To rent or to own? If you are planning on moving and are financially stable enough to potentially qualify for a mortgage, there is a lot for you to consider. Buying a home usually requires a down payment plus closing costs; renting also comes with its own fees, but those are generally less than you will need to buy a home. Here, we will explore whether it is cheaper to rent or own a house and the pros and cons of both.
If you are buying a home, you will need a mortgage lender to help you fund it. There are many mortgage lenders available, so finding the right one can be difficult sometimes. Here, we will look at how to reach out to mortgage lenders so that you can find the best lender available to help you finance your dream home.
When buying a home in Washington, D.C. you should work with a lender familiar with Mortgage Credit Certificates (MCC’s) and who is participating in the MCC Program. A Mortgage Credit Certificate allows eligible borrowers to claim a Federal Tax Credit of 20% of the mortgage interest paid on the mortgage during each calendar year. The remaining 80 percent of the mortgage interest paid for that year may still be claimed as a tax deduction.
There are increases coming to mortgage interest rates due to several rule changes. One change is a proposed increase in the guarantee fees, also called the g-fees. This fee will increase 10 basis points, which is equal to 1/10th%. There are also increases coming to what I call add-ons. Add-ons are fees charged by Fannie Mae and Freddie Mac, that vary depending on credit score and down payment of each mortgage borrower. Read the rest of this entry »
I read a Wall Street Journal article titled, U.S. Sues Wells Fargo for Faulty Mortgages. It is another government lawsuit against another big bank. It is another attempt at a department of government to make sure the public knows it is doing something, something that is allegedly for the public good. Thank goodness for our government watchdogs, because we are not able to look out for ourselves, right? Read the rest of this entry »
Getting a loan is easy, right? You apply for the loan, you send in some paperwork, someone appraises the home, and if your credit is OK, a little bit later, you get a mortgage. Right? It should be that easy, I agree. We have the technology and desire in place to make the mortgage process easy, I believe. The problem with assuming you can shop anywhere, call anyone, and get a loan through any source is that the above is not only not true, the truth is completely the opposite. Getting a mortgage has become the most arcane, complicated, minutia filled experience ever. It is worse than going to the Department of Motor Vehicles, by far. Read the rest of this entry »
I know it is difficult to understand why the mortgage process gets more complicated. And I know its curious why the number of loan disclosures you have to sign just keeps growing. When I started in the mortgage business in 1986 I bet there were only 12-15 pages of loan disclosures. That ballooned to around 30-35 pages up until 2008. Then the financial world seemed to implode in 2008, and the Feds took over Fannie Mae and Freddie Mac, and the number of disclosures you get now must be over 50. And now we have the Consumer Financial Protection Bureau’s latest action. Get ready for more disclosures, and more cost, and more complication. Read the rest of this entry »
The Good Faith Estimate (GFE) is one of the worst ways to compare lenders. I must get asked for a GFE 10 times a week, and 10 times a week I try and explain that using a GFE is the wrong way to compare lenders. Below are a few reasons why: Read the rest of this entry »
I just heard that FHFA (Federal Housing Finance Agency) has implemented a hike to the Fannie Mae/Freddie Mac guarantee fee. This is the fee that the GSE’s (Government Sponsored Enterprises) which are now actually GOE’s (Government Owned Enterprises) pays to the government for their backing. They raised this fee to pay for the Temporary Payroll Tax Cut, signed by President Obama! The announcement said specifically: Read the rest of this entry »
In case you did not see the hundreds of news stories on it, the government is still open. Whew, that was a close one. Thank goodness our cradle to grave caretaker is still open for business. Read the rest of this entry »