As a part of the Economic Stimulus Bill, jumbo mortgage limit has been extended especially in higher cost areas. And recently rates on jumbo loans have also dropped down. But in spite of this, borrowers aren’t able to make use of the rate cut or the extended limit. This is because even though rates have gone down, lenders have tightened their lending criteria. As such, getting a jumbo mortgage does not depend only upon the appraised home value and your credit score, but also on the condition of the housing market in your area.

There are 3 types of jumbo loans:

1. Jumbo-conforming loans: These loans (between $417,000 and $729, 750) and satisfy the Fannie Mae/Freddie Mac guidelines and are sold off to the secondary market.

2. FHA jumbo-conforming loans: Such loans meet the guidelines put forward by the FHA.

3. Bank jumbo loans: These loans do not conform to the FHA or any agency.

As I said before, lending criteria for these loans have tightened and as such you’d have to pay at least 20% down payment if you’d like to get a jumbo-conforming loan. The other criteria are:

• A credit score of 660 and above
• A housing market which isn’t on a decline.

Read the rest of this entry »

Once again a Bill has been passed on Thursday 8th May 2008 to relieve millions of homeowners who are facing problem with their mortgage payments. To stabilize the housing market, Massachusetts Representative Barney Frank, who is the chairman of the House Financial Services Committee, has authored the bill.

The main provision of this new bill is that FHA will guarantee about $300 billion of refinance loans. The borrowers who have taken sub-prime loan and ARM and also have the ability to pay the refinanced loan can have a reduction on their principal balance and it will be converted into 30 year FRM. That will make monthly payments lower so that they can afford to pay off their mortgages.

This is totally a voluntary plan as because no lender or bank require to participate in it. If they accept the reduction on the mortgage amount of borrowers in default, or those likely to be in default, then they will get federal guarantee on the refinance mortgages. Any loss from the defaulted FHA backed loan will be borne by the Federal government. The lenders or the bank will not have to bear any loss. It is predicted that this Democratic House Bill will provide help to more than 1.5 million troubled borrowers.

[tags]mortgage bill, mortgage help, fha refinance[/tags]

Hi all,

Here’s something interesting to talk about!

We have come up with the Video Forum in MF to help you share and learn finance the easy way. Our purpose is to empower you with financial knowledge so that you can make wise financial moves.

What is it all about?

The Video Forum is an interactive platform wherein you can add financial videos or browse through those shared by others. What we get to see and hear leaves a lasting impression on our minds. That’s the reason videos are so effective in spreading financial knowledge.

What you need to do is, select a financial video from YouTube and add the video url into the forum. Not only can you add videos, but also you can post your opinion and comment on videos added by others. However, the community will not encourage promotional or commercial videos. They have the right to vote in the negative and prevent anyone from posting such videos. Only helpful videos will be allowed into the forum.

Who can add videos?

Only registered members will be able to share finance videos into the forum.

How do you benefit?

As a community member, you get the chance to add financial videos, share information and earn dollars. Whereas, lenders can add videos and refer them to their clients thereby helping in their business promotion.

So, are you interested to share and learn through videos? Check out the MF Video Forum .

[tags]finance video forum, add finance video[/tags]

I find a lot of websites offering mortgage quotes online itself. What I mean is, not simply applying for quotes online but applying as well as getting the quotes online. Whether it is preferable or not, is quite controversial. Some say it’s fast and easy, and you don’t have to take out time to visit the lender’s office or call up to discuss your financial situation and do some analysis before getting the loan. While others like me feel the best is to have a talk with the lender/broker. After all how do you explain why you were late on your payments or what your liabilities are if you aren’t having a talk. It isn’t possible to write down everything on a piece of paper and who has the time to read so much. None I guess!

Well, with due respect to the companies out there I don’t think getting quotes online are reliable enough with respect to your specific situation. What I mean is, the lenders are not able to get an overall idea about your situation, and analyze what to do if you’ve had any credit problems. Moreover, the industry has a wide variety of loans to offer and as such it’s not easy to select the right program for you simply by going through the little details you provide.

The lenders need to analyze your financial situation and creditworthiness, assess your ability to pay off loans and take into account your liabilities prior to approving your loan. But this is only possible if you attend a face-to-face meeting with the lender and discuss your loan options along with any credit repair steps to be taken. That’s the reason I feel, getting quotes online won’t do much for the borrower. It’s very generic and in most cases borrowers end up getting the best offers. And then later on when he applies and gets approved, he finds himself being offered something which he can’t afford.

Thus, one can opt for companies which gives the chance to apply online and wait till lenders/brokers review their basic information and contact them depending upon whether the latter are comfortable signing a deal with the former.

Just in case you’d like to take a quick look at the entire discussion on how reliable are online mortgage quotes, refer to http://www.mortgagefit.com/quote/online-reliable.html

[tags]online mortgage quote, online mortgage, mortgage quote[/tags]

The Bush administration has come forward with additional mortgage help for borrowers who are facing problems with their mortgage payments and are at risk of facing foreclosure. The FHA has announced a new plan, the FHA Secure Expansion, which will be backed by the Bush Administration, for the struggling borrowers so that they can keep up with the monthly mortgage payments.

