WASHINGTON, D.C. (Washington Post) – The federal government has placed new requirements on lenders to reduce troubled borrowers’ mortgage payments to no more than 31 percent of their income for up to six months.
Several changes have also been made to the Home Affordable Modification Program. Borrowers in bankruptcy will now be eligible for mortgage relief under the federal program. Lenders will evaluate delinquent homeowners for the program before referring them to foreclosure.
The program will lower monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms up to 40 years.
To complete the program, homeowners will go through a three-month trial period and provide proof of their income, as well as a letter documenting their financial hardship.

1. Develop a Family Budget – Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.
2. Reduce your debt – Generally speaking, lenders look for a total debt load of no more than 36% of income. Since this figure includes your mortgage, which typically ranges between 25% and 28% of income, you need to get the rest of installment debt – car loans, student loans, and revolving balances on credit cards – down to between 8% and 10% of your total income.
3. Get a handle on expenses – You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.
4. Increase your income – It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.
5. Save for a down payment – Although it’s possible to get a mortgage with only 5% down – or even less in some cases – you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20% down payment.
6. Create a house fund – Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.
7. Keep your job – While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.
8. Establish a good credit history – Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

Reprinted from REALTOR Magazine Online by permission of the National Association of Realtors, Copyriht 2005, All rights reserved.

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SEATTLE, March 2 /PRNewswire/ — The 30-year fixed mortgage rate on Zillow Mortgage Marketplace is currently 4.80 percent, down four basis points from 4.84 percent compared to this same time last week. The 30-year fixed mortgage rate peaked at 4.87 percent late last week before hovering below 4.80 percent over the weekend.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060503/ZILLOWLOGO)
Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers through the site, and reflect the most recent changes in the market. These are not marketing rates, or a weekly survey.
The rate for 15-year fixed home loans is currently 4.23 percent, while the rate for 5-1 adjustable-rate mortgages (ARM) is 3.57 percent.
The total volume of mortgage requests in the past week was unchanged from the prior week. Of last week’s requests, 32.2 percent were for refinance loans, 65.8 percent were for purchase loans and 2.0 percent were for home equity loans. The prior week, 30.2 percent of requests were for refinance loans, 67.7 percent were for purchase loans and 2.1 percent were for home equity loans.
Below are current rates for 30-year fixed mortgages by state. Additional states’ rates are available at: www.zillow.com/Mortgage_Rates.
State Current 30-Year Fixed Rate (3/2/10) Last week’s 30-Year Fixed Rate (2/23/10) Change in Basis Points
California Mortgage Rates
4.71% 4.82% -11
Colorado Mortgage Rates
4.88% 4.92% -4
Florida Mortgage Rates
4.79% 4.86% -7
Illinois Mortgage Rates
4.79% 4.85% -6
Massachusetts Mortgage Rates
4.90% 4.88% +2
New Jersey Mortgage Rates
4.86% 4.89% -3
New York Mortgage Rates
4.88% 5.00% -12
Pennsylvania Mortgage Rates
4.81% 4.78% +3
Texas Mortgage Rates
4.69% 4.82% -13
Washington Mortgage Rates
4.82% 4.89% -7

About Zillow Mortgage Marketplace
Zillow Mortgage Marketplace is a free, open, and transparent lending marketplace, where borrowers connect with lenders to find loans and get the best mortgage rates. Borrowers anonymously submit loan requests and receive an unlimited number of custom mortgage quotes with real rates directly from thousands of competing lenders. Zillow Mortgage Marketplace also provides mortgage calculators, mortgage advice, mortgage widgets, and lender directories.
Zillow.com and Zillow are registered trademarks of Zillow, Inc.
SOURCE Zillow.com

Today rates went up…our Real Estate Research Center at Texas A&M said it was coming…

(COLLEGE STATION, Tex.) — Mortgage interest rates are low right now, but don’t expect that to last. When the government quits buying mortgage-backed securities, rates will head up and away.

Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University, explained why mortgage rates were so low at the end of 2009.

“First, the global consensus among bondholders appeared to be that inflation will remain low in the United States for an extended period. This caused the ten-year U.S. Treasury rate to fall to between 3.2 and 3.6 percent for much of the second half of 2009.”

With extraordinary levels of federal deficit spending,  Dotzour said it is unlikely that the low-inflation scenario will be popular when the economy starts to rebound.  Consumers should expect mortgage rates to rise when signs of improvement appear.

A second factor contributing to the low mortgage rates is the Federal Reserve Bank’s unprecedented purchase of nearly all the mortgage-backed securities issued by Fannie Mae and Freddie Mac in 2009, he said. Totaling more than $1 trillion for the year, this program has been extended through the end of March 2010.

“The Fed has never done this before in its history, “said Dotzour. “They are doing this to stimulate the economy by keeping mortgage rates as low as possible. When the Fed stops buying these securities from Fannie and Freddie, mortgage rates are likely to increase, possibly quite abruptly.”

How far will rates go up when the Fed terminates its buying program?  Dotzour said that question is difficult to answer precisely, because this has never been done before. But many experts think that rates could move up one-half to 1 percent.

“The combination of extraordinarily low mortgage rates and current price levels are making homes extremely affordable to American families. In fact, national and Texas housing affordability indices indicate that homes are more affordable than ever. But this will not last. When the economy recovers and the Fed stops purchasing mortgages, rates will rise.”

To read more on this subject, see Dotzour’s article in the January 2010 issue of Tierra Grande magazine.

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Credit Scores range between 200 and 800.  Scores above 620 are considered desirable for obtaining a mortgage.  These factors will affect your score.

1.  Your payment history.  Whether you paid credit card obligations on time.

2.  How much you owe.  Owing a great deal of money on numerous accounts can indicate that you are overextended.

3.  The length of your credit history.  In general, the longer the better.

4.  How much new credit you have.  New credit, either installment payments or new credit cards, are condidered more risky, even if you pay promptly.

5.  The types of credit you use.  Generally, it’s desirable to have more than one type of credit – installment loans, credit cards, and a mortgage, for example.

For more on evaluating and underststanding your credit score, go to http://www.myfico.com.

Reprinted from REALTOR Magaxine Online by permission of the National Association of REALTORS.

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