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IO Sales to the GSEs Fall Again in Second Quarter

imfpubs — Wed, 09 Jul 2008 17:04:25 +0000

Sales of interest-only mortgages to Fannie Mae and Freddie Mac continued to decline in the second quarter of 2008, according to the Inside Mortgage Finance MBS Database. Lenders sent $19.1 billion worth of the mortgages to the government-sponsored enterprises in the quarter, a 65.1 percent drop compared with the peak volume seen in the same period in 2007. Fannie purchased 52.4 percent of the mortgages in the most recent period.

G & M Mortgage Services of Wayne PA 19087 has 90% and 95% mortgages available to qualified buyers!

thebestofthemainline — Thu, 10 Apr 2008 19:55:07 +0000

G & M Mortgage Services of Wayne PA 19087 has 90% and 95% mortgages available to qualified buyers! If you've got good credit, G & M Mortgage Services has mortgage funds available for low down payment loans. They can refinance your existin house, too. An save you money on closing costs with their online coupons. Find them at http://www.bythezip.com/coupons/1000010690.htm .

Learn more about them at http://www.bythezip.com/companies/1000010690.htm and also http://kdragone.localbizpress.com/2008/01/02/g-m-mortgage-services-inc-in-wayne-pa-19087-well-do-your-homework-for-you/ .

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Bad Credit? It's Ok....

Taking an interest

barneymc — Fri, 28 Mar 2008 17:00:10 +0000

In light of the current market conditions, might interest-only mortgages be the answer for pressed borrowers? Barney McCarthy finds out

The plight of the first-time buyer has worsened over the last six months. Getting onto the property ladder was difficult enough with soaring property prices presenting a fearsome hurdle, but the credit crunch has made things even tougher. While the rate of house price growth has slowed somewhat giving the appearance that the situation may be mellowing, the credit crunch has led to lenders tightening their criteria (see the May issue of Your Mortgage, on sale 17 April to find out more) and even withdrawing products.

With all this conspiring against them, you wouldn’t blame first-time buyers for giving up their aspirations of homeownership. But there are still a number of ways to ease the burden and obtain a mortgage. Interest-only mortgages reduce a borrower’s monthly repayments as they are only paying the interest on the mortgage, rather than a small portion of their mortgage in addition to the interest. While interest-only mortgages can be a useful way of alleviating the financial strain at the outset of home ownership, it should not be viewed as a long-term solution as you are not actually making any headway in paying your homeloan back.

It used to be the case that interest-only mortgages were coupled with endowment policies, but lenders do not require a stipulated payment method. This isn’t to say you shouldn’t have one though, and lenders should ensure that the customer is fully aware of the implications of taking out an interest-only mortgage and of not being able to repay the loan.

Approach with caution

Vicki O’Connell, spokesperson for Chelsea Building Society, says a rise in property prices and affordability issues have seen the popularity of interest-only mortgages soar, but warns that choosing one is still a decision that needs to be carefully thought through. “Many people presume they can rely on a rise in their property’s value or expected inheritance to repay their mortgage, but this could be a risky gamble,” she says. “A decline in the housing market could mean a very different return to the one expected and inheritance shouldn’t be relied upon either, especially with the increasing trend of equity release mortgages for the older generation, which will ultimately mean a diminishing inheritance pot.”

O’Connell adds that some borrowers take out a combination of interest only and repayment methods so at least some of the loan is decreasing, while others convert a percentage of their interest-only loan to repayment a year or two into the mortgage term and continue to do so every few years thereafter as their income grows.

Sue Read, associate at Birmingham-based brokerage Moneywatch Finance, says that she adopts a cautious approach when advising on interest-only mortgages. “If borrowers take out interest-only mortgages, I stress that they should put any spare cash into a savings pot such as an ISA or use it to overpay the mortgage,” she says. “This would build up a contingency fund so that if times become hard they have some accessible funds to fall back on. If anything I over-emphasise the dangers of the interest-only route as it does concern me that in 20 years or so we will see a whole pile of mortgages coming up for repayment and no vehicle in place.”

The hard facts

The Your Mortgage website has mortgage comparison calculators where you can compute your monthly repayments and total interest owed by entering your loan amount, interest rate and mortgage term, and compare the results for a conventional repayment method with that for interest-only. Taking the average house price in the UK at present – £180,000 – and the average interest rate paid in January according to the Council of Mortgage Lenders – 6% - and calculating the interest due over 25 years (a conventional mortgage term) makes for some eye-watering results.

Borrowers on a repayment mortgage will have to pay £1,159 a month on a £180,000 mortgage and will end up owing £167,922 in interest. Those on interest-only mortgages will have to pay only £900 a month to their mortgage lender, but will end up paying a whopping £269,999 in interest by the end of the term. Although this is an extreme example as interest-only mortgages are only really intended as a short-term solution, it shows how much more you will end up owing in the long run.

