Mortgage Archives

Understanding FHA Mortgage Refinancing Is It For Me?

Friday, November 27th, 2009 at 3:36 PM

You should refinance a mortgage if you have a mortgage or second mortgage with interest rates that are too high. If you have one or two mortgages which are much higher than the going interest rate of today’s market it may be worth refinancing to save some money. You first need to see what the new

FHA Mortgage Interest Rates

will be compared to your current rate, and factor in the closing costs to see how many months it will take before you turn a profit.

If you do not have very good credit it may be hard to find a lender that will refinance your loans for a reasonable rate. FHA mortgage refinancing is a type of mortgage refinance through the federal housing administration which can help people who don’t normally qualify for refinancing get a low cost mortgage refinance loan. This means the FHA Mortgage Interest Rates ought to be lower as well.

With the Federal Housing Administration, FHA loans you can refinance your mortgage with no credit score or a score as low as 620. This can be helpful for those of us who accidentally paid our loans a little late a few times. These loans can help you consolidate all your bills into one monthly bill, lower your interest payments considerably and have lower closing costs then a regular refinancing program. The Federal Housing Administration also has very competitive FHA Mortgage Interest Rates for people who have even declared bankruptcy after 2 years, or had a foreclosure after 3 years. Along with FHA mortgage refinancing, the FHA also offers reverse mortgages for senior citizens who do not want to pay any more bills. this works by paying the senior a monthly income or lump sum and taking claim to the home only after the owner has deceased. In the meanwhile the owner lives there worry free and still holds the title.

The FHA offered fixed rate loans which are strongly recommended, as well as adjustable rate loans which are good for very short term borrowers but if you plan on staying in the home more than 5 years do not consider this option. There is much more information about FHA loans on their website.

The Federal Housing Administration is now more than ever an instrumental part of getting the American homeowner back on their feet with dignity, and can help get people loans who normally wouldn’t qualify as well as save many from foreclosure.

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A great resource to help you in your continued research on FHA Mortgage Interest Rates is http://www.approveall.com They offer completely free and unbiased information about FHA Mortgage Refinancing, Refinance Options and a lot more.

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New Mortgage Proposals: More Common Sense Required, Not More Regulation!

Wednesday, October 28th, 2009 at 7:58 PM

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The news that the Financial Services Authority has issued its plans to repair the barn doors of the mortgage industry has received a mixed response.

Leaving aside obvious jibes about more points scoring than credit scoring, there is at least a return to a common sense approach to mortgage lending.

The headlines have centred on the abolition of so called self certification loans. “Toxic Combination” loans will be also banned in the proposals i.e. those loans with a high loan to value for somebody with a poor credit history.

True, these loans were oversold in the heady days of 2006-2007, but this is an easy shot at a predictable target.

Let us not forget that a major contribution to the debacle of the last 2 years was the seeming ease that original loans could be bundled up by financial institutions into securitised packages. These loans were further rebundled and so on, in a scheme which was part Pyramid selling and part Emperor’s clothes. An initial loan of £100,000 taken out by a home buyer could easily multiply into a final loan of 5 times as much.

It is a relief that Lenders will not be restricted to artificially set cap on loans to value or loans to income.

What comes through loud and clear is that the Lenders will be held ultimately responsible for assessing a borrower’s ability to repay the loan, taking in all the circumstances.

The Banks and Building Society cost cutting measures have proved to be a false economy.

A Radical Solution

We do not need to delve too far into the past to seek clues for a better proposition.

Before the major Lenders fell prey to shareholder pressure to cut costs (come in credit scoring, you’re moment has arrived), decisions were made by Bank Managers and Building Society Managers.

By and large, this was done by personal knowledge, with “customer facing” interviews (although we didn’t know it at the time) and based on the skill and expertise of the Manager as to whether or not a person was worthy of a mortgage.

Is it Happening Already?

Well possibly. The fact that the FSA has not gone further with its proposed regulation, may lead to such a conclusion.

The FSA may already have seen a more prudent lending regime over the last year or so.

Research by the Daily Telegraph, released this week states that half of all home buyers are having their mortgage requests rejected This in a mortgage market where the number of approved mortgages is rising each month. The Banks and Building Societies are clearly pursuing a strategy of fighting only for the best : a flight to quality applicants.

Conclusion:

So there you have it. Not more blunt instrument legislation, but empowered human beings with experience. Radical eh?

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The news that the Financial Services Authority has issued its plans to repair the barn doors of the mortgage industry has received a mixed response.

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