. Ideally, you want to refinance into a low, Fixed Rate Mortgage before your current mortgage resets and before Rates on Fixed Mortgage Loans start to rise!
The Obama Administration has put forth a government mandate to Lenders called the "Federal Home Affordable Modification Program" or HAMP. Many lenders have their own guidelines under which they would agree to a Modification of your existing Mortgage but the Obama program, HAMP has specific guidelines under which a Lender must allow a Mortgage Modification if you meet the criteria. The Obama Making Home Affordable Program may be available if your loan is owned by Fannie Mae or Freddie Mac. If not, check with your Lender or Loan Servicer to find out what Mortgage Modification programs they might have available.
You can apply to your Lender on your own for a Modification of your Mortgage but, the process can be quite daunting. Just here locally, in Las Vegas, many Loan Modification companies or consultants have popped up in the past two years. While many have been reputable, many have been taking advantage of desperate homeowners by charging high fees in advance and then not providing the service. Some have even collected as many fees as they could and then just disappeared after stringing along as many people as possible while they collect fees from as many "clients" as they can. For this reason, the State of Nevada and many other states have enacted laws requiring any person or company engaging in Loan Modification services, to be licensed and regulated just as Mortgage Brokers and Lenders are currently.
At the end of this post, you will find important links to resources that you can and should use to educate yourself on the Loan Modification Programs that are available to you. It is important to be very well informed and know your rights before you contact one of these Mortgage Modification companies. First and foremost, check to see if your State requires Licensing for Loan Modification Companies or Consultants. Then make sure that the company you choose is licensed!
So which one should I choose?
That depends on your current situation. Generally, if you are current on your mortgage and not owing more than your home is valued at, i.e. "upside down", you should look at Refinancing first. Even if you have had a few late payments in the past two years, you may qualify so don’t tell yourself that you can’t before consulting with our Mortgage Professionals here at Valley West Mortgage. If you are not sure that you are “upside down” or have too many late payments, not enough income or a long enough employment history, etc., we will help you to determine your exact situation so that you can make an informed choice.
Here at Valley West Mortgage, we do not provide Loan Modification services. We don’t charge any fees in advance so it will cost nothing to talk to us and find out which choice makes sense for you. We can provide you with a true picture of your situation so that you will be comfortable in the knowledge that either, you can qualify to refinance and would gain a significant savings in your Monthly Payment by doing so or, you will know that you should seek a competent and trustworthy Loan Modification Specialist who is properly licensed (if required in your State). You may also choose from many non-profit homeowner counseling services in your area. Please check with your States regulatory agency for Mortgages or Real Estate and with your local Better Business Bureau before you sign a contract or pay a fee to any Loan Modification Consultant or Company!
To find out more about how Loan Modification Programs work you can go to:
Making Home Affordable: Set up specifically for educating consumers about the HAMP program enacted by the Obama Administration: Making Home Affordable
The Federal government also provides free resources: Call the Homeowner's "HOPE™ Hotline at 1-888-995-HOPE (4673) for information about the Making Home Affordable Program and to speak with a HUD approved housing counselor. Assistance is available in English and Spanish, and other languages by appointment.
HUD.gov is a free website: To find a local counselor in your region: HUD.gov
Lastly, if you are in the State of Nevada, here is a link to check the license status of Mortgage Brokers, Lenders, Modification Companies and Individuals: Nevada Mortgage Lending Division Licensee Data . Most States are now required to have all of their licensed Mortgage Professionals registered through a recently created National Database called the "National Mortgage Licensing System" or NMLS for short.
While the State of Nevada will be one of the last States to join the NMLS System in October of 2010, your State probably already has. Here is a link to the NMLS Consumer Search for Licensees . In their search box, you can enter a Company name or an Individual (first then last name) and any location information. Once the result is displayed, you will be able to filter the results if you got too many John Smiths for example. Then check on the status of the Professional that you are thinking of working with once you are looking at the correct record.
An Introduction to ARM Mortgages
Introduction to: Adjustable Rate Mortgages
At some point you will want to purchase a home and at that point you will need to apply for a mortgage loan. However, purchasing a home may become complicated if you aren’t aware of the various mortgage terms. One key term we’re going to define today is an ARM loan.
An ARM is a mortgage loan that doesn’t have a fixed interest rate for the entire life of the loan. There are different periods in this kind of mortgage loan. The Initial fixed rate period, and the adjustable rate period. During the initial fixed period, no changes in the rate will take place. This can last from six months to ten years depending on the type of ARM that you choose. The changes in the interest rate will start during the adjustable period. The rate can either increase or decrease.
There are 2 factors that will make the rate change. These are the indices and the margin. There are several types of indices that contribute to the rate but the commonly used index by various lenders are the Constant Maturity Treasury and London Interbank Offered Rate. The margin also influences the rate, as this is the percentage that can be added to the index. There is also a ceiling and floor. This contributes to the maximum limit that the rate can increase or decrease at each recalculation date.
What you need to know about ARM loans
A great reason one would choose to go with an ARM would be the potential to save during the fixed rate period, During that period, the interest rates and monthly payments are lower than a conventional 30 year fixed rate loan. Remember, that will change and most likely increase, when the adjustable rate period starts.
Another important fact to know about an ARM is how often the rate can change after the initial fixed period lapses. The most common choice is an annual recalculation but there are many other types.
An ARM is not for everyone! Make sure you that you choose this type of mortgage with confidence that you understand all of the terms of this type of loan before you commit to it.