Interest-only mortgages can provide a valuable leg-up onto the property ladder, but should really only be regarded as a short-term option. Rely on them too heavily, and you could end up dangling dangerously from said ladder.

Trident Mortgage - Wayne, Pa 19087 - Local Office, Local Service

tjbtz — Sun, 16 Mar 2008 03:56:30 +0000

Check out the great rates with Trident Mortgage....Waynes local mortgage lender!

http://www.bythezip.com/companies/1000011172.htm

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Lower your monthly mortgage payment

Sandra — Thu, 17 Jan 2008 17:42:18 +0000

Interest only mortgages are one of the best selling products today. With an interest only mortgage you may either pay just the monthly interest that is due on your loan or you may pay both the principle and interest that is due. This type of mortgage is an excellent choice for a homebuyer that may own their own business or be in commission sales because you are not committed to make the full principle and interest payment. If you have a bad sales month, just pay only the interest due on the mortgage, and if you have a good month you can pay extra towards the principle. With an interest only mortgageif you make a payment towards the principle your monthly mortgage payment will be reamortized to reflect the new interest only payment that is now due, because interest will be calculated on the new, lower, principal balance.

This is also a good mortgage choice for someone that wants to pay off their mortgage quickly because of the reamortization feature. Most mortgage companies will reamortize your mortgage if you make a principal payment of at least $5,000, but they will charge you a few hundred dollars to do so. Kinda takes away from any savings on the interest. With any other type of mortgage if you pay anything towards the principal your monthly mortgage payment will not change. On a Fannie Mae interest only mortgage, interest rates (which are the best there is) there is a hit to the pricing on interest only mortgages of about 1.50%. It used to be a hit of about .25% to .375%. Fannie Mae changed their pricing guidelines because of the increased risk for Fannie Mae.

The interest rate on the Fannie Maeinterest only mortgage is fixed for the full 30 yrs so the interest rate will never change. The loan is interest only for 10 to 15 yrs. After this initial period you will have to pay both the principle and the interest. The loan will also at this time be reamortized to 20 yrs if it was a 10 yr interest only and 15 yrs if it was a 15 yr interest only. If you haven't been paying anything towards your principle during that initial period your payment will go up dramatically. At that point it will be like you have a 20 yr or 15 yr mortgage depending upon which interest only term you originally chose.

The interest only mortgage is also good for anyone that thinks that they will be selling their home in the next 10 to 15 yrs.

Joe McMonagle of the Sovereign Bank Mortgage Division in Villanova PA has a full menu of mortgage solutions for you

tjbtz — Thu, 03 Jan 2008 20:01:09 +0000

Joe McMonagle of the Sovereign Bank Mortgage Division in Villanova PA has a full menu of mortgage solutions for you. You can learn more about Joe and Sovereign Bank at http://www.bythezip.com/companies/1000011617.htm . Joe, a specialist in reverse mortgages, can handle your purchase and refinance needs, too. You can't beat the service Joe will give you or the products and stability offered by Sovereign Bank.

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What If You Got To The Closing Table And The Money Never Showed Up?

tonygallegos — Fri, 03 Aug 2007 16:01:39 +0000

Several high-profile mortgage lenders, including American Home Mortgage, closed their doors this week and stopped funding loans. Others dramatically limited their list of "eligible" borrowers.

Many buyers and sellers across the country have been stranded at the closing table without funds this week, only adding to the confusion.

Because the story is not getting much press, let's talk about why lenders are having to shut down. It's not because they made bad loans in the past, per se.

It's because their only function is to serve as a go-between for Wall Street and home owners.

Different from mortgage banks, a "traditional" bank collects deposits from customers and then lends some of those deposits in the form of mortgages. Then, a special quasi-government agency steps in and buys the mortgages from the bank, in effect, "replacing" the deposits.

If you've heard of Fannie Mae or Freddie Mac, they are the quasi-government agencies we're talking about. Their mandate is to buy home loans from banks that meet certain criteria.

For a mortgage bank, though, Fannie and Freddie are not the buyers -- it's hedge funds, pension funds, international investors, and others. If these end investors decide to stop buying loans, the mortgage bank can't play matchmaker anymore.

And that is precisely what's happening.

Unlike Fannie and Freddie, mortgage banks rely on investors to provide money to their clients and, now that many investors closed the spigot on mortgage loans, many mortgage banks have no choice but to fold.

Trident Mortgage Company - Haverford Station

tjbtz — Wed, 01 Aug 2007 02:53:00 +0000