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Home Mortgage Financing

Is The Credit Score You Purchased Online Useless?

Submitted by Joseph Pettinella on March 30, 2017 - 1:05pm

Are you under the impression that the credit scores you purchase online from Equifax, TransUnion or Experian are what lenders use to approve and price a home loan?

Then you might be in for a surprise.  Yes, you can buy a score online, but it is not one of the FICO mortgage scores that mortgage lenders use. The actual scores used by lenders can be higher or lower by as many as 75 points or more.

The selling of useless credit scores has become such a big business that the Consumer Financial Protection Bureau (CFPB) is trying to stop the practice.

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Did You Know? How Low Mortgage Payments Can Be

Submitted by Joseph Pettinella on July 13, 2016 - 1:40pm

Mortgage interest rates are amazingly low right now.  If you are thinking about purchasing your first home, or considering selling and buying something different . . . well, now might be the BEST time to make your move.  The cost of a mortgage is about as affordable as it gets. 

The chart here shows what your monthly principal and interest payment would be for various mortgage amounts.  Did you realize how much of an impact the interest rate has on monthly mortgage payments?  As a result of the lower payments, buyers are able to purchase 'more' home for the money.

Not only are the monthly payments low, but the long term financial impact is also stunning.

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How Is YOUR Mortgage Interest Rate Determined?

Submitted by Joseph Pettinella on January 13, 2016 - 4:20pm

The good news for buyers is that mortgage interest rates continue to hold below 4%.

Freddie Mac's weekly survey of lenders showed that for the week ending January 7, 2016, the average rate for a 30-year fixed-rate mortgage was 3.94% with an average of 0.6 point, and the 15-year fixed-rate mortgage averaged 3.26% with an average of 0.5 point.

Those are average rates, not the rates that everyone will get.  Understanding the factors used to determine the interest rate that you may be offered are important to help you make good decisions.  What are they?

  • Credit Score
  • Home Location
  • Home Price and Loan Amount
  • Down Payment
  • Loan Term
  • Interest Rate Type
  • Loan Type

The Consumer Financial Protection Bureau has a thorough explanation of how all these factors work together to determine the interest rate and an interactive tool to help you understand how interest rates change as each factor changes.  The more you know about it, the better equipped you will be to find the best mortgage to fit your needs (and save you money!).

Fannie Mae Introduces Enhanced Affordable Mortgage Program That May Be A Game Changer For You!

Submitted by Joseph Pettinella on January 6, 2016 - 4:05pm

After much research and feedback from lenders as well as home buyers, Fannie Mae has announced that it will provide an enhanced affordable lending product designed to meet the financial needs of responsible, credit-worthy buyers.  

Fannie has recognized the many financial challenges many would-be homebuyers are facing.  Many can't afford a large down payment, they may have multiple student loans, and/or they may rely on income from non-traditional sources, such as parents or other family members.  These factors have impacted the ability of a lot of people from qualifying for a mortgage.  Well, that may be about to change . . . perhaps for YOU!

The new program, called the HomeReady™ Mortgage, will be available from lenders later this year, and will offer expanded eligibility guidelines which will be real game changes for a lot of people who could not previously qualify for a mortgage:

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More Home Buyers Financing With Non-Bank Lenders

Submitted by Joseph Pettinella on November 6, 2015 - 2:24pm

According to the Federal Reserve, an increasing number of home loans are being done by non-bank lenders . . . independent mortgage companies, such as Quicken Loans, Loan Depot, and other large and small nondepository lenders. 

Independent mortgage lenders tout their ability to complete transactions online, and in some cases the borrower may not even need to speak to a loan officer.  They also claim to offer more flexibility in the types of loans they offer.

Banking institutions, on the other hand, may be able to offer better rates and closing costs than independent mortgage companies based on the length of account history and amount of holdings.

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Have Your Eye on a Fannie Mae HomePath Property?

Submitted by Joseph Pettinella on April 20, 2015 - 3:19am

Would you spend 4-1/2 hours and $75 for a homebuyer education course if doing so would save you 3% on closing costs?  This equates to $4,500 on a $150,000 house.

Fannie Mae has a new program to help buyers save money at closing when they purchase a Fannie Mae HomePath listing, which is a foreclosed home owned by Fannie Mae.  Under the program, qualifying first-time homebuyers can receive up to 3% of the purchase price of the subject property in closing cost assistance and reimbursement of the $75 cost of the homebuyer education course at the time of closing.

The homeownership education course, which contains nine, thirty-minute sessions, is entirely online and covers both the complexities of home buying and the responsibilities of owning a home.  To be eligible for the closing cost assistance and the reimbursement of the training cost:

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