PMI versus LPMI versus 1st trust/2nd trust Combo Loan

February 27th, 2014

Everyone likes to think PMI (Private Mortgage Insurance) is evil. Everyone likes to think they should not have to pay it, and everyone wants to find a way around paying it. There are ways to work around PMI, but like all things in life, there are trade-offs. A person really needs to look at all the options and trades-offs, and consider how long they think they are likely to spend in their new home. Then everyone needs to consider paying PMI! What do I mean? Read the rest of this entry »

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220 Year History of Interest Rates

February 21st, 2014

A while back, I published a chart of interest rates that went back about 40 years. I did this in an attempt to show that the recent increase in interest rates, as well as future interest rate increases, is not a major event when put into historical context.

I want to put this into a larger perspective; how about looking at a 220-year history of interest rates? Read the rest of this entry »

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The Refinance Boom is not Over? Refinance Your HELOC!

January 23rd, 2014

Actually, the refinance boom is indeed over; however, there are a fair amount of people that still need to refinance. There are a stunning amount of home equity lines (HELOCs) outstanding and most people will need to refinance those. Most HELOCs were set up so that the first ten years of the loan only require interest only payments and no principal is due. Then, in year 11, the principal would start to amortize, and it amortizes over 20 years, not 30. This is a problem because Read the rest of this entry »

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The Refinance Boom is not Over? Refinance Your ARM to a Fixed Rate!

January 21st, 2014

Actually, the refinance boom is over; however, there are a fair amount of people that still need to refinance. The problem is that the people that have not refinanced when rates were low simply don’t realize that they should still refinance. The people that obviously needed to refinance have already refinanced, in some cases multiple times. There are many people left that can refinance. For example, Read the rest of this entry »

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Interest Rates Going Up by Rules, Not by Market

January 2nd, 2014

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 »

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Interest Rates Went Up This Week, About 1/4%!

January 4th, 2013

Interest rates went up this week, about 0.25% to 0.375%, depending on the type of loan. Below are some details from a bond market service I use (called MBSQuoteLine) that sends me news on the bond market, which is the biggest driver of the direction of interest rates, on why this rate increase happened.

Mortgage Rates Move Higher

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They Go Down Forever!

July 16th, 2012

Rates appear to be going down forever. There is no end to how low they can go, is there? Of course there is. And I find consumers have gotten used to not only low rates, but the fact that they will keep dropping. So they procrastinate and put off refinancing because rates will be lower tomorrow. But they may not. Rates can only go so low, we are at the lowest point for rates in our country. But the weak economy not only produces low rates, it produces doubt and fear. There will also be a point where debt issuers will wonder if they’ll be repaid, and they will slow down on debt issuance, which will push rates up. Consumers act as if there is an endless stream of people and institutions who will lend them money, there is not. And Read the rest of this entry »

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