The borrowers, who miss payments in 2 consecutive months or at 2 different times in the last 12 months, will be able to refinance with FHA Secure Expansion program if they meet 97 percent loan-to-value ratio requirement. Even borrowers having 3 missed payments in 3 consecutive months or at 3 different times in the last 12 months can refinance if they meet 90 percent LTV ratio requirement. The lenders will have to ensure that the borrowers have the capability to pay back their mortgages.

Borrowers who are currently using FHA Secure is saving on an average 400 dollars per month than their previous sub-prime loans. So the bottom line is that the government is providing a golden opportunity to the sub-prime borrowers so that more people can refinance with FHA Secure and avoid facing foreclosure.

For further details, check out the community discussion on FHA Secure Expansion

[tags]fha secure expansion, fha refinance, mortgage help, avoid foreclosure[/tags]

Are you in a situation where the lender has declared foreclosure and you don’t know what the next step is for you? Well, there are workout options such as an alternative repayment plan, loan modification, or a partial claim to try out for. But such things are ok only if you wish to preserve the home.

What if you wish to move out? Well, you’d probably negotiate for a short sale if you’re upside down on the mortgage. Or perhaps you may try to negotiate for a deed-in-lieu because this is one option where you need not pay the deficiency as the law says.

But how about keeping the home and at the same time paying down the mortgage? This is quite possible if you’re filing bankruptcy chapter 13 which allows you to follow a repayment plan (approved by the trustee and your lender) and pay off a part or whole of the mortgage within a period of 3-5 years so that the rest can be paid off using a separate repayment plan or a refinance as allowed by the lender.

Interested to know more? Check out why chapter 13 is often a far better option .

[tags]chapter 13 or foreclosure, chapter 13, avoid foreclosure[/tags]

The Federal Reserve took a courageous decision by accepting 200 million of housing debts as collateral to promote liquidity in the housing market and give some relief to the banks brokerages. The banks and other financial institutes are facing cash crunch and even after five rate cuts within the last few months experts believe that this is not much effective. So FED came up with this program to eliminate the credit crisis.

This is the first time when FED is accepting the housing debts as collaterals.  Fed has assured to offer 200 billion dollars in a new Term Securities Lending Facility (TSLF) with a term of 28 days. The loans will be given with an auction process and it will start from 27th of March 2008. Fed has also declared that they may raise the amount of loan that they make available to the banks to 100 billion. FED has been injecting billions of dollars into the banking system to help the economy to get out of this credit crisis.

[tags]credit crisis, housing debt collateral, fed move[/tags]

Mortgage rates have been increasing for last three weeks but this week rates on 30 year mortgage rose highest in the last three months. Last week it was 6.04 percent but now it has been increased to 6.24 percent in this week.

On November 15th 2007 it was also 6.24 percent. But since then we saw a steady downfall in the mortgage rates. During January 2008 the rates were falling steadily and refinancing had hit 12 months highest in that month because homeowners were trying to take advantages of the lower rates to make their monthly payments lower.

Other mortgage rates have also been increased in this week. Rates on 15 year Fixed rate mortgage rose to 5.72 percent whereas it was 5.64 percent last week. Rates on 5 year ARM rose to 5.43 percent compared to last week’s 5.37 percent and rates on one year ARM rose to 5.11 percent compare to last weeks 4.98 percent.

[tags]FRM, Fixed Rate Mortgage, Refinancing, Mortgage[/tags]

Bush administration has announced another plan to offer help to the delinquent homeowners. It is expected that over a million of homeowner will face foreclosure during this year. This is not a government project. Six major lenders have agreed to delay foreclosure for 30 days. They are Bank of America, Citigouup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo. In this project, Banks will target the delinquent borrowers to get up to date with loan modification so that they can avoid foreclosure.

But housing advocates and mortgage experts are a bit skeptical on this project Lifeline. They think this is too little when more than a million of homeowners are going to face foreclosure in this year. But the fact is, a recent survey shows that half of the foreclosure faced in the October, 2007, no contacts have been made between the homeowners and the lenders. So this project gives a chance to the homeowner to get up to date on his mortgage and avoid foreclosure.

President George W. Bush has signed a160 billion dollar Economic Stimulus Bill into law on 13th Feb, 2008 to ward off a possible economic collapse. Under this Economic Stimulus package, individuals who earn 75k dollars or less will get 600 dollar tax rebate and working couples who earn less than 150k dollars or less, will get 1200 dollar tax rebate. For each child, there will be additional 300 dollar rebate.

Under the package, the limits of conforming loans insured by Government-sponsored entities, Fannie Mae and Freddie Mac, will be increased from 417k dollars to 729,750 dollars, though the limit will vary depending upon how expensive the area is.

The Bill also has provisions for small businesses. Small investors will also get tax break which has been increased from 125k dollar to 250k dollars.

[tags]economic stimulus bill, tax rebate, conforming loan limit[/tags]