Mortgage Rate News

When you get ready to buy a home, one of the most important factors is the mortgage interest rate. However, with things as they are, even having good credit and getting your mortgage application approved does not mean that you will automatically get the best rate. Indeed, choppy mortgage rates mean that you need to be prepared to lock in rates when they are lower.

The Mortgage Reports Blog points out some interesting facts about mortgage rates since the beginning of the year:

• Mortgage rates changed 68 percent of the days for the two months ending on May 19.
• Mortgage rates changed 73 percent of the days for the two months ending on June 20.
• Right now, mortgage rates change during the day 82 percent of the time.

This means that the mortgage interest rate you are quoted may be different the next day. Heck, the quote you got in the morning may not be the same quote you get in the afternoon. And with things as volatile as they are, you never know whether that change will result in your mortgage interest rate going up or down. Here is what The Mortgage Reports Blog recommends in the current climate:

When you’re shopping for a home loan, remember that Wall Street often sets the rates — not the loan officer. Your best protection from mortgage rate volatility, therefore, is to saddle up with a pro that understands how Wall Street works, and then be prepared to lock your mortgage rate as soon as possible.

Your mortgage interest rate can make a big difference

Mortgage rates matter because they make a big difference in how much you pay overall on your mortgage. Even half a percentage can determine, over the full course of a 30 year mortgage, a difference of tens of thousands of dollars in how much you pay back.

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Mortgage applications are on the rise again, reports the Mortgage Banker’s Association. CNN Money reports on the gains in mortgage applications:

Refinance volume increased 4.4%, while purchase volume grew 1.8% during the week. Refinance applications accounted for 35.9% of all applications during the week, compared with 35.2% during the previous week. …

Application volume rose from its 2008 low as interest rates were mixed. The average rate for traditional, 30-year fixed-rate mortgages fell to 6.41% from 6.46% during the prior week.

This is an interesting trend, and one that may indicate some slow turning around for the housing market. Some buyers are realizing that they can get good deals right now (my next-door neighbor just sold his house for $20,000 less than he bought it for), and are pressing their advantage in this buyer’s market.

Unfortunately, even though mortgage applications are up, it may not mean that more home buying is going on. That will depend on how many of these applications are approved. It is increasingly difficult to refinance, thanks to falling home values, and mortgage lenders have been tightening their standards on all home loans.

If you are looking to buy a home, you will need to have a down payment (3% for FHA loans and at least 5% for many other mortgage lenders) and good credit, as well as a favorable debt-to-income ratio. This means that you may need to plan ahead to prepare your finances and credit situation in order to receive mortgage loan approval.

Here are the steps you should take in order to increase your chances of mortgage approval (and they will ensure that you are more financial stable as well):

• Pay down your consumer debt.
• Work to improve your credit score.
• Save up money for a down payment.
• Avoid a bigger mortgage than you can easily afford.
• Look for state and federal programs geared toward homebuyers.

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With foreclosures mounting, and late and missed home mortgage loan payments becoming more common, it is no surprise that some homeowners are dropping through the cracks. But just because things are awfully busy for home mortgage lenders and servicers, does it mean it’s right to foreclose on those that are trying to save their homes?

One couple, at least, has decided to fight back against foreclosure proceedings initiated by home mortgage loan servicer Washington Mutual. Boston.com offers a quick look at the lawsuit against WaMu:

In the suit, filed in Suffolk Superior Court, Lori and Mark Pestana of Westford allege the loan servicer was unresponsive to their repeated phone calls and to their applications to negotiate an arrangement that would have allowed them keep their house out of foreclosure. …

“I feel like we were just sucked in and caught in a vortex that we couldn’t get out of,” Lori Pestana said about trying to prevent Washington Mutual, or WaMu, from foreclosing on a $275,000, fixed-rate mortgage.

And when you look at the basics of the case — as alleged by the couple — it really does look like they were rather badly railed in this one. Here is a stripped down look at some of the transactions that led to the foreclosure:

• In August 2007, the Pestanas missed their home mortgage loan payment.
• In an effort to get current (by dipping into savings), they called WaMu to work something out.
• WaMu told them they had to be 50 days late in order to work something out.
• The couple stopped paying until they were exactly 50 days late and then applied for help in October 2007.
• The Pestanas claim WaMu told them they would receive and answer in four or five weeks.
• On Nov. 13, 2007, WaMu sent notice of foreclosure proceedings.
• The couple tried repeatedly to find out a final amount to stop proceedings. Their calls were either ignored or no amount was given.
• The Pestanas offered up $12,000, which was rejected. (They were only then told they needed $15,000.)
• The couple repeatedly called WaMu, only to deal with constant telephone looping.
• The Pestanas are being evicted from their home.

If this chain of events is a faithful narration, then there is something seriously wrong. A home mortgage loan servicer should be interested in helping its customers before things get desperate. This whole waiting 50 days to help thing is ridiculous. The Pestanas obviously wanted to resolve the problem, and were obviously trying to do what was needed in order to save their house.

And all they got was the runaround.

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