Luckily for consumers who had loans about to fund with them, they will most likely still go through.  They are just not allowing new submissions or new rate locks.

Just when we thought all the big banks still remaining had made it through the mortgage meltdown, Indymac releases this news.  It will be interesting to see how this plas out and we will keep you posted.

Countrywide has been denying their troubled situation over and over, but when you lay the facts down on paper, they ARE in trouble.

It really shows in the value of the company and their stock prices.  They were valued at nearly $26 billion last year and today their worth is about $3.2 billion.  The stocks 52-week high in Feb. was $45.19 and now is currently $7.75.  Awesome work guys!

How any one or any company can say “We are fine” as they deplete their worth by $23 BILLION is beyond me.

A new buzz word that I am hearing a lot about from people seeking a home loan is the “No Cost Mortgage”.  It seems that mortgage companies have started a new marketing twist to an existing product. I am seeing ads about no cost refinances and no closing cost mortgages.  Although there is some truth to these claims, you will find that there is always a cost involved with these transactions, it is just how the cost is applied.

Typical closing costs involved with a home loan transaction may include an appraisal, title insurance, escrow/attorney fees, underwriting fees, credit report, property inspections, recording and tax service fees.  Most of these fees are third party fees; meaning that they are fees that need to paid for services that the mortgage company does not provide. 

So where does the money come from to pay these closing costs? You still pay them!  However, you do not pay them upfront.  The home loan lender fronts the money and pays these costs for you and in return they will increase your interest rate slightly to cover the costs.  That means that you are paying more per month with each payment that you send to your mortgage company.  So you aren’t really paying the closing costs at the close of the transaction, but you are paying more per month with your mortgage payment.

Let’s look at hypothetical numbers as a more detailed example; Say that you qualify for an interest rate of 6% and that the typical closing costs would be $3,000.  In order for the mortgage company to make an extra $3,000 on the home loan to cover these costs, they might raise your interest rate to 6.75%.  Depending on the dollar amount of the mortgage and the actual closing costs in your area, the increase in rate could be higher or lower.  This is just an example to explain how mortgage companies offer these programs.

You may be wondering if this is a good deal for you or a sly trick that your lender is trying to pull over on you.  Well, that would depend on your situation.  Have your loan officer show you the difference of a no cost loan and the regular version.  See how much your monthly payment differs and ask yourself how long you will have this mortgage.  If it makes sense to pay a little more per month and save the cash out of pocket then that would be the way for you.  If you plan on having the mortgage for several years with no intention of moving or refinancing, paying the costs yourself and taking the lower payment may be the best bet.

Although the no cost loans are becoming more popular and being advertised quite a bit as of late, mortgage lenders have always had this available as an option for their clients.  The key is for you to know how these mortgages work and to do the math for your scenario to make sure which option is best for you.  A good loan officer will be able to explain the options available to you to help make the decision an easy one.

Today’s home loan standards are changing almost every day.  It is a combination of the declining home values in some cities and the sub-prime mortgage “melt-down”.

There was a time not too long ago where all you had to do to qualify for a home loan was to apply.  Well, it was a little harder than that, but it seems like it was that easy.

You didn’t need a down payment and you didn’t need to make a lot of money.  At least that is what some home loan lenders would lead you to believe.

Now, for the most part, you will need a down payment and you will have to verify that you make enough money to afford the home that you are buying.  That sounds like commom sense if you ask me, however that is where the industry has put itself.

The down payments do not have to be large, they can be as little as 3-5% of the purchase price and there are still a few ways to obtain 100% financing.  You need to talk to your home loan lender or mortgage company and find out what is available today